Key Points
Instead, the issue primarily arose from the existence of thresholds for determination of BOs(beneficial owners) In fact, the thresholds were only lowered (i.e., made tighter) between 2014 and 2019, Sebi said in its affidavit filed before the Supreme Court.ETMarkets.com..
The Securities and Exchange Board of India(Sebi) told Supreme Court on Monday that the challenges faced by it for getting the details about the economic interest holders in the Adani Group companies, was not because of the repeal of the opaque structure provisions in 2019...
Since granular details of all underlying investors with ownership, economic, or control interest in entities below the threshold was never required to be made available to the custodians.. .. there was a possibility that the same natural person could hold a significant aggregate economic interest in the FPI via different investing entities, each of which were individually below the threshold for identification as a BO, Sebi said...
The regulator said it had also observed in some cases that entities having economic interest in an FPI are in jurisdictions where the equivalent PMLA (Prevention of Money Laundering Act) regulations require BO identification only on the basis of control or ownership, leaving ambiguity regarding entities that have economic interest but no ostensible control...
Thus, the investment manager/ trustee etc. acting through arrangements such as voting shares/ management shares, is then identitied as the BO of the FPI, Sebi said.. Consequently, while in compliance with the regulations, the actual investing constituents with economic interest may not be identified as BOs of the FPI..
