Relief from Additional Disclosure for Non-Profit University Funds and University related Endowments FPIs

The Securities and Exchange Board of India (SEBI) has, through a circular dated Aug 1, 2024, removed the additional disclosure requirements for non-profit University Funds and University related Endowments (Category I – Foreign Portfolio Investors (FPI)).

The Master Circular for Foreign  Portfolio Investors, Designated Depository Participants, and Eligible Foreign Investors (“FPI Master Circular”) dated May 30, 2024 has been amended to provide for this exclusion subject to the conditions that the Indian equity AUM is less than 25% of the global AUM, the global AUM is more than INR 10,000 crore equivalent, and the FPI has filed an appropriate return in their home jurisdiction to  evidence the  nature of a  non-profit  organisation  exempt from tax.

The eligible jurisdictions with respect to the exemption granted shall be as specified by SEBI from time to time, in consultation with the pilot Custodians and DDPs Standards Setting Forum.

The circular came into effect on the date of issue and is applicable to FPIs, Designated Depository Participants (DDPs), custodians, depositors, stock exchanges, clearing corporations, registrars, issuers, share transfer agents, and listed companies.

The circular follows the proposal to improve ease of doing business with respect to the additional disclosure framework for FPIs. The exemption was proposed since contributions received by these entities from various donors and the corpus of the fund is used for the benefit of the university or students rather than the donors. Further, such funds generally enjoy tax-exempt status in their home jurisdictions, and are, therefore, subject to disclosure requirements to ensure that the corpus of the fund is used for the purposes for which the fund was set up.