TMC MP Seeks Greater Transparency in India's Financial Markets
New Delhi, April 1 — The Supreme Court on Tuesday directed Trinamool Congress MP Mahua Moitra to submit a detailed representation to the Securities and Exchange Board of India (SEBI), seeking public disclosure mandates for Alternative Investment Funds (AIFs) and Foreign Portfolio Investors (FPIs).A bench comprising Justices B V Nagarathna and Satish Chandra Sharma issued the directive while hearing Moitra’s plea, which sought to compel SEBI to ensure transparency regarding the ultimate beneficial ownership and investment portfolios of AIFs, FPIs, and their intermediaries operating in India.
Court Disposes Plea, Grants Liberty to Approach SEBI
While disposing of the writ petition, the bench stated that SEBI had not yet been given the opportunity to consider the concerns raised. The court added that Moitra’s representation should be duly considered in accordance with the law once submitted.“We dispose of this writ petition by reserving liberty to the petitioner herein to make a detailed representation to the respondents ventilating the grievances that have been enumerated in this writ petition,” the bench stated. The court also noted that if SEBI fails to act within a reasonable timeframe, legal remedies would remain open to the petitioner.
Privacy vs. Public Interest: The Debate Over Disclosure
Advocate Prashant Bhushan, representing Moitra, argued that current SEBI regulations impose disclosure requirements on mutual funds and other traditional investment vehicles, but not on AIFs and FPIs.He highlighted a recent development where SEBI mandated disclosures only for entities managing assets above ₹50,000 crore — and even then, only to the board, not the public. "There is no public disclosure… Below ₹50,000 crore, no disclosure to anybody," Bhushan noted.
He contended that the lack of transparency in these high-value investment structures could lead to financial risks including market manipulation, money laundering, and tax evasion. SEBI, however, maintains that enforcing such disclosures could infringe upon the privacy rights of investors.
Moitra's Plea Highlights Urgent Need for Transparency
Moitra's petition emphasized the rapid growth of AIFs and FPIs in India's financial ecosystem and the potential threats posed by their opaque structures. Unlike mutual funds, which are bound by public disclosure norms, AIFs and FPIs remain shielded from public scrutiny.“The rapid expansion of AIFs and FPIs in India's financial markets has given rise to serious transparency concerns,” the plea stated. “Mandating public disclosure of their beneficial ownership and portfolios is essential for investor protection and market integrity.”
The Supreme Court's order now places the responsibility on SEBI to reconsider its stance and respond to the formal representation Moitra has been allowed to submit.
Last updated by a enewsx:
