Global asset managers have opposed SEBI’s plan to create a centralised database of beneficial owners of foreign portfolio investors.
SEBI (Securities and Exchange Board of India) plan to create a central database containing personal information of all beneficial owners of offshore funds has drawn opposition from global asset managers, including BlackRock, Fidelity and Franklin Templeton.
The plan was announced in an April 2018 circular, where SEBI laid out new KYC requirements for FPIs (foreign portfolio investors), including the identification of beneficial owners, where their personal information would be maintained in a centralised database that could be accessed by other market intermediaries, provided consent was given.
According to an Economic Time report, overseas fund managers have argued that sharing such a database with an external agency in India violates data privacy laws in their home countries, such as the EU’s GDPR (the General Data Protection Regulation).
The opposition, including from non-resident Indians, has forced SEBI to narrowed the interpretation of beneficial ownership to just KYC information. With this, FPIs will be required to submit KYC documents of beneficial owners to custodian banks, which in turn will share them with registrars.