SEBI’s new decision
India’s market regulator, SEBI, is now thinking of bringing family offices under its supervision, because the billionaires of the country are becoming a big force in the stock market. SEBI wants the family office to give full information about the returns of its company, property and investment for the first time. Also, there is talk of creating a separate category to control their investment methods.
The Bloomberg report quoted sources as saying. SEBI has to understand how big families invest in public companies and what can be the risk in the market. Earlier this year, SEBI held a meeting with some big family offices and sought information in writing from the rest. But in what way will these rules apply. Or there is no clear information about which families will have more impact.
Earlier there were very few family offices in India, but now they have become big investors in startups, private equity and IPOS. Many family offices invest through regulated institutions like Alternative Investment Funds or Shadow Lenders. Some of the world’s richest people live in India. Many family offices, such as Azim Premji’s Premji Invest, Bajaj Holdings, and Shiv Nadar and Narayan Murthy’s investment firms, work as anchor investors in IPOS. Family Office is a firm managing a family’s wealth and lifestyle.
Why is you going to tighten?
SEBI wants to give full information about how and where these families invest their wealth so that issues like conflict of interest, insider trading can be avoided. According to Srinath Sreedharan, every company of Nifty 1000 holds at least one investment unit in India or abroad, and sometimes even more. That is, there are more than 3,000 such institutions, including real estate firms, but very few of them are professionally managed. SEBI also asked in a conversation with big family offices whether he should give the status of qualified institutional buyers. This can give them a special share in IPOS, as mutual funds, insurance companies or foreign funds. Earlier, SEBI wanted to limit such reach, but now he is considering it.