NRIs can own up to 100% of a global fund set up at GIFT City

Current Context: On April 30, 2024, the Securities and Exchange Board of India (SEBI) made a significant change to the investment norms for non-resident Indians (NRIs) and Overseas Citizens of India (OCIs).

• They are now allowed to own up to 100% in global funds set up at the Gujarat International Finance Tec-City (GIFT City), a major shift from the previous rule where their combined holdings in a global fund were capped at less than 50%.
• This move is expected to boost the fund ecosystem at GIFT City and attract genuine flows from overseas Indians.
• However, there are certain conditions for this increased participation, including the submission of Permanent Account Number (PAN) cards of all their NRI/OCI individual constituents, along with their economic interest in the FPI.
• Additionally, such FPIs will still have to adhere to the granular disclosure norms on economic interest and ultimate ownership issued by the regulator.
• This is to ensure that the NRI route is not used to circumvent rules such as the 25% minimum public shareholding requirement.
• SEBI has also relaxed rules on caps on passive funds’ exposures to sponsor group company stocks, increasing the threshold from 25% to 35%.

Question:

Q.1 What significant change did the Securities and Exchange Board of India (SEBI) make to the investment norms for non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) on April 30, 2024?
a. They are now allowed to own up to 50% in global funds set up at the Gujarat International Finance Tec-City (GIFT City)
b. They are now allowed to own up to 100% in global funds set up at the Gujarat International Finance Tec-City (GIFT City)

c. They are now allowed to own up to 75% in global funds set up at the Gujarat International Finance Tec-City (GIFT City)

d. They are now allowed to own up to 25% in global funds set up at the Gujarat International Finance Tec-City (GIFT City)