Key Takeaways
- • The Supreme Court refused to direct Sebi to mandate public disclosure of ultimate beneficial owner (UBO) details and portfolio holdings of Alternative Investment Funds (AIFs) and Foreign Portfolio Investors (FPIs), citing the absence of any legal or regulatory framework requiring such disclosure.
- • The bench of Justices BV Nagarathna, R Mahadevan and DK Upadhyaya rejected a public interest litigation filed by Trinamool Congress leader Mahua Moitra, stating a writ of mandamus could not be issued without a legal basis.
- • The court found that AIF and FPI investments are already disclosed to the regulator or custodian, and said it is for the government and Sebi to consider the matter further.
- • Moitra argued that AIFs and FPIs operate under opaque structures, citing risks of market manipulation, money laundering and tax evasion, and pointed to the sharp growth of both segments.
- • Per the petition, registered AIFs rose from 42 as of March 31, 2013 to over 1,528 as of March 9, 2025, while FPI custody assets exceeded ₹74 lakh crore as of January 31, 2026, versus about ₹68 lakh crore in mutual fund AUM.
Summary
The Supreme Court on Thursday declined to direct the Securities and Exchange Board of India (Sebi) to require public disclosure of ultimate beneficial owners and portfolio holdings of Alternative Investment Funds and Foreign Portfolio Investors, according to The Economic Times. A bench comprising Justices BV Nagarathna, R Mahadevan and DK Upadhyaya said the court could not grant relief because no existing legal or regulatory framework addresses the issues raised. "In the absence of any such framework, this court cannot exercise its discretion and issue a writ of mandamus to respondents to mandate a full public disclosure," the bench said.
The ruling disposed of a public interest litigation brought by Trinamool Congress leader Mahua Moitra, who sought greater transparency and investor awareness through a judicial mandate for public disclosure of UBO details and portfolio holdings. After reviewing Sebi's response, the court found there was currently no legal framework requiring public disclosure of entity-wise investments. It noted, however, that AIFs and FPIs already disclose their investments to the regulator or custodian, which enables supervision. The bench said the government and Sebi should consider the matter in light of the discussions so far.
Moitra's petition argued that AIFs and FPIs operate under opaque structures unlike mutual funds, which are subject to stringent public disclosure norms, raising risks of market manipulation, money laundering, tax evasion and financial instability. It cited the growth of the sector: registered AIFs rose more than 30-fold from 42 as of March 31, 2013 to over 1,528 as of March 9, 2025, and average AUM increased from ₹1,437 crore to almost ₹13 lakh crore as of December 31, 2024. The petition also put FPI assets under custody at over ₹74 lakh crore as of January 31, 2026, compared with mutual fund AUM of close to ₹68 lakh crore as of the same date.
For institutional investors, the decision leaves existing disclosure arrangements unchanged for now, with any move toward public UBO or portfolio transparency dependent on future legislative or regulatory action.
The ruling disposed of a public interest litigation brought by Trinamool Congress leader Mahua Moitra, who sought greater transparency and investor awareness through a judicial mandate for public disclosure of UBO details and portfolio holdings. After reviewing Sebi's response, the court found there was currently no legal framework requiring public disclosure of entity-wise investments. It noted, however, that AIFs and FPIs already disclose their investments to the regulator or custodian, which enables supervision. The bench said the government and Sebi should consider the matter in light of the discussions so far.
Moitra's petition argued that AIFs and FPIs operate under opaque structures unlike mutual funds, which are subject to stringent public disclosure norms, raising risks of market manipulation, money laundering, tax evasion and financial instability. It cited the growth of the sector: registered AIFs rose more than 30-fold from 42 as of March 31, 2013 to over 1,528 as of March 9, 2025, and average AUM increased from ₹1,437 crore to almost ₹13 lakh crore as of December 31, 2024. The petition also put FPI assets under custody at over ₹74 lakh crore as of January 31, 2026, compared with mutual fund AUM of close to ₹68 lakh crore as of the same date.
For institutional investors, the decision leaves existing disclosure arrangements unchanged for now, with any move toward public UBO or portfolio transparency dependent on future legislative or regulatory action.
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