No law, no disclosure order: SC rejects Mahua Moitra's AIF, FPI plea

New Delhi: The Supreme Court Thursday refused to direct the Securities and Exchange Board of India (Sebi) to mandate public disclosure of ultimate beneficial owners (UBOs) details as well as portfolio holdings of Alternative Investment Funds (AIFs) and Foreign Portfolio Investors (FPIs), saying it could not issue directions in the absence of a legal framework mandating such disclosures.

Rejecting a public interest litigation (PIL) by Trinamool Congress leader Mahua Moitra seeking transparency and investor awareness in financial markets, a bench comprising justices BV Nagarathna, R Mahadevan and DK Upadhyaya said the court cannot grant any relief considering there is no existing legal or regulatory framework regarding 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.


After going through Sebi's response, the top court found there was presently no legal framework to mandate public disclosure of entity-wise investments, though disclosures of investments by every Alternative Investment Fund and Foreign Portfolio Investors were in fact made to the regulator or custodian, enabling the regulation. It is for the government and Sebi to consider the matter in light of the discussions that have been made, the bench said.

Moitra wanted the court's intervention to boost transparency and investor awareness in the financial markets through a judicial mandate for public disclosure of UBO details and portfolio holdings of AIFs and FPIs. The West Bengal lawmaker told the court the rapid expansion of AIFs and FPIs in India's financial markets has given rise to serious transparency concerns.

"Unlike mutual funds (MFs), which are subject to stringent public disclosure norms, AIFs and FPIs operate under opaque structures, raising risks of market manipulation, money laundering, and tax evasion," she said.

The lack of public disclosure norms on AIFs and FPIs poses severe risks to financial stability, market integrity, and economic sovereignty, she said.

Given the increasing role of AIFs and FPIs in India's financial markets, regulatory transparency is crucial to protect the interests of market stakeholders, especially the retail investor, ensuring market stability and preventing financial malpractices through circumvention of the law, the petitioner said.

According to the petition, the capital markets in India have witnessed unprecedented growth through AIFs and FPIs in the last few years.

"Furthermore, with increasing foreign investment into the Indian market, the absence of transparent UBO disclosure norms raises concerns over possible money laundering (round tripping of funds, front running, circular running, green washing, channel tripping), tax evasion, and market manipulation," said the petition.

The number of AIFs registered with Sebi had increased over 30 times from 42 as on March 31, 2013 to over 1,528 as on March 9, 2025. The average assets under management of AIFs has increased over 835 times from ₹1437 crore as on March 31, 2013 to almost ₹13 lakh crore as on December 31, 2024, the petition stated.

The current assets under custody of registered FPIs in India as on January 31 are over ₹74 lakh crore, Moitra said, adding that in contrast, the total assets under management of MFs in India is only close to ₹68 lakh crore as on January 31, 2026.

"However, while MFs (known as Collective Investment Schemes) are subjected to strict public disclosure norms (under Sebi Mutual Fund Regulations 1996 & SEBI Collective Investment Scheme (CIS) Regulation 1999, etc.), there are virtually no public disclosure norms for both AIFs as well as FPIs in India," the petition stated.