The Securities and Exchange Board of India (SEBI) recently issued new rules for certain Foreign Portfolio Investors (FPIs). These rules indicate an admission of guilt in the sense that they aim to restrict FPIs that are from non-compliant jurisdictions or those with a significant beneficial ownership (SBO) in such jurisdictions. Here's a breakdown of the implications:

• The rules restrict FPIs from countries that are not members of the Financial Action Task Force (FATF) or from countries that are identified as high-risk by the FATF.
• FPIs with significant beneficial ownership in non-compliant jurisdictions are required to provide additional disclosure and face stricter scrutiny.
• The rules aim to enhance the due diligence on FPIs and prevent money laundering and other financial risks.
• FPIs from non-compliant jurisdictions or with significant beneficial ownership in such jurisdictions may face increased regulatory scrutiny, impacting their ability to invest in the Indian market.
• SEBI's move can be seen as an effort to ensure compliance and maintain the integrity of the Indian financial markets.

Overall, these new rules highlight SEBI's determination to address compliance concerns and uphold strict regulatory standards for FPIs in India.