The Supreme Court on Thursday (October 29, 2026) refused to direct the Securities and Exchange Board of India (SEBI) to mandate full public disclosure of the details of ultimate beneficial owners who own and profit from Alternative Investment Funds (AIFs) and Foreign Portfolio Investors (FPIs) operating within the Indian securities market.
AIFs registered with SEBl had increased over 30 times from 42 in 2013 to 1,528 in 2025, Ms. Their average Assets Under Management (AUM) had hiked by over 835 times from ₹1,437 crore in 2013 to almost ₹13 lakh crore by the end of 2024. Bhushan submitted that the Assets Under Custody (AUC) of registered FPIs was over ₹74 lakh crore in 2025. In contrast, the total AUM of mutual funds in India was only around ₹68 lakh crore in 2025. 1996 and SEBI Collective Investment Scheme Regulation 1999, there were virtually no public disclosure norms for both AIFs and FPIs, the petition said While mutual funds were subjected to strict public disclosure norms under the SEBI Mutual Fund Regulations. “Is the court saying that no MP in the country can approach the Supreme Court under Article 32? Justice Nagarathna pointed out that the court had the discretion to entertain writ petitions under Article 32. Moitra’s petition against the premature release of 11 convicts in the Bilkis Bano gangrape case. Mehta referred to the Supreme Court’s own judgment of January 2024 in the Adani-Hindenberg short-selling case ( Vishal Tiwari versus Union Of India ) that courts have only limited powers of judicial review into SEBI’s regulatory domain.
A judicial order mandating full public disclosure of the individuals behind these AIFs and FPIs could be justified without the support of an existing “legal framework of Regulations”, the court said. Nagarathna said it was ultimately for the Union government and the market regulator (SEBI) to put in a framework, based on which the court could issue a mandamus for “full public disclosure”. Upadhyay said. Unlike mutual funds, which were subject to stringent public disclosure norms, AIFs and FPIs operate under opaque structures, raising risks of market manipulation, money laundering, and tax evasion, the petition said. Moitra said. Justice Nagarathna questioned why an MP wanted to “lend her name” and file a public interest petition under Article 32 of the Constitution. Moitra could have very well raised the issue on the floor of the House for discussion, the judge said The MP was concerned about the lakhs of innocent investors, Mr. Bhushan said. It would be a “very dangerous proposition” for the court to suggest that an MP could not file an Article 32 petition in public interest, he said. Besides, he said, discussions have hardly taken place in the House in the recent past. “She is also an investor,” Mr. Then this was hardly a petition in public interest, Justice Nagarathna said. Solicitor General Tushar Mehta, for SEBI, said that disclosures of investments of AIFs and FPIs were, in fact, made to the regulator, and detailed investigation was conducted when warranted.
A three-judge Bench headed by Justice B.V. The court asked the Centre and SEBI to consider the need for bringing out suitable transparency Regulations. “SEBI is the regulator. It has been granted certain powers. The situation in the country and in the international economy keeps on evolving,” Justice D.K. The court was hearing a writ petition filed by Member of Parliament Mahua Moitra, represented by advocates Prashant Bhushan and Cheryl D’Souza, who argued that the rapid expansion of AIFs and FPIs in financial markets had given rise to serious concerns over transparency. Mr. Ms. The senior counsel pointed to Ms. Moitra’s expertise as a former investment banker. As an MP, she is concerned about the fate of crores of people who are investing in the stock markets. She believes the opacity may lead to manipulation through AIFs and FPIs,” Mr. Bhushan submitted. The judge reminded the counsel that the court had allowed Ms. Mr.
