Hedge funds are threatening to pull investments from India because of controversial new rules introduced in response to last year’s short seller attack on Adani, one of the country’s biggest companies.
The rules, from Indian markets regulator Sebi, require big foreign investors — including hedge funds — betting on Indian stocks to reveal all their end investors, something the funds argue would create “severe practical difficulties” for funds and mark a stark departure from international practice.
Large global banks also feared they would be caught by an earlier version of the rules. Banks including JPMorgan, Goldman Sachs, BNP Paribas, Société Générale and UBS wrote to Sebi in January warning there were “material legal and regulatory reasons” why it would be “very difficult” to supply investors’ information to the regulator. The banks declined to comment.