Sebi says no plans to regulate family offices after reports spark speculation

Synopsis

Family offices are investment firms set up by wealthy families to manage their assets. Over the past two decades, they have become a significant force in India’s markets—investing in startups, private equity, and initial public offerings.

India’s markets regulator on Friday denied media reports suggesting it was planning to bring family offices under its regulatory ambit. In a statement, the Sebi said such reports were factually incorrect and clarified that it is not examining or pursuing this matter at present.

The clarification came after Bloomberg reported earlier during the day that Sebi had begun discussions on introducing oversight of family offices, particularly those run by India’s billionaires.

The report said the regulator wanted greater visibility into how these entities invest in public markets and could ask for disclosures on assets, investment returns, and structures.

Family offices are investment firms set up by wealthy families to manage their assets. Over the past two decades, they have become a significant force in India’s markets—investing in startups, private equity, and initial public offerings.

Many of them, such as Premji Invest of Wipro founder Azim Premji, Bajaj Holdings of the Bajaj family, and investment arms of tech billionaires Shiv Nadar and Narayana Murthy, are regular participants in public offerings as anchor investors.

While there is no specific regulation for family offices in India, they often invest through registered entities like alternative investment funds or non-banking finance companies.

Regulators globally have taken different approaches. Singapore offers tax incentives to large family offices that meet minimum asset thresholds, while in Hong Kong, multi-family offices often require licenses.

Bloomberg’s report had suggested that Sebi was concerned about the scale and influence of family offices in public markets and had even sought feedback from some of the largest groups earlier this year. Industry observers argued that tighter oversight could help reduce risks such as conflicts of interest and insider trading.

However, Sebi’s denial indicates that such a framework is not on the cards for now. The regulator has in recent years focused on tightening norms for mutual funds, alternative investment funds, and foreign portfolio investors, but family offices have remained largely outside its rulebook.

India is home to some of the world’s richest business families, including Mukesh Ambani and Gautam Adani, whose fortunes run into tens of billions of dollars.

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