Sebi says there are no plans to regulate family agencies after reports that Spark speculation

The Regulator of India’s markets refused on Friday media reports that suggested that it was planning to bring family agencies under his regulatory effect. In a statement, the Sebi said that such reports were actually incorrect and clarified that it is not currently investigating or pursuing this issue.

The clarification came after Bloomberg reported earlier in the day that Sebi had started discussions about introducing supervision of family agencies, in particular that run by the billionaires of India.

The report said that the supervisor wanted more visibility in how these entities in public markets were investing and to ask for disclosures about assets, investment returns and structures.

Family agencies are investment firms set up by rich families to manage their assets. In the past two decades they have become an important force in the Indian markets – investing in startups, private equity and first public offers.

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

Although there is no specific regulation for family agencies in India, they often invest through registered entities such as alternative investment funds or non-bank financial companies. Regulators have followed different approaches worldwide. Singapore offers tax stimuli to large family agencies that meet minimal asset thresholds, while in Hong Kong Multi-Family officials often need licenses. The Bloomberg report had suggested that Sebi was concerned about the scale and influence of family agencies in the public markets and even searched for feedback from some of the largest groups earlier this year. Observers in industry argued that strict supervision could help reduce risks such as conflicts of interest and prior knowledge trade.

However, Sebi’s refusal indicates that such a framework is not on the cards for the time being. In recent years, the supervisor has focused on the tightening of standards for investment funds, alternative investment funds and foreign portfolio buggers, but family agencies have largely remained outside its Rulebook.

India is the home of some of the world’s richest business families, including Mukesh Ambani and Gautam Adani, whose fortunes come across dozens of billions of dollars.