SEBI Settles Jetha Global Master Fund Violations: FPI Breaches Lead to ₹78 Lakh Settlement Order

SEBI Settles Jetha Global Master Fund Violations: FPI Breaches Lead to ₹78 Lakh Settlement Order​

Compliance Headaches: SEBI Finalizes Proceedings Against Jetha Global Master Fund​

The Securities and Exchange Board of India (SEBI) has issued a comprehensive Settlement Order regarding the Jetha Global Master Fund, concluding enforcement proceedings related to multiple violations under the Foreign Portfolio Investor (FPI) regulations. The settlement addresses breaches concerning FPI status, material changes in ownership, and improper rectification procedures as defined by SEBI's regulatory framework.

The Applicant filed a voluntary settlement application, proposing to settle without admitting or denying the findings of facts and conclusions of law regarding the violations. These violations spanned several areas, including regulations under the Foreign Portfolio Investors (FPI) Regulations, 2019, and associated Master Circulars issued by SEBI in May and June 2024.

Anatomy of the Violations: NRI Control Breach and Reporting Delays​

The investigation highlighted significant lapses in compliance concerning Jetha Global Master Fund’s FPI status. The fund was registered as an FPI since October 23, 2021. A critical lapse occurred when the fund transitioned to Non-Resident Indian (NRI) control between March 14, 2025, and October 08, 2025.

This failure to comply with necessary regulations constituted a Type 1 material change. The breach became effective on March 14, 2025. However, the fund intimated this change to its Designated Depository Participant (DDP) only on September 29, 2025, resulting in a delay exceeding six months beyond the prescribed timeline.

Furthermore, a Type 2 material change concerning a shift in beneficial ownership occurred on April 29, 2025. The fund notified this second change to its DDP on September 19, 2025 and submitted supporting documents on October 16, 2025, both surpassing the mandatory 30-day reporting period.

Misconduct and Regulatory Non-Compliance Under FPI Rules​

The settlement findings extended to observations regarding temporary breach protocols under the FPI Regulations. Specifically, SEBI noted that Jetha Global Master Fund remained in breach of the NRI control limit from March 14, 2025, until October 08, 2025.

Regulation required a rectification within 90 days, which expired on June 12, 2025. The Applicant continued making fresh purchases even after this period, continuing until the DDP blocked its account on September 29, 2025. This inaction was found to be non-compliant with regulations governing FPI conduct and reporting standards.

The SEBI order further noted that an initial declaration made by the fund on March 10, 2025, regarding the proposed change was incorrect, resulting in violations of compliance requirements specified in the Third Schedule of the FPI Regulations.

From Internal Committee to Final Order​

Following the receipt of the settlement application, SEBI's Internal Committee held a deliberation meeting on March 11, 2026. The committee recommended a settlement amount of ₹78,00,000 (Rupees Seventy-Eight Lakhs only) as computed under Schedule II and Regulation 10 of the Settlement Regulations.

The Applicant formally proposed this revised settlement term in a letter dated March 31, 2026. The High Powered Advisory Committee (HPAC) reviewed these terms on May 06, 2026, before the matter was approved by the Panel of Whole Time Members on June 01, 2026.

After issuing a Notice of Demand, the Applicant informed SEBI via email dated July 02, 2026, regarding the remittance of the amount, which has since been confirmed and credited by SEBI.

Terms of Settlement Order​

Exercising powers under Section 15JB read with Section 19 of the Securities and Exchange Board of India Act, 1992, SEBI finalized the settlement order. The core terms dictate that SEBI shall not initiate any enforcement action against Jetha Global Master Fund for the violations detailed in the proceedings.

However, the Settlement Order includes a reservation clause. This means that passing this Order is without prejudice to SEBI's right to take appropriate further action if it subsequently finds any of the following:
1. Any representation made by the Applicant in these settlement proceedings is found untrue.
2. The Applicant breaches any clauses or conditions of undertakings filed during the settlement process.
3. The Applicant fails to pay the difference due to any discrepancy encountered while arriving at the settlement terms.

The Settlement Order comes into force immediately, and a copy has been dispatched for publication on the SEBI website.