MUMBAI: The markets watchdog Sebi has simplified the operational guidelines for onboarding low–risk foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs), along with compliance requirements, under the single window access system, streamlining compliance for foreign investors along with eased KYC norms.
The new provisions will come into effect from June 1, 2026, Sebi said Friday.
Under the new framework, an eligible Swagat-FI (single window automatic & generalised access for trusted foreign investors) applicant can apply for FVCI registration, along with FPI registration without submitting separate application forms or documents, if the same custodian and the designated depository participant (DDP) are appointed for both registrations, Sebi said Friday in two separate circulars.
Last month, Sebi had made it easier for low risk foreign investors to participate in the domestic securities market with the introduction of a single window access, a move aimed at simplifying compliance and enhancing the country's attractiveness as an investment destination.
The new framework provides easier investment access to low-risk foreign investors, enable a unified registration process across multiple investment routes and reduce repeated compliance and documentation for such entities.
Existing FVCIs that meet Swagar-FI eligibility can also convert to Swagat-FI status by applying through their DDP under the same condition, the circular said, adding the new system has also eased KYC renewals process.
Easing KYC renewal requirements for FVCIs, the new rules require them to renew their registration every 10 years, instead of five now, along with payment of fees and intimation of any changes in information. Further, the periodicity of KYC review has also been extended to 10 years.
The Sebi has also amended the FPI master circular to incorporate the Swagat-FI framework, whereby certain contribution-related restrictions do not apply to Swagat-FI FPIs, subject to specific conditions for resident Indian contributions through the liberalised remittance scheme (LRS).
The new framework defines eligible Swagat-FI FPIs to include government and government-related investors, regulated retail mutual funds, insurers investing proprietary funds, and pension funds, subject to prescribed safeguards. This means that not all FPIS can access this liberalized policy but only those with low risks.
The circular further said FPIs meeting the eligibility criteria may convert to Swagat-FI status by applying to their DDP. Additionally, depositories are required to enable a unified investment and accounting experience for these investors, allowing securities held as FPIs, FVCIs, or other eligible foreign investors to be maintained seamlessly.
For Swagat-FI FPIs, the registration validity has been extended to 10 years, and the periodic KYC review by custodians will also be conducted once every 10 years.