Sebi Eases FPI Onboarding for Best-in-Class Experience

New Delhi, Nov 19 (PTI) Markets regulator Sebi is actively working towards the end-to-end digitisation of the Foreign Portfolio Investor (FPI) registration process, leveraging digital signatures to make it entirely paperless, chairman Tuhin Kanta Pandey said on Wednesday.

The aim, he noted, is to sharply cut the registration timeline from months to just a few days, while ensuring that any data-privacy concerns are suitably addressed.

To further enhance service quality, Sebi is also enabling a second platform for FPI registrations, currently being developed by CDSL, he added.

This initiative comes at a time when foreign investors continue to play a key role in Indian markets, even as domestic participation grows.

Addressing Goldman Sachs' 14th India CIO Conference, Pandey said foreign investors remain central to India's capital markets. Since India opened its doors to FPIs in 1992, portfolio flows have delivered an XIRR (Extended Internal Rate of Return (XIRR) of 9.3 per cent.

As of September 2025, FPIs manage assets worth USD 876 billion and hold around 17 per cent of the stake in listed companies. XIRR refers to an annualised return rate on an investment.

Going forward, Pandey said that Sebi is considering ways to make market access even smoother. Under the proposed framework, SWAGAT-FIs (Single Window Automatic & Generalised Access for Trusted Foreign Investors) may soon be allowed to invest through other routes prescribed under FEMA without undergoing additional approvals.

The Sebi chief said that the regulator is also examining whether netting of settlements for trades executed on the same day can be permitted for FPIs, an operational change that could reduce costs, as FPIs currently need to give and take delivery for every trade.

He added that Sebi is working closely with the RBI and the Ministry of Finance to advance these reforms.

According to him, Sebi's next phase of reforms is designed to create a best-in-class experience for global investors. Over recent months, the regulator has acted on continuous FPI feedback. The registration module has been revamped to make it faster and more user-friendly; a 'light-touch' regulatory framework has been introduced for FPIs investing solely in government securities; and the SWAGAT framework will serve as a 'diplomatic passport,' offering trusted, low-risk investors simpler access to Indian markets.

Additionally, the anchor investor framework in IPOs has been modified to make participation easier for large FPIs operating multiple funds, while also widening the anchor pool to include long-term investors such as life insurance and pension funds.

Sebi has also strengthened the ecosystem with tools like the India Market Access portal, which consolidates all regulatory and procedural information in one place, and by comprehensively reviewing the block window framework to deepen market liquidity.

Apart from these measures, Sebi is also turning its attention to broadening market depth on the domestic side. To deepen the cash equities market and spur capital formation, a working group is being set up to review the short selling and Securities Lending and Borrowing frameworks, and to improve linkages between the cash and derivatives markets, Pandey said.

The regulator is further committed to introducing a closing auction session, in consultation with stakeholders, for better price discovery and market efficiency, he added.