SEBI Fast-Tracks FPI Onboarding Towards Five-Day Window and Readies Paper on Compliance Norms — October 28, 2026

The Securities and Exchange Board of India (SEBI) is stepping up efforts to dismantle operational bottlenecks for foreign capital, confirming substantial progress in compressing onboarding timelines for Foreign Portfolio Investors (FPIs) while preparing a fresh consultation paper to rationalise ongoing compliance requirements.

The regulatory initiative aims to transform what was once a month-long, paper-intensive registration process into a seamless, digital-first journey. In pilot rollouts conducted in coordination with custodians, depositories, and designated depository participants (DDPs), onboarding timelines have already been compressed to approximately five business days for select low-risk jurisdictions.

Slashing Onboarding Bottlenecks

Historically, global institutional investors looking to allocate capital into Indian equities and debt faced multi-layered procedural hurdles across multiple regulators, including SEBI, the Reserve Bank of India (RBI), and the Central Board of Direct Taxes (CBDT). The process required physical documentation, consularisation or apostillisation of legal instruments, complex Permanent Account Number (PAN) applications, and extensive Know Your Customer (KYC) documentation.

To address these pain points, SEBI and the RBI have introduced several structural reforms:

• Digital Powers of Attorney: The regulator permitted the execution of Power of Attorney (PoA) documents via digital signatures, completely eliminating traditional notarisation, apostillisation, and consularisation requirements.
• Simplified PAN Verification: In coordination with the CBDT, SEBI resolved PAN application frictions under revised tax reporting rules, allowing FPIs to use authorised signatory data from the Common Application Form (CAF) without redundant supporting records.
• Unified Digital Platforms: The revamp of the National Securities Depository Limited (NSDL) front end and the operationalisation of the single-window India Market Access portal allow global funds to track approvals centrally.
• Fast-Track Depository Pilots: Institutional custodians, including global banks such as Citi, have deployed automated eFPI workflows to register regulated public funds from jurisdictions like the US, Ireland, and Luxembourg within five trading days.

Consultation Paper to Ease Compliance Burdens

Parallel to entry-level simplifications, SEBI is set to release a consultation paper designed to rationalise post-registration compliance and reporting mandates.

A central objective of the review is recalibrating the granular ultimate beneficial ownership (UBO) disclosure rules that were mandated for funds holding concentrated equity exposure in single corporate groups or exceeding specific asset thresholds. While the regulator remains committed to preventing the circumvention of minimum public shareholding norms and takeover regulations, market feedback indicated that overly rigid reporting created unnecessary friction for legitimate global asset managers.

The forthcoming proposals are expected to consider exempting FPIs with holdings below certain equity thresholds or those invested in professionally managed companies without identifiable promoters, as well as refining compliance requirements for government-backed and sovereign funds.

Impact on Indian Markets and Capital Flows

The regulatory focus on making Indian capital markets frictionless comes at a critical juncture. With emerging markets competing aggressively for long-term global liquidity, administrative delays and high compliance overhead have often discouraged foreign funds from initiating or expanding exposure to Indian securities.

Speaking on the regulator’s policy approach, SEBI Chairman Tuhin Kanta Pandey noted that while market regulators cannot dictate global asset allocation decisions, they are determined to make market entry and ongoing compliance proportionate to risk, fast, and digitally frictionless.

For domestic equity indices and the expanding corporate bond segment, establishing an efficient pipeline for foreign institutional capital provides essential institutional depth, dampens extreme volatility, and strengthens overall market resilience.