Sebi clears single window for low-risk foreign investors

Mumbai: The Securities and Exchange Board of India (Sebi) on Friday approved a major reform to simplify foreign participation in Indian securities markets by introducing a unified access framework for low-risk investors.

The initiative, called Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI), is designed to streamline compliance, reduce duplication, and enhance India’s appeal as an investment destination.

Sebi Chairman Tuhin Kanta Pandey said the new framework will allow simplified entry for entities such as sovereign wealth funds, central banks, multilateral institutions, pension funds, regulated insurers, and public retail funds. These investors, considered objectively low-risk, contribute over 70 per cent of total FPI assets under custody, which stood at Rs 80.83 lakh crore as of June 30, 2025, across 11,913 registered FPIs.

The SWAGAT-FI framework will let eligible investors register simultaneously as Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs) without additional documentation. This dual status will allow investments both in listed securities and debt instruments as FPIs, and in unlisted companies, startups, and specified sectors as FVCIs.

To improve compliance ease, Sebi extended the periodicity for registration continuance, including fee payments and KYC reviews, to 10 years from the current three- or five-year cycle. Investors can also opt for a single demat account to hold securities acquired across categories, with depositories tagging investments to ensure regulatory oversight. Additionally, the current restriction that caps NRI, OCI, and resident Indian individual contributions to 50 per cent in FPIs will no longer apply to SWAGAT-FIs.

Sebi has given a six-month window to fully implement the framework after necessary system modifications.

In another step, Sebi allowed retail schemes operating from International Financial Services Centres (IFSCs) with resident Indian sponsors or managers to register as FPIs, aligning them with Alternative Investment Funds already enjoying this status. To remove inconsistencies between Sebi and IFSCA regulations, the board capped sponsor contributions by resident Indian non-individuals in IFSC funds at 10 per cent of corpus or assets under management for retail schemes.

Further, Sebi launched a new digital platform, India Market Access (www.indiamarketaccess.in), to serve as a one-stop source of regulatory and procedural information

for FPIs.