SEBI approves SWAGAT-FI framework to simplify access for trusted foreign investors

At the post-board meeting press conference, Pandey was asked if exchanges faced a conflict between maximising trading volumes and disciplining errant participants.

In a major step towards enhancing ease of doing business for foreign investors in India’s capital markets, the Securities and Exchange Board of India (Sebi) has approved the introduction of SWAGAT-FI – Single Window Automatic and Generalised Access for Trusted Foreign Investors.

"The Board approved the introduction of the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework for FPIs and Foreign Venture Capital Investors (FVCIs)," stated the SEBI release while adding that this will facilitate easier investment access for objectively identified and verifiably low-risk foreign investors.

It will also enable a unified registration process across multiple investment routes for these entities while minimising repeated compliance requirements and documentation for such investors, as per the SEBI release.

The framework is designed to simplify onboarding, reduce compliance burdens, and make market access easier for low-risk foreign investors such as sovereign wealth funds, pension funds, multilateral organizations, central banks, regulated retail funds, and insurance companies. In the simpler terms it will act like a diplomatic passport to invest more easily in Indian markets.

Meanwhile, foreign investors eligible for identification as SWAGAT-FIs include government and government-related investors, such as central banks, sovereign wealth funds (SWFs), international or multilateral organizations/agencies, and entities controlled or at least 75% owned (directly or indirectly) by such entities; appropriately regulated Public Retail Funds (PRFs) with diversified investors and investments, managed independently and regulated by their home jurisdiction, including mutual funds and unit trusts open to retail investors, operating as blind pools with diversified investments and independent investment managers, insurance companies investing proprietary funds without segregated portfolios and pension funds regulated in their home jurisdictions.

Further, relaxations being offered to eligible investors include option to register as FVCI without additional documentation, if already registered or applying as FPIs; exemption from the FVCI Regulation requiring at least 66% investment in eligible unlisted assets; registration validity, KYC review, and fee payment ($2,500) to be applicable for a 10-year block instead of the standard 3-year cycle; exemption from the 50% aggregate contribution cap applicable to Non-Resident Indians, Overseas Citizens of India, and Resident Indian individuals in FPIs and option to use a single demat account for holding all securities acquired as FPI, FVCI, or foreign investor units, with systems in place to ensure proper tagging and identification across channels.