Sebi engages stakeholders to ease KYC for FPIs, highlights market reforms and India’s growth story

Sebi engages stakeholders to Ease KYC for FPIs, highlights market reforms and India’s growth story

The Securities and Exchange Board of India (Sebi) is actively engaging with stakeholders to simplify Know Your Customer (KYC) norms for Foreign Portfolio Investors (FPIs), a move aimed at easing access for global investors to Indian capital markets. Sebi Chairman Tuhin Kanta Pandey stated, “To facilitate the ease of investments by foreign investors in India, we are engaging with various stakeholders to streamline the KYC norms across regulators. This will simplify onboarding and ensure seamless participation of FPIs in India’s financial ecosystem.” He made these remarks at an event organised by the Indo-American Chamber of Commerce.

Pandey outlined the steps Sebi has undertaken to deepen and streamline the primary market. IPO listing timelines have been reduced from T+6 to T+3 working days, enabling companies to access funds faster and investors to receive quicker liquidity. Rights issues have been fast-tracked, now requiring completion within 23 working days of board approval, a change expected to streamline fundraising and reduce procedural delays. Sebi has also eased Minimum Public Offer norms under the Securities Contracts (Regulation) Rules, allowing large issuers to list with lower initial public float while providing extended time to achieve the mandated 25% Minimum Public Shareholding.

He said, the anchor investor framework has been strengthened by merging the previous two categories into a single allocation pool for up to Rs 250 crore, with 15 additional investors permitted for every extra ₹250 crore. Overall anchor reservation has increased from one-third to 40%, with one-third reserved for domestic mutual funds and the remainder for insurers and pension funds. These measures are expected to broaden anchor investor participation and facilitate involvement from large FPIs operating multiple funds.

On the asset management front, Sebi has introduced the Mutual Funds Lite framework for passively managed schemes, simplifying compliance and encouraging innovation. To bridge the gap between mutual funds and portfolio management services, Specialized Investment Funds have been launched, offering hybrid structures that combine regulatory oversight with operational flexibility. Sebi has reclassified Real Estate Investment Trusts (REITs) as equity for mutual fund investments and broadened the definition of Strategic Investor for REITs and Infrastructure Investment Trusts, for wider institutional participation. For Alternative Investment Funds, the minimum investment in Large Value Funds has been reduced from Rs 70 crore to Rs 25 crore, and Category I and II AIFs can now establish Co-Investment Vehicles alongside the existing portfolio management services route, facilitating co-investments by accredited investors.

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Pandey also highlighted measures specifically aimed at foreign investors. Sebi has launched the SWAGAT–FIs framework, providing eligible FPIs with single-window access, reduced documentation, and simplified compliance. Investors focused solely on government securities are now exempt from certain disclosure and reporting obligations. To further streamline onboarding, Sebi has introduced simplified registration forms, a standard operating procedure for registration, and a tracker portal that allows applicants to monitor the status of their registration in real time. A dedicated FPI outreach cell has been established, and the India Market Access portal serves as a consolidated platform providing regulatory and procedural information to current and prospective FPIs. These steps are expected to facilitate ease of doing business and enhance confidence among both domestic and foreign investors.

Beyond regulatory reforms, Pandey emphasized India’s strong economic growth trajectory, noting that over the past three years, the country has averaged quarterly GDP growth of 7.8%, making it the fourth-largest economy in the world and poised to enter the top three in the near future. Government-led reforms, including the simplification of GST, the introduction of the New Income Tax Act, 2025, the launch of the National Single Window System portal, and record public investment in infrastructure, have created an enabling environment for investment, reduced costs, and enhanced global competitiveness. These measures, he said, are boosting investor confidence, strengthening domestic consumption, and accelerating capital formation.