SEBI mulling direct market access to foreigners: Report

SEBI

The Securities and Exchange Board of India (SEBI) recently discussed a proposal to allow overseas individuals to invest directly into India's stock market, the Economic Times has reported.

At a meeting last week, the market regulator was exploring various ways to increase the ownership base for local risk assets, the report added.

Foreigners can invest in India's primary and secondary markets only through the foreign portfolio investor (FPI) route.

In case overseas individuals are allowed to invest directly, ultra-high net worth people may rush to buy Indian stocks, bypassing the compulsory intermediary fund structure, the report said.

The discussions are still at a preliminary stage and any change in investment rules will require approvals of the finance ministry and the Reserve Bank of India (RBI).

Moneycontrol couldn't verify the report independently.

Deloitte India partner Rajesh H Gandhi told ET that foreign individuals can invest in Indian stocks through the Category II FPI route.

If investment rules are changed, then foreign investors outside the FPI framework will be able to directly invest in the market by opening a brokerage account, easing compliance requirements and increasing investor base, he said.

Category II FPIs include firms which can invest in India after registering with SEBI.

SEBI chief Tuhin Kanta Pandey, who on April 1 completes a month in the job, recently said India needed both, domestic and foreign investors, to support growth.

Speaking at Moneycontrol Global Wealth Summit 2025, Pandey said, "We will be happy to engage with FPIs and AIF industry participants to address their difficulties and further rationalise regulations to promote ease of operation."

Indian market has fallen sharply from their September peaks in recent months, with FPIs leading the selloff.