'Working on reforms to create a best-in-class experience for global investors': SEBI Chair Tuhin Kanta Pandey

Pandey indicated that the recently launched SWAGAT framework, a“diplomatic passport” for trusted, low-risk foreign institutions, may be expanded. Under consideration is a proposal to allow SWAGAT-recognised entities to invest through other routes permitted under FEMA without undergoing fresh compliance checks.

SEBI Chairman Tuhin Kanta Pandey on November 19 highlighted that the market regulator is working on a series of  reforms aimed at improving the experience of foreign portfolio investors (FPIs). Speaking at the Goldman Sachs 14th India CIO Conference, Pandey said the regulator is working on building a “best-in-class” entry and operating environment for global investors.

Pandey noted that the long-term relationship between India and FPIs has remained strong, with portfolio flows delivering a pre-dividend XIRR of 9.3% since 1992. FPIs today hold around 17% of India’s listed equity market, with total assets under custody reaching $876 billion as of September 2025. “Foreign investors remain central to our markets,” he said, adding that SEBI has been acting consistently on FPI feedback.

Going ahead, some of SEBI’s upcoming proposed reforms includes a complete digitisation of the FPI registration process, a move that could sharply compress onboarding timelines from months to mere days. The new system will be fully paperless, leveraging digital signatures and enhanced security measures to address data privacy considerations.

To improve service quality further, SEBI is working towards enabling a second registration platform, developed by CDSL. Once operational, it will operate alongside the current system, giving investors an alternative channel and injecting competition into a process long considered cumbersome by global funds.

Pandey indicated that the recently launched SWAGAT framework, a“diplomatic passport” for trusted, low-risk foreign institutions, may be expanded. Under consideration is a proposal to allow SWAGAT-recognised entities to invest through other routes permitted under FEMA without undergoing fresh compliance checks. The move could significantly reduce procedural overlap for some of the world’s largest sovereign, pension, and long-term funds.

SEBI is also examining whether FPIs should be allowed to net off trades executed on the same day instead of being required to give and take delivery for each transaction. Netting, if permitted, would ease operational friction for high-volume global investors and lower overall settlement costs.

Pandey added that they continue to focus on deepening India’s capital markets. SEBI is setting up a working group to comprehensively review short selling and the securities lending and borrowing (SLB) framework, with the aim of strengthening linkages between the cash and derivatives markets. The regulator is also committed to introducing a closing auction session to improve end-of-day price discovery, a long-standing demand of large institutional investors.

On the fixed-income side, Pandey said SEBI will push efforts to expand participation in the corporate bond market, supported by a retail awareness drive. The commodities market, particularly in both agri and non-agri segments, is also slated for development, with SEBI exploring ways to allow wider institutional participation without compromising on risk management.

Pandey added that SEBI remains “a guardian of trust” but also a facilitator of efficient capital formation. “We are committed to a risk-based regulatory approach that is consultative, transparent and facilitative,” he said.