The Securities and Exchange Board of India (SEBI) has relaxed Know Your Customer (KYC) requirements for foreign portfolio investors (FPIs), extending the review period to eight years for specified categories. The regulator has also removed the requirement to submit a declaration about changes in previously furnished information at the time of registration continuance.
The changes are aimed at reducing compliance requirements and promoting ease of doing business, the market regulator said in a circular.
Under the existing framework, FPIs were required to undergo periodic KYC reviews annually or once every three years, depending on their jurisdiction, category and regulatory status. The revised framework extends the review period to eight years for eligible investors, while retaining a two-year cycle for certain categories.
Under the revised norms, Category I FPIs from non-high-risk jurisdictions will undergo KYC reviews once every eight years.
For Category I FPIs from high-risk jurisdictions, the eight-year review cycle will apply to those registered under Regulation 5(a)(i). Other Category I FPIs from high-risk jurisdictions will continue to undergo reviews every two years.
For Category II FPIs from non-high-risk jurisdictions, regulated entities will be subject to an eight-year review cycle, while other investors will undergo reviews every two years. Category II FPIs from high-risk jurisdictions will also continue with a two-year review cycle.
The review periodicity for government securities-focused FPIs (GS-FPIs) will remain linked to the KYC review requirements applicable to their respective bank accounts under Reserve Bank of India guidelines. The 10-year review cycle for SWAGAT-FI FPIs will also remain unchanged.
SEBI has also dispensed with the requirement relating to intimation of changes in previously furnished information at the time of registration continuance. This includes the requirement to submit a declaration confirming that there have been no changes in the information provided earlier.
Under the revised provisions, FPIs seeking to continue their registration for the subsequent three-year block, or 10 years in the case of SWAGAT-FI, will have to pay the applicable fees to their Designated Depository Participants (DDPs).
The regulator has specified that FPIs must pay the continuance fee at least 15 days before the expiry of their current registration validity to facilitate a smooth continuance process.
The circular also directs depositories, custodians and DDPs to make the necessary changes to their systems and processes and inform the relevant FPIs about the revised requirements.
“The provisions of this circular shall come into force with effect from December 01, 2026,” SEBI said.
The changes have been made through amendments to the SEBI Master Circular for FPIs dated May 30, 2024.