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The Securities and Exchange Board of India ('SEBI'), through a notification1 dated 1 December 2025 has made certain significant amendments to the SEBI (Foreign Portfolio Investors) Regulations, 2019.
The amendment regulations aim at easing the regulatory requirements for low-risk foreign investors and standardizing norms for funds based in the International Financial Services Centre ('IFSC'). This initiative is expected to make India's capital markets more attractive to stable and trusted foreign capital investors while reducing the compliance burdens. These amendments shall come into effect from the 30 May 2026. The key highlights of the amendment regulations have been outlined below -
KEY HIGHLIGHTS
- Introduction of the SWAGAT-FI framework: The
definition of 'Single Window Automatic and Generalised Access
for Trusted Foreign Investors (SWAGAT-FI)' has
been added. The framework provides for streamlined registration
process and compliances for trusted and low-risk foreign investors
such as :
- Government & government-related investors;
- Public retail funds
- Registration fees for SWAGAT-FI: A SWAGAT-FI shall be required to pay registration fees in advance for a block of 10 years as compared to the existing 3 year block period
- Constituents of FPI :
- Mutual funds registered under the SEBI (Mutual Fund) Regulations, 1996, are now permitted to become constituents in the FPI, subject to prescribed conditions
- Resident Indians (other than individuals) are also now permitted to become constituents in a 'Retail scheme' established in IFSC provided such resident Indians are either the fund management entity or its associate
- Changes in contribution threshold :
The threshold for contribution by resident Indians (other than individuals) in an FPI, has been increased as below:- 10% of the corpus of the FPI
applicant in case the applicant is an Alternative Investment Fund
('AIF')
[Previously, Category I and II AIFs were subject to a limit of 2.5% of the corpus or USD 750,000, whichever is lower, and Category III AIFs were subject to a limit of 5% of corpus or USD 1.5 million, whichever is lower] - 10% of the Assets under Management in case the applicant is a Retail Scheme
- 10% of the corpus of the FPI
applicant in case the applicant is an Alternative Investment Fund
('AIF')
AURTUS COMMENTS
These amendments aim to ease access to Indian markets for trusted foreign investors, broaden eligible entities, and simplify compliance and fee structures, while aligning with IFSC Authority regulations
Footnote
1 [No.SEBI/LAD-NRO/GN/2025/279
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