Sebi eases compliance norms for FPIs investing only in govt securities
The move is aimed at streamlining procedures and attracting more long-term overseas investments in the sovereign debt market.
Markets regulator Sebi on Wednesday said foreign portfolio investors who put money only in government securities under the fully accessible route will not be required to furnish investor group details.
Such investors will also be exempted from certain disclosure and reporting requirements applicable to regular foreign portfolio investors (FPIs), the regulator said in a circular.
The move is aimed at streamlining procedures and attracting more long-term overseas investments in the sovereign debt market.
Sebi said the amendments to the FPI framework were carried out in August this year to simplify compliance for this category of investors. Accordingly, the master circular for FPIs has been modified to reflect the changes.
Under the new framework, FPIs investing only in government securities (GS-FPIs), will just need to pay fees to their DDPs to continue with registration for the subsequent block of three years and will not be required to submit periodic declarations about changes in information unless there are material changes.
"In case of no change in information, FPIs will give declaration that there is no change in the information, as previously furnished. However, requirement of giving such declaration will not be applicable to GS-FPIs," the regulator said.
Investments by resident Indian individuals in GS-FPIs will be permitted only through the Liberalised Remittance Scheme (LRS) of the RBI, and such participation will be allowed only in global funds whose Indian exposure is below 50%, Sebi said.
Sebi has also allowed both new and existing FPIs to transition into GS-FPIs by making appropriate declarations. Similarly, GS-FPIs will be permitted to switch back to regular FPI status by complying with the additional requirements.
The regulator has also mandated that GS-FPIs must inform all material changes in their structure or operations within 30 days, along with supporting documents wherever applicable.
Further, the periodicity of Know Your Customer (KYC) review for GS-FPIs will now be harmonised with that of their bank accounts, as prescribed by the Reserve Bank of India.
The provisions of the circular will come into effect from February 8, 2026, Sebi said, adding that custodians and designated depository participants standards setting forum in consultation with the regulator will have to make necessary system changes to implement the new framework.