India’s capital markets regulator, the Securities and Exchange Board of India (Sebi), on Friday, 5 December 2025, proposed a comprehensive overhaul of the Foreign Portfolio Investor (FPI) framework, with aims to streamline the registration process, reported the news agency PTI.

Sebi aims to enhance the ease of doing business and simplifying compliance requirements for global investors, according to the consultation paper. As part of this effort, Sebi has suggested a complete update and simplification of the Master Circular for FPIs and Designated Depository Participants (DDPs).

The revised circular consolidates all rules, procedures, and circulars issued since May 2024 into a single, clearer document.

What does the consultation paper propose?

As per the consultation paper, Sebi has proposed introducing a simplified registration process for certain categories of FPIs, including funds managed by an investment manager already registered as an FPI, sub-funds of an existing master fund, segregated share classes, and insurance schemes linked to an already registered entity.

Under the proposal, these applicants may either complete the entire Common Application Form (CAF) or use an abridged version that requires filling only the information unique to them, while the rest is auto-populated.

Custodians should obtain explicit consent to rely on existing information and ensure that unchanged details remain intact. Once the application is submitted, the custodian updates the CAF module and the DDP issues the Sebi-generated registration certificate after verifying eligibility, the regulator suggested.

The DDP should also conduct due-diligence, seek clarifications for incomplete forms, verify PAN details through the CAF portal and undertake checks related to the applicant’s country of residence, regulatory status and other eligibility norms.

In addition to simplifying registration, Sebi has proposed clearer rules around KYC and beneficial-owner identification. The updated circular specifies requirements for NRIs, OCIs and resident Indians, and introduces dedicated frameworks for FPIs that exclusively invest in government securities, IFSC (based FPIs, banks, insurance entities, pension funds and funds with multiple investment managers).

Also, the regulator has detailed procedures for renewal, surrender, transition, and reclassification of registrations, while also establishing uniform compliance and reporting standards for custodians and DDPs.

Sebi has sought public comments till 26 December 2025 on the proposals.

(With inputs from the news agency PTI)