In a significant move to boost ease of doing business and attract more foreign capital, the Securities and Exchange Board of India (SEBI) has substantially relaxed Know Your Customer (KYC) norms for foreign portfolio investors (FPIs).
This decision, announced in a recent circular, aims to reduce paperwork and streamline processes for international funds looking to invest in India.
Under the revised framework, Category I FPIs from non-high-risk jurisdictions will now undergo KYC reviews only once every eight years, a substantial extension from the previous one or three-year cycles. Even certain Category I FPIs from high-risk jurisdictions will benefit from this extended eight-year review, while others in this category will face reviews every two years. Similarly, regulated Category II FPIs from non-high-risk jurisdictions will also enjoy an eight-year review cycle.
SEBI has also removed the requirement for FPIs to notify changes in previously submitted information or provide a ‘no-change’ declaration during their registration continuance. Instead, they will simply pay applicable fees to their Designated Depository Participants (DDPs) 15 days prior to their registration validity expiry. These new provisions are set to take effect from December 1, 2026, offering long-term stability and predictability for foreign investors and reflecting India’s commitment to fostering a more investor-friendly environment.