Description

SEBI introduces SWAGAT-FI framework to simplify on-boarding and ongoing compliances for eligible foreign portfolio investors including government entities, regulated mutual funds, insurance companies, and pension funds.

Summary

SEBI has introduced the Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework through amendments to the FPI Regulations. This framework simplifies registration and compliance requirements for eligible foreign portfolio investors. The circular modifies the FPI Master Circular to accommodate SWAGAT-FI FPIs, allowing resident Indian contributions through LRS in global funds with less than 50% Indian exposure, and enables unified account management across FPI, FVCI, and other foreign investment categories.

Key Points

  • SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2025 notified on December 03, 2025
  • Four categories eligible for SWAGAT-FI FPI registration: government/government-related investors, appropriately regulated mutual funds/unit trusts, insurance companies, and pension funds
  • Mutual funds must operate as blind pools with diversified investors and independent investment managers
  • Insurance companies must invest own funds without segregated portfolios
  • Resident Indian contributions allowed through RBI’s LRS in global funds with less than 50% Indian exposure
  • SWAGAT-FI applicants must be from identified jurisdictions regulated by identified statutory authorities
  • Existing FPIs meeting requirements can convert to SWAGAT-FI status by applying to their DDP
  • Depositories must facilitate unified accounting for all securities across FPI, FVCI, and other foreign investment categories
  • List of identified jurisdictions and regulatory bodies to be specified by CDSSF in consultation with SEBI

Regulatory Changes

Amendment to Para 1 of Part A: New sub-para (ii)(db) inserted exempting SWAGAT-FI FPIs from certain provisions, subject to resident Indian contributions being made through LRS in global funds with less than 50% Indian exposure.

Amendment to Para 2 of Part A: New sub-para (vi) inserted defining SWAGAT-FI eligibility criteria, conversion process, and unified account management requirements.

Amendment to Para 4 of Part A: Sub-para (i) modified regarding continuation of FPI registration (content truncated in source document).

Eligibility Criteria:

  1. Government or government-related investors per Regulation 5(a)(i)
  2. Regulated mutual funds/unit trusts open to retail investors without accredited investor requirements, operating as blind pools with independent investment managers
  3. Regulated insurance companies investing own funds without segregated portfolios
  4. Regulated pension funds

Compliance Requirements

For Eligible FPIs:

  • Must be set up in identified jurisdiction
  • Must be regulated by identified statutory authority/regulatory body in such jurisdiction
  • Existing FPIs seeking conversion must apply to their Designated Depository Participant (DDP)
  • Resident Indian contributions must comply with RBI LRS requirements
  • Must invest in global funds with less than 50% Indian exposure when resident Indians contribute

For DDPs and Custodians:

  • CDSSF must frame and adopt Standard Operating Procedure in consultation with SEBI
  • Must specify list of identified jurisdictions and regulatory bodies
  • Must facilitate conversion applications from existing FPIs

For Depositories:

  • Must facilitate single unified accounting/investing experience for SWAGAT-FI
  • Must enable maintenance of all securities acquired as FPI, FVCI, or foreign investor in investment vehicle units in unified manner

Applicable to:

  • Foreign Portfolio Investors (FPIs)
  • Designated Depository Participants (DDPs) and Custodians
  • Depositories
  • Stock Exchanges and Clearing Corporations

Important Dates

  • December 03, 2025: SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2025 notified
  • January 16, 2026: Circular issued (Circular No. HO/19/34/14(5)2025-AFD-POD2/I/2703/2026)
  • Effective Date: Modifications to FPI Master Circular effective from circular date

Impact Assessment

Market Impact: The SWAGAT-FI framework is expected to attract increased foreign portfolio investment by simplifying the registration and compliance process for trusted institutional investors from recognized jurisdictions. This should enhance market liquidity and depth.

Operational Impact:

  • Streamlined on-boarding process for eligible foreign investors
  • Reduced compliance burden for government entities, regulated funds, insurance companies, and pension funds
  • Unified account management across investment categories eliminates operational complexity
  • DDPs and depositories must implement technical infrastructure for unified account management
  • CDSSF must develop comprehensive SOPs defining identified jurisdictions and regulatory bodies

Investor Impact:

  • Eligible foreign investors benefit from simplified registration and ongoing compliance
  • Resident Indians can participate in global funds through LRS with specified limits
  • Existing FPIs can opt-in to SWAGAT-FI status through conversion process
  • Enhanced flexibility for portfolio management across investment categories

Regulatory Impact: Aligns India’s FPI framework with international best practices while maintaining regulatory oversight through jurisdiction and regulator identification requirements. Balances ease of doing business with investor protection.

Impact Justification

Major regulatory framework introduction affecting FPI registration process and compliance requirements, enabling unified account management for foreign investors