Description

SEBI introduces SWAGAT-FI framework to simplify on-boarding and ongoing compliances for eligible Foreign Portfolio Investors including government investors, regulated mutual funds, insurance companies, and pension funds from identified jurisdictions.

Summary

SEBI has introduced the Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework through amendments to the FPI Master Circular. This framework simplifies the on-boarding process and ongoing compliance requirements for eligible Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs). The SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2025 notified on December 03, 2025 provides the regulatory basis for this framework.

Key Points

  • SWAGAT-FI framework allows simplified registration and compliance for eligible foreign investors
  • Resident Indian individual contributions to SWAGAT-FI FPIs must be through LRS and limited to global funds with less than 50% Indian exposure
  • Eligible entities include government/government-related investors, appropriately regulated retail mutual funds/unit trusts, insurance companies investing own funds, and pension funds
  • Applicants must be from identified jurisdictions and regulated by identified statutory authorities (list to be specified by CDSSF in consultation with SEBI)
  • Retail mutual funds must operate as blind pools with diversified investors and independent investment managers
  • Existing FPIs meeting SWAGAT-FI requirements can convert by applying to their Designated Depository Participant (DDP)
  • Depositories will facilitate unified accounting for SWAGAT-FI investors across FPI, FVCI and other foreign investor categories

Regulatory Changes

The FPI Master Circular has been modified with three key amendments:

  1. Para 1 of Part A - New sub-para (db): Exempts SWAGAT-FI FPIs from certain contribution restrictions, but mandates that resident Indian individual contributions must be made through RBI’s Liberalised Remittance Scheme (LRS) and limited to global funds with Indian exposure below 50%

  2. Para 2 of Part A - New sub-para (vi): Establishes comprehensive eligibility criteria for SWAGAT-FI FPI registration, including specific requirements for different investor categories and jurisdictional requirements

  3. Para 4 of Part A - Sub-para (i) modification: Updates requirements for FPIs wishing to continue their registration (content truncated in source document)

Compliance Requirements

For Eligible FPIs:

  • Government or government-related investors under Regulation 5(a)(i) of FPI Regulations, 2019
  • Appropriately regulated mutual funds/unit trusts that are:
    • Open for retail subscription without specific investor type requirements
    • Operating as blind pools with diversified investors and investments
    • Having independent investment managers without contributor control over operations
  • Appropriately regulated insurance companies investing own funds without segregated portfolios
  • Appropriately regulated pension funds
  • Must be established in identified jurisdictions and regulated by identified statutory authorities

For DDPs and Custodians:

  • Accept applications from eligible FPIs for SWAGAT-FI conversion
  • CDSSF to frame and adopt Standard Operating Procedures specifying identified jurisdictions and regulatory bodies in consultation with SEBI

For Depositories:

  • Facilitate single unified accounting/investing experience for SWAGAT-FI investors
  • Enable maintenance of all securities acquired as FPI, FVCI or foreign investor in unified manner

Important Dates

  • December 03, 2025: SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2025 notified
  • January 16, 2026: Circular issued with modifications to FPI Master Circular
  • Effective immediately: SWAGAT-FI framework operational for eligible investors

Impact Assessment

Market Impact:

  • Expected to attract increased foreign investment by simplifying entry barriers for trusted institutional investors
  • Creates level playing field for government investors, regulated retail funds, insurance companies and pension funds from approved jurisdictions
  • Unified accounting structure reduces operational complexity and costs for eligible foreign investors

Operational Impact:

  • DDPs and custodians need to update processes for SWAGAT-FI registration and conversion applications
  • CDSSF must develop Standard Operating Procedures defining identified jurisdictions and regulatory authorities
  • Depositories must implement unified account structures enabling seamless investment across FPI/FVCI/foreign investor categories
  • Existing FPIs meeting criteria can voluntarily convert to benefit from simplified compliance framework

Regulatory Impact:

  • Aligns with government’s ease of doing business initiatives for foreign investors
  • Maintains regulatory oversight while reducing compliance burden for low-risk investor categories
  • Sets precedent for risk-based differentiated regulatory approach for foreign investors

Impact Justification

Major regulatory framework introduction that significantly simplifies FPI registration and compliance processes for eligible foreign investors, enabling unified investment experience across FPI, FVCI and other foreign investor categories