Description

Comprehensive regulations providing framework for registration and procedures for foreign investors making portfolio investments in India.

Summary

SEBI has issued comprehensive regulations establishing the framework for Foreign Portfolio Investors (FPI) registration and investment procedures in India. These regulations, originally notified on September 23, 2019, and last amended on August 12, 2025, provide the legal foundation for foreign investors seeking to make portfolio investments in Indian securities markets.

Key Points

  • Establishes definition and registration framework for Foreign Portfolio Investors
  • FPIs are deemed intermediaries under the SEBI Act
  • Introduces concept of “appropriately regulated” entities from home jurisdictions
  • Defines role of designated depository participants for FPI registration
  • Establishes framework for Bilateral Memorandum of Understanding with foreign regulators
  • Covers custodian services and designated bank requirements
  • Includes provisions for International Financial Services Centre (IFSC) operations
  • Defines control mechanisms and investment manager roles

Regulatory Changes

  • Latest amendments incorporated as of August 12, 2025
  • Comprehensive revision of FPI regulatory framework from 2019 base regulations
  • Enhanced definitions for appropriately regulated entities
  • Strengthened bilateral cooperation mechanisms with foreign regulators
  • Updated provisions for IFSC operations

Compliance Requirements

  • Foreign investors must obtain FPI registration through designated depository participants
  • Compliance with appropriately regulated entity criteria from home jurisdiction
  • Adherence to custodian and designated bank requirements
  • Investment managers must fulfill specified role requirements
  • Compliance with bilateral MOU provisions where applicable

Important Dates

  • Original notification: September 23, 2019
  • Last amendment: August 12, 2025
  • Regulations came into force on date of publication in Official Gazette

Impact Assessment

  • Provides comprehensive regulatory certainty for foreign portfolio investments
  • Streamlines registration process through designated depository participants
  • Enhances international regulatory cooperation through bilateral MOUs
  • Establishes clear framework for IFSC operations
  • Strengthens investor protection through appropriately regulated entity requirements
  • Facilitates foreign capital inflows into Indian securities markets

Impact Justification

Fundamental regulatory framework governing foreign portfolio investments in India with recent amendments