Description

SEBI amends Foreign Venture Capital Investors Regulations, 2000 to introduce changes in terminology, registration renewal procedures, and special provisions for Single Window Access (SWAGAT-FI) entities.

Summary

SEBI has issued the Securities and Exchange Board of India (Foreign Venture Capital Investors) (Amendment) Regulations, 2025, notified in Mumbai on December 1, 2025. The amendments modify the SEBI (Foreign Venture Capital Investors) Regulations, 2000, introducing significant changes in terminology (replacing “Investee” with “Investor” throughout), adding provisions for Single Window Access for Trusted Foreign Investors (SWAGAT-FI), and modifying registration renewal procedures and investment limit requirements.

Key Points

  • Regulations came into effect 180 days from publication date in the Official Gazette
  • Comprehensive terminology changes replacing “निवेशधानकर्ता” (Investee) with “निवेशक” (Investor) throughout the regulations
  • Introduction of SWAGAT-FI (Single Window Access for Trusted Foreign Investors) definition aligned with FPI Regulations, 2019
  • Special exemptions and relaxations provided for SWAGAT-FI entities
  • Modified registration renewal fee structure for SWAGAT-FI with 10-year block periods
  • Removal of investment limit restrictions (66.67% and 33.33% caps) for SWAGAT-FI entities
  • Amendment notified as SEBI/LAD-NRO/GN/2025/280
  • Official Gazette reference: CG-MH-E-03122025-268196

Regulatory Changes

Terminology Changes:

  • Systematic replacement of terms “Investee” with “Investor” and related variations throughout the regulations
  • “Investment” terminology standardized across all provisions

Definition Addition (Regulation 2):

  • New clause (टक) added defining “SWAGAT-FI” (Single Window Access for Trusted Foreign Investors) as per SEBI (Foreign Portfolio Investors) Regulations, 2019

Registration Provisions (Regulation 3):

  • Additional proviso stating that sub-regulation (2) provisions shall not apply to SWAGAT-FI cases

Registration Renewal (Regulation 9):

  • New proviso for SWAGAT-FI: Registration renewal fees shall be paid for each 10-year block
  • Renewal fees applicable from the 11th year from the date of issuance of registration certificate
  • Fee amount as specified in Second Schedule

Investment Limits (Regulation 11):

  • Exemption for SWAGAT-FI from investment limits prescribed in clause (ग)
  • 66.67% limit in sub-clause (i) and 33.33% limit in sub-clause (ii) shall not apply to SWAGAT-FI

Fee Schedule Amendments (Second Schedule):

  • Clause (2): SWAGAT-FI registration renewal fees payable for each 10-year block to maintain valid registration
  • Clause (3): Additional proviso for SWAGAT-FI fee structure (text incomplete in provided document)

Compliance Requirements

For Existing FVCIs:

  • Review and update documentation to reflect new terminology
  • Assess eligibility for SWAGAT-FI classification
  • Ensure compliance with amended registration renewal procedures

For SWAGAT-FI Entities:

  • Benefit from relaxed investment limit restrictions
  • Plan for 10-year block registration renewal cycle starting from 11th year
  • No longer subject to 66.67% and 33.33% investment allocation limits

For All Foreign Venture Capital Investors:

  • Update internal policies and procedures to align with amended regulations
  • Ensure fee payment schedules comply with new renewal requirements
  • Review investment strategies considering modified limit provisions for SWAGAT-FI

Important Dates

  • December 1, 2025: Date of notification and publication in Official Gazette
  • Effective Date: 180 days from December 1, 2025 (approximately May 30, 2026)
  • Registration Renewal for SWAGAT-FI: Fees applicable from 11th year onwards in 10-year blocks

Impact Assessment

Positive Impacts:

  • SWAGAT-FI framework provides streamlined access for trusted foreign investors
  • Removal of investment limits for SWAGAT-FI enhances investment flexibility
  • Extended 10-year registration renewal periods reduce administrative burden
  • Terminology standardization improves clarity and consistency

Operational Impacts:

  • FVCIs need to update legal and operational documentation
  • Classification as SWAGAT-FI may require additional verification and eligibility assessment
  • Investment allocation strategies may be revised for eligible entities
  • Fee payment cycles modified for long-term planning

Market Impacts:

  • Enhanced attractiveness for trusted foreign venture capital investors
  • Potential increase in foreign venture capital inflows under relaxed framework
  • Improved ease of doing business for qualifying foreign investors
  • Alignment with FPI regulations creates regulatory consistency

Compliance Burden:

  • Medium-term compliance effort for existing FVCIs to transition to new framework
  • Long-term reduction in compliance burden for SWAGAT-FI entities
  • Need for legal review and documentation updates across all registered entities

Impact Justification

Regulatory amendment affecting Foreign Venture Capital Investors with procedural and terminology changes, particularly beneficial for SWAGAT-FI entities with relaxed investment limits and extended registration renewal periods