Description

SEBI simplifies onboarding and compliance for Foreign Venture Capital Investors (FVCIs) under the SWAGAT-FI framework, allowing joint FPI-FVCI registration and extending renewal cycles to 10 years.

Summary

SEBI has modified the operational guidelines for Foreign Venture Capital Investors (FVCIs) to implement the SWAGAT-FI (Single Window Automatic and Generalised Access for Trusted Foreign Investors) framework. The circular simplifies the registration process by allowing SWAGAT-FI FVCI applicants to apply jointly with FPI registration using the same application and documents. Key changes include extended registration renewal periods from 5 years to 10 years for SWAGAT-FI entities and streamlined KYC review cycles. These modifications follow the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2025 notified on December 03, 2025.

Key Points

  • SWAGAT-FI FVCI applicants can now apply for FVCI registration together with FPI registration without separate forms or documents
  • Applicants must appoint the same custodian and DDP (Designated Depository Participant) for both FVCI and FPI registration
  • Existing FVCIs meeting SWAGAT-FI FPI requirements can convert to SWAGAT-FI FVCI status by applying to their DDP
  • Registration renewal period extended from 5 years to 10 years for SWAGAT-FI FVCIs
  • KYC review periodicity for SWAGAT-FI FVCIs extended to 10 years (from 5 years)
  • Provisions effective from June 01, 2026

Regulatory Changes

New Registration Process (Para 1.4.3 & 1.4.4):

  • SWAGAT-FI FVCI applicants can submit a combined application for FPI and FVCI registration, with processing based solely on FPI application documents
  • Existing FVCIs can convert to SWAGAT-FI FVCI status upon application to their DDP
  • Mandatory requirement: same custodian and DDP must be used for both registrations

Modified Renewal Requirements (Para 1.5.1 & 1.5.2):

  • FVCIs registered on or before December 31, 2019 must pay renewal fees and intimate changes by March 31, 2025
  • Subsequent renewal blocks extended to 10 years (from 5 years) for SWAGAT-FI entities, starting January 01, 2030
  • FVCIs registered after December 31, 2019 must renew at least 15 days before completion of their 5-year (or 10-year for SWAGAT-FI) registration period

KYC Review Changes (Para 2.6.3):

  • KYC review periodicity for SWAGAT-FI FVCIs extended to 10 years (double the standard 5-year period)

Compliance Requirements

For SWAGAT-FI FVCI Applicants:

  • Apply for FVCI registration concurrently with FPI registration
  • Appoint the same custodian and DDP for both FPI and FVCI registrations
  • Submit only FPI application documents (no separate FVCI forms required)

For Existing FVCIs:

  • FVCIs registered on or before December 31, 2019: pay renewal fee and intimate changes by March 31, 2025
  • FVCIs registered after December 31, 2019: renew at least 15 days before 5-year/10-year period completion
  • FVCIs eligible for SWAGAT-FI status: apply to DDP for conversion using same custodian and DDP as FPI registration

For Depositories, Custodians, and DDPs:

  • Make necessary system changes to implement the new framework
  • Process combined FPI-FVCI applications for SWAGAT-FI applicants
  • Handle conversion requests from existing FVCIs to SWAGAT-FI status
  • Implement 10-year renewal and KYC cycles for SWAGAT-FI FVCIs

Important Dates

  • December 03, 2025: SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2025 notified
  • March 31, 2025: Deadline for FVCIs registered on or before December 31, 2019 to pay renewal fees and intimate changes
  • June 01, 2026: Effective date for provisions of this circular
  • January 01, 2030: Start of subsequent 5-year/10-year renewal blocks for FVCIs registered before December 31, 2019

Impact Assessment

Positive Impacts:

  • Reduced Administrative Burden: Eliminates duplicate documentation and application processes for entities seeking both FPI and FVCI registration
  • Lower Compliance Costs: Extended 10-year renewal and KYC cycles (vs. 5 years) reduce recurring compliance expenses for SWAGAT-FI entities
  • Faster Onboarding: Streamlined single-window registration process accelerates market entry for qualified foreign investors
  • Regulatory Efficiency: Consolidation of processes reduces coordination requirements between custodians and DDPs

Operational Considerations:

  • Market intermediaries (depositories, custodians, DDPs) must update systems by June 01, 2026 to support new processes
  • Existing FVCIs need to evaluate eligibility for SWAGAT-FI conversion and potential benefits
  • Custodian/DDP selection becomes more critical as same provider must be used for both FPI and FVCI registrations

Market Impact: Limited direct market impact as changes affect registration and compliance processes rather than investment activities. Primary beneficiaries are foreign venture capital investors and FPIs seeking streamlined operations in Indian markets. The framework aligns with India’s broader initiatives to attract and retain trusted foreign capital.

Impact Justification

Regulatory simplification for FVCIs under SWAGAT-FI framework reduces compliance burden but affects a limited subset of foreign investors. No immediate market-wide impact.