The Securities and Exchange Board of India (SEBI) has introduced changes to Know Your Customer (KYC) requirements for foreign portfolio investors (FPIs), reducing the frequency of compliance checks for certain categories of overseas investors. Under the revised framework, eligible FPIs will now have to complete periodic KYC reviews once every eight years instead of undergoing checks at shorter intervals.
The move will simplify compliance procedures, cutting down documentation requirements and improving the ease of doing business for foreign investors participating in Indian markets. The changes have been announced through a regulatory circular and will become effective from December 1, 2026.
“The provisions of this circular shall come into force with effect from December 01, 2026,” SEBI said.
Under the earlier system, the frequency of KYC reviews varied between one and three years, depending on an investor’s category, jurisdiction and regulatory status. The revised framework introduces longer intervals for several eligible investors.
Category I FPIs registered in non-high-risk jurisdictions will now be required to undergo KYC reviews once every eight years. The same extended timeline will apply to Category I investors from high-risk jurisdictions registered under Regulation 5(a)(i).
However, other Category I FPIs operating from high-risk jurisdictions will continue to face KYC reviews every two years.
For Category II investors, regulated FPIs from non-high-risk jurisdictions will also benefit from an eight-year review cycle. Other investors in this category, including those operating from high-risk jurisdictions, will remain subject to KYC checks once every two years.
SEBI has clarified that the existing arrangements for government securities-only foreign portfolio investors (GS-FPIs) and SWAGAT-FI (Single Window Automatic and Generalised Access for Trusted Foreign Investors) will not be affected by the latest changes.
GS-FPIs, SWAGAT-FI Investors To Retain Existing KYC Rules
The regulator has decided against changing the periodic review requirements applicable to these two categories of foreign investors. GS-FPIs will continue to follow the KYC review frequency prescribed for their respective bank accounts under Reserve Bank of India (RBI) guidelines.
Meanwhile, SWAGAT-FI investors will retain their existing 10-year KYC review cycle. This means the latest relaxation will not alter the compliance timelines already applicable to these investor groups.
Besides extending the KYC review intervals, SEBI has also simplified the process for FPIs seeking to continue their registration.
Under the earlier system, investors were required to inform the relevant authorities about changes in information or documents submitted previously. They were also required to provide a declaration confirming that no changes had occurred, wherever applicable, during the registration continuation process.
The revised framework removes these requirements, reducing the additional paperwork involved in maintaining FPI registration.
Going forward, investors seeking to continue their registration for another three years will only need to pay the applicable continuation fee to their Designated Depository Participants (DDPs). For SWAGAT-FI investors, the continuation period will remain 10 years.
However, SEBI has specified a timeline for making these payments to ensure that the registration process is completed without disruption.
“FPI shall pay the fees for continuance of its registration at least 15 days prior to current validity of its registration in order to facilitate a smooth continuance process,” it said.
