Market regulator aims to simplify onboarding for foreign investors through digital processes and improved coordination among intermediaries.
Key Highlights
• SEBI is exploring ways to reduce FPI registration timelines from around one month to just five days.
• The regulator has held multiple meetings with custodians to identify bottlenecks in the onboarding process.
• A pilot model developed with custodians has reportedly completed FPI registrations within five days.
• SEBI is encouraging fully digital workflows and wider adoption of Indian digital signatures.
• The market regulator is coordinating with the RBI and the Income Tax Department to further streamline approvals.
• The Common Application Form has simplified registration, bank account opening, and tax-related formalities.
• Electronic signatures could significantly reduce embassy attestations and paperwork requirements.
• A fully digital integrated workflow was introduced by SEBI in January 2026.
The Securities and Exchange Board of India (SEBI) is considering measures to reduce the onboarding time for Foreign Portfolio Investors (FPIs) to just five days, compared with the current registration period of nearly one month.
According to sources familiar with the discussions, SEBI has asked custodians to focus on complete digitisation of the registration process, wider use of Indian digital signatures, and improved coordination among the various intermediaries involved in FPI onboarding.
Sources said the market regulator held at least two meetings with custodians over the past month to identify operational bottlenecks and accelerate the registration framework. A pilot model developed in collaboration with custodians is currently being tested, and people aware of the initiative indicated that the process was successfully completed within five days under the trial.
Officials noted that several reforms had already shortened registration timelines, but SEBI is now engaging with the Reserve Bank of India (RBI) and the Income Tax Department to further reduce approval periods.
The introduction of the Common Application Form has played a significant role in simplifying SEBI registration, RBI-related bank account opening procedures, and tax formalities, leading to greater efficiency in the overall process.
SEBI is also encouraging custodians to transition to fully digital operations. Such a move would substantially reduce dependence on embassy verification and physical documentation, making the registration process faster and more convenient for overseas investors.
In January 2026, SEBI launched an integrated digital workflow enabling the issuance of digital signature certificates and electronic signatures directly through the Common Application Form.
Under the existing framework, FPI registration begins online through the National Securities Depository Limited (NSDL) platform and is subsequently authorised by a designated depository participant (DDP). After submitting the required documents, applicants must still send signed hard copies of the Common Application Form to the DDP. Following registration, PAN applications are forwarded to the Income Tax Department.
Before commencing trading in Indian markets, FPIs must also complete several additional formalities, including entering into custodian agreements, opening securities and cash accounts, fulfilling demat and KYC requirements, obtaining a Constituent Subsidiary General Ledger (CSGL) account for government securities, opening rupee-denominated bank accounts, and securing a unique client code from stock exchanges.
Tax experts point out that the issuance of a Permanent Account Number (PAN) alone can currently take up to four days.
According to NSDL data, the value of assets held by FPIs declined from ₹81.39 lakh crore at the end of December 2025 to approximately ₹74.77 lakh crore by May 2026.
In February, Kotak Mahindra Bank announced the issuance of two FPI licences entirely through electronic signatures. The bank stated that its new process enables parallel verification using scanned documents and allows digital execution of powers of attorney, standing instructions, agreements, and related documentation.
