Sebi eyes five-day FPI onboarding timeline through end-to-end digitisation

Sebi is working to cut FPI onboarding time to five days through digitisation, streamlined approvals and closer coordination with regulators

The Securities and Exchange Board of India (Sebi) is exploring measures to reduce the onboarding time for foreign portfolio investors (FPIs) to as little as five days, from the current timeline of nearly a month. 

According to sources, the regulator has asked custodians to focus on end-to-end digitisation, wider adoption of Indian digital signatures, and better coordination among intermediaries involved in the registration process. 

Sources said Sebi had held at least two meetings with custodians over the past month to identify bottlenecks and expedite onboarding. 

A pilot model developed in collaboration with custodians is currently being tested and is claimed to have achieved onboarding within five days, said a person familiar with the discussions.

 

“While several reforms have already shortened the process, Sebi is also engaging with the Reserve Bank of India (RBI) and the income tax (I-T) department to further streamline approvals and reduce turnaround times,” said an official. 

The introduction of the common application form (CAF) has helped synchronise Sebi registration, RBI-related bank account opening procedures, and tax-related formalities, significantly improving efficiency, sources said. 

Sebi is also encouraging custodians to move towards fully digital documentation, eliminating the need for embassy attestations and physical paperwork wherever possible. 

An emailed query sent to Sebi remained unanswered until the time of going to press. 

In January, Sebi operationalised a unified digital workflow that enables issuance of digital signature certificates and electronic signatures directly through the CAF for FPIs. 

Under the current process, FPI registration begins online through the National Securities Depository Ltd (NSDL) platform and is subsequently authorised by a designated depository participant (DDP). Once the required information and documents are submitted, FPIs are required to send signed hard copies of the CAF to the DDP. 

Following review and registration by the DDP, a PAN application is forwarded to the I-T Department.

 

Before becoming trade-ready, FPIs must also establish custody arrangements, open securities and cash accounts, complete demat and KYC (know-your-customer) formalities, obtain a Constituent Subsidiary General Ledger (CSGL) account for holding government securities, open an INR bank account, and secure a unique client code for trading on stock exchanges.

 

A tax expert noted that PAN issuance alone can take up to four days.

 

“Several FPIs, particularly those based in the US, have raised concerns with Sebi regarding delays in application processing. The issue has gained importance at a time when India has witnessed an erosion in FPI liquidity. The RBI and Sebi are working more closely than ever before to introduce measures aimed at attracting foreign capital,” said an executive at a custodian firm.

 

According to NSDL data, FPI assets under custody stood at ₹ 74.77 trillion at the end of May 2026, down from ₹81.39 trillion at the end of December 2025.

 

“Our approach has to be digital-first. Greater use of digital signatures can eliminate delays caused by physical execution of documents. Sebi's SWAGAT-FI (Single Window Automatic and Generalised Access for Trusted Foreign Investors) framework is also expected to further accelerate the registration process," said another custodian industry executive.

 

In February, Kotak Mahindra Bank announced the issuance of two FPI licences entirely through electronic signatures, marking a significant step towards complete digital onboarding of overseas investors.

 

Sachin Samant, president, Banking & Financial Institutions Group, Kotak Mahindra Bank, explained that they have enabled a workflow with parallel verification based on scanned/draft documents, digital signing of execution documents such as power of attorney, indemnities, standing instructions, agreements, etc.

 

“The challenges stem from regulatory requirements, multiple documents required for registration and KYC, and the need for coordination across intermediaries such as custodians, banks, and brokers, etc. Very importantly, since offshore funds are global in nature, there are logistical challenges emanating from multiple signatories in different geographies,” he added, noting that digitised processes eliminate such inefficiencies.

 

Sebi has also introduced the SWAGAT-FI framework to facilitate investments by low-risk foreign investors. Separately, the regulator has allowed FPIs to net their cash market transactions, a move aimed at easing liquidity pressures and reducing funding costs. 

Coordinated move

• Sebi pushes for digitisation, digital signatures and better intermediary coordination processes
• Collaborating with RBI, tax department to streamline approvals
• Pilot model reportedly achieved onboarding within just 5 days
• Move comes at a time when outflows have put pressure on liquidity 
• FPI assets fell to ₹74.77 trn by May 2026, shows NSDL data