SEBI stretches KYC review cycles for foreign portfolio investors

Most foreign portfolio investors will have their know-your-customer records reviewed every two or eight years instead of every year or every three years from 1 December, SEBI said in a press release on 30 October.

The change comes in a circular dated 30 October, No. HO/19/34/14(10)2026-AFD-POD3/I/24814/2026, which amends the Master Circular for foreign portfolio investors (FPIs), designated depository participants and eligible foreign investors of 30 May 2024. Under the new table, Category I investors registered under Regulation 5(a)(i), the government and government-related investors, are reviewed every eight years even in high-risk jurisdictions, while other Category I investors in those jurisdictions are reviewed every two years. Category II investors in high-risk jurisdictions are reviewed every two years. In jurisdictions that are not high risk, Category I investors are reviewed every eight years, as are regulated entities in Category II; other Category II investors are reviewed every two years. In SEBI's summary, the cycles lengthen from 1 year to 2 years and from 3 years to 8 years.

Two groups keep their current terms. Investors that hold only government securities follow the KYC periodicity that the Reserve Bank of India sets for their bank accounts, and SWAGAT-FI investors stay on a 10-year cycle, the circular says.

The circular also removes a second filing. An FPI no longer has to report changes to previously furnished information, or submit a no-change declaration, when it continues its registration. It pays the fee for the next block of three years, or 10 years for SWAGAT-FI investors, to its designated depository participant at least 15 days before its current registration expires. SEBI said the measure aims to cut repetitive compliance and the burden on FPIs.

SWAGAT-FI, the single window for trusted foreign investors, was brought into effect by a SEBI circular of 16 January 2026, applying from 1 June 2026, after amendments to the FPI Regulations notified on 3 December 2025. It is open to government and government-related investors, regulated retail public funds that meet its conditions, insurers investing their own funds and regulated pension funds.

Depositories, custodians and designated depository participants must change their systems and processes and tell the FPIs concerned, the circular says. It was issued under section 11(1) of the SEBI Act, 1992, read with Regulation 44 of the FPI Regulations, 2019. The rules apply from 1 December 2026.

The circular follows SEBI's memorandum with the Bank of England on clearing corporations, announced on 28 October; on the exchange-control side, the Reserve Bank of India has moved some FEMA compounding to its regional offices.