SEBI eases KYC rules for foreign portfolio investors; extends review period to 8 years for some FPIs from December 1

The Securities and Exchange Board of India (SEBI) has eased Know Your Customer (KYC) requirements for Foreign Portfolio Investors (FPIs), giving several categories of foreign investors more time between mandatory KYC reviews.

Under the revised rules, the KYC review period, which currently takes place every year or once every three years depending on the investor category, will be extended to two years or eight years. The changes will come into effect from December 1, 2026.

The move is aimed at reducing repeated paperwork and making it easier for foreign investors to operate in Indian financial markets.

KYC Review Period Extended for FPIs

SEBI has revised the frequency of KYC checks based on the category of foreign portfolio investors. Under the new framework, the review period will increase from one year to two years for some categories and from three years to eight years for others.

For high-risk Category I FPIs, the KYC review period will be eight years. The revised framework also provides an eight-year review period for regulated entities in the non-high-risk Category II group. Other investors in this category will have to undergo KYC reviews every two years.

For SWAGAT-FI FPIs, the existing KYC review period of 10 years will remain unchanged. SEBI has also said that the current relaxations available to GS-FPIs will continue.

Separate Confirmation Requirement Removed

In another change, SEBI has removed the requirement for FPIs to separately confirm whether information submitted earlier has changed when continuing their registration.

This means foreign investors will no longer need to provide a separate confirmation for this purpose at the time of registration continuation.

The move is expected to reduce repetitive compliance work for investors and the entities involved in processing their documentation.

Why Has SEBI Changed the Rules?

SEBI said the changes are part of its efforts to simplify compliance requirements for foreign portfolio investors.

The regulator aims to reduce multiple requirements that serve similar purposes and cut down on repeated paperwork. Longer gaps between KYC reviews could also lower administrative work and costs for investors.

Foreign portfolio investors play an important role in Indian financial markets by investing in stocks, bonds and other securities. Easier compliance requirements could help make the Indian market more accessible for overseas investors.

When Will the New Rules Take Effect?

The revised KYC review requirements will come into effect on December 1, 2026. SEBI said the changes are intended to create a simpler and more investor-friendly regulatory environment for FPIs while reducing procedural requirements.

In simple terms, foreign portfolio investors will have fewer frequent KYC checks under the revised framework, along with one less confirmation requirement when continuing their registration.