Sebi Eases Compliance Norms for Foreign Portfolio Investors Amid Equity Outflows
Sebi eases FPI compliance norms amid continued overseas equity outflows
Business Standard
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The Securities and Exchange Board of India (Sebi) has relaxed certain compliance requirements for foreign portfolio investors (FPIs) in response to operational challenges under the new Income-tax Rules, 2026. This decision comes as FPIs have withdrawn over ₹2.1 trillion (approximately $25.3 billion USD) from Indian equity markets this year.
- 01The Central Board of Direct Taxes (CBDT) has relaxed PAN allotment requirements for FPIs.
- 02FPIs have withdrawn over ₹2.1 trillion (approximately $25.3 billion USD) from Indian markets in 2023.
- 03The new measures allow FPIs more flexibility in providing taxpayer identification numbers and contact details.
- 04Sebi aims to facilitate easier onboarding for foreign investors with these compliance relaxations.
- 05The changes were prompted by feedback from industry participants regarding operational difficulties.
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The Securities and Exchange Board of India (Sebi) announced on Thursday that the Central Board of Direct Taxes (CBDT) has relaxed specific requirements related to Permanent Account Number (PAN) allotment for foreign portfolio investors (FPIs). This decision follows concerns raised by industry participants about operational challenges under the newly implemented Income-tax Rules, 2026. Amid ongoing overseas equity outflows, which have seen FPIs withdraw over ₹2.1 trillion (approximately $25.3 billion USD) from Indian markets this year, the new measures aim to simplify the onboarding process. FPIs will now have greater flexibility in providing necessary identification and contact information when applying for PAN through the Common Application Form (CAF).
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These changes are expected to ease the process for foreign investors looking to enter or remain in the Indian market, potentially stabilizing equity outflows.
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