SEBI has relaxed regulatory compliances forforeign portfolio investors (FPIs) investing only in Government Securities (G-Secs), whereby they will have less frequent mandatory KYC review and overseas Indians and resident Indian individuals will be permitted to be constituents of GS-FPIs without any restrictions applicable to other FPIs, among other things.
The aforementioned measures are aimed at enhancing the ease of doing business through a risk-based approach and optimum regulation.
They come at a time when FPI investment in Fully Accessible Route (FAR) eligible securities has seen a significant increase and crossed ₹3 lakh crore in March 2025, after several global index providers announced the inclusion of G-Secs in their respective bond indices.
SEBI said the periodicity of mandatory KYC review for GS-FPIs (FPIs that exclusively invest in G-Secs) shall be harmonized with RBI’s requirements. GS-FPIs will, therefore, have less frequent mandatory KYC reviews.
Existing and prospective FPIs that exclusively invest in G-Secs under the Fully Accessible Route (FAR) shall not be required to furnish investor group details. Such details are largely relevant for monitoring FPI exposures into equity and corporate debt only.
The markets regulator said non-resident Indians, Overseas Citizens of India and Resident Indians (RIs) individuals shall be permitted to be constituents of GS-FPIs without any restrictions applicable to other FPIs, including being in control of GS-FPI.
The conditions regarding participation of RIs – that is contribution through the Liberalised Remittance Scheme and in global funds whose Indian exposure is less than fifty percent, shall continue to apply.
GS-FPIs shall be permitted to intimate all material changes within 30 days (instead of 7 days).
Identification as GS-FPI at the time of onboarding, and transition of existing as well as prospective FPIs to GS-FPIs and vice-versa, shall be subject to conditions as may be specified by SEBI from time to time.