SEBI plans faster market access for foreign investors, teases next reforms to create 'best-in-class' experience

The Securities and Exchange Board of India (SEBI) is actively working to introduce a fresh set of market-friendly reforms to make it faster and easier for global investors to enter Indian capital markets, chairperson Tuhin Kanta Pandey said on Wednesday.

Addressing the Goldman Sachs 14th India CIO Conference, Pandey said the regulator is now working on “end-to-end digitisation” of the foreign portfolio investor (FPI) registration process, which will reduce timelines from “months to days”.

The fully paperless system will use digital signatures, he said, adding that concerns around data privacy will be addressed.

SEBI is also enabling a second registration platform developed by Central Depository Services Ltd (CDSL) to improve service quality and create competition among intermediaries.

“Our next reforms aim to create a best-in-class experience for global investors,” Pandey said.

He revealed that the regulator is in discussions with the Reserve Bank of India and the Finance Ministry on allowing settlement netting for trades executed on a single day.

"This would ease operational convenience and reduce costs for FPIs.”

Going forward, Pandey said that SEBI is considering ways to make market access even smoother. Under the proposed framework, SWAGAT-FIs (Single Window Automatic & Generalised Access for Trusted Foreign Investors) may soon be allowed to invest through other routes prescribed under FEMA without undergoing additional approvals.

FPIs hold around 17% of listed equities, with assets under custody touching USD 876 billion as of September 2025.

Since India opened its markets to FPIs in 1992, portfolio flows have delivered an XIRR of 9.3%, Pandey noted.

He said SEBI has already acted on several long-standing FPI concerns, including revamping the registration module, introducing a “light-touch” regulatory regime for those investing solely in government securities, easing anchor investor norms for large FPIs operating multiple funds, and rolling out the India Market Access portal to consolidate regulatory information.

The domestic investor base has surged, he said, with unique investors rising from 38 million in FY19 to 135 million today.

Mutual fund assets under management have more than doubled since 2019 to USD 850 billion, supported by monthly SIP inflows of about USD 3.3 billion.

This growing pool of domestic capital “acts as a counter-balance to volatile global flows”, he added.

SEBI will prioritise further market development, including deepening cash equity markets, introducing a closing auction session, reviewing short-selling and securities lending rules, and expanding participation in commodities markets.

“While we are guardians of trust in our markets, we are also facilitators of efficient capital formation,” Pandey said.