SEBI Removes Disclosure Requirement For FPIs Investing In Government Securities

The Securities and Exchange Board of India (SEBI) has eased compliance requirements for foreign portfolio investors (FPIs) investing exclusively in government securities, removing the need to furnish investor-group details.

The change was announced through a circular that was released on 7 September 2026. It extends a previous exemption that was available only to FPIs that were investing in government securities through the fully accessible route (FAR).

Under the latest change, the exemption will apply to all FPIs investing only in government securities, irrespective of the route through which they invest.

What Has SEBI Changed?

FPIs investing in Indian government securities can use different routes. Under FAR, eligible investors can purchase specified government securities without the investment limits applicable under the General Route, which is subject to prescribed investment limits and other regulatory conditions.

SEBI has now modified its rules to state that FPIs investing only in government securities will not be required to furnish investor-group details.

The change effectively removes an additional disclosure requirement for overseas investors whose investments are limited to government securities.

Why Has SEBI Removed The Requirement?

The new SEBI rule is based mainly on an earlier instruction from the Reserve Bank of India (RBI). On 5 June 2026, the RBI withdrew the requirement for FPIs investing in government securities through the General Route to comply with prescribed concentration limits.

These concentration limits were one of the reasons regulators required investor-group information. Such details helped identify investors belonging to the same group and assess their combined exposure.

With the concentration limits no longer applicable to FPIs using the General Route, SEBI said identifying the investor group for an FPI that invests only in government securities is no longer relevant.

The revised requirement takes effect immediately. SEBI has directed depositories, custodians and designated depository participants to make the necessary changes to their systems to implement the revised framework.

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