SEBI Plans Simpler KYC Rules To Attract Foreign Investors

Market regulator SEBI is preparing a series of reforms aimed at making Indian markets more accessible to foreign investors. The proposed measures include simplifying know-your-customer (KYC) requirements, reviewing disclosure norms and reducing the time taken for foreign portfolio investors (FPIs) to start investing in India.

SEBI Chairman Tuhin Kanta Pandey said the regulator will adopt a risk-based approach while reviewing disclosure requirements and streamlining compliance processes for FPIs. The objective is to improve the ease of doing business for global investors and strengthen capital flows into Indian markets.

What Is The Main Change?

One of the most important changes is the reduction of the FPI registration and onboarding process to just five days. At the moment, the process can take several weeks or sometimes even more.

To achieve this, SEBI is working on fully digitising the registration process and improving coordination with the Reserve Bank of India (RBI) and the Income Tax Department. The regulator is also encouraging the use of digital signatures and a standard application form to make paperwork easier, remove the need for several manual steps, and reduce waiting time caused by several approvals from different regulatory bodies.

SEBI Wants Deeper and More Liquid Markets

Alongside easing entry barriers for foreign investors, SEBI is also looking to deepen market participation with the introduction of futures and options contracts with longer tenures in the equity derivatives segment.

SEBI is also conducting a comprehensive review of the securities lending and borrowing framework as well as short-selling regulations to improve liquidity and make the relationship between cash and derivatives markets stronger.

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Already, FPI assets have fallen in India recently. According to NSDL data, the value of FPI holdings in Indian financial markets stood at ₹74.77 trillion in May 2026, whereas the highest level was ₹81.39 trillion in the last week of December 2025.

These reforms can make India more attractive for international investments by reducing compliance-related challenges and speeding up access to the market.

Source:

The Economic Times