SEBI And RBI Mulling Over Easing Entry Process For Foreign Investors

SEBI And RBI Mulling Over Easing Entry Process For Foreign Investors

The changes would include standardised documentation and less scrutiny on investors already regulated in other countries

The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have had advanced discussions on easing the entry process for new overseas investors.

The changes would include fewer and standardised documentation and less scrutiny on investors already regulated in other countries. This will reduce the time to register in India to 30-60 days from nearly six months and will be in line with global standards.

Elaborating on the talks, Tuhin Kanta Pandey, Chairman, SEBI, stated, "To facilitate the ease of investments by foreign investors in India, we are engaging with various stakeholders to streamline the know your customer (KYC) norms across the regulators.”

The proposal is relevant in the wake of the country facing harsh trade tariffs from the US, leading to uncertainty for the economy and its markets.

So far, during 2025, overseas investors sold a net $10 billion in Indian equities and bonds, with selling intensifying in July and August because of muted corporate earnings and US tariff concerns.

Meanwhile, top Indian regulatory officials have met over 200 global asset managers across Europe, Asia and the US in the last five months. They sought feedback on ways to make Indian markets more accessible.

Recently, a delegation of investors from six countries met officials at the RBI, SEBI exchanges, and the Ministry of Finance.

As part of the changes, the Central Bank will match SEBI's more liberal documentation needs for regulated overseas pooled funds, such as insurance and mutual funds (MFs), considered low risk.

An analyst said that in 2019, the market regulator eased documentary requirements for regulated public retail funds, bringing them at par with government-owned funds. However, the Central Bank had yet to make a similar relaxation.

It is contemplated that the RBI will also align norms for foreign investors to open bank accounts with SEBI’s registration requirements. Presently, RBI requires banks to follow a risk-based assessment, which includes seeking a declaration on the source of funds and proof of identity.

Recently, SEBI launched a website for foreign investors and explored whether to allow them to submit registration documents directly.

Commenting on the scenario, Eugenie Shen, Managing Director, Asia Securities Industry & Financial Markets Association, a lobbyist for offshore investors, said, “SEBI and RBI have been very responsive and proactive this year in finding ways to make it easy for foreign investors to invest in India.”