SEBI lengthens the KYC review cycle for Foreign Portfolio Investors

SEBI has rationalised how often Foreign Portfolio Investors (FPIs) must undergo KYC review, amending the periodicity set out in its Master Circular for FPIs, DDPs and Eligible Foreign Investors. Under the revised Table 6, a high-risk FPI registered under Regulation 5(a)(i) of the SEBI (Foreign Portfolio Investors) Regulations, 2019 — broadly, government and government-related investors — moves from annual review to once every eight years, while other high-risk Category I FPIs move from a three-year to a two-year cycle. For Category II FPIs, regulated entities move to an eight-year cycle and others to a two-year cycle; non-high-risk Category I FPIs are reviewed every eight years.

FPIs investing only in government securities continue to follow the review periodicity applicable to their bank accounts as prescribed by the RBI, and SWAGAT-FI FPIs remain on a ten-year cycle. SEBI has also dropped the separate requirement for an FPI to intimate changes in previously furnished information, or file a no-change declaration, at the time its three-year registration comes up for continuance; a continuing FPI need now only pay the continuance fee at least fifteen days before its registration's current validity expires. The changes, issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 44 of the FPI Regulations, 2019, take effect from 1 December 2026.