The Securities and Exchange Board of India (SEBI) has notified changes to the Foreign Portfolio Investors (FPI) Regulations, shifting from the current US dollar-denominated fee to a rupee-denominated payment structure for foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs). The changes will take effect after six months, giving foreign entities time to transition.
Key Highlights
- SEBI shifts FPI, FVCI fees from dollar to rupee-denominated payments, effective after six months.
- Registration charges for Category-I FPIs and FVCIs revised from $2,500 to Rs 2.3 lakh under new rules.
Key Fee Changes Under the New Framework
Per the notification dated July 3, the existing $1,000 fee under Regulation 43B(2) will be replaced with Rs 90,000 in eligible foreign exchange equivalent. SEBI has also revised registration charges for Category-I FPIs and FVCIs from $2,500 to Rs 2.3 lakh, with corresponding revisions to late fees and continuance fees. Designated depository participants, who handle FPI trades in India, will be required to remit fees to Securities and Exchange Board of India within five working days of registration being granted.
The changes follow long-standing operational challenges, including manual accounting and invoicing for fees received in US dollars, which consumed significant time and lacked real-time accounting visibility - leading to delays in financial reporting. SEBI collected a total of $12.98 million (including GST) in FY26 from FPI and FVCI registration, continuation, and other fees.
In a related change, the fee paid by custodians has been revised from an annual to a monthly payment structure - moving from Rs 10 lakh annually to Rs 85,000 per month.
SEBI is also simplifying compliance by adding the date of birth or incorporation to the common application form for FPI registration, aligning with a March notification from the Central Board of Direct Taxes (CBDT) to facilitate PAN applications.
Also Read: FPI Outflows Hit Rs 49,340 Crore from Indian Equities in June
Mutual Funds Get New Intraday Borrowing Flexibility
Separately, SEBI has notified changes to the Mutual Fund Regulations around intraday borrowing. Mutual funds will now be able to use intraday borrowing to bridge timing gaps arising from pay-in and pay-out settlements within asset classes, forex settlements, and other transactions - in addition to the existing provision allowing borrowing of up to 20% of a scheme's net assets for unit-holder payouts such as redemptions.
Asset management companies (AMCs) will be responsible for repaying such borrowings by the end of the day and must comply with mutual fund regulations if the borrowing needs to be converted to overnight borrowing.
