Sebi, the market regulator, announced that foreign portfolio investors (FPIs) who invest solely in government securities through the fully accessible route will no longer be required to provide investor group details.

In a circular, Sebi stated that these investors will also be exempt from certain disclosure and reporting requirements that apply to regular FPIs. According to PTI, the changes are intended to streamline procedures and increase long-term overseas participation in India's sovereign debt market.

Key Highlights

• FPIs investing only in government securities under FAR/Fully Accessible Route now exempt from investor group disclosures.
• SEBI’s eased norms effective February 2026 aim to accelerate foreign investment inflows into sovereign debt market.

The amendments were made in August to simplify compliance for this type of investor, and the master circular for FPIs has been updated to reflect the changes.

Under the revised framework, FPIs that only invest in government securities (GS-FPIs) will only have to pay fees to their designated depository participants (DDPs) to maintain registration for the next three years. They will not be required to submit periodic declarations unless there is a significant change.

"In the event of no change in information, FPIs will provide a declaration that the information provided previously has not changed. However, the requirement to provide such a declaration will not apply to GS-FPIs, the regulator clarified.

Resident Indian individuals can only invest in GS-FPIs through the Reserve Bank of India's Liberalised Remittance Scheme (LRS), and such participation will be permitted only in global funds with less than 50% Indian exposure, Sebi added.

The regulator has also allowed both new and existing FPIs to convert to GS-FPIs by making the necessary declarations. Similarly, GS-FPIs can revert to regular FPI status by meeting additional compliance standards.

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Furthermore, GS-FPIs must notify Sebi of any material changes in their structure or operations within 30 days, along with supporting documentation if applicable. The frequency of Know Your Customer (KYC) reviews for GS-FPIs will be consistent with that of their bank accounts, as required by the RBI.

Sebi said the new provisions will take effect on February 8, 2026. The standards-setting forum, in consultation with the regulator, has been asked to make the necessary system changes for implementation.