SEBI Introduces SWAGAT-FI Framework to Streamline Compliance for Trusted Foreign Portfolio Investors.

The Securities and Exchange Board of India (SEBI) has recently proposed the creation of a Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework to streamline the regulatory process for Foreign Portfolio Investors (FPIs). The initiative aims to ease compliance, attract long-term capital inflows, and enhance India’s global investment appeal.

      - The proposed SWAGAT-FI framework will provide a unified, automated, and standardised compliance mechanism for a select group of trusted FPIs. These include government-owned funds, central banks, sovereign wealth funds, multilateral agencies, and highly regulated pooled funds such as mutual funds and pension funds. This move will simplify onboarding procedures, reduce duplication, and create faster market access for global investors.

      - The system is designed to replace multiple regulatory approvals with a single-window clearance process, integrating both FPI and Foreign Venture Capital Investor (FVCI) registrations. Currently, these processes are handled separately, creating delays and higher compliance costs. By merging these procedures, SEBI aims to create a more investor-friendly environment while maintaining strong regulatory oversight.

      - A major change under the proposal is the modification of Know Your Customer (KYC) requirements. At present, FPIs undergo annual or triennial KYC reviews based on their risk category, while FVCIs are reviewed every five years. Under SWAGAT-FI, the frequency for trusted investors will be reduced, reflecting their low-risk profile and lowering the operational burden on both investors and intermediaries.

Main Point :-   (i) Another significant relaxation is related to the participation of Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Resident Individuals (RIs) in FPIs. The current 50% cap on their collective investment in an FPI’s corpus will be eased for low-risk funds such as diversified retail mutual funds. This will encourage more NRI/OCI participation in India’s capital markets, especially in regulated schemes.

      (ii) SEBI has also proposed allowing SWAGAT-FIs to maintain a single dematerialised (demat) account for all investments, whether classified as FPI or FVCI. At present, multiple demat accounts are required, creating operational complexity and higher maintenance costs. The unified account structure will reduce paperwork, transaction delays, and administrative expenses for global investors.

(iii) As of 30 June 2025, India had 11,913 registered FPIs with Assets Under Custody (AUC) totalling ₹83.81 trillion, marking a substantial rise from ₹51 trillion in March 2022. SEBI believes that implementing SWAGAT-FI will further boost these numbers by improving India’s ease of doing business, aligning with global best practices, and strengthening the country’s position as a top emerging-market investment destination.
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