Sebi notifies changes to FPI regulations, mandates fee payment in INR
Mumbai, Jul 8, 2026
Sebi has shifted FPI and FVCI fee payments to a rupee-denominated structure, revised registration charges and custodian fees, and notified new intraday borrowing norms for mutual funds
The Securities and Exchange Board of India (Sebi) has notified changes to the Foreign Portfolio Investors (FPI) Regulations, shifting to a rupee-denominated payment structure instead of the current US dollar-denominated fee for foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs).
The changes will come into effect after six months, giving the foreign entities time to make the shift.
“In regulation 43B(2), the words and symbols ‘US $1000’ shall be substituted with the words and symbols ‘₹90,000 in eligible foreign exchange equivalent’,” states the notification dated 3 July.
The regulator has also revised the registration charges for Category-I FPIs and FVCIs from $2,500 to ₹2.3 lakh. Similarly, the late fee and continuance fee have also been revised.
Designated depository participants—those who handle FPI trades in India—will have to remit the fees to Sebi within five working days of the grant of registration.
Additionally, in a move to simplify compliance and operations, the common application form for FPI registration will also include the date of birth or incorporation. This is to facilitate PAN application following the new notification by the Central Board of Direct Taxes (CBDT) in March.
The market regulator collected a total of $12.98 million in the financial year 2025-26 from the fees paid by FPIs and FVCIs for registration, continuation, and other charges. This amount includes GST.
The changes follow issues such as manual accounting and invoicing for fees received in US dollars, which take a significant amount of time and lack real-time accounting visibility, leading to delays in financial reporting.
Further, the fee paid by custodians has also been revised from annual to monthly payments—from ₹10 lakh annually to ₹85,000 per month.
Sebi has also notified changes to the Mutual Fund Regulations on intraday borrowing.
Mutual funds will be able to avail of intraday borrowing to bridge differences arising out of pay-in and pay-out settlement timings within asset classes, forex settlements, and other transactions.
This is in addition to the current borrowing permitted—up to 20 per cent of the net assets of a scheme for meeting unit-holder payouts such as redemptions.
Asset management companies will be responsible for repaying the borrowings by the end of the day and complying with the mutual fund regulations for conversion to overnight borrowing.
[The Business Standard]
