MUMBAI: The Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are working together to further simplify the onboarding and registration process for foreign portfolio investors (FPIs), while also exploring the development of bond indices on exchanges, Sebi Chairman Tuhin Kanta Pandey said on Wednesday.
Speaking at the Association of Portfolio Managers in India’s annual conclave, Pandey said the two regulators were working to make FPI registration “fast”, “seamless”, and digital.
“RBI and Sebi have been working very closely and we have been able to sort out many issues, including FPI onboarding where we are currently engaged very actively on ironing out issues so that we are able to do fast onboarding. We have already achieved quite a lot but our ambition is more. We want to make it further simpler,” said Pandey.
With the help of the custodians and depositories, FPI onboarding within five working days has also been successfully tested for certain jurisdictions.
Sebi is also encouraging digital onboarding, allowing documents to be submitted with digital signatures instead of physical signatures that earlier required apostillation or notarisation.
He said several steps had already been taken, including revamping the National Securities Depository Limited (NSDL) front-end and launching the India Market Access portal for FPIs, which provides requirements, frequently asked questions and documentation at one place.
The regulator has also moved from physical powers of attorney to e-powers of attorney.
Pandey said the RBI and Sebi were working to streamline KYC, while the RBI had allowed corresponding branches of foreign commercial banks to certify documents. The RBI was also examining whether the SWIFT process could be used for uploading registration documents.
On the bond market, Pandey said Sebi was working on bond indices that could be fitted on exchanges.
“The RBI has prepared draft guidelines and asked for comments and I think we are pursuing with RBI to finalise,” said the chairman.
In his address, Pandey said portfolio managers’ assets under management, excluding PF and EPFO assets, had grown to about ₹9.2 trillion by August 2026 from ₹1.4 trillion at end-FY16, a growth rate of around 20 per cent annually. The number of registered portfolio managers has crossed 530, while discretionary PMS clients have risen to around 220,000.
He said Sebi’s new portfolio management services (PMS) framework seeks to widen investment options, ease compliance, simplify regulations and remove redundant provisions. It introduces PRIM, allowing portfolio managers to use direct mutual fund plans, including ETFs, index funds and SIFs, with a minimum ticket size of ₹25 lakh. The framework also introduces Independent Fund Managers.
Pandey said the growth of the PMS industry also brings greater responsibility for portfolio managers. He said PMS clients may meet the prescribed investment threshold, but eligibility and suitability were not the same. Portfolio managers, given their greater understanding of a strategy’s concentration, liquidity, volatility and downside risks, must understand investors equally well. He also stressed that performance should be presented with context, including the risks taken, appropriate benchmarks, portfolio concentration and drawdowns.
Source: Business Standard
