The Securities and Exchange Board of India (SEBI) has suggested that foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs) should pay registration and related fees in Indian rupees (INR) instead of US dollars (USD). This move aims to streamline fee collection processes, enhance accounting efficiency, and reduce operational challenges linked to foreign currency transactions. SEBI collected a total of $12.98 million, including Goods and Services Tax (GST), in the fiscal year 2026 through fees paid by FPIs and FVCIs.
The current system of receiving fees in US dollars necessitates manual accounting and invoicing, leading to time-consuming processes and hindering real-time financial record visibility, as per SEBI. This often results in delays in financial reporting. SEBI also highlighted that remittance charges and foreign exchange conversion costs frequently cause shortfalls in fees received or create reconciliation discrepancies, requiring significant time and manpower to resolve such issues.
Under the proposal, FPIs and FVCIs will need to pay registration fees in eligible foreign exchange equivalent to the specified amount by SEBI in INR terms to the designated depository participant (DDP) before registration is granted. The DDP will then have to remit the fees to SEBI within five working days of the registration grant.
SEBI has suggested revising the registration fee for Category-I FPIs and FVCIs from the current $2,500 to Rs 2.3 lakh. Additionally, the regulator is contemplating changes to late payment charges and renewal fees. FPI registrations are presently valid for three years, while specific trusted FPIs registered under the Swagat-FI route enjoy a registration validity of 10 years. Registrations granted to FVCIs remain valid for five years.
SEBI has also proposed modifications to the Common Application Form (CAF) used for FPI registration by requiring the inclusion of the applicant’s date of birth or, for entities, the date of incorporation, agreement, trust deed, or any other date of formation or partnership. This step is intended to strengthen the registration process and enhance the quality of applicant information maintained by the regulator.
