SEBI proposes INR-based registration fee payment for FPIs, FVCIs to simplify processes
New Delhi, July 3
The Securities and Exchange Board of India on Friday proposed that foreign portfolio investors and foreign venture capital investors pay registration and related fees in Indian rupees, replacing the existing system of payments in US dollars, according to board meeting documents.
The proposal is aimed at streamlining fee collection, improving accounting efficiency and reducing operational challenges associated with foreign currency transactions.
SEBI collected a total of $12.98 million, including Goods and Services Tax (GST), in FY26 through registration, continuation and other fees paid by FPIs and FVCIs.
According to the regulator, the current mechanism of receiving fees in US dollars requires manual accounting and invoicing, making the process time-consuming and limiting real-time visibility of financial records. This often results in delays in financial reporting.
The market regulator also pointed out that remittance charges and foreign exchange conversion costs frequently lead to shortfalls in the fees received or create reconciliation discrepancies. It added that considerable time and manpower are spent coordinating across departments to resolve such issues, leading to an opportunity cost.
Under the proposal, FPIs and FVCIs will pay registration fees in eligible foreign exchange equivalent to the amount specified by Sebi in INR terms to the designated depository participant (DDP) before the registration is granted.
The DDP will then be required to remit the fees to Sebi within five working days of the grant of registration.
SEBI has proposed revising the registration fee for Category-I FPIs and FVCIs from the current $2,500 to Rs 2.3 lakh. The regulator is also considering changes to late payment charges and renewal fees.
At present, FPI registrations are valid for three years, while specified trusted FPIs registered under the Swagat-FI route receive a registration validity of 10 years. Registrations granted to FVCIs remain valid for five years.
Separately, SEBI has proposed changes to the Common Application Form (CAF) used for FPI registration by mandating the inclusion of the applicant's date of birth or, in the case of entities, the date of incorporation, agreement, trust deed or any other date of formation or partnership. The move is intended to strengthen the registration process and improve the quality of applicant information maintained by the regulator.
— IANS
Reader Comments
Makes sense operationally, but isn't the fee increase from $2,500 to Rs 2.3 lakh ($2,700 roughly) a bit steep for small FPIs? That's a 8-10% jump. And with the dollar strengthening of late, smaller players might feel the pinch. Hope SEBI considers a sliding scale.
As a young chartered accountant following Indian capital markets, I think this is a step in the right direction 🇮🇳. The current manual process for dollar receipts is a nightmare—different bank charges, forex spreads, and constant reconciliation. Automation will free up so much manpower at SEBI. Also smart to mandate date of birth/incorporation in the CAF to prevent fraud.
Honestly, this is just a small administrative change. India wants to internationalise its markets, yet we're making everything rupee-centric for FPIs. Over time, this might discourage portfolio investments from countries with capital controls. And Rs 2.3 lakh is steep for small funds. Mixed feelings.
Great to see SEBI innovating! The DDP role for remittance within 5 days is a good accountability measure. But I hope GST implications are sorted—currently it's in dollars, now switching to rupees might create input tax credit issues for FPIs. The devil is in the details, as always.
As someone who works in the securities market, I can tell you this is long overdue. The current system requires multiple emails to banks and foreign exchanges for every $100 fee. Rupee payments will also reduce currency risk for Indian intermediaries. Good job SEBI 👏
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.