SEBI and CBDT Eases PAN Requirements for Foreign Portfolio Investors Amid Continued Outflows

Securities and Exchange Board of India (SEBI) on Thursday announced that the Central Board of Direct Taxes (CBDT) has eased certain PAN allotment requirements applicable to foreign portfolio investors (FPIs), following concerns raised by market participants regarding implementation challenges under the newly introduced Income-tax Rules, 2026. 

Relaxations Introduced for Foreign Investors 

As per news reports, the latest clarification is expected to make the onboarding process smoother for overseas investors seeking access to Indian capital markets. 

Under the revised framework, FPIs will receive greater flexibility while submitting representative information, taxpayer identification details, and contact-related data during PAN applications filed through the Common Application Form (CAF). 

The changes are intended to reduce operational friction and simplify procedural requirements that industry participants had flagged after the rollout of the updated income-tax rules. 

According to SEBI, the measures are aimed at maintaining ease of onboarding for foreign investors and ensuring smoother compliance processes. 

Move Comes Amid Heavy Overseas Outflows 

The regulatory easing comes at a time when Indian equity markets continue to witness sustained selling by foreign portfolio investors. 

So far this year, FPIs have withdrawn more than ₹2.1 trillion from domestic equity markets, reflecting cautious global investor sentiment and continued volatility across international financial markets. 

The latest compliance relaxations are being viewed as part of broader efforts to improve operational convenience for global investors and support participation in Indian markets. 

Read More: SEBI Considering Specialised Distributors to Boost Debt Products Access! 

Conclusion 

The easing of PAN-related compliance requirements for FPIs reflects ongoing efforts by Indian regulators to improve investor accessibility and reduce procedural hurdles amid continued foreign capital outflows from domestic markets. 

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