SEBI Mandates FPI Fee Payments in INR Under Revised Regulations

The Securities and Exchange Board of India (SEBI) has notified amendments to the Foreign Portfolio Investors (FPI) Regulations, replacing the existing US dollar-based fee system with a rupee-linked structure, as per a Business Standard report.  

The revised rules will become effective after six months, giving foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs) time to make the required changes to their payment process. 

Under the amended regulations, the registration fee of $1,000 has been replaced with ₹90,000 in eligible foreign exchange equivalent. The registration fee for Category-I FPIs and FVCIs has also been revised from $2,500 to ₹2.3 lakh.  

SEBI has made similar revisions to the applicable late fees and continuation charges. 

Changes Extend to Registration Process 

The regulator has also updated the common application form used for FPI registration. The form will now require the applicant's date of birth or date of incorporation.  

According to SEBI, this change is intended to support Permanent Account Number (PAN) applications following the notification issued by the Central Board of Direct Taxes (CBDT) in March. 

Designated depository participants (DDPs), which handle FPI registrations in India, will now have to remit the prescribed fees to SEBI within five working days of granting registration. 

Administrative Reasons Behind the Move 

SEBI said the amendments address operational issues linked to collecting fees in US dollars. The existing system required manual accounting and invoicing, while foreign currency receipts also delayed reconciliation and financial reporting.  

The revised framework is to simplify fee collection and accounting procedures. The regulator collected $12.98 million, including GST, during FY2025-26 through registration, continuation and other charges paid by FPIs and FVCIs. 

Another amendment changes the payment schedule for custodians. Instead of an annual payment of ₹10 lakh, custodians will now pay ₹85,000 every month. 

Mutual Fund Regulations Also Revised 

Alongside the FPI amendments, SEBI has notified changes to the Mutual Fund Regulations. Mutual funds will now be allowed to use intraday borrowing to meet temporary funding gaps arising from pay-in and pay-out settlement timings, foreign exchange settlements and similar transactions. 

The existing provision allowing mutual funds to borrow up to 20% of a scheme's net assets to meet redemption requirements remains unchanged.  

Asset management companies must repay intraday borrowings before the end of the day or comply with the rules governing overnight borrowing. 

Read More: India’s Smartphone Production Crosses $71 Billion Under PLI Scheme, Industry Tells Government! 

Conclusion 

The regulatory changes cover fee payments, registration processes and compliance timelines for foreign investors, along with separate amendments to mutual fund borrowing rules. The revised provisions will come into force after six months. 

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