SEBI Proposes Collecting FPI and FVCI Registration Fees in Rupees, Replacing Existing Dollar-Based System

The Securities and Exchange Board of India (SEBI) is considering a proposal to shift registration and related fee payments by foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs) from US dollars to Indian rupees, as per news reports.  

The proposal is part of the agenda for a board meeting and seeks to change the way these fees are collected and transferred to the market regulator. 

Under the proposal, FPIs and FVCIs will pay the prescribed fee in rupees to the designated depository participant (DDP) before registration is granted. The DDP will be required to remit the amount to SEBI within five working days of issuing the registration. 

Administrative Issues with Existing System 

SEBI noted that the current system of collecting fees in US dollars involves manual accounting, invoice generation, and reconciliation. According to the regulator, this process takes time and does not provide real-time visibility of fee collections, leading to delays in financial reporting. 

The board papers also point to foreign exchange conversion costs and remittance charges as recurring issues. These often result in differences between the fee payable and the amount received, requiring additional reconciliation before accounts can be finalised.  

SEBI also noted that the process involves considerable coordination across departments. 

Fee Revisions Under Consideration 

Category-I FPIs and FVCIs currently pay a registration fee of $2,500. As part of the proposal, this may be replaced with a fee of ₹2.3 lakh. SEBI is also examining revisions to renewal fees and charges applicable in cases of delayed payments. 

In FY26, the regulator collected $12.98 million through registration, continuation and other fees paid by FPIs and FVCIs. The figure includes Goods and Services Tax (GST).  

Registration validity is proposed to remain unchanged at three years for FPIs, ten years for specified trusted FPIs under the Swagat-FI route and five years for FVCIs. 

Changes to Application Process 

The regulator has also proposed changes to the common application form (CAF), which is used for FPI registration, Permanent Account Number (PAN) applications and opening bank and demat accounts.  

The revised form will include the applicant's date of birth or date of incorporation, trust deed, agreement or partnership formation details, in line with PAN application requirements introduced by the Central Board of Direct Taxes (CBDT) earlier this year. 

Separately, SEBI has proposed shifting custodian fee payments from an annual schedule to monthly remittances. The regulator collected ₹175.8 crore in custodian fees during FY26. 

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Conclusion 

The proposed changes seek to modify the fee collection process and update registration requirements for FPIs and FVCIs. The proposals are currently under SEBI's consideration. 

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