No PANs issued to FPIs for a month, onboarding hit

Without a PAN, FPIs cannot open trading or demat accounts, effectively preventing them from investing in Indian securities.

Foreign portfolio investors (FPIs) have not received any Permanent Account Numbers (PAN) for nearly a month following changes to the PAN application process under the common application form (CAF), creating a bottleneck in onboarding fresh foreign investors into Indian markets.

At least 20 newly registered FPIs are currently awaiting PAN allotment despite having completed registration formalities, people familiar with the matter said.

Without a PAN, FPIs cannot open trading or demat accounts, effectively preventing them from investing in Indian securities.

“Normally, once the application is initiated through the custodian or designated depository participant, PAN is issued within two to three days. But for the past month, no PANs have been issued,” a source said.

CAF framework

The issue has emerged after changes were made to the PAN forms integrated within the CAF framework. The CAF serves as a single-window system for FPI registration, PAN allotment, KYC and account opening.

The disruption is linked to changes introduced by the Income Tax Department through new PAN application forms and related system validations. A similar hold up is being faced by FDIs at the Reserve Bank of India (RBI), another source said.

Market participants said some applications are getting held up due to field-level validation issues, such as mismatches in character limits, formatting requirements and other data-entry checks in the revised forms.

Some FPIs are also facing challenges in appointing ‘authorised representatives’ (ARs), which is required under the updated framework. They are finding it difficult to identify suitable domestic individuals willing to take on the role due to concerns around potential tax liability exposure.

The matter has been taken up with the Securities and Exchange Board of India (SEBI), which is understood to be in discussions with the government and stakeholders. Sources said the regulator has proposed allowing FPIs to appoint ‘authorised signatories’ instead of authorised representatives to ease the process. Discussions with the Central Board of Direct Taxes (CBDT) are ongoing.

“FPIs are finding it challenging to find appropriate domestic persons to complete the new AR entry in the CAF form,” said an FPI market participant, adding that they are waiting on an update on SEBI’s discussions with CBDT.

An email sent to the regulator did not elicit a response.

The PAN issuance process flows from the Income Tax Department to Protean and then through APIs to the depositories. Once the PAN is issued, new registrants can open demat accounts with the stock exchanges to be able to trade or invest.

Published on May 10, 2026