Sebi eases onboarding norms for foreign portfolio investors

Synopsis

The Securities and Exchange Board of India has simplified rules for foreign investors. This eases the process of obtaining PAN cards for overseas portfolio investors. New rules introduced by the Income-tax Department had created difficulties. The Central Board of Direct Taxes has now issued relaxations. This aims to make onboarding smoother for foreign investors.

The Securities and Exchange Board of India (Sebi) on Friday eased onboarding norms for foreign portfolio investors (FPIs) by simplifying PAN allotment requirements, following operational challenges under the new Income-tax Rules, 2026.

The regulator said the Central Board of Direct Taxes (CBDT) has issued clarifications to facilitate smoother issuance of PAN for FPIs after concerns were raised by market participants over revised PAN application forms notified in March. Sebi said it had actively engaged with CBDT to address the compliance hurdles faced by overseas investors.

Under the new PAN application framework, additional fields such as taxpayer identification number (TIN), and details and documents of representative or authorised representatives were introduced, while some previously optional fields-including mobile numbers-were made mandatory, creating procedural difficulties for FPIs. Following discussions, CBDT has now issued a set of relaxations.

As part of the changes, the authorised signatory named in the common application form (CAF) can be treated as the authorised representative for PAN purposes without requiring separate supporting documents.

"In this regard, the liability of the AS (authorised signatory) named in the RA/AR field is solely limited to the purpose of applying for PAN," Sebi said in a statement. The regulator added that where contact details of the authorised signatory are unavailable, FPIs can provide their own address, email and phone details in the application.

In cases where PAN, Aadhaar or passport details of authorised signatory are unavailable, FPIs can furnish their FPI registration number. CBDT has also allowed FPIs from jurisdictions where TIN or equivalent identification numbers are not issued to use a placeholder value of '0000000000' in the relevant field.

Additionally, where a mobile number is not available, a landline number can be provided as an alternative, Sebi said. "These resonate with continuous efforts towards providing ease of onboarding to FPI," the regulator said. FPIs use a single common application form for registration with Sebi, opening bank and demat a/cs, and obtaining PAN.

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