In a move aimed at simplifying market access for foreign investors and boosting fund-raising, the Securities and Exchange Board of India (SEBI) has approved a single-window clearance system for Foreign Portfolio Investors (FPIs). This decision, made during a board meeting on Friday, is expected to ease norms particularly for sovereign wealth funds, pension funds, and public retail funds, which collectively manage over ₹81 lakh crore in Indian assets.

Currently, FPIs navigate multiple entry routes into the Indian market, each with its own set of compliance requirements and documentation. The new single-window system aims to streamline this process by enabling unified registration across all routes. This automatic window will be applicable to FPIs that are at least 75% owned by foreign governments or are regulated in their home countries.

SEBI's move is seen as a way to enhance India's appeal as an investment destination by simplifying operational hurdles for foreign entities. The single-window system is expected to integrate compliance norms across various regulatory bodies, including SEBI, RBI, FEMA, PMLA, and the Income Tax Department. It will offer comprehensive assistance on procedures, timelines, and documentation, including category selection and Common Application Form (CAF) submissions, to streamline the onboarding process for FPIs.

SEBI is also working with the Ministry of Electronics and Information Technology (MeitY) to enable FPIs to use Indian digital signatures, replacing the current reliance on physical documents. Furthermore, SEBI is considering a new FPI category specifically for investments solely in Indian government bonds.

In addition to easing FPI entry, SEBI has also taken steps to lower the minimum share-sale requirement for large companies seeking listings. This move addresses the challenges faced by large issuers in diluting significant stakes through IPOs due to limited market absorption capacity. SEBI has also proposed extending the timeline for issuers to meet shareholding norms. The retail investor quota in IPOs has been retained at 35%, and SEBI permits undersubscription spillover to mutual funds. Furthermore, SEBI has increased anchor investor reservation for Qualified Institutional Buyers (QIBs) from 33% to 40%.

SEBI's efforts to streamline the FPI tax calculation process, with assistance from depositories, now ensure that tax certificates for transactions executed on the trade day (T-day) are delivered by 9 a.m. the following day. This enhancement is projected to result in annual savings of up to ₹2,000 crore for FPIs.

These changes reflect SEBI's commitment to rationalizing regulations, removing redundancies, and upgrading cybersecurity infrastructure to mitigate trading anomalies. SEBI's initiatives are expected to encourage long-term capital flows into the country and enhance the overall attractiveness of the Indian securities market for foreign investors.