Sebi Notifies Rupee-Based FPI Fee Framework; Eases Mutual Fund Borrowing Rules

The Securities and Exchange Board of India (Sebi) has notified amendments to the Foreign Portfolio Investors (FPI) Regulations, replacing the existing US dollar-denominated fee structure with a rupee-based payment mechanism for foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs).

The changes will come into effect after six months, giving foreign investors and intermediaries time to transition to the revised framework.

Under the amended regulations, the registration fee prescribed under Regulation 43B(2) has been revised from US $1,000 to ₹90,000 in eligible foreign exchange equivalent. Sebi has also revised the registration charges for Category-I FPIs and FVCIs from US $2,500 to ₹2.3 lakh. The regulator has similarly revised the late fee and continuance fee.

Designated depository participants (DDPs), which process FPI registrations in India, will be required to remit the fees collected to Sebi within five working days from the grant of registration.

Changes Aim To Simplify Fee Collection

Sebi said the move follows operational issues associated with collecting fees in US dollars, including manual accounting and invoicing, lack of real-time accounting visibility and delays in financial reporting.

According to the regulator, it collected $12.98 million in FY26 through registration, continuation and other fees paid by FPIs and FVCIs. The amount includes GST.

In another operational change, Sebi has revised the fee payable by custodians from an annual payment of ₹10 lakh to a monthly payment of ₹85,000.

The regulator has also amended the common application form for FPI registration to include the date of birth or date of incorporation. The change is intended to facilitate Permanent Account Number (PAN) applications following the notification issued by the Central Board of Direct Taxes (CBDT) in March.

Sebi Eases Intraday Borrowing Rules For MFs

Separately, Sebi has notified amendments to the Mutual Fund Regulations permitting mutual funds to avail of intraday borrowing to bridge temporary funding mismatches arising from pay-in and pay-out settlement timings across asset classes, foreign exchange settlements and other transactions.

The facility will be in addition to the existing provision that allows mutual fund schemes to borrow up to 20% of their net assets to meet redemption and other unit-holder payout obligations.

Under the revised framework, asset management companies (AMCs) will be responsible for ensuring that all intraday borrowings are repaid by the end of the day and that any conversion into overnight borrowing complies with the applicable mutual fund regulations.