SEBI Report; Dated: 05.12.2025
1. Background
The Securities and Exchange Board of India (SEBI) has released a draft updated and simplified Master Circular for Foreign Portfolio Investors (FPIs) and Designated Depository Participants (DDPs). The document is now open for public consultation, reflecting SEBI’s ongoing effort to modernise and harmonise the regulatory framework governing foreign portfolio flows and custodial oversight.
2. Purpose of the Draft Circular
The existing Master Circular for FPIs and DDPs contains several amendments, clarifications, and transitional provisions issued over time. SEBI’s draft proposal seeks to:
- Consolidate circulars issued since May 2024
- Eliminate duplication and overlapping provisions
- Simplify regulatory language
- Remove transitional clauses or temporary instructions that are no longer relevant
- Offer a cleaner, practitioner-friendly format for compliance and interpretation
This initiative aligns with SEBI’s wider agenda of regulatory rationalisation and ease of doing business for foreign investors.
3. Scope of the Update
The draft Master Circular:
- Integrates all relevant circulars and clarifications issued post-May 2024
- Reorganises content to improve logical sequencing, readability, and internal consistency
- Retains the substantive regulatory conditions applicable to FPIs and DDPs while clarifying terminology and structure
- Aims to ensure that custodians, intermediaries, compliance teams, and investors have access to a single authoritative reference document
4. Consultation Window
Stakeholders—including FPIs, market intermediaries, industry associations, and compliance professionals—may provide feedback on the proposed framework.
Last date for submission of comments – December 26, 2025
Comments are expected to help SEBI further refine the document for clarity, practical usability, and regulatory alignment.
5. Expected Outcomes
Once finalised, the updated Master Circular is likely to:
- Reduce interpretational ambiguities
- Provide a streamlined and consolidated regulatory resource
- Improve operational compliance for onboarding, reporting, KYC, investment conditions, and custodial functions
- Enhance transparency and reduce administrative effort for intermediaries and foreign investors
Click Here To Read The Full Update
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