SEBI Eases FPI Compliance: Extends KYC Review Periodicity to 8 Years for Category I & II Investors

In a major reform aimed at enhancing the ease of doing business for global investors, the Securities and Exchange Board of India (SEBI) has significantly rationalised the periodicity of Know Your Customer (KYC) reviews for Foreign Portfolio Investors (FPIs). Under the updated circular effective December 1, 2026, Category I and Category II FPIs registered from non-high-risk jurisdictions will now undergo periodic KYC reviews once every eight years, easing the compliance burden substantially from the earlier one-to-three-year review cycles.

Eligible sovereign wealth funds, central banks, and multilateral institutions covered under the fast-track SWAGAT-FI window will be granted an extended ten-year review window. However, high-risk entities and investors based in jurisdictions identified on the Financial Action Task Force (FATF) 'grey' or 'black' compliance lists will remain subject to mandatory annual reviews to ensure robust anti-money laundering (AML) safeguards.

Additionally, SEBI has eliminated the need for repetitive "no-change" declarations or fresh documentation during registration continuance blocks if beneficial ownership (BO) structures remain unaltered. Custodians and Designated Depository Participants (DDPs) will instead adopt a continuous, risk-based monitoring framework, ensuring regulatory oversight without subjecting institutional foreign capital to unnecessary procedural friction.