SEBI proposes INR-based FPI, FVCI fee payments to cut forex friction
Synopsis
SEBI wants to stop collecting FPI and FVCI fees in US dollars — a shift that sounds administrative but signals something bigger. By routing payments through DDPs in INR, the regulator is tackling forex reconciliation losses and manual accounting delays that have quietly cost time and money. The Category-I FPI fee conversion from $2,500 to ₹2.3 lakh also locks in a rupee benchmark, insulating SEBI's revenue from exchange-rate swings.
Key Takeaways
SEBI proposed on 3 July that FPIs and FVCIs pay registration fees in INR instead of USD .
The regulator collected $12.98 million (including GST) in FY26 from FPI and FVCI fees under the current dollar-based system.
Category-I FPI and FVCI registration fee proposed to change from $2,500 to ₹2.3 lakh .
Designated depository participants (DDPs) will collect fees and remit them to SEBI within five working days of registration.
SEBI also proposed amending the Common Application Form (CAF) to mandate applicants' dates of birth or incorporation for stronger data quality.
FPI registrations remain valid for 3 years ; Swagat-FI route FPIs for 10 years ; FVCIs for 5 years .
The Securities and Exchange Board of India (SEBI) on Friday, 3 July proposed shifting registration and related fee payments by foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs) from US dollars (USD) to Indian rupees (INR), according to board meeting documents. The move is designed to streamline fee collection, reduce forex-related reconciliation gaps, and improve real-time financial visibility for the regulator.
Why SEBI Wants to Move Away from Dollar Payments
Under the current system, SEBI receives registration, continuation, and other fees in USD — a mechanism the regulator says creates significant operational drag. Manual accounting, time-consuming invoicing, and limited real-time visibility of financial records have all been flagged as pain points.
The regulator also noted that remittance charges and foreign exchange conversion costs frequently result in shortfalls in fees received or trigger reconciliation discrepancies. Considerable manpower is spent coordinating across departments to resolve such issues — an opportunity cost the regulator wants to eliminate.
In FY26, SEBI collected a total of $12.98 million — including Goods and Services Tax (GST) — through FPI and FVCI registration and related fees.
How the New Fee Mechanism Would Work
Under the proposed framework, FPIs and FVCIs would pay registration fees in eligible foreign exchange equivalent to the amount specified by SEBI in INR terms, to their designated depository participant (DDP) before registration is granted.
The DDP would then be required to remit those fees to SEBI within five working days of the grant of registration. This introduces a structured intermediary step that centralises currency conversion and removes the burden from SEBI's own accounting processes.
Revised Fee Levels and Registration Validity
SEBI has proposed revising the registration fee for Category-I FPIs and FVCIs from the current $2,500 to ₹2.3 lakh. The regulator is also considering changes to late payment charges and renewal fees, though specific revised figures for those have not yet been disclosed.
On registration validity, the existing structure remains unchanged under the proposal: FPI registrations are valid for three years; specified trusted FPIs registered under the Swagat-FI route receive a validity of 10 years; and FVCI registrations remain valid for five years.
CAF Changes to Strengthen Applicant Data Quality
Separately, SEBI has proposed amendments to the Common Application Form (CAF) used for FPI registration. The revised form would mandate the inclusion of the applicant's date of birth — or, for entities, the date of incorporation, agreement, trust deed, or any other date of formation or partnership.
The change is intended to strengthen the registration process and improve the quality of applicant information maintained by the regulator, addressing gaps that could otherwise complicate due-diligence and compliance checks.
What Comes Next
The proposals are currently at the consultation stage, with SEBI inviting stakeholder feedback before finalising the framework. If adopted, the INR-based fee structure would mark a significant administrative shift in how India's capital markets regulator handles foreign investor onboarding — one that could also reduce friction for FPIs navigating multi-currency compliance requirements.
Point of View
Reducing dependence on foreign currency mechanics even for administrative functions. The CAF amendment — mandating dates of birth and incorporation — is equally telling: it suggests the regulator has identified data-quality gaps in its foreign investor registry that need plugging before the next compliance audit cycle. Neither proposal is headline-grabbing, but both reflect a regulator tightening its back-office before the next wave of foreign capital inflows.
NationPress
3 Jul 2026
Frequently Asked Questions
What has SEBI proposed regarding FPI and FVCI registration fees?
SEBI has proposed that foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs) pay registration and related fees in Indian rupees (INR) instead of US dollars (USD). The change aims to reduce manual accounting burdens, eliminate forex conversion losses, and improve real-time financial visibility for the regulator.
How much did SEBI collect from FPI and FVCI fees in FY26?
SEBI collected a total of $12.98 million, including GST, in FY26 through registration, continuation, and other fees paid by FPIs and FVCIs. This figure highlights the scale of fee revenue currently exposed to foreign exchange conversion costs and reconciliation risks.
What is the revised registration fee for Category-I FPIs under the proposal?
SEBI has proposed revising the Category-I FPI and FVCI registration fee from the current $2,500 to ₹2.3 lakh. The regulator is also considering revisions to late payment charges and renewal fees, though specific amounts for those have not yet been disclosed.
What role will designated depository participants play in the new fee structure?
Under the proposed mechanism, FPIs and FVCIs will pay fees in eligible foreign exchange — equivalent to the INR amount specified by SEBI — to their designated depository participant (DDP) before registration is granted. The DDP must then remit those fees to SEBI within five working days of registration being granted.
What changes has SEBI proposed to the Common Application Form for FPI registration?
SEBI has proposed mandating the inclusion of an applicant's date of birth — or, for entities, the date of incorporation, agreement, trust deed, or other date of formation — in the Common Application Form (CAF). The amendment is intended to strengthen the registration process and improve the quality of applicant data held by the regulator.
