The Securities and Exchange Board of India (SEBI) has decided to shift the payment of registration and related fees by Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs) from US dollars to Indian rupees, with the changes set to be implemented within six months of the notification.
Fees will be specified in rupee terms, while FPIs and FVCIs will continue to pay the equivalent amount in eligible foreign exchange to their Designated Depository Participant (DDP).
Fee payment
The DDP will, in turn, remit the amount to SEBI in Indian rupees within five working days of granting registration. The six-month implementation period has been provided to enable changes to systems and processes required for the transition from dollar-based payments to rupee-denominated fees.
Accordingly, the registration fee for category-I FPIs will be ₹2.3 lakh, replacing the current fee of $2,500, while Category-II FPIs will pay ₹23,000 instead of $250. Registration fees for FVCIs will also be ₹2.3 lakh, replacing $2,500.
Renewal fees will similarly shift to ₹2.3 lakh for category-I FPIs and ₹23,000 for category-II FPIs from the existing $2,500 and $250, respectively, while the FVCI renewal fee will be ₹9,000 instead of $100.
During FY26, SEBI collected $12.99 million or about ₹115.98 crore through FPI and FVCI registration, continuation and other related fees.
The changes are aimed to be revenue neutral for SEBI based on fee collections during FY26, when it received about ₹115.98 crore through FPI and FVCI registration and related charges.
Currently, custodians remit fees only during the first five days of every month, meaning any fee due after 5th till end of month, is only paid in the subsequent month leading to opportunity cost for SEBI.
Fees received in USD have to be manually accounted in the SAP Portal of SEBI and invoices for the same have to be prepared manually. This manual process is time consuming and lacks real time accounting visibility, leading to delays in financial reporting.
In several cases charges during remittance of USD and the subsequent conversion charges are deducted from the fees received in the ICICI Bank account, thereby resulting in shortfall in fee received and discrepancies during reconciliation.
Further, identification of the corresponding FPI/FVCI and the services for which fees are paid involves co-ordination between relevant departments of SEBI for reconciliation of data is a rigorous process that consumes many man-hours.
PAN compliance
Separately, SEBI has decided to modify the FPI registration certificate by capturing the date of birth or incorporation of the applicant. The change follows the Central Board of Direct Taxes’ introduction of new PAN application forms for foreign citizens and entities that require proof of date of birth or incorporation. Since the existing FPI registration certificate is already accepted as proof of identity and address, the regulator believes including this additional information will simplify the onboarding process.
Separately, SEBI has also decided to change the frequency of custodian fee payments from annual to monthly to improve the timeliness of fee collection. Under the revised framework, custodians will pay a monthly fee of ₹85,000 or 0.0000416 per cent of assets under custody (AUC), whichever is higher, instead of the current annual fee of ₹10 lakh or 0.0005 per cent of AUC, whichever is higher.
The revised fee structure will come into effect from October 1, 2026, and is intended to be revenue neutral. The regulator said the change would ensure more regular remittance of fees instead instead of the delay in receipt from the current annual fee structure.
The proposals were discussed with the Custodians and Designated Depository Participants Standards Setting Forum (CDSSF) and the FPI Advisory Committee, both of which agreed with the changes before they were approved by the SEBI Board in June.