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What is the story about?
The Securities and Exchange Board of India (SEBI) has eased compliance requirements for foreign portfolio investors (FPIs) investing exclusively in government securities, removing the need to furnish investor-group details.
The change, announced in a circular dated September 7, expands an exemption that was earlier available only to FPIs investing in government securities through the Fully Accessible Route (FAR).
FPIs can invest in Indian government securities through different routes. Under FAR, eligible investors can buy specified government securities without the investment limits applicable under the General Route, which is subject to prescribed investment limits and other regulatory conditions.
With the latest move, the disclosure exemption has been extended to all FPIs investing only in government securities, irrespective of the route they use.
Why has SEBI removed the requirement?
The change is linked to an earlier decision by the Reserve Bank of India (RBI). On June 5, 2026, the RBI withdrew the requirement for FPIs investing in government securities through the General Route to comply with prescribed concentration limits.
These concentration limits were one of the reasons regulators needed investor-group details — essentially, information that helps identify investors belonging to the same group and assess their combined exposure.
With those limits no longer applicable to FPIs investing through the General Route, SEBI said identifying the investor group for an FPI that invests only in government securities is no longer relevant.
As a result, SEBI has modified its rules to state that “FPIs investing only in Government Securities shall not be required to furnish investor group details.”
The change takes effect immediately, with depositories, custodians and designated depository participants directed to make the necessary changes to their systems.
In simple terms, an overseas investor that comes to India solely to buy government bonds will no longer have to provide additional information about its broader investor group merely to meet a concentration-limit monitoring requirement that no longer applies to such investments.
The change, announced in a circular dated September 7, expands an exemption that was earlier available only to FPIs investing in government securities through the Fully Accessible Route (FAR).
FPIs can invest in Indian government securities through different routes. Under FAR, eligible investors can buy specified government securities without the investment limits applicable under the General Route, which is subject to prescribed investment limits and other regulatory conditions.
With the latest move, the disclosure exemption has been extended to all FPIs investing only in government securities, irrespective of the route they use.
Why has SEBI removed the requirement?
The change is linked to an earlier decision by the Reserve Bank of India (RBI). On June 5, 2026, the RBI withdrew the requirement for FPIs investing in government securities through the General Route to comply with prescribed concentration limits.
These concentration limits were one of the reasons regulators needed investor-group details — essentially, information that helps identify investors belonging to the same group and assess their combined exposure.
With those limits no longer applicable to FPIs investing through the General Route, SEBI said identifying the investor group for an FPI that invests only in government securities is no longer relevant.
As a result, SEBI has modified its rules to state that “FPIs investing only in Government Securities shall not be required to furnish investor group details.”
The change takes effect immediately, with depositories, custodians and designated depository participants directed to make the necessary changes to their systems.
In simple terms, an overseas investor that comes to India solely to buy government bonds will no longer have to provide additional information about its broader investor group merely to meet a concentration-limit monitoring requirement that no longer applies to such investments.
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