Key approvals in SEBI’s board meeting dated September 12, 2025

The Securities and Exchange Board of India (SEBI) in its 211^th board meeting held on September 12, 2025, considered and approved a wide range of regulatory measures across the financial markets. The approvals are set to usher in new frameworks and operational flexibility for foreign portfolio investors (FPIs) and alternative investment funds (AIFs), aiming to boost trusted and accredited investor participation. Further, SEBI has approved amendments to re-classify Real Estate Investment Trusts (REITs) as equity instruments for the purpose of mutual fund investments, while Infrastructure Investment Trusts (InvITs) will continue to be treated as hybrid instruments. SEBI’s approvals follow recommendations from various consultation papers issued between August and September 2025.

Key amendments approved by SEBI in its board meeting, have been discussed below:

1. Approval of Ease of Doing Business measures for FPIs based in IFSCs:

• • • SEBI has approved registration of retail schemes based in International Financial Services Centres (IFSCs), managed or sponsored by resident Indian non-individuals, as FPIs.

• • • The maximum permissible contribution by resident Indian non-individual sponsors/managers in IFSC-based funds is capped at 10% of the corpus or assets under management for AIFs and retail schemes set up in IFSCs, harmonizing SEBI and International Financial Services Centres Authority (IFSCA) norms.

• • • SEBI has approved amendments permitting Indian mutual funds to be constituents of overseas mutual funds/unit trusts registering as FPIs subject to conditions laid out in SEBI’s circular dated November 4, 2024 (whereby SEBI permitted Indian mutual fund schemes to invest in overseas mutual funds/unit trusts that have exposure to Indian securities, subject to certain conditions in terms of exposure limit, pooling requirement, pari-passu and pro-rata rights, independence of investment manager, etc.).

2. Approval for operationalising the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework for FPIs and FVCIs: 

• • • SEBI has approved introduction of ‘Single Window Automatic & Generalised Access for Trusted Foreign Investors’ (SWAGAT-FI) framework to enable a unified registration process across multiple investment routes for certain objectively verified, low-risk foreign investors which include government-owned investors such as sovereign wealth funds, central banks, multilateral agencies, and certain regulated public retail funds having a diversified investor and investment base with independent fund managers (e.g. mutual funds, insurance, and pension funds).

• • • The framework aimed at simplifying onboarding procedures and reducing compliance requirements, is said to, inter alia, provide for: (I) dual registration (i.e. both as FPIs and Foreign Venture Capital Investors (FVCIs)); (II) single demat account usage; (III) extension of the review and fee-payment cycle for registration renewals and Know Your Client (KYC) review to ten years from the prevailing three- or five-year cycles; and (IV) exemption from the 50% aggregate contribution limit applicable to Non-Resident Indians, Overseas Citizens of India, and Resident Indian individuals investing in FPIs.

• • • Eligible foreign investors may opt to be identified as a SWAGAT-FI at the time of their initial FPI registration. Existing FPIs that satisfy the eligibility criteria will also be permitted to apply for SWAGAT-FI status. Upon obtaining SWAGAT-FI status, both new applicants and existing FPIs will become eligible for the proposed regulatory relaxations – SEBI shall release jurisdiction-wise lists of eligible fund structures for SWAGAT-FI framework based on a trust-but-verify approach and has stipulated a six-month period for the complete roll-out and implementation of the SWAGAT-FI framework.

3. Launch of ‘India Market Access’ website for FPIs: SEBI launched the ‘India Market Access’ website offering a unified digital portal for both existing and prospective FPIs. This comprehensive single-window platform brings together all regulatory and procedural requirements eliminating the inefficiencies of dispersed information and provides investors with transparent, streamlined access and ongoing compliance support for investing in India’s securities markets.

4. Approval of measures to promote ease of doing business for Accredited Investors of AIFs

• • • SEBI has approved introduction of a separate category of AIF schemes exclusively for accredited investors (AI-only Schemes) which shall be subject to lighter-touch regulatory framework compared to regular AIFs and shall be exempt from: (I) ensuring pari-passu treatment of investors; and (II) cap of number of investors in a scheme (extant limit of 1,000 investors per scheme of an AIF).

• • • Further, AI-only Schemes shall also have the option of extending the tenure of close-ended schemes up to five years (as opposed to extension of two years allowed for regular AIF schemes). SEBI has permitted Large Value Funds (LVFs), being AI-only Scheme in nature to avail the operational and regulatory flexibilities being offered to AI-only Schemes.

• • • SEBI has approved lowering the minimum investment threshold for LVFs from INR 70,00,00,000 to INR 25,00,00,000 and extending relaxations such as exemptions from following the standard template of private placement memorandum (PPM) and conducting annual PPM audits.

• • • Existing AIF schemes can continue onboarding investors based on the extant minimum ticket size of INR 1,00,00,000 but a glide path is set in motion toward full adoption of accreditation-based eligibility and launch of AI-only Schemes in the future.

5. Approval of re-classification of REITs for mutual fund investments:

• • • SEBI has approved amendments to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 re-classifying REITs as equity instruments and retaining the hybrid classification for InvITs for the purpose of investments by mutual funds and specialized investment funds.

• • • This change enables mutual funds to include REITs within their equity investment limits and potentially in equity indices, facilitating enhanced investments by mutual fund schemes in REITs. Additionally, as a result of REITs being classified as ‘equity’, the existing mutual fund investment limits for both REITs and InvITs will now be exclusively applicable to InvITs, supporting further growth and liquidity in the infrastructure segment.

6. Approval to expand the definition of ‘Strategic Investor’ for REITs and InvITs: SEBI has approved amendments to the regulatory frameworks for REITs and InvITs to widen the investor base applying under the ‘strategic investor’ category in public issues of REITs and InvITs, to include all Qualified Institutional Buyers (QIBs), family trusts and intermediaries with a net worth of more than INR 500,00,00,000 and middle layer, upper layer and top layer non-banking financial companies, enabling greater institutional participation. This amendment is expected to promote increased participation by long-term, regulated institutional investors, thereby reinforcing investor confidence and enhancing capital access for investment trusts.

Conclusion:

SEBI is likely to notify amendment regulations and/or circulars in respect of these decisions in the coming days.