India’s markets regulator, Sebi, has unveiled a plan to streamline the onboarding process for individual overseas investors, introducing digital verification methods to cut paperwork and attract more foreign capital.
India’s markets regulator has proposed letting individual overseas investors complete regulatory onboarding online, in a move designed to cut paperwork and make access to the country’s securities markets easier. The Securities and Exchange Board of India said the changes would allow intermediaries to use video-based customer identification and verification for individual Person Resident Outside India clients, including non-resident Indians, overseas citizens of India and foreign nationals living abroad.
The proposal would require the technology used in onboarding to check that the applicant is physically present and to detect spoofing attempts, while still accommodating people with disabilities. Sebi also wants intermediaries to be able to reuse know-your-customer checks already carried out by another Sebi-registered firm, or by entities regulated by other financial authorities, provided the records come through KYC registration agencies or the Central KYC Records Registry. Even so, the intermediary would remain responsible for the client’s KYC and would have to apply extra checks according to risk.
According to the regulator, once onboarding is completed for an individual overseas client, the information must be passed to KYC registration agencies within three working days. The simplified process would also cover re-KYC, or refreshed identity checks, for clients based in countries that comply with the Financial Action Task Force standards. Clients in non-compliant countries would still have to go through the existing process.
The proposal comes after a series of Sebi moves aimed at making India more attractive to foreign capital. Moneycontrol reported that Sebi has already added a digital signature certificate application feature to the common application form portal for foreign portfolio investors, allowing applicants to seek the certificate from Indian authorities while filing registration papers. The Economic Times has also reported that Sebi and the Central Board of Direct Taxes have eased PAN compliance requirements for foreign investors, after earlier concerns about documentation and identification rules slowed onboarding. Mint, meanwhile, reported that Sebi has introduced the SWAGAT-FI framework for trusted foreign investors, a single-window route that offers longer registrations and a unified digital entry point. Sebi has invited public comments on the latest proposal until September 4.
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