I. Background
The Securities and Exchange Board of India (“SEBI”) Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors dated May 30, 2024 (“Master Circular”) currently requires Foreign Portfolio Investors (“FPIs”) to identify their investor group to enable SEBI to monitor compliance with concentration limits prescribed for FPI investment in Government Securities. SEBI vide circular dated September 10, 2025, modified this requirement and excluded FPIs investing exclusively in Government Securities under the Fully Accessible Route (“FAR”) from furnishing investor group details considering that the FAR does not have any concentration limits.
Subsequently, in June 2026, the Reserve Bank of India (“RBI”) withdrew the concentration and security wise investment limits for FPIs investing in Government Securities through the General Route. Considering this position, SEBI has now, vide circular dated September 7, 2026 (“Circular”), amended the Master Circular to bring its text in line with the RBI.
II. Key Update
The requirement to furnish investor group details, which was previously waived only for FPIs investing exclusively in Government Securities under the FAR, has now been extended to all FPIs investing exclusively in Government Securities. Accordingly, the relevant sub-paragraph has been amended to provide that “FPIs investing only in Government Securities shall not be required to furnish investor group details.”
III. Our view
In our view, the Circular simply brings the text of the Master Circular up to date with the position that RBI’s circular had already brought about in substance. The circular is a clarificatory alignment of SEBI’s framework with RBI’s position and reduces the compliance burden for investments made exclusively in Government Securities through the General Route.
