Key Highlights:

  • SEBI Chairman Tuhin Kanta Pandey outlined plans to simplify FPI onboarding and expand foreign investor access to non-agricultural commodity derivatives.
  • Around 205 FPIs have used the SWAGAT-FI framework for trusted, low-risk investors since its launch on June 1, 2026.
  • SEBI is consulting on net settlement of mutual fund scheme funds in the cash market and examining derivative settlement prices on expiry days.
  • A market-making framework is being developed to improve liquidity and repo market access in the corporate bond segment.
  • SEBI is also considering a Credit Risk-o-Meter framework to help investors better understand debt instrument risks.

A Broad Agenda to Improve Market Accessibility

The Securities and Exchange Board of India (SEBI) is preparing a range of measures to make Indian capital markets more accessible, efficient and resilient, with a particular focus on foreign investors, corporate bond markets and new investment products, Chairman Tuhin Kanta Pandey said on Tuesday.

Key Initiatives Outlined

Addressing the JP Morgan India Conference, Pandey said the regulator is working to simplify digital onboarding for individuals residing outside India, expand participation by foreign portfolio investors (FPIs) in non-agricultural commodity derivatives, and introduce depository receipts against units of real estate investment trusts (REITs) and publicly listed infrastructure investment trusts (InvITs), spanning three distinct areas of reform aimed at different segments of the market.

Reducing Friction Across the Investment Journey

He said SEBI's approach towards foreign investors has been centred on reducing friction across the entire investment journey. According to Pandey, onboarding procedures are becoming faster, more digital and proportionate to risk, reflecting a shift toward a more calibrated regulatory approach that differentiates between investors based on their risk profile rather than applying uniform procedures across the board.

The SWAGAT-FI Framework

He highlighted the SWAGAT-FI framework for trusted, low-risk investors, noting that around 205 FPIs have already used the mechanism since it became operational on June 1, 2026, offering concrete evidence of adoption for this newer, streamlined onboarding pathway.

Priorities Going Forward

The SEBI chief said easier market access, deeper participation and stronger resilience will remain key priorities for the regulator. Designated depository participants have already adopted digital workflows and API-based integration to reduce onboarding timelines for FPIs, and SEBI intends to encourage wider adoption of such technology-driven solutions across the ecosystem, suggesting that technology integration will remain a central theme in the regulator's ongoing efforts to simplify market access.

Consultations on Fund Settlement

Pandey said the regulator is also consulting on net settlement of funds for mutual fund schemes in the cash market. After establishing the Closing Auction Session (CAS), SEBI is now examining concerns related to settlement prices for derivatives contracts on expiry days, for which a consultation paper has already been issued, indicating that this is an active, ongoing area of regulatory review rather than a settled matter.

Strengthening Cash Market Participation

He added that SEBI will continue efforts to broaden participation in the cash market while strengthening securities lending and borrowing mechanisms and promoting hedging and arbitrage activities to improve price discovery, tying together several distinct market infrastructure improvements under the broader goal of making Indian markets function more efficiently.

Improving Liquidity in Corporate Bonds

On the corporate bond market, Pandey said work is underway on a market-making framework aimed at improving liquidity, infrastructure and access to the repo market, addressing a segment of India's capital markets that has historically lagged behind equities in terms of trading depth and liquidity.

New Distribution Channels and Risk Communication Tools

SEBI is also consulting on the introduction of Fixed Income Channel Partners to expand distribution through regulated online bond platforms and considering a Credit Risk-o-Meter framework to help investors better understand credit risks associated with debt instruments. Together, these proposed measures point toward a broader effort to both widen access to fixed income products for retail investors and improve the transparency of risk information available to them, addressing two distinct but related challenges that have historically limited retail participation in India's corporate bond market.