SEBI now allows foreign portfolio investors to use digital signatures for power of attorney documents, replacing the need for physical notarization or consularization. This change, effective August 20, 2026, aims to cut onboarding time and operational costs for global funds. Investors should watch for further digital reforms as the regulator works to streamline remaining compliance processes.
The Securities and Exchange Board of India (SEBI) has announced a major update to its onboarding process for foreign portfolio investors (FPIs). Starting August 20, 2026, foreign funds can now execute power of attorney (PoA) documents using digital signatures. This change marks a move away from the traditional, manual-heavy requirements that often delayed market entry for global investors.
Previously, FPIs were required to submit physical copies of the power of attorney, which often necessitated time-consuming procedures like notarization, apostillization, or consularization. Depending on the country of origin, these steps could take weeks, acting as a significant barrier for funds looking to deploy capital quickly in Indian equity and debt markets. By aligning the process with the Information Technology Act, 2000, SEBI has effectively removed these physical bottlenecks for the power of attorney document.
Impact on Market Access
For global investors, this shift is expected to reduce the operational friction and costs associated with setting up accounts in India. Faster onboarding means that funds can begin trading or investing in securities much sooner than before. This is a critical step in the regulator's broader effort to make the Indian capital market more accessible and competitive on a global scale. The move follows other digitization initiatives, such as the Common Application Form (CAF), which have already aimed to simplify the registration process.
Important Monitorables for Investors
While this change simplifies the power of attorney process, it does not mean that all documentation requirements have been removed. Investors and market observers should track how the regulator handles other mandatory compliance and KYC (Know Your Customer) documents, which may still require physical verification or different validation methods for the time being.
Additionally, as the process moves toward a fully digital format, the risk of cybersecurity issues becomes a point of focus. The reliance on digital signatures requires funds and their custodians to maintain strict adherence to security protocols to prevent unauthorized access or the use of fraudulent signatures. Maintaining the integrity of these digital documents will be essential for the regulator to continue opening up these digital channels.
The next important step for the market will be to observe if SEBI expands this digital-signature framework to other types of legal or constitutional documents in the future. Further simplification of these remaining processes would likely provide a clearer picture of how much more friction can be removed from the FPI onboarding timeline.