SEBI is transitioning all FPI and FVCI registration and renewal fees from US dollars to Indian rupees within six months. This administrative change aims to simplify accounting, reduce reconciliation issues, and ensure timely revenue collection. Additionally, the regulator is shifting custodian fee payments from an annual to a monthly schedule starting October 1, 2026.
What Happened
The Securities and Exchange Board of India (SEBI) has announced a significant shift in how it collects fees from foreign investors. Registration and renewal fees for Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs), which were previously denominated in US dollars, will now be charged in Indian rupees. This change is set to be implemented within six months of the official notification.
The regulator has designed this move to be revenue-neutral, meaning the total collection will effectively remain the same, but the administrative process will become cleaner. Under the new framework, foreign investors will pay the equivalent of the rupee-specified fee in foreign exchange, which will then be remitted in rupees by their Designated Depository Participant (DDP) to SEBI within five working days of registration.
New Fee Structure
The new fee structure replaces dollar-based pricing with fixed rupee amounts. For Category-I FPIs and FVCIs, the registration fee is now set at ₹2.3 lakh, replacing the previous $2,500 charge. Category-II FPIs will now pay ₹23,000, down from the earlier $250 fee. Similar adjustments have been applied to renewal fees, with Category-I FPIs and FVCIs paying ₹2.3 lakh and Category-II FPIs paying ₹23,000. For FVCIs, the renewal fee is now set at ₹9,000, replacing the previous $100 charge.
Why The Change Matters
SEBI’s decision addresses several operational inefficiencies. The current system, which relies on manual accounting for dollar-denominated fees in the regulator's portal, has often led to reporting delays and reconciliation difficulties. By moving to a rupee-based system, SEBI aims to improve real-time visibility of payments and reduce discrepancies caused by currency conversion charges or delays in remittance.
In FY26, SEBI collected approximately ₹115.98 crore (equivalent to about $12.99 million) from these fees. The switch is expected to remove the opportunity cost associated with the current manual, month-based remittance schedule, leading to more consistent and timely revenue collection.
Changes to Custodian Fees
In a related move, the regulator is also altering the frequency of custodian fee payments. Starting October 1, 2026, custodians will move from an annual payment schedule to a monthly one. The new monthly fee is set at ₹85,000 or 0.0000416 percent of Assets Under Custody (AUC), whichever is higher. This replaces the previous annual structure of ₹10 lakh or 0.0005 percent of AUC. This shift is also intended to be revenue-neutral and is aimed at ensuring smoother fee remittances throughout the year.
Administrative Updates for FPI Certificates
SEBI is also modifying FPI registration certificates to include the applicant's date of birth or date of incorporation. This change aligns with the updated PAN application forms issued by the Central Board of Direct Taxes (CBDT) for foreign entities. As the FPI certificate acts as a primary proof of identity and address, including this information is expected to streamline the onboarding process for new foreign investors.
What Investors Should Track
For most stock market investors, this is primarily an administrative and operational change that does not directly impact market dynamics or company performance. The key monitorable will be the transition period over the next six months. Investors involved with FPIs or FVCIs should watch for updates from their designated custodians regarding the new payment procedures to ensure compliance before the deadline.