FPI Onboarding to Get Faster: SEBI and RBI Working Closely on FPIs and Bond Market, Says Tuhin Kanta Pandey
- September 30, 2026
- Posted by: Harsh Piplani
- Category: News
SEBI Chief Tuhin Kanta Pandey, 30 Sep 2026: SEBI and RBI making FPI registration fast, seamless, digital. Bond index derivatives approval being pursued. No exchange interoperability plan.
Quick Answer
FPI onboarding in India is set to become faster and fully digital as SEBI and the RBI work closely to remove hurdles for foreign portfolio investors, SEBI Chairman Tuhin Kanta Pandey said on 30 September 2026. He added that SEBI cannot force foreign capital into India but can make entry frictionless. SEBI and the RBI are also pursuing bond index derivatives to deepen the corporate bond market. Pandey ruled out plans for exchange interoperability and said SEBI will stick to its closing auction proposal.
FPI onboarding is getting a major push. On Wednesday, SEBI Chairman Tuhin Kanta Pandey said the capital market regulator and the RBI are working together to make registration for foreign portfolio investors (FPIs) very fast, seamless and digital, at a time when FPI outflows have weighed heavily on Indian markets.
On FPI onboarding and joint efforts by SEBI, the RBI and the Income Tax Department to attract FPIs, Pandey said investment decisions rest with market participants and that regulators cannot force capital into the country. What they can do, he said, is remove operational hurdles so global investors can enter India easily.
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What Did Tuhin Kanta Pandey Say?
Tuhin Kanta Pandey made several points on 30 September 2026 about FPIs, the bond market and market structure:
- FPI onboarding: SEBI and the RBI are actively working to make FPI registration very fast, seamless and digital.
- No forced flows: Regulators cannot force foreign capital into India; investment choices rest with investors.
- Bond indices and derivatives: Approval for bond indices and related derivatives is being pursued between regulators.
- Closing auction session: SEBI will stick to its published proposal on changes to the closing auction session, which sets closing prices.
- No interoperability: SEBI is not exploring exchange-level interoperability, such as trading BSE-listed products on NSE and vice versa.
On FPI onboarding a week earlier, after the SEBI board meeting on 24 September, Pandey said the RBI was fully cooperating to make onboarding as fast as possible, while noting that FPIs are mobile capital that weigh their own risks and returns globally.
What Is FPI Onboarding and Why Does It Matter?
FPI onboarding is the process through which a foreign investor registers with SEBI through a designated depository participant, completes know-your-customer checks and opens the bank, custody and demat accounts needed to trade. Long paperwork, multiple approvals and slow timelines have often been cited as barriers to investing in India.
Faster FPI onboarding matters because foreign flows drive a large share of market moves. FPIs have been heavy sellers in 2026, a key reason the Nifty had its worst September since 2018 and a seven-week losing streak. Easier access will not reverse outflows on its own, but it can make India more competitive when global conditions improve.
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SEBI RBI Push to Deepen the Bond Market
The SEBI RBI partnership goes beyond onboarding. In June 2026, Pandey said the two regulators were working together to introduce derivatives on corporate bond indices, aimed at improving liquidity, price discovery and access for global capital. Bond index derivatives are futures or options linked to a basket of bonds, which help investors hedge interest rate and credit risk.
A working group is also sorting out operational details for a market-making framework to improve liquidity in corporate bonds. SEBI has already eased requirements for FPIs investing in government securities, introduced standardised forms and digital-signature-based submissions, and is working with custodian banks and the RBI to cut registration timelines further. Corporate bond issuance crossed Rs 9 trillion in FY26, showing how quickly the market is growing.
Pandey has also pointed out the market’s limits. In January 2026, he said the bond market has grown from about 40% to about 60% of bank credit to industry and services, but secondary trading remains thin and largely over the counter.
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What It Means for Investors
For equity investors, smoother and faster FPI onboarding could support foreign inflows over time, which tends to help large-cap stocks. For bond investors, derivatives and market-making could make corporate bonds easier to buy and sell. SEBI’s decision to stick with its closing auction proposal and to rule out exchange interoperability also removes some uncertainty for exchanges and brokers.
Key Things to Watch
- FPI onboarding timelines: Any new circular cutting FPI registration time will be a positive signal.
- Bond index derivatives: Final guidelines from the RBI and SEBI could launch a new product segment.
- FPI flows: Whether foreign selling slows in Q3 FY27 will show if reforms and global factors are aligning.
- Closing auction session: Implementation of the published proposal will affect how closing prices are set.
Bottom Line on FPI Onboarding
FPI onboarding is set to become faster and more digital as SEBI and the RBI work closely on foreign investor access and bond market reforms, according to Tuhin Kanta Pandey. While regulators cannot force foreign money into India, easier entry, bond index derivatives and deeper bond markets could make India more attractive once global conditions turn. Consult a SEBI-registered advisor before making investment decisions based on policy changes.
Disclaimer: Data and figures in this article are sourced from publicly available information and reflect intraday levels at the time of writing. These may or may not be accurate. Please verify all data independently before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions on FPI Onboarding and SEBI RBI Reforms
What did Tuhin Kanta Pandey say about FPIs on 30 September 2026?
Ans. SEBI Chairman Tuhin Kanta Pandey said SEBI cannot force foreign capital into India, but it is working with the RBI to make FPI registration very fast, seamless and digital. He said investment decisions rest with market participants.
What is FPI onboarding?
Ans. FPI onboarding is the process through which a foreign portfolio investor registers with SEBI through a designated depository participant, completes KYC and opens the accounts needed to invest in Indian stocks and bonds.
What are bond index derivatives?
Ans. Bond index derivatives are futures or options linked to an index of corporate bonds. They let investors hedge interest rate and credit risk and can improve liquidity and price discovery in the bond market.
What steps has SEBI taken to help FPIs invest in bonds?
Ans. SEBI has eased requirements for FPIs investing in government securities, introduced standardised forms and digital-signature-based submissions, and is working with custodian banks and the RBI to cut registration timelines further.
Will SEBI allow interoperability between NSE and BSE?
Ans. No. Tuhin Kanta Pandey dismissed market talk about SEBI exploring exchange-level interoperability, such as trading BSE-listed products on NSE and vice versa.
Why does faster FPI onboarding matter now?
Ans. FPIs have been heavy sellers of Indian equities in 2026, contributing to the Nifty’s worst September since 2018. Faster, simpler access could make India more attractive once global conditions improve.
What did SEBI say about closing auction session changes?
Ans. Pandey confirmed that SEBI is sticking to its published proposal on changes to the closing auction session, the mechanism used to determine closing prices.
