SEBI Issues Draft Updated Master Circular for FPIs and DDPs for Public Consultation

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  • Last Updated on 8 December, 2025

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SEBI draft Master Circular for FPIs and DDPs

SEBI Report; Dated: 05.12.2025

1. Background

The Securities and Exchange Board of India (SEBI) has released a draft updated and simplified Master Circular for Foreign Portfolio Investors (FPIs) and Designated Depository Participants (DDPs). The document is now open for public consultation, reflecting SEBI’s ongoing effort to modernise and harmonise the regulatory framework governing foreign portfolio flows and custodial oversight.

2. Purpose of the Draft Circular

The existing Master Circular for FPIs and DDPs contains several amendments, clarifications, and transitional provisions issued over time. SEBI’s draft proposal seeks to:

  • Consolidate circulars issued since May 2024
  • Eliminate duplication and overlapping provisions
  • Simplify regulatory language
  • Remove transitional clauses or temporary instructions that are no longer relevant
  • Offer a cleaner, practitioner-friendly format for compliance and interpretation

This initiative aligns with SEBI’s wider agenda of regulatory rationalisation and ease of doing business for foreign investors.

3. Scope of the Update

The draft Master Circular:

  • Integrates all relevant circulars and clarifications issued post-May 2024
  • Reorganises content to improve logical sequencing, readability, and internal consistency
  • Retains the substantive regulatory conditions applicable to FPIs and DDPs while clarifying terminology and structure
  • Aims to ensure that custodians, intermediaries, compliance teams, and investors have access to a single authoritative reference document

4. Consultation Window

Stakeholders—including FPIs, market intermediaries, industry associations, and compliance professionals—may provide feedback on the proposed framework.

Last date for submission of comments – December 26, 2025

Comments are expected to help SEBI further refine the document for clarity, practical usability, and regulatory alignment.

5. Expected Outcomes

Once finalised, the updated Master Circular is likely to:

  • Reduce interpretational ambiguities
  • Provide a streamlined and consolidated regulatory resource
  • Improve operational compliance for onboarding, reporting, KYC, investment conditions, and custodial functions
  • Enhance transparency and reduce administrative effort for intermediaries and foreign investors
Click Here To Read The Full Update

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied