Market regulator SEBI on Friday proposed allowing all individual foreign investors to complete their regulatory onboarding digitally, a move aimed at simplifying the process and boosting their participation in the Indian securities market. According to the consultation paper issued on Friday, the proposed framework will enable intermediaries to undertake video-based customer identification and verification (VIPV) for individual Person Resident Outside India (PROI) clients, including Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals residing outside India. The infrastructure used for the digital onboarding process will be required to verify face liveness and detect spoofing attempts, while ensuring that such checks do not exclude persons with special needs. Under the latest proposals, individuals from FATF-compliant countries would no longer need to be physically present in India to complete their KYC and could instead complete the process digitally through video-based verification and digital document submission. As reported by Reuters, the regulator has relaxed the requirement that overseas investors be located in India while undergoing digital know your customer verification.
The proposed framework allows intermediaries to rely on KYC carried out by another Sebi-registered intermediary, based on records obtained from KYC Registration Agencies (KRAs), with appropriate tagging of verified attributes. According to the consultation paper, intermediaries may also rely on KYC undertaken by entities regulated by other financial sector regulators, based on records obtained from the Central KYC Records Registry (CKYCRR) through KRAs. This multi-layered approach ensures comprehensive verification while maintaining regulatory compliance across different jurisdictions. SEBI has also proposed allowing KYC records of PROI clients to be portable across intermediaries in the securities market, reducing the need for overseas clients to repeat KYC procedures when dealing with multiple intermediaries. Overseas investors can submit KYC forms and supporting documents electronically, including through digital signatures, streamlining the entire onboarding process. The regulator has also proposed mandatory collection of email IDs from PROI clients to facilitate communication with intermediaries and mobile-number verification where feasible.
The proposed framework includes comprehensive safeguards for video in-person Verification (VIPV) to ensure secure digital onboarding processes. These measures include live GPS coordinates, prevention of spoofed IP addresses, face-liveness checks, end-to-end encryption, authorised-official oversight and concurrent audits to protect against fraudulent activities. SEBI has also proposed expanding the list of officials authorised to certify documents to include officials of branches of overseas banks that have relationships with Indian banks, providing additional flexibility for document certification processes.
According to the proposed framework, intermediaries will retain the ultimate responsibility for the KYC of its clients and will have to undertake enhanced KYC measures in line with the client's risk profile. As reported by Reuters, once KYC of an individual PROI client is completed, the intermediary will have to provide the KYC information to KRAs within three working days. The proposed process will also apply to re-KYC of clients residing in FATF-compliant countries, ensuring continuous compliance monitoring for existing investors. The regulator has also proposed expanding the list of officials authorised to certify documents, providing additional flexibility for document certification processes.
The proposed framework will apply to onboarding of PROI clients, except those residing in FATF non-compliant countries, for whom the existing KYC process will continue to apply. According to the consultation paper, for individual foreign nationals seeking registration as Foreign Portfolio Investors (FPIs), the existing provisions under Sebi's Master Circular for FPIs, Designated Depository Participants and Eligible Foreign Investors will continue to apply. SEBI has released a consultation paper on August 14, 2026, seeking public comments till September 4, 2026 on the proposed changes. The consultation paper aims to ease the onboarding process for individual PROI clients while adding safeguards for video verification and cybersecurity compliance. The proposals are not final KYC rules yet and will follow SEBI's consultation process and subsequent regulatory action.
