Research and Articles

• SEBI has operationalised DSC-based digital execution on the NSDL FPI Portal, enabling largely paperless filing and signing of the CAF and other FPI onboarding documents.

• The integrated DSC is expected to significantly reduce registration timelines and cross-border logistical friction for FPIs and intermediaries.

• While wet-ink execution is largely eliminated, notarisation / apostillisation of underlying KYC and constitutional documents continues, with scope for future reforms.

Introduction

As India moves into 2026, the Securities and Exchange Board of India (“SEBI”) has taken a significant step towards easing compliance for Foreign Portfolio Investors (“FPIs”) by operationalising the use of Digital Signature Certificates (“DSCs”), issued in accordance with the Information Technology Act, 2000 (“IT Act”) for execution of the Common Application Form (“CAF”) and other registration-related documents in the FPI onboarding process, including by enabling in-portal procurement and use of such DSCs on the NSDL FPI Portal Annexure to CAF and ancillary documents as part of the FPI registration process.¹ 

Background

Pursuant to SEBI’s circular dated March 27, 2023², FPIs were permitted to use digital signatures for execution of the CAF and other registration-related documents. However, this was only an enabling provision and, in the absence of an integrated, regulator-facilitated digital signature workflow, FPIs were required to independently procure DSCs from the Controller of Certifying Authorities (“CCA”)-licensed Certifying Authorities (“CAs”) and thereafter upload and use the same while filing the CAF and executing related documents.

In practice, DDPs and custodians continued to insist on wet-ink execution and physical submission of documents, driven by the continued requirement of notarisation / apostillisation or authorised bank certification of KYC and constitutional documents and the need for subsequent physical verification. Consequently, notwithstanding the regulatory permissibility of digital execution, FPIs were required to print, physically sign and courier the CAF, annexures and other ancillary documents to the DDP / Custodian, which diluted the intended benefit of digitalisation.

Implications and Way Forward

SEBI, through NSDL, has now addressed this implementation gap by enabling DSC functionality on the NSDL FPI portal. The portal now offers a fully integrated workflow comprising online FPI application, in-portal DSC enrolment through a CA (currently e-Mudhra), and electronic execution and submission of the CAF and the Annexure to the CAF. Other registration-related and ancillary documents may also be executed using DSCs in accordance with the IT Act. NSDL has further issued detailed user manuals for DDPs and custodians outlining the end-to-end process for DSC enrolment and digital execution of FPI registration documentation through the NSDL FPI portal. Detailed process flows and FAQs related to obtaining a DSC are made available on the India Market Access Portal.³

From a practical perspective, this change makes the FPI registration process largely paperless, eliminating the need for wet-ink execution of multiple documents, including lengthy custodian agreements, and significantly reducing cross-border logistical challenges. Digitally executed documents are expected to materially shorten registration timelines and improve operational efficiency for FPIs and intermediaries.  

SEBI has also clarified through its FAQs that where an FPI has multiple authorised persons, each signatory who intends to sign must complete individual eKYC and obtain a separate DSC, although organisation-level KYC need not be repeated for each such individual. Each FPI is required to complete eKYC separately, as umbrella-level eKYC is not permitted, except in the case of sub-funds, segregated portfolios, MIMs, insurance schemes or similar structures, where entity-level eKYC would suffice. A valid DSC may also be used for execution of post-registration documents such as intimations of material changes, renewal or surrender filings and tax-related documentation. Overall, this move marks a meaningful step towards making the FPI registration process more efficient and investor-friendly, significantly reducing operational friction and timelines for FPIs and intermediaries.

At the same time, while the CAF and related documents can now be digitally executed, constitutional documents of the FPI applicant and the KYC documents of beneficial owners, authorised signatories and senior management personnel continue to require notarisation, apostillisation or certification by authorised bank officials under the extant KYC and AML framework. Accordingly, certain physical or equivalent statutory authentication formalities remain. Looking ahead, SEBI may consider moving towards a fully digital trust framework based on video KYC, qualified digital signatures, reliance on regulated intermediaries for document attestation and inter-regulatory information-sharing, which could, in a phased manner, substantially reduce notarial and apostille requirements while preserving AML, authenticity and non-repudiation standards.

An additional aspect that merits consideration is the scope of permissible e-signature frameworks. Presently, SEBI recognises only DSCs or eSign services issued by CAs licensed by the CCA under the IT Act, thereby excluding globally prevalent platforms such as DocuSign and Adobe Sign which operate under foreign trust frameworks. While this ensures legal certainty under Indian law, it creates practical friction for FPIs who already rely on such platforms in their home jurisdictions. SEBI may therefore consider, at least on a phased or pilot basis, recognising such global platforms through backend integration with Indian CAs, an equivalence or cross-certification framework, or limited use for non-statutory onboarding documents, so as to balance regulatory robustness with ease of doing business and alignment with international digital market practices.

Akash Shirore and Chandrashekar K
You can direct your queries or comments to the authors.

¹SEBI facilitates seamless DSC functionality.

²SEBI | Streamlining the onboarding process of FPIs

³India Market Access - Digital Signature Certificate (DSC)