The Securities and Exchange Board of India (SEBI) has relaxed Know Your Customer (KYC) requirements for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals, making it easier for eligible overseas investors to participate in India’s stock market. Under the revised framework, individuals living in countries compliant with Financial Action Task Force (FATF) standards can complete their KYC and investment onboarding digitally without travelling to India.
The revised rules, announced through a circular dated November 4, will come into effect on December 3, 2026. The move is expected to reduce procedural difficulties for overseas investors who want to open trading and demat accounts or access other investment opportunities in India’s securities market.
Until now, overseas investors faced restrictions while completing digital KYC because existing rules required clients to be physically present in India during the verification process. This made it difficult for NRIs and foreign nationals living abroad to complete account-opening formalities remotely.
With the latest changes, SEBI has removed this requirement for eligible individual investors residing in FATF-compliant jurisdictions. SEBI-registered stockbrokers, custodian banks and other market intermediaries can now accept KYC information and supporting documents electronically from these clients.
The relaxation is expected to make the Indian investment process more convenient, particularly for members of the Indian diaspora who want to invest in domestic equities and other securities without having to travel to the country for verification.
KYC Records To Become Portable Across Intermediaries
Another important feature of the revised SEBI KYC framework is the increased portability of investor records. The regulator has introduced provisions allowing existing KYC information to be reused when investors move between different financial intermediaries.
KYC Registration Agencies (KRAs) will identify and mark individual details in an investor’s KYC record as ‘validated’ when they have been verified against official databases or other recognised sources.
However, the entire KYC record can be shared with another intermediary even if every individual detail has not been validated. This is expected to reduce repeated documentation and verification requirements for investors who maintain accounts with multiple stockbrokers, depositories and financial institutions.
Intermediaries will also be permitted to rely on KYC verification already completed by another SEBI-registered intermediary or an entity regulated by another financial-sector regulator. They can retrieve the relevant information through KYC Registration Agencies or the Central KYC Records Registry (CKYCRR).
This change is particularly relevant for overseas investors who may need to maintain relationships with several financial institutions. Instead of repeatedly submitting the same documents, they can benefit from the availability and sharing of existing KYC records.
However, the responsibility for ensuring proper customer verification will continue to rest with the intermediary onboarding the investor. Financial institutions must also conduct enhanced due diligence wherever required, depending on the client’s risk profile.
PAN Verification And Overseas Address Rules Simplified
SEBI has also introduced changes to documentation requirements to make the KYC process less cumbersome.
Under the revised framework, intermediaries can verify an investor’s Permanent Account Number (PAN) through the Income Tax database instead of insisting on the original PAN card or a physical copy. This is expected to reduce the paperwork involved in opening investment accounts.
Investors will still need to provide essential identity documents, including a passport copy and an Overseas Citizen of India (OCI) card wherever applicable.
The regulator has also clarified that an overseas address can be accepted as the current address for individual persons resident outside India. This is an important change for NRIs and foreign nationals who may not have a current residential address in India.
Electronic submission of KYC forms and specimen signatures will also be permitted, subject to the prescribed verification requirements.
The changes are intended to make investor onboarding more accessible while retaining the necessary checks to establish the identity and address of clients.
Video Verification To Continue With Safeguards
Where physical in-person verification is not possible, SEBI has allowed intermediaries to use Video In-Person Verification (VIPV) to complete the KYC process.
The video-based verification mechanism will have to follow prescribed security measures. These include live geo-tagging, face-liveness checks and end-to-end encryption to ensure that the person completing the verification is genuine.
An authorised official of the intermediary must also be present during the video verification process. The procedure will be subject to concurrent audit to ensure that the required safeguards are followed.
Once the KYC process is completed, intermediaries will have to submit the relevant information to the KYC Registration Agency within three working days.
The revised provisions will also cover re-KYC requirements for eligible overseas investors. This means existing clients living in FATF-compliant countries can benefit from the simplified verification process when updating their KYC details.
Who Can Benefit From The New SEBI Rules?
The revised framework applies to individual Persons Resident Outside India (PROIs), covering NRIs, OCIs and foreign nationals residing in FATF-compliant countries.
However, the relaxation does not apply universally to every overseas investor. Individuals residing in countries that do not comply with FATF standards will continue to follow the existing KYC requirements.
Foreign nationals seeking to invest in Indian markets through the Foreign Portfolio Investor (FPI) route will also remain subject to SEBI’s existing FPI regulatory framework.
The distinction is important because the latest changes primarily address individual overseas investors and their onboarding requirements, rather than introducing a blanket relaxation for all categories of foreign investment.
By simplifying digital KYC, improving the portability of investor records and reducing repeated documentation, SEBI is attempting to make India’s securities market more accessible to overseas individuals.
The changes could encourage greater participation from the Indian diaspora and other eligible international investors. At the same time, the continuation of identity checks, video verification safeguards and enhanced due diligence requirements indicates that the regulator intends to balance easier market access with financial security and regulatory compliance.
The new framework, effective December 3, is therefore an important step towards streamlining overseas investor onboarding and strengthening the digital infrastructure supporting India’s capital markets.