SEBI allows digitally signed PoA for FPIs, removes notarisation requirement

The Securities and Exchange Board of India (SEBI) has eased documentation requirements for Foreign Portfolio Investors (FPIs), allowing them to submit digitally signed Power of Attorney (PoA) documents without having to get them notarised, apostilled or consularised. The regulatory change is aimed at simplifying the onboarding process for overseas investors and reducing paperwork associated with entering the Indian securities market. Until now, FPIs submitting PoA documents were required to complete additional authentication procedures, which could increase both the time and cost involved in registration.

Digital PoA gets recognition

Under the revised framework, a Power of Attorney carrying a valid digital signature can be accepted without the additional requirement of notarisation, apostillisation or consularisation.

A PoA is commonly used by foreign investors to authorise custodians or other representatives to undertake transactions and complete operational requirements on their behalf. The document therefore forms an important part of the onboarding and investment process for many overseas entities.

By recognising digitally signed documents, SEBI has sought to bring the process closer to the increasingly digital nature of financial-market operations.

The change is expected to particularly benefit overseas investors operating across multiple jurisdictions, where obtaining physical certification or consular authentication can involve additional administrative procedures and delays.

Compliance burden reduced

The move forms part of SEBI's broader efforts to make the Indian securities market easier to access while retaining safeguards governing investor identification and regulatory compliance.

Removing the additional authentication requirement does not eliminate the underlying due-diligence obligations applicable to FPIs. Investors will continue to be subject to registration, Know Your Client requirements, beneficial ownership disclosures and other regulatory conditions prescribed for participation in Indian markets.

The relaxation instead addresses the manner in which a particular document can be authenticated, allowing technology-based verification to replace a more cumbersome physical process.

For foreign investors, procedural requirements can influence the ease and speed with which capital is deployed across markets. Simplifying documentation can therefore improve operational efficiency without necessarily diluting regulatory scrutiny.

Push for easier market access

India has taken several steps in recent years to streamline procedures for FPIs as policymakers seek to deepen domestic capital markets and encourage greater participation from global investors.

Foreign portfolio flows remain an important component of India's financial markets, although they can fluctuate sharply depending on global interest rates, currency movements, geopolitical developments and investor appetite for emerging-market assets.

SEBI's latest decision is significant because it targets a relatively small but recurring procedural hurdle faced during onboarding. Allowing digital signatures also reflects the wider transition towards paperless regulatory processes across India's financial system.

The measure could reduce turnaround times for investors and intermediaries while making onboarding more convenient for entities located outside India.

By removing notarisation and related requirements for digitally signed PoAs, SEBI has taken another step towards reducing avoidable paperwork while retaining the regulatory checks necessary for foreign participation in Indian securities markets.