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This Newsletter covers key Regulatory & Policy Updates, Government Notifications and Judicial Pronouncements.
REGULATORY AND POLICY UPDATES
SEBI introduces Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework for FPIs and FVCIs
The Securities and Exchange Board of India ("SEBI") has issued two circulars dated 16.01.2026, namely, circular on the Single Window Automatic and Generalised Access for Trusted Foreign Investors ("SWAGAT-FI") framework for Foreign Portfolio Investors1 ("FPI Circular") and circular on the SWAGAT-FI framework for Foreign Venture Capital Investors2 ("FVCI Circular"). The FPI Circular and the FVCI Circular are hereinafter collectively referred to as the "SWAGAT-FI Circulars".
Under the FPI Circular, SWAGAT-FI eligibility is available to: (i) government and government-related investors; (ii) appropriately regulated mutual funds or unit trusts open to retail investors and operating as diversified blind pools with independent investment managers; (iii) appropriately regulated insurance companies investing proprietary funds without segregated portfolios; and (iv) appropriately regulated pension funds. In addition, the applicant must be a public retail fund established in an identified jurisdiction and regulated by a recognised authority, as may be specified in the standard operating procedure framed by the Custodians and Designated Depository Participants Standards Setting Forum ("CDSSF") in consultation with SEBI.
Eligible existing FPIs may convert to SWAGAT-FI FPIs through their Designated Depository Participants ("DDPs"). Depositories are required to provide a unified accounting and investment framework enabling SWAGATFI investors to hold securities acquired as FPIs, FVCIs or as foreign investors in investment vehicle units in a consolidated manner.
The FVCI Circular permits a SWAGAT-FI applicant to seek FVCI registration concurrently with FPI registration without a separate application or additional documentation, subject to appointment of the same custodian and DDP for both registrations. Existing FVCIs meeting the SWAGATFI FPI eligibility criteria may similarly convert to SWAGAT-FI status through their DDPs, subject to the same custodian and DDP condition.
The SWAGAT-FI Circulars will come into effect from 01.06.2026.
SEBI introduces Closing Auction Session in the Equity Cash Segment and certain modifications in the Pre-Open Auction Session
SEBI by way of circular dated 16.01.20263 ("CAS Circular"), has introduced a Closing Auction Session ("CAS") in the equity cash segment and modified the PreOpen Auction Session framework.
SEBI has decided to introduce CAS to determine the closing price of stocks, replacing the existing Volume Weighted Average Price ("VWAP") mechanism for securities on which derivative contracts are available. The CAS will operate as a separate 20-minute session from 3:15 PM to 3:35 PM on all trading days, comprising order entry periods, a random close mechanism in the last 2 minutes, and order matching. The closing price will be determined based on an equilibrium price mechanism that maximizes executable volume.
Key features include a +/- 3% price band from the reference price (calculated based on VWAP between 3:00 PM to 3:15 PM), allowance of only limit and market orders (with market orders receiving priority), and carrying forward of eligible unexecuted limit orders from the Continuous Trading Session. The Pre-Open Auction Session has also been modified to align with the CAS framework, including revised timings and order execution priorities.
SEBI has directed stock exchanges and clearing corporations to formulate standard operating procedures within 30 days, implement CAS from 03.08.2026, and implement Pre-Open Session changes from 07.09.2026.
SEBI issues SEBI (Issue and Listing of Non Convertible Securities) (Amendment) Regulations, 2026
SEBI by way of notification dated 20.01.2026, has notified the SEBI (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 20264 ("NCS Amendment Regulations") to amend the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
The NCS Amendment Regulations introduce the following key changes:
- A new definition has been inserted defining "retail individual investor" as an individual investor who applies or bids for debt securities for a value of not more than INR 2 Lakhs.
- NCS Amendment Regulations also permit issuers to offer incentives in the form of additional interest or a discount to the issue price to the following categories of investors, namely, senior citizen, women, serving and retired defence personnel, widows and widowers of defence personnel, retail individual investors, and any other category of investors as may be specified by SEBI from time to time. However, such incentives shall be available only to the initial allottee and shall not be applicable in case the debt securities are transferred or transmitted post allotment.
The NCS Amendment Regulations came into force from 20.01.2026.
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Footnotes
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