Date: 15 November 2026
Category: SEBI Regulatory Updates | AIF Compliance | FATCA & CRS
Introduction
The Securities and Exchange Board of India (SEBI), through its circular dated November 11, 2026, has issued revised directions concerning reporting requirements under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS).
The circular aligns the compliance framework for SEBI-registered intermediaries with the Income-Tax Act, 2025 and Income-Tax Rules, 2026, which came into effect on April 1, 2026.
The revised framework introduces updated reporting, due diligence, customer onboarding and KYC requirements for entities qualifying as Reporting Financial Institutions (RFIs).
1. New Regulatory Framework
The earlier FATCA and CRS reporting framework was governed by:
Section 285BA of the Income-Tax Act, 1961.
Rules 114F to 114H of the Income-Tax Rules, 1962.
Form 61B.
Under the revised framework, these provisions have been replaced by:
Section 508 of the Income-Tax Act, 2025.
Rules 238, 239 and 240 of the Income-Tax Rules, 2026.
Form 166.
The new framework governs reporting obligations under the Automatic Exchange of Information (AEOI) framework for reportable accounts.
2. Who Needs to Comply?
The reporting obligations apply to entities that qualify as Reporting Financial Institutions (RFIs).
SEBI has directed all registered intermediaries that qualify as RFIs to take the necessary steps to comply with Rules 238 to 240 of the Income-Tax Rules, 2026.
Financial institutions should determine their applicability based on the definitions of Financial Institution and Reporting Financial Institution under Rules 238(3) and 238(8), respectively.
3. Key Compliance Requirements Under the SEBI Circular
SEBI has specifically identified the following areas that registered intermediaries must review and update.
A. Self-Certification Procedures
Intermediaries must update their self-certification collection procedures to capture the validity indicator as prescribed under the revised framework.
B. Controlling Person Identification
Systems for identifying Controlling Persons must be updated to capture their respective roles, including:
Settlor
Trustee
Protector
Beneficiary
Other
C. Account Classification
Account classification systems must capture:
Account type.
Whether the account is pre-existing or new.
D. Form 166 XML Generation
Intermediaries must update their Form 166 XML generation software to incorporate all newly mandatory fields.
SEBI has specifically highlighted that failure to include the required fields will result in validation errors on the Income Tax portal.
E. KRA Upload Requirements
Registered intermediaries must upload FATCA and CRS certifications obtained from clients onto the systems of the KYC Registration Agencies (KRAs).
4. Responsibility for FATCA and CRS Compliance
SEBI has clarified that the responsibility for obtaining and reporting FATCA and CRS certifications, along with related compliance obligations, rests solely with the respective intermediaries.
This makes it important for regulated entities to establish appropriate internal processes for collecting, validating, maintaining and reporting the required information.
5. What Should AIFs and Fund Managers Do?
AIF managers and other regulated financial institutions should assess whether their entities qualify as Reporting Financial Institutions under the revised Income-Tax Rules.
Where applicable, the following actions should be considered:
Review existing FATCA and CRS onboarding documentation.
Update investor self-certification formats and collection procedures.
Review the identification and classification of Controlling Persons.
Update investor account classification systems.
Ensure Form 166 XML generation supports all mandatory fields.
Establish processes for uploading client certifications to KRAs.
Review internal reporting and record-maintenance procedures.
6. Important Reference Documents
The SEBI circular refers to the following resources:
Income-Tax Rules, 2026: https://www.incometaxindia.gov.in/income-tax-rule-2026
CBDT Guidance Note on FATCA and CRS: Issued on July 24, 2026: https://www.incometaxindia.gov.in/documents/d/guest/e-book-crs-and-fatca-guidance-note-faqs-pdf
Conclusion
SEBI’s November 11, 2026 circular reinforces the need for registered intermediaries qualifying as Reporting Financial Institutions to align their FATCA and CRS reporting processes with the revised Income-Tax framework.
The changes go beyond regulatory references and require operational updates to investor onboarding, self-certification, Controlling Person identification, account classification, Form 166 XML generation and KRA reporting.
AIF managers and other financial institutions should review their existing systems and ensure that applicable reporting and due diligence procedures are aligned with the new requirements.
Regulatory Reference: SEBI Circular No. HO/38/14/(18)2026-MIRSD-POD2/I/25560/2026 dated November 11, 2026.