The Securities and Exchange Board of India (SEBI), through its circular dated November 4, 2026, has introduced significant changes to the Know Your Client (KYC) framework for individual Persons Resident Outside India (PROIs).
The circular, titled Review of Know Your Client process for individual Person Resident Outside India clients, aims to simplify the onboarding of Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals who wish to participate in India’s securities markets.
One of the most important changes is the relaxation of the requirement that an overseas investor must be physically present in India to complete digital KYC. Eligible overseas investors residing in Financial Action Task Force (FATF)-compliant countries can now submit KYC information and supporting documents digitally.
For Alternative Investment Funds (AIFs), their managers and other SEBI-regulated intermediaries, this change can make onboarding overseas individual investors considerably more accessible.
1. Why Has SEBI Introduced These Changes?
Under the earlier KYC framework, intermediaries were required to ensure that clients were physically located in India during digital KYC onboarding.
This created practical difficulties for overseas investors who wanted to invest in Indian securities markets. NRIs and foreign nationals often had to coordinate physical documentation, travel or additional verification procedures to complete their onboarding.
Recognising these challenges and taking into account representations from market participants, SEBI has revised the existing framework.
The objective is to:
Simplify KYC onboarding for overseas individual investors.
Enable digital submission of KYC information and supporting documents.
Improve portability and reuse of existing KYC records.
Reduce repetitive documentation requirements.
Maintain appropriate identity verification, auditability and regulatory safeguards.
2. Who Is Covered Under the New Circular?
The circular specifically covers individual Persons Resident Outside India (PROIs), including:
Non-Resident Indians (NRIs): Individuals who qualify as non-residents under the applicable provisions of the Income-tax Act.
Overseas Citizens of India (OCIs): Individuals registered as OCI cardholders under the Citizenship Act, 1955.
Foreign Nationals: Individuals who are not resident in India and seek to establish an account-based relationship with a SEBI-regulated intermediary.
An important distinction is that the relaxation for digital onboarding applies to individuals located in FATF-compliant countries.
Individuals residing in FATF non-compliant countries will continue to follow the existing KYC framework.
3. Key Changes Introduced by SEBI
A. Digital KYC Permitted for Overseas Investors
One of the most significant changes is the relaxation of the physical-location requirement.
Previously, the digital KYC framework required the client to be physically present in India.
Under the revised framework, an individual PROI located in a FATF-compliant country can submit KYC information and supporting documents digitally without being physically present in India.
This is particularly relevant for AIF managers onboarding overseas individual investors.
B. Greater Portability of KYC Records
SEBI has introduced an important change concerning KYC record portability.
KYC Registration Agencies (KRAs) will tag individual attributes in a KYC record as “validated” when verified against official or source databases.
Importantly, all KYC records will be portable and can be shared with another intermediary, irrespective of whether every individual attribute has been validated.
This can reduce repetitive documentation and verification when an investor establishes relationships with multiple intermediaries.
C. Reliance on Existing KYC Records
Intermediaries can rely on KYC undertaken by:
Another SEBI-registered intermediary, based on records obtained from the KRA.
An entity regulated by another financial sector regulator, based on records obtained from the Central KYC Records Registry (CKYCRR).
However, the intermediary continues to retain ultimate responsibility for the KYC of its clients, including enhanced due diligence based on the client’s risk profile.
D. Revised Video In-Person Verification (VIPV) Requirements
The circular provides detailed requirements for Video In-Person Verification (VIPV) when physical In-Person Verification (IPV) is not feasible.
The revised framework requires:
Recording of client consent in an auditable and alteration-proof manner.
Random action initiation to establish that the interaction is live and not pre-recorded.
Uninterrupted video recording containing live GPS coordinates, date and timestamp.
Prevention of connections through spoofed IP addresses, VPNs and proxy servers.
Verification that the client’s IP address originates from India or a FATF-compliant country and matches the country declared in the KYC form and supporting documents.
Clear capture of the client’s photograph and matching against submitted documents.
End-to-end encryption of data between the client’s device and the intermediary’s hosting platform.
Presence of the intermediary’s authorised official throughout the VIPV process.
Face-liveness verification and spoof detection.
Concurrent audit of the VIPV process.
These provisions are intended to ensure that the flexibility of remote onboarding does not compromise the integrity of identity verification.
4. Documentation Required for Overseas Individual Investors
The revised circular specifies the documentation and verification requirements for individual PROI clients.
PAN Verification
The intermediary must collect the client’s PAN and verify it against the Income Tax Database.
The intermediary is not required to insist on the production of the original PAN card or a copy of the PAN card.
The KRA will also verify the PAN and the client’s name against the Income Tax Database and mark the attribute as validated.
Passport and OCI Documentation
The intermediary must collect a copy of the client’s passport.
An OCI card must also be collected, wherever applicable.
Passport verification must be undertaken by the intermediary and KRA, wherever feasible.
KYC Form
The intermediary must collect KYC information in accordance with the CKYCRR template prescribed for individuals.
The form can be submitted through:
Original physical form.
Scanned copy of a physical form under electronic signature.
Digital KYC form under electronic signature.
Specimen Signature
The intermediary must collect the client’s specimen signature.
This can be provided through a wet signature on the physical KYC form or a cropped image of the specimen signature under electronic signature.
Where a digital specimen signature is submitted, the client must also provide a wet signature during VIPV. The intermediary must verify that both signatures match.
Proof of Identity and Address
The intermediary must collect one of the specified Officially Valid Documents (OVDs) or deemed OVDs for proof of identity and address.
An important clarification is that the current address of an individual PROI client will be their overseas address.
For foreign nationals whose OVDs do not contain address details, the intermediary may collect a document issued by a government department of a foreign jurisdiction or a letter issued by a Foreign Embassy or Mission in India.
Original Seen and Verified (OSV)
The intermediary must see and verify the original OVD or deemed OVD and collect physical self-attested copies.
Where the original document cannot be produced, the circular permits alternative verification methods, including:
Equivalent electronic documents through DigiLocker.
Electronic documents issued by the issuing authority through a verifiable mechanism.
OTP, biometric or face-authentication-based Aadhaar e-KYC authentication.
Copies attested by specified certifying authorities, including Notaries Public, authorised bank officials, Court Magistrates, Judges, Indian Embassies or Consulates.
The intermediary must maintain the authorised official’s details and the date and timestamp of OSV.
Mobile Number and Email Verification
The intermediary must collect an Indian or international mobile number and the client’s email address.
Verification should be performed through OTP or another verifiable mechanism wherever feasible.
If the mobile number cannot be verified, all communications must be sent to the client’s verified email address.
5. KRA Reporting and Compliance Timelines
The revised framework also specifies an important reporting timeline.
After completing the KYC process for an individual PROI client, the intermediary must provide the KYC information to the KRA within three working days.
The intermediary must also ensure that the infrastructure used for the KYC process complies with SEBI’s Cyber Security and Cyber Resilience Framework (CSCRF).
Additionally, all documents submitted by an individual PROI client must be in English. Documents in other languages must be translated into English and attested by a certifying authority before submission.
The revised process will also apply to re-KYC of clients residing in FATF-compliant countries.
6. What Does This Mean for AIF Managers?
The revised framework is relevant to AIF managers who onboard overseas individual investors.
For venture capital, private equity, private credit, real estate and other alternative investment funds, overseas individual investors can be an important source of capital.
The relaxation of digital onboarding requirements can help reduce operational friction when onboarding eligible overseas investors.
AIF managers should consider the following operational changes:
Review existing onboarding procedures: Update investor onboarding checklists to incorporate the revised PROI KYC requirements.
Enable overseas digital onboarding: Ensure that digital KYC processes can accommodate eligible investors located in FATF-compliant countries.
Review VIPV infrastructure: Ensure that the video verification platform meets the technical, security and audit requirements specified by SEBI.
Improve document management: Maintain passport, OCI, address proof, specimen signature, consent and verification records.
Strengthen KRA coordination: Establish processes to retrieve, update and submit KYC information within the prescribed timelines.
Review re-KYC processes: Incorporate the revised framework into periodic KYC updates for eligible overseas clients.
It is important to note that the circular does not remove the intermediary’s responsibility for client identification, verification or enhanced due diligence.
7. Effective Date of the Circular
The revised provisions will come into effect 30 days from the date of issuance, i.e. December 3, 2026.
The following distinctions are important:
The revised provisions apply to onboarding of individual PROI clients, except those residing in FATF non-compliant countries.
Clients residing in FATF non-compliant countries will continue under the existing KYC framework.
KYC undertaken before the effective date will continue to be governed by the existing provisions.
The relevant provisions of the earlier KYC Master Circular and specified previous circulars stand superseded to the extent stated in the new circular.
8. Conclusion
SEBI’s November 4, 2026 circular is an important step towards simplifying the onboarding of overseas individual investors into India’s securities markets.
By allowing eligible overseas investors to complete digital KYC without being physically present in India, improving KYC portability and permitting reliance on existing verified KYC records, SEBI has sought to make the onboarding process more efficient.
For AIF managers and other SEBI-regulated intermediaries, the immediate priority should be to review existing KYC workflows, assess VIPV infrastructure and ensure that operational processes are aligned with the revised requirements before December 3, 2026.
The objective is to make overseas investor onboarding easier while maintaining the identity verification, cybersecurity and audit standards expected of regulated market participants.