With out a PAN, FPIs can not open buying and selling or demat accounts, successfully stopping them from investing in Indian securities.
A minimum of 20 newly registered FPIs are presently awaiting PAN allotment regardless of having accomplished registration formalities, folks conversant in the matter mentioned.
With out a PAN, FPIs can not open buying and selling or demat accounts, successfully stopping them from investing in Indian securities.
“Usually, as soon as the applying is initiated by the custodian or designated depository participant, PAN is issued inside two to a few days. However for the previous month, no PANs have been issued,” a supply mentioned.
CAF framework
The problem has emerged after modifications have been made to the PAN types built-in inside the CAF framework. The CAF serves as a single-window system for FPI registration, PAN allotment, KYC and account opening.
The disruption is linked to modifications launched by the Revenue Tax Division by new PAN software types and associated system validations. The same maintain up is being confronted by FDIs on the Reserve Financial institution of India (RBI), one other supply mentioned.
Market individuals mentioned some purposes are getting held up resulting from field-level validation points, akin to mismatches in character limits, formatting necessities and different data-entry checks within the revised types.
Some FPIs are additionally going through challenges in appointing ‘authorised representatives’ (ARs), which is required underneath the up to date framework. They’re discovering it troublesome to determine appropriate home people keen to tackle the function resulting from issues round potential tax legal responsibility publicity.
The matter has been taken up with the Securities and Trade Board of India (SEBI), which is known to be in discussions with the federal government and stakeholders. Sources mentioned the regulator has proposed permitting FPIs to nominate ‘authorised signatories’ as a substitute of authorised representatives to ease the method. Discussions with the Central Board of Direct Taxes (CBDT) are ongoing.
“FPIs are discovering it difficult to seek out acceptable home individuals to finish the brand new AR entry within the CAF type,” mentioned an FPI market participant, including that they’re ready on an replace on SEBI’s discussions with CBDT.
An e mail despatched to the regulator didn’t elicit a response.
The PAN issuance course of flows from the Revenue Tax Division to Protean after which by APIs to the depositories. As soon as the PAN is issued, new registrants can open demat accounts with the inventory exchanges to have the ability to commerce or make investments.
Printed on Could 10, 2026
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