With no PAN, FPIs can’t open buying and selling or demat accounts, successfully stopping them from investing in Indian securities.
Overseas portfolio buyers (FPIs) haven’t obtained any Everlasting Account Numbers (PAN) for practically a month following modifications to the PAN software course of below the widespread software type (CAF), making a bottleneck in onboarding recent overseas buyers into Indian markets.
Not less than 20 newly registered FPIs are at the moment awaiting PAN allotment regardless of having accomplished registration formalities, folks conversant in the matter stated.
With no PAN, FPIs can’t open buying and selling or demat accounts, successfully stopping them from investing in Indian securities.
“Usually, as soon as the appliance is initiated by the custodian or designated depository participant, PAN is issued inside two to 3 days. However for the previous month, no PANs have been issued,” a supply stated.
CAF framework
The problem has emerged after modifications had been made to the PAN kinds 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 Earnings Tax Division by new PAN software kinds and associated system validations. An identical maintain up is being confronted by FDIs on the Reserve Financial institution of India (RBI), one other supply stated.
Market contributors stated some purposes are getting held up resulting from field-level validation points, reminiscent of mismatches in character limits, formatting necessities and different data-entry checks within the revised kinds.
Some FPIs are additionally going through challenges in appointing ‘authorised representatives’ (ARs), which is required below the up to date framework. They’re discovering it tough to establish appropriate home people prepared to tackle the position resulting from considerations round potential tax legal responsibility publicity.
The matter has been taken up with the Securities and Alternate Board of India (SEBI), which is known to be in discussions with the federal government and stakeholders. Sources stated the regulator has proposed permitting FPIs to nominate ‘authorised signatories’ as an alternative 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 applicable home individuals to finish the brand new AR entry within the CAF type,” stated 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 Earnings 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 Might 10, 2026
