SWAGAT-FI

Some foreign investors are about as low-risk as foreign money gets: a central bank, a sovereign wealth fund, a large regulated fund sold to the public in its home country. SEBI's FPI rules still apply to them, but a few of the restrictions that exist to stop Indians routing money back through foreign vehicles make little sense for them.

SWAGAT-FI — Single Window Automatic and Generalised Access for Trusted Foreign Investor — is the label the SEBI (Foreign Portfolio Investors) Regulations, 2019 give to this trusted group.

The workbook's text on it is short and precise. It tells you who is in the group and one limit that no longer applies to them. Everything else in the FPI eligibility criteria still does — and that is where the marks are.

Who is a SWAGAT-FI (Chapter 11). Subject to conditions SEBI specifies from time to time, it includes:

1. Government and Government related investors, as provided under regulation 5 — the first entry in Category I, described as central banks, sovereign wealth funds, international or multilateral organisations or agencies, including entities controlled or at least 75% directly or indirectly owned by a Government or Government related investor; and
2. Public retail funds, as defined in the Explanation to regulation 22(4).

The rule it relaxes. An FPI applicant may have NRIs, OCIs and resident Indian individuals as constituents only on conditions:

The proviso is narrow: "the provisions of sub-clause (ii) of clause (c) shall not be applicable to a SWAGAT-FI". Only (ii) is lifted.

The same carve-out elsewhere. Sub-clause (ii) is also disapplied for an applicant regulated by IFSCA and based in an IFSC in India, subject to SEBI's conditions. Separately, an FPI investing only in Government Securities is relieved of (i), (ii) and (iv).

The general eligibility tests continue — for example, a Government or Government related investor applicant is eligible if resident in a country approved by the Government of India, and applicants must not be on the UN Security Council Sanctions List or resident in a FATF-identified high-risk jurisdiction.

Illustrative figures. Three foreign funds apply for FPI registration through a designated depository participant. Each has a corpus of ₹1,000 crore, part of it from NRIs, OCIs and resident Indian individuals.

Fund A — an ordinary Category II regulated fund. Six NRIs contribute ₹90 crore each.

Single largest   = 90 ÷ 1,000  = 9%    → below 25%, (i) met
Aggregate        = 540 ÷ 1,000 = 54%   → not below 50%, (ii) fails

Not eligible as structured.

Fund B — a public retail fund that qualifies as a SWAGAT-FI. Same six NRIs, same ₹540 crore.

Single largest   = 9%    → (i) met
Aggregate        = 54%   → (ii) does not apply to a SWAGAT-FI

Eligible on this test, provided none of the NRIs is in control, as (iv) still requires.

Fund C — also a SWAGAT-FI. One OCI contributes ₹280 crore.

Single largest   = 280 ÷ 1,000 = 28%   → not below 25%, (i) fails

Not eligible. SWAGAT-FI status removed the aggregate limit only; the single-investor limit is intact.

The pattern to take into the exam: Fund B passes and Fund C fails although both are SWAGAT-FIs, because the relaxation is one sub-clause wide.

Chapter 11 (SEBI (Foreign Portfolio Investors) Regulations, 2019) introduces SWAGAT-FI inside the eligibility criteria of section 11.1, directly after the NRI/OCI/RI constituent conditions. It is one of the newest provisions in the paper — the workbook's footnote cites the FPI Regulations as last amended on December 3, 2025.

Expect it as a "which limit does not apply" question, or as a True/False on the expansion of the name. The 25% single and 50% aggregate thresholds sit right beside it and are the natural distractors.

• Only the aggregate 50% limit is lifted. The single-investor 25% limit, the LRS condition and the no-control condition still apply.
• Two groups, not one: Government and Government related investors, and public retail funds.
• "Below 25%" and "below 50%" — exactly 25% or exactly 50% fails the ordinary test.
• SWAGAT-FI is not the only carve-out from (ii). An IFSCA-regulated applicant in an IFSC in India gets the same relief.
• A G-Sec-only FPI is a different relief — from (i), (ii) and (iv) — and has nothing to do with SWAGAT-FI.
• Trusted does not mean exempt from eligibility. Sanctions-list, FATF and fit-and-proper tests continue.
• The workbook defines public retail funds only by cross-reference to regulation 22(4); the definition itself is not reproduced, so do not expect a question on its content from this text.