Without a PAN, FPIs can not open trading or demat accounts, efficiently avoiding them from purchasing Indian securities.
Foreign portfolio financiers (FPIs) have actually not gotten any Permanent Account Numbers(PAN) for almost a month following modifications to the PAN application procedure under the typical application (CAF), developing a traffic jam in onboarding fresh foreign financiers into Indian markets.
A minimum of 20 freshly signed up FPIs are presently waiting for PAN allocation in spite of having actually finished registration rules, individuals knowledgeable about the matter stated.
Without a PAN, FPIs can not open trading or demat accounts, efficiently avoiding them from buying Indian securities.
“Normally, once the application is started through the custodian or designated depository individual, PAN is provided within 2 to 3 days. For the previous month, no PANs have actually been released,” a source stated.
CAF structure
The problem has actually emerged after modifications were made to the PAN forms incorporated within the CAF structure. The CAF works as a single-window system for FPI registration, PAN allocation, KYC and account opening.
The disturbance is connected to modifications presented by the Income Tax Department through brand-new PAN application and associated system recognitions. A comparable hold up is being dealt with by FDIs at the Reserve Bank of India (RBI), another source stated.
Market individuals stated some applications are getting held up due to field-level recognition problems, such as inequalities in character limitations, format requirements and other data-entry checks in the revised types.
Some FPIs are likewise dealing with obstacles in selecting ‘authorised agents’ (ARs), which is needed under the upgraded structure. They are discovering it challenging to determine appropriate domestic people going to handle the function due to issues around prospective tax liability direct exposure.
The matter has actually been taken up with the Securities and Exchange Board of India (SEBI), which is comprehended to be in conversations with the federal government and stakeholders. Sources stated the regulator has actually proposed enabling FPIs to designate ‘authorised signatories’ rather of authorised agents to relieve the procedure. Conversations with the Central Board of Direct Taxes (CBDT) are continuous.
“FPIs are discovering it challenging to discover suitable domestic individuals to finish the brand-new AR entry in the CAF kind,” stated an FPI market individual, including that they are waiting on an upgrade on SEBI’s conversations with CBDT.
An e-mail sent out to the regulator did not generate an action.
The PAN issuance procedure streams from the Income Tax Department to Protean and after that through APIs to the depositories. As soon as the PAN is released, brand-new registrants can open demat accounts with the stock market to be able to trade or invest.
Released on May 10, 2026
