In short: On 11 November 2026, SEBI told all registered intermediaries, stock exchanges and depositories to bring their FATCA and CRS reporting in line with the Income Tax Act, 2025 and the Income Tax Rules, 2026.
What has happened?
SEBI issued a circular dated 11 November 2026 addressed to all intermediaries registered with it, all stock exchanges and all depositories. It deals with reporting under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). These are frameworks under which financial institutions report information on certain accounts as part of the Automatic Exchange of Information (AEOI).
SEBI had earlier issued circulars on this subject in 2015 and in February 2024. Those were based on the older Income-tax Act, 1961 and the Income-tax Rules, 1962. According to the circular, the Income Tax Act, 2025, read with the Income Tax Rules, 2026, replaced that older regime from 1 April 2026. The AEOI reporting requirements have been revised accordingly.
What is the legal basis?
The circular says the revised reporting requirements flow from Section 508 of the Income Tax Act, 2025, read with Rules 238, 239 and 240 and Form 166 of the Income Tax Rules, 2026. Under Rule 239(12)(a), a regulator must issue instructions to the financial institutions it regulates. These instructions must cover the due diligence and reporting procedures, the manner of maintaining account information, and keeping that information available for reporting.
SEBI issued the circular using its powers under Section 11(1) of the Securities and Exchange Board of India Act, 1992, read with Rule 239(12)(a), to protect investors and to regulate and develop the securities market.
Who is affected?
The obligations apply to entities that qualify as Reporting Financial Institutions (RFIs). The terms "RFI" and "Financial Institution" are defined in Rule 238 of the Income Tax Rules, 2026. Registered intermediaries that are RFIs must take steps to comply with Rules 238 to 240. SEBI also asks them to refer to the Guidance Note on FATCA and CRS issued by the Central Board of Direct Taxes, dated 24 July 2026.
What must intermediaries update?
Intermediaries must build AEOI reporting and due diligence requirements into their customer onboarding and Know Your Customer (KYC) processes. The circular lists the following items to be reviewed and updated:
- Self-certification collection: procedures must capture the validity indicator.
- Controlling Person identification: systems must capture the person's role, such as settlor, trustee, protector, beneficiary or other.
- Account classification: systems must capture the account type and whether the account is pre-existing or new.
- Form 166 XML generation software: it must include all the new mandatory fields. SEBI warns that missing fields will cause validation errors on the Income Tax portal.
Intermediaries must also upload the FATCA and CRS certification obtained from clients to the systems of the KYC Registration Agencies (KRAs).
Who is responsible?
The circular states that the onus of obtaining and reporting FATCA and CRS certification, and of related compliance, lies solely with the respective intermediaries.
What should readers do?
Frequently asked questions
Does this circular apply to every SEBI-registered intermediary?
It is addressed to all registered intermediaries, stock exchanges and depositories. The reporting obligations apply to those that qualify as Reporting Financial Institutions under the Income Tax Rules, 2026.
Why was a new circular needed?
The earlier SEBI circulars were based on the Income-tax Act, 1961 and the 1962 Rules. Those have been replaced from 1 April 2026 by the Income Tax Act, 2025 and the Income Tax Rules, 2026, so the reporting framework was revised.
What happens if the reporting data is incomplete?
The circular says that if Form 166 XML software omits the new mandatory fields, the Income Tax portal will show validation errors. It also says compliance responsibility lies solely with the intermediary.