The Securities and Exchange Board of India (SEBI) approved a wide-ranging set of regulatory changes at its Board meeting, including replacing the 1992 stock broker framework with the Securities and Exchange Board of India (Stock Brokers) Regulations, 2025 and approving a comprehensive rewrite of the mutual fund regime through the Securities and Exchange Board of India (Mutual Funds) Regulations, 2026. Alongside these rewrites, the Board cleared targeted amendments spanning IPO processes, corporate bond issuance and governance, listing-related investor services, and credit rating agency activities. For stock brokers, the new framework is reorganised into 11 chapters, removes redundant provisions, updates key definitions, enables electronic maintenance of books of accounts and joint inspections, and rationalises the criteria for identifying “qualified stock brokers” for enhanced supervision. Reporting flows are revised to reflect stock exchanges as first-line regulators for stock brokers, including for non-compliance reporting and submission of financial statements. For mutual funds, the Regulations, 2026 consolidate and simplify provisions while revising the expense framework by defining a Base Expense Ratio (BER) that excludes statutory levies, with statutory and regulatory levies charged on actuals and Total Expense Ratio defined as the sum of BER, brokerage, and levies. SEBI also reduced key caps, including BER limits (for example, index funds and ETFs to 0.90% from 1.00%, and close-ended equity schemes to 1.00% from 1.25%) and brokerage limits (cash market to 6 bps and derivatives to 2 bps, both exclusive of levies), and removed the additional 5 bps allowance previously linked to exit loads. Compliance-related changes include rationalised reporting, digital-first disclosures, and a streamlined borrowing framework including execution-related borrowing for equity-oriented index funds and ETFs. Other approvals include changes to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 to operationalise lock-ins where shares are pledged by marking them “non-transferable” in depository systems and to introduce a standardised draft abridged prospectus at the draft offer document stage. Amendments to the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 permit specified investor-category incentives in public debt issues (additional interest or issue-price discounts) for initial allottees only, while SEBI’s listing rules are amended to remove the “Letter of Confirmation” process in specified investor service requests and enable direct demat credit, reducing the indicative timeline from about 150 days to 30 days. The Board also approved a new window, subject to conditions to be specified, for lodging certain pre-1 April 2019 physical transfer deeds with original certificates, excluding dispute and fraud cases; aligned the transfer of unclaimed amounts for listed non-convertible securities to a one-time transfer after seven years from maturity; enabled credit rating agencies to rate instruments under other financial sector regulators with specified segregation and disclosure safeguards; and raised the High Value Debt Listed Entity threshold to INR 5,000 crore outstanding non-convertible debt while aligning related governance and related party transaction provisions with equity-listing norms. Separately, the Board took note of the High-Level Committee report on conflicts of interest and disclosures for SEBI Members and officials and indicated it would discuss the recommendations in a subsequent meeting.

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