SEBI Approves Key Regulatory Reforms Across Markets: What Investors Need to Know

The Securities and Exchange Board of India (SEBI) on Monday cleared a broad set of regulatory changes covering alternative investment funds (AIFs), foreign portfolio investors (FPIs), and governance norms, aimed at balancing operational ease with stronger oversight.

Relief for AIFs and FPI Settlement Reforms

Among the key decisions, SEBI introduced greater flexibility for AIFs in the winding up of schemes and related registrations, making fund closures more efficient.

In a significant move for foreign investors, the regulator approved net settlement of funds for FPI transactions in the cash market. This allows investors to net their obligations, improving capital efficiency and reducing operational complexities.

Boost for Social Impact Funds

SEBI also amended norms for Social Impact Funds under AIFs, lowering the minimum investment threshold from ₹2 lakh to ₹1,000. The step is expected to widen participation and improve access to impact-oriented investments.

Ease of Doing Business for REITs and InvITs

The Board approved additional measures to simplify operations for market participants in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), further enhancing ease of doing business in these segments.

Also Read: Indian Bank Raises ₹5,000 Crore via 10-Year Infra Bonds at 7.15% Coupon Rate

Stricter Governance and Conflict of Interest Rules

On the governance front, SEBI accepted recommendations from a high-level committee on conflict of interest and disclosures for its members and officials.

Under the revised framework:

• The Chairman and whole-time members may need to choose how to manage their investments upon taking office, through liquidation, freezing holdings, or regulated sale.
• Investments in equity and equity-related instruments in commercial ventures must either be fully liquidated or frozen during their tenure.
• The Chairman and whole-time members will now be classified as “insiders,” ensuring uniform rules on trading and investment restrictions.

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