SEBI Reviews Analyst Fee Unbundling and Short Selling Norms

The Securities and Exchange Board of India (SEBI) is reconsidering its proposal to separate analyst fees from broking charges after industry feedback suggested similar reforms in London and Europe had limited success, according to news reports. SEBI has indicated it may reverse the move if domestic outcomes prove unsatisfactory.

Proposed Regulatory Overhaul

The planned changes aim to eliminate regulatory overlaps, simplify compliance requirements and bring clarity to existing rules. SEBI’s review comes as part of a broader effort to strengthen market infrastructure and improve transparency in brokerage practices.

Focus on Short Selling and SLB Framework

Alongside the analyst fee proposal, SEBI is examining India’s short-selling norms and the Stock Lending and Borrowing (SLB) mechanism. Introduced in 2008 to facilitate short selling and prevent settlement failures, the SLB framework has seen limited activity since its inception in 2007 and is widely viewed as needing structural upgrades to encourage wider participation.

Monitoring Derivatives Segment

SEBI is also closely tracking Futures & Options (F&O) data as it considers further policy measures in the derivatives market. Officials have stressed the need for a calibrated approach to derivatives regulation, balancing market development with investor protection.

Read More: SEBI Explores REIT Inclusion in Indices to Boost Liquidity and Participation.

Conclusion

Further clarity on these proposals is expected after SEBI’s board meeting next month. The regulator’s review of analyst fee unbundling, short-selling norms, and SLB framework reflects its intent to modernise market regulations while ensuring robust investor safeguards.

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