SEBI Announces Major Reforms: 10 Key Decisions That Will Impact Investors And Companies
The Securities and Exchange Board of India (SEBI) has unveiled a wide-ranging set of reforms aimed at enhancing market efficiency, reducing compliance burdens, strengthening investor protection and improving access to capital.
Approved at the regulator’s board meeting on June 19, the measures span share buybacks, mutual funds, alternative investment funds (AIFs), securities transmission, municipal bonds and governance standards. Here are the 10 most significant announcements:
1. Share Buybacks Through Stock Exchanges Make A Comeback
SEBI has reinstated the stock exchange route for share buybacks from August 1, 2026. The mechanism had been discontinued in 2025 due to concerns relating to taxation and equitable treatment of shareholders.
Companies will now be able to repurchase shares directly through the exchange platform, providing an additional option alongside the tender offer route.
2. Buybacks To Be Completed Faster
The regulator has significantly shortened the timeline for open-market buybacks. Companies must complete the process within 66 working days, compared to the earlier six-month window.
SEBI has also mandated that at least 40 percent of the approved buyback amount be utilised during the first half of the buyback period. Additionally, appointing a merchant banker will no longer be compulsory, helping reduce costs.
3. Mutual Funds Get Greater Liquidity Flexibility
Mutual fund houses will now have more flexibility to manage short-term liquidity needs.
SEBI has expanded the scope of intraday borrowings, allowing fund managers to use them for settlement timing mismatches, foreign exchange obligations and mark-to-market payments on derivatives, apart from redemption-related requirements.
4. No Leveraging Through Intraday Borrowings
While providing greater flexibility, SEBI has drawn a clear line against misuse.
The regulator clarified that intraday borrowings cannot be used to create leverage. Asset management companies must ensure that such borrowings are fully repaid before the close of business on the same day.
5. GARUDA Green Channel For AIF Launches
SEBI has introduced GARUDA (Green-Channel AIF Rollout Upon Document Acknowledgement), a fast-track mechanism for eligible Alternative Investment Fund schemes.
Under the new framework, qualifying AIFs can launch and start fundraising within 10 working days of filing placement documents, reducing the current waiting period by two-thirds.
6. Easier Rules For Angel Funds And Accredited Investor Schemes
The regulator has simplified the launch process for angel funds and schemes catering exclusively to accredited investors.
These schemes will no longer be required to submit placement memorandums through merchant bankers and can begin operations immediately after filing the necessary documents and declarations.
7. Simpler Transmission Process For Nominees And Legal Heirs
SEBI has introduced measures to make the transfer of securities after an investor’s death faster and less cumbersome.
A new Quick Transmission Processing (QTP) mechanism will facilitate smaller claims, while documentation requirements have been streamlined to reduce delays for nominees and legal heirs.
8. Higher Thresholds For Simplified Claims
The regulator has doubled the limits under the simplified transmission framework.
The threshold has been raised to Rs 10 lakh for physical shareholdings in each listed company and Rs 30 lakh for demat holdings per beneficial owner. Requirements related to PAN, affidavits and death certificate verification have also been eased.
9. Municipal Bonds And Securitisation Framework Updated
SEBI has approved changes to municipal debt regulations, enabling municipalities to refinance existing project loans through bond issuances.
The regulator has also aligned securitised debt instrument regulations with the Reserve Bank of India’s framework, a move expected to improve operational efficiency and strengthen the securitisation market.
10. Governance Standards Strengthened
To improve transparency and accountability, SEBI has approved a new Code of Conduct for its board members and revised employee service regulations.
The changes strengthen conflict-of-interest safeguards and disclosure requirements. The board also approved an evidence-based review of the SME fundraising ecosystem to evaluate the effectiveness of current regulations and identify areas for improvement.
What It Means
The latest reforms signal SEBI’s push to make India’s capital markets more efficient, investor-friendly and globally competitive. From faster buybacks and smoother fund launches to easier inheritance procedures and stronger governance norms, the changes are expected to benefit both market participants and listed companies in the coming years.
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