Brief Overview:
1) No need to list old debt securities: A first-time issuer of listed non-convertible debt securities (“NCDs”) will no longer have to list all outstanding unlisted NCDs issued on or after 1 January 2024. The listing requirement will apply only to future issuances. This comes in as a relaxation to the existing framework.
2) A wider canvas for portfolio managers: The proposed SEBI (Portfolio Managers) Regulations, 2026 will replace the earlier 2020 regulations. Portfolio managers will be able to invest in initial public offerings, primary debt issuances and overseas securities. Under discretionary portfolio management services, up to 10% of a client’s AUM may be invested in investment grade unlisted non-convertible debt securities with client consent. Exchange-traded derivative exposure may go up to 1.25 times AUM.
3) A mutual fund-focused portfolio service: The Portfolio Managers Route for investing in Mutual Fund Units (‘PRIM’) will allow investments in direct plans of mutual funds, exchange-traded funds, index funds and specialised investment funds. The minimum ticket is INR 25 lakh.
4) Limited access to commodity derivatives to FPIs: Foreign portfolio investors are permitted to participate in (a) non-agricultural index derivative contracts (irrespective of underlying cash being settled or not); and (b) non-cash settled non-agricultural commodity derivative contracts.
5) REITs and InvITs: SEBI permits REITs and InvITs to issue depository receipts, initially in India’s International Financial Services Centre. Foreign investors, including non-resident Indians, may invest in these receipts. It has also approved changes to the unitholder approval framework and the exit offer framework in cases of change in sponsor.
6) The same protection for every form of AIF: AIFs set up in any legal form, not only as trusts, will be protected against their assets being used to meet a fund manager’s or its officers’ own losses, expenses or investor-dispute costs.
7) Other approvals by the SEBI board are as follows:
(a) Review of the SEBI (Settlement Proceedings) Regulations, 2026.
(b) Review of the regulatory requirement for maintenance of call records of institutional clients by Research Analysts or Research Entities.
(c) Approval of Common Advertisement Code for Specified SEBI Regulated Entities.
(d) Amendments to the Securities and Exchange Board of India (Vault Managers) Regulations, 2021.
(e) Review of the framework for accrediting investors.
(f) A fourth settlement scheme for eligible entities involved in pending proceedings relating to non-genuine trades in BSE illiquid stock options executed between 1 April 2014 and 30 September 2015. Settlement amounts will vary based on the number of contracts.
Takeaways:
These are just the approvals by the SEBI board. They shall become effective once they are notified or are introduced by way of an amendment or circular.
For further details, please see:
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