SEBI Board Approves Wide-Ranging Reforms for Brokers | Mutual Funds | IPOs | Debt Markets

PR No. 84/2025, Dated: 17.12.2025

The SEBI Board, at its 212th meeting, approved a series of regulatory proposals. These include replacing the SEBI (Stock Brokers) Regulations, 1992, with the SEBI (Stock Brokers) Regulations, 2025 and a comprehensive review of the SEBI (Mutual Funds) Regulations. Amendments were approved to the ICDR, LODR, and NCS Regulations, along with measures for credit rating agencies, relaxation for HVDLEs, and alignment of timelines for the transfer of unclaimed amounts.

Some of the Key highlights of the Board Meeting in detail are as follows:

1. Replacement of SEBI (Stock Brokers) Regulations, 1992 with SEBI (Stock Brokers) Regulations, 2025

The Board has approved of a proposal to replace the SEBI (Stock Brokers) Regulations, 1992, with the SEBI (Stock Brokers) Regulations, 2025, with the objective of:

(a) Streamlining the regulations to ensure simple and clear language

(b) Omission of repetitive and redundant provisions

(c) Updating regulations with contemporary changes

(d) Modification/inclusion of certain provisions to provide more clarity and to ensure ease of compliance

Some of the features of the new Regulations approved by the Board are as follows:

(a) Reorganisation of the Regulations

(b) Amendments of certain key definitions, such as clearing member, professional clearing member, proprietary trading member, proprietary trading, designated director, etc. to provide clarity

(c) Modifications or inclusion of certain provisions to provide for ease of compliance and ease of doing business by enabling provision for joint inspection and maintenance of books of accounts

(d) Removal of obsolete and non-applicable historical provisions, such as provisions relating to physical delivery of shares, Forward Market Commission sub-brokers, etc.

2. Comprehensive Review of Mutual Funds Regulations, 1996 to Ensure Transparency and Strengthen Investor Protection

Almost, for nearly three decades, the SEBI (Mutual Funds) Regulations, 1996, have served as the foundational regulatory architecture for the Indian mutual fund industry. Over time, multiple amendments were incorporated to address evolving market practices, resulting in an extensive and layered regulatory structure.

The Board has now approved a comprehensive review of the Mutual Funds Regulations. The new SEBI (Mutual Funds) Regulations, 2026, are designed to offer stakeholders greater clarity, improved readability, and enhanced structural coherence.

While simplifying compliance, the revised framework retains the core principles, safeguards, and regulatory intent built over the years and further strengthens investor protection, transparency, and governance standards within the mutual fund ecosystem.

3. Streamlining Public Issue Requirements to Enhance Ease of Doing Business and Retail Investor Participation

As per ICDR Regulations, the entire pre-issue capital held by persons other than the promoters, except for shares held by certain specified categories of shareholders, must be locked in for a period of 6 months from the date of allotment in the IPO.

Certain issuers face challenges in complying with such lock-in requirements, particularly in cases where pledges have been created by non-promoters before the IPO.

In this regard, the Board has approved an amendment to ICDR to prescribe that, in case lock-in of the specified securities cannot be created, the depositories must record such securities as “non-transferable” for the duration of the applicable lock-in period.

The depositories must ensure that, subsequent to the invocation or release of a pledge, the shares in the account of the beneficiary (pledger or pledgee) must automatically be locked-in for the balance period, as required under the ICDR Regulations.

Further, the Board has also approved that a focused, concise and standardised summary of offer documents in the form of a draft abridged prospectus must be available at the DRHP stage as well, in addition to the current requirement of filing of an abridged prospectus at the RHP stage. Also, the Board has approved the proposal to rationalise the disclosures in the abridged prospectus.

4. Permitting Debt Issuers to Offer Incentives in Public Issues to Certain Category of Investors

Currently, issuers of debt securities are not able to offer incentives to any persons for making an application in the issue, except for fees or commissions for services rendered in relation to the issue.

With a view to enhancing the participation of retail investors in the corporate debt market and also to encourage public issuances in the debt market, the Board considered and approved a proposal for amending the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, to permit debt issuers to offer incentives to specific categories of investors.

Pursuant to this amendment, issuers of debt securities will be able to offer incentives in the form of additional interest or a discount to the issue price to specific categories of allottees, viz. senior citizens, women, armed forces personnel namely, serving and retired defense personnel and widows and widowers of such personnel, retail individual investors or any other category of investors as may be specified by the Board.

5. Aligning the Timeline for Transfer of Unclaimed Amount By An Entity Having Listed Non-Convertible Securities with Companies Act

Presently, unclaimed amounts are transferred to IEPF/IPEF after 7 years of remaining unclaimed. To enable ease of doing business, the Board has now approved a proposal for amending the SEBI (LODR) Regulations, 2015, on aligning the timeline for transfer of unclaimed interest/dividend/redemption payment entities having listed non-convertible securities to the Investor Education and Protection Fund (IEPF)/ Investor Protection and Education Fund (IPEF) with the Companies Act.

Accordingly, issuers of non-convertible securities will now need to transfer the unclaimed amounts only once after completion of 7 years from the date of maturity of the security, instead of multiple transfers when interest/dividend/redemption payment becomes due.

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