3 Years at SEBI: Madhabi Buch’s legacy of triumphs & turmoil

Under Madhabi Puri Buch’s leadership, SEBI has worked to ensure that investors’ assets are always under their ownership.

A consultative approach, data-driven policy making, transparency, and protecting the retail investor have been among the defining characteristics of SEBI (Securities and Exchange Board of India) Chairperson Madhabi Puri Buch’s tenure, according to market insiders.

However, her term also saw its share of controversies, with protests by SEBI officials unhappy with a “toxic work environment” and short-seller Hindenburg Research’s accusations of irregularities, which Buch has since denied.

Buch took charge on March 2, 2022, and her term ends on February 28. On February 27, Finance and Revenue Secretary Tuhin Kanta Pandey was appointed as the new SEBI Chairperson.

Here’s a look at some of the pathbreaking reforms under Buch, the first woman chief of SEBI, and the first person from the private sector to head the regulator.

Also read: Tuhin Kanta Pandey is next Sebi chief: All about the man who will succeed Madhabi Puri Buch

1. T+0 settlement: under Buch’s leadership, SEBI has worked to  ensure that investors’ assets are always under their ownership. Reforms such as the T+0 settlement cycle, the transfer of securities and funds from client accounts to the clearing corporation and back (without accumulating in brokers’ accounts), and the ASBA-like facility for secondary markets were introduced.

With ASBA, or Application Supported by Blocked Amount, you authorise your bank to block funds in your account until your transaction is processed, which ensures that your monies are in your hands — and not in the broker’s — till they’re wired to the seller.

India was one of the first major economies to have a T+0 settlement cycle, which means that a trade would be settled on the day it was initiated, and the investor would not have to wait for the securities or the money to be transferred to his/her account the next day (T+1 settlement). The settlement cycle had been reduced from T+2, which is what most major markets follow, to T+1 in January 2023, and then to T+0 on a pilot basis in March 2024.

In 2023, an ASBA-like facility for secondary market investors was launched on an optional basis. In 2024, the bigger brokers were mandated to provide this or a three-in-one account (savings, demat + trading) to investors.

2. Actual charges:  brokerages were collecting an exchange-transaction fee from investors for buying and selling stock but didn't pass that on to the exchanges. Instead, they paid a discounted fee, and the discount was decided based on the trading volumes the brokerages channelled to the exchange. The regulator put a stop to this saying that the investor should be asked to pay only the transaction charge the broker passes on to the exchange. This reform promoted transparency across the supply chain.

3. A safer index-derivatives market: in October 2024, a new framework to regulate index derivatives was launched, to protect investors and improve market stability. There were also concerns that capital was being diverted for speculative activities and not towards genuine wealth creation. To address these, weekly expiries were reduced to one for each for the exchange's benchmark indices, minimum contract sizes were increased from Rs 5 - 10 lakh to Rs 15 lakh, the premium was collected upfront from Option buyers, and an additional 2 percent ELM (extreme loss margin) was charged to investors.

ELM is an additional margin that exchanges charge over and above the normal margin requirements, thereby reducing the trader’s ability to deploy leverage, and thus protect him from potential losses.

4. Crackdown on finfluencers: in October 2024, SEBI also restricted the partnership of regulated entities (REs) such as brokerages with unregulated advisors and illegal portfolio management services (PMSs). The regulator asked REs not to associate, directly or indirectly, with people who give advice without being registered as an RA (research analyst) or an IA (investment advisor), and those who claim they’ve delivered a certain level of returns without having permission from SEBI to do so.

It put an end to various referral programmes that were powering finfluencer-run illegal advisories. This improved transparency in the market, placed more accountability on REs, and stopped fraudulent activity even in the unregistered segment of the industry.

5. SME IPOs: in March 2024, Buch warned investors about “irrational exuberance” in the SME segment. In December 2024, SEBI tightened rules around SME public issues, including imposing a minimum operating profit percentage and regulating the use of the issue proceeds, in particular, banning their use for paying off loans from promoter or promoter-related entities. The regulator was trying to strike a balance between ease-of-doing business and investor protection. It didn’t want to get in the way of raising capital, but also didn’t want false narratives to trap retail investors.

6. Sachetisation of mutual funds: SEBI has been trying to balance financial inclusion and investor protection. One of the most-talked-about innovations in this regard has been the launch of the small SIP (systematic investment plan) in 2025, that allows one to start a SIP with as little as Rs 250. It is yet to be seen how widely it will be adopted; meanwhile, the industry has said that it may not be financially viable for them, considering the operational costs.

Along the same lines, the regulator has allowed research analysts to offer model portfolios, and on February 27, 2025, it cleared the way for the launch of Specialised Investment Funds (SIFs). SIFs aim to address the need for a product that falls between a mutual fund and a portfolio management service (PMS), and can be offered by mutual fund houses with a proven track record. SIFs have a minimum investment threshold of Rs 10 lakh.

7. Related party transactions (RPTs): SEBI has launched a portal that helps investors track RPT decisions and what proxy advisors (those who advise institutional investors) have to say about them. Under Buch's tenure, industry bodies came together to formulate the minimum information that would be provided to a company’s audit committee and shareholders for approval of RPTs. This is aimed at improving the participation of smaller shareholders in resolutions and improving corporate governance.

8. Debt market innovations: Buch has actively pursued a vision for the bond market and, in March 2023, she said at an event that Indian bonds would eventually be as  famous as 007: “We are hoping, down the line, it will be a case of ‘my name is bond, Indian bond”.

During her term, several measures to grow this segment of the market were introduced, such as setting up the Corporate Debt Market Development Fund (CDMDF) to assure debt funds that there will be liquidity in times of stress. Also, online bond platforms were allowed to register as stockbrokers to cater to increasing investor demand for fixed-income assets that generated better returns than bank deposits, even if they were somewhat riskier.

The CDMDF is meant to step in when a negative event triggers a wave of redemptions and the AMC finds it difficult to sell the underlying bonds quickly to meet the redemption pressure. These AMCs can then rely on this master fund to be the buyer.

To cater to retail demand, the regulator enabled the operation of bond platforms and reduced the face value of corporate bonds from Rs 1 lakh to Rs 10,000. Articulating a vision for the debt-market, in March 2024, Buch said that REITs (real estate investment trusts), InvITs (infrastructure investment trusts), and municipal bonds could grow as big as the equity markets.

To enable this, the minimum holding requirement for sponsors and sponsor groups was reduced from 25  to 15 percent of the outstanding units, the registration of smaller REITs was allowed, compliance norms were eased, and employees could be rewarded through Unit-based Employee Benefit (UBEB) schemes.

Also read: SEBI Chairperson launches Bond Central, free repository open to all investors

9. Responsible global integration: to ensure that foreign portfolio investors (FPIs) were not circumventing the minimum public shareholding and takeover regulations, SEBI asked some such funds to make additional disclosures. FPIs with concentrated holdings (>50 percent of their Assets Under Management) in one corporate group and high exposure (>Rs 25,000 crore) to the Indian securities market were asked to disclose granular details of entities that have an economic interest in the FPI and control the same.

Later, based on industry feedback, these norms were eased by exempting FPIs with concentrated holdings in certain corporate groups (broadly, those that were not held primarily by any one entity), and well-diversified FPIs such as university funds and university-related endowments.

The regulator also worked to facilitate the integration of Indian companies with the global supply chain. SEBI introduced the Business Responsibility and Sustainability Report (BRSR) Core for Environmental, Social, and Governance (ESG) reporting. This reduced the number of key performance indicators (KPIs) that listed companies needed to disclose to be seen as ESG compliant from 800 to 49. Following industry representation, SEBI also relaxed certain other norms, including allowing the phased ESG disclosure of the supply chain.

10. Social good: the market regulator has supported the goals set by Finance Minister Nirmala Sitharaman in her budget speeches. In July 2022, the regulatory framework for social stock exchanges (SSEs) was introduced, in line with the FY20 budget that asked for the participation of the capital markets to “meet various social welfare objectives.” The exchange was to facilitate the listing and fund-raising by non-profit organisations (NPOs). The framework was tweaked over the next few years to improve participation, such as reducing the minimum issue size to Rs 50 lakh from Rs 1 crore, and the application size to Rs 10,000 from Rs 2 lakh.

Category I and II Alternative Investment Funds are not allowed to borrow, except for meeting temporary funding requirements. But in August 2024, SEBI allowed these funds to pledge their equity investments in the infrastructure sector and raise funds for the investee companies. This furthered the government’s vision of  building robust and high-quality infrastructure for economic growth.