The Securities and Exchange Board of India (SEBI) cleared a wide-ranging set of reforms at its board meeting on September 12, spanning IPO rules, alternative funds, FPIs, mutual funds, and market infrastructure. Here are the ten most important highlights:
Mega IPO Relief
Large firms will now face a more practical path to listing. For companies above Rs 50,000 crore market cap, the minimum public offer is set at Rs 1,000 crore plus 8%. Those between Rs 1-5 lakh crore must issue at least Rs 6,250 crore plus 2.75%, while those above Rs 5 lakh crore must issue Rs 15,000 crore plus 1%, with a floor of 2.5%. Timelines to reach the mandated 25% public float have been relaxed to 10 years, easing the pressure on mega listings.
Anchor Investor Boost
Anchor investor allocation has been raised to 40% of the IPO size (up from one-third). Within this, insurance and pension funds will get 7%, while mutual funds retain 33%. The number of anchor allottees will scale with IPO size, rising from 5 to 15 per Rs 250 crore block, broadening participation.
RPT Thresholds Revamped
SEBI has overhauled thresholds for related-party transactions. Companies with turnover up to Rs 20,000 crore will follow a 10% of turnover limit. For turnover between Rs 20,001–40,000 crore, the limit is Rs 2,000 crore plus 5% of incremental turnover. Above Rs 40,000 crore, the cap is Rs 3,000 crore plus 2.5% of incremental, subject to a ceiling of Rs 5,000 crore.
FPIs from IFSCs
Retail schemes operating from GIFT City’s IFSC, even with Indian sponsors or managers, can now register as Foreign Portfolio Investors (FPIs). Sponsor contribution is capped at 10% of corpus/AUM, opening the FPI route to a broader set of domestic-linked entities.
AIF Reforms
A new class of AI-only AIFs (for accredited investors) has been approved, with lighter investor-protection norms. Large Value Funds will see their minimum ticket size cut from Rs 70 crore to Rs 25 crore and will be exempted from mandatory audits, reducing compliance burdens.
SWAGAT-FI Framework
To attract stable foreign capital, SEBI launched the SWAGAT-FI framework for sovereign wealth funds, central banks, pension funds, insurers, and similar “trusted” investors. They will enjoy 10-year registration cycles (vs 3 years currently), a single demat account, and exemptions from the FVCI rule requiring 66% of corpus in unlisted equity.
REITs & InvITs
SEBI has reclassified REITs as equity instruments, making them eligible for equity indices and mutual fund equity allocation limits. InvITs remain hybrid instruments. Strategic investor eligibility has been expanded to include QIBs, large NBFCs, and family trusts with net worth above Rs 500 crore.
Mutual Fund Rules
The cap on exit loads has been reduced from 5% to 3%. To push financial inclusion, distributors can now receive incentives up to 1% of inflows (max Rs 2,000) for onboarding first-time investors from B-30 cities and women investors.
Ease for IAs & RAs
Investment Advisers (IAs) and Research Analysts (RAs) will benefit from lighter entry norms. Graduates from any discipline can qualify with NISM certifications. Documentation requirements such as address proof, CIBIL report, or net worth certificates are being scrapped. Until PaRRVA goes live, they may also share past two years’ performance records.
Exchange Governance Strengthened
Market infrastructure institutions (MIIs) such as stock exchanges must now appoint two Executive Directors — one each for risk/compliance and operations — alongside the Managing Director. The CTO and CISO roles have been brought within the compliance framework, further tightening governance.
On one hand, the regulator is easing rules for scale and sophistication — whether by creating accredited-investor-only funds, cutting LVF thresholds, or giving mega IPOs more breathing room. On the other, Chairperson Tuhin Kanta Pandey has underscored that SEBI will remain vigilant against market excesses.
His remarks on the Jane Street episode — stressing that enforcement and surveillance, not new rules, are the real gap — signal that the regulator intends to upgrade its technical capacity as much as it rewrites rulebooks.
At the same time, SEBI is alert to the risks facing small investors, especially in derivatives where losses have mounted despite record participation. Pandey has hinted at structural changes and stronger safeguards, even as SIP flows continue to deepen retail engagement.
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