SEBI Board Meeting Highlights: Key Regulatory Reforms Approved on December 17, 2025
The Securities and Exchange Board of India (SEBI), in its 212th Board Meeting held in Mumbai on December 17, 2025, approved a series of far-reaching regulatory reforms aimed at simplifying compliance, enhancing investor protection, and improving ease of doing business across India’s securities market. The decisions span stock brokers, mutual funds, IPO disclosures, debt markets, credit rating agencies, and corporate governance.
Below is a comprehensive overview of the key announcements and their implications for market participants.
1. New Stock Brokers Regulations, 2025: Simplification at the Core
SEBI approved the replacement of the Stock Brokers Regulations, 1992 with the SEBI (Stock Brokers) Regulations, 2025, marking a major overhaul of a three-decade-old framework.
Key highlights:
- Regulations reorganized into 11 clear chapters
- Removal of obsolete and redundant provisions
- Simplified language and updated definitions
- Rationalisation of compliance and reporting responsibilities
- Enhanced clarity on supervision of large brokers
Notably, the revised framework cuts the regulation length nearly in half, reducing total pages from 59 to 29 and word count from 18,800 to 9,000, significantly improving readability and compliance efficiency
2. SEBI (Mutual Funds) Regulations, 2026: Stronger Investor Protection
SEBI approved a comprehensive review of the Mutual Funds Regulations, 1996, culminating in the new SEBI (Mutual Funds) Regulations, 2026.
Major reforms include:
a) Simplification and Consolidation
- Unified eligibility criteria for mutual fund sponsors and AMCs
- Clear demarcation of roles between AMCs and trustees
- Consolidation of prudential investment norms
b) Rationalisation of Expense Ratios
- Introduction of Base Expense Ratio (BER) excluding statutory levies
- Clear disclosure of statutory costs like STT, GST, and stamp duty
- Revised TER limits across equity, debt, index funds, ETFs, and FoFs
This improves transparency by ensuring investors can clearly distinguish fund management costs from statutory charges.
c) Ease of Compliance
- Reduced reporting requirements
- Elimination of duplicate filings
- Digitisation of disclosures and investor communications
- Streamlined borrowing framework for mutual funds
Overall, the regulations were reduced from 162 pages to 88 pages, reflecting SEBI’s focus on regulatory efficiency without compromising safeguards
3. IPO Reforms: Simplified Lock-in and Disclosures
To enhance retail investor participation and reduce friction in IPO processes, SEBI approved amendments to the ICDR Regulations, 2018.
Key changes:
- Automated lock-in of non-promoter shares through depositories
- Simplified disclosures in Draft Red Herring Prospectus (DRHP)
- Rationalised abridged prospectus requirements
- Improved information accessibility for retail investors
These measures aim to streamline capital raising while ensuring adequate transparency and investor comprehension.
4. Incentives for Retail Investors in Debt Markets
In a significant move to deepen the corporate bond market, SEBI approved amendments allowing issuers of listed non-convertible securities to offer incentives to certain categories of investors.
What’s new?
Issuers can offer additional interest or discounts to:
- Retail investors
- Senior citizens
- Employees and other notified categories
Incentives applicable only at primary issuance, not on transfers
This is expected to encourage greater retail participation and expand the investor base in the debt segment
5. Faster Demat Credit and Relief for Physical Shareholders
SEBI approved amendments to the LODR Regulations, 2015 to simplify investor service requests:
- Removal of the requirement for Letters of Confirmation (LoC) in select cases
- Faster credit of securities into demat accounts (reduced from ~150 days to ~30 days)
- Special window for re-lodgement of old physical transfer deeds purchased before April 1, 2019
These steps significantly reduce procedural delays and enhance investor convenience.
6. Unclaimed Amounts: Simplified Transfer Timeline
SEBI aligned timelines for transferring unclaimed interest, dividends, and redemption amounts to the Investor Protection and Education Fund (IPEF):
- Single transfer after completion of 7 years from maturity
- Reduced administrative burden for issuers
- Easier claim process for investors
7. Expanded Role of Credit Rating Agencies (CRAs)
SEBI approved amendments enabling CRAs to rate financial instruments not regulated by another Financial Sector Regulator (FSR), subject to safeguards such as:
- Clear labeling of SEBI-regulated vs non-SEBI instruments
- Separate disclosures and grievance mechanisms
- Explicit communication that investor protection mechanisms may differ
This move broadens the availability of credit ratings while maintaining transparency.
8. Relaxation for High Value Debt Listed Entities (HVDLEs)
SEBI eased compliance norms for HVDLEs by:
- Lowering the identification threshold
- Aligning corporate governance norms closer to equity-listed entities
- Providing flexibility in board approvals, committee structures, and RPT compliance
These changes aim to facilitate fundraising for NBFCs, HFCs, REITs, and infrastructure entities.
9. Strengthening SEBI’s Internal Governance
Finally, the Board took note of the High-Level Committee report on conflict of interest and disclosures concerning SEBI Members and Officials. The recommendations will guide future improvements in governance, transparency, and operational integrity within the regulator.
Conclusion
The December 17, 2025 SEBI Board Meeting marks a decisive step toward modern, principle-based regulation. By simplifying rules, enhancing disclosures, and prioritising investor protection, SEBI continues to balance market development with regulatory prudence.
These reforms are expected to reduce compliance friction, encourage wider participation across asset classes, and strengthen trust in India’s capital markets.
