SEBI board meeting: 10 key changes approved by the regulator you need to know

In its recent board meeting, capital markets regulator Sebi approved a series of key measures aimed at protecting investors’ interests and improving various aspects of market regulations. From tightening SME IPO norms to relaxing certain reporting requirements, here are 10 key changes you need to know.

1. Strict rules for SME IPO

In at least two of the last three financial years, SEBI has raised Rs. It has made it mandatory for companies planning to tap the SME IPO market to show an operating profit of Rs 1 crore. Further, promoters and other major stakeholders selling under OFS are limited to 50% of their holdings during the IPO.

The regulator has also curbed misuse of IPO proceeds by allowing unutilized funds to repay loans taken from promoters, directors or related parties.

Further, Sebi said the allocation methodology for non-institutional investors (NIIs) in SME IPOs should be aligned with the methodology used for NIIs in mainboard IPOs.

2) Review of Merchant Banker Rules

Under the new norms approved by SEBI, merchant bankers, other than banks, public financial institutions and their subsidiaries, will carry out only permitted activities. These bankers can carry out other regulated activities as a separate business unit after obtaining registration from the concerned regulatory authority.

Other changes for merchant bankers include maintaining a liquid net worth of at least 25% of the minimum net worth requirement, at all times, and an underwriting limit set at 20 times the liquid net worth.

3) Relaxation in ESG reporting

SEBI has relaxed norms related to ESG reporting where companies now have more time to comply with ESG reporting. Mandatory reporting of value chain data has been deferred by 1 year till FY26 and will remain voluntary till then.

4) Regulatory bodies responsible for the use of AI

During the board meeting, SEBI also approved rules related to artificial intelligence, where it has mandated infrastructure entities, registered intermediaries and other persons regulated by SEBI to use AI tools for marketing.

Sebi said regulatory bodies including brokers and AMCs are responsible for the privacy and security of stakeholders’ data and outputs arising from the use of such tools.

5) Simplified debt listing rules

SEBI has relaxed norms for listing of debt securities, making it easier and faster for companies to raise funds through bonds. These measures include mandatory listed or listed debt instrument issue and its transfer only in demat form.

6) Strengthening corporate governance

SEBI has introduced stringent rules to enhance corporate governance standards. Companies will be required to disclose more details about related-party transactions and use of funds, ensuring greater transparency for investors.
The SEBI board has approved strict rules for the SME market, including financial stability before IPOs

7) Amendment of mutual fund norms

Sebi has approved amendments to the rules that outline the timeline for deployment of funds raised by mutual funds in New Fund Offers (NFO).

The objective of the framework is to provide a timeline within which the fund manager will be required to deploy the funds raised in the NFO as per the required asset allocation of the scheme.

The objective of the new framework is to encourage AMCs to raise only the amount of funds in NFOs that can be deposited within a reasonable period, as investors in open-ended funds always have the option of entering the scheme at a later date in the prevailing time. NAV.

The framework also provides investors with an option to exit the scheme without exit load if the fund manager is unable to deposit the funds within the specified timeline.

8) Investor protection for REITs and InvITs

SEBI approved amendments to strengthen investor protection for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). It includes better disclosures and mechanisms to protect investors’ money in this asset class.

9) Rules for Startups

SEBI has relaxed the eligibility criteria for listing startups on the Innovators Growth Platform (IGP). Startups now need only 25% of pre-issue capital from qualified investors, making it easier for them to list and raise funds.

10) Alternative Investment Funds (AIFs)

AIFs will now be required to provide detailed quarterly disclosures on their investments, valuations and performance, which will help investors track their money more effectively.

Enhanced monitoring of trading platforms

To prevent market manipulation, SEBI has introduced strict monitoring mechanisms for trading platforms. This includes real-time monitoring of suspicious trades and strong penalties for entities that violate market norms.