The SEBI board meeting on September 24 will review reforms including faster legal settlement routes, new flexibility for portfolio managers, and wider FPI access to commodity derivatives. These changes aim to improve market efficiency and liquidity.
The Securities and Exchange Board of India (SEBI) is set to hold a board meeting on September 24, 2026, to discuss a range of policy reforms. These proposals are aimed at streamlining enforcement procedures, increasing investment options, and expanding market access for foreign investors.
Overhauling Settlement Frameworks
One of the main items on the agenda is a major update to the settlement mechanism. SEBI intends to speed up the resolution of cases by introducing a fast-track route for violations involving amounts up to ₹10 lakh. This is designed to help the regulator clear backlogs of lower-level enforcement matters efficiently. Additionally, the regulator is considering allowing settlement applications for cases currently pending before the Securities Appellate Tribunal or the Supreme Court, which could reduce the time and cost associated with long-drawn legal battles for all parties involved.
Other changes to the settlement process include issuing settlement notices before a formal show-cause notice in specific cases and extending the filing window from 60 to 90 days. The proposal also suggests reducing the penalty for refiling withdrawn applications from 50% to 20%. These steps aim to encourage entities to cooperate and settle matters without lengthy litigation. While these changes may improve administrative efficiency, investors should note that the impact on enforcement quality will depend on how the regulator implements these new pathways.
Portfolio Management and Market Access
SEBI is also looking to expand flexibility for Portfolio Management Services (PMS). One proposal includes creating a "mutual-fund-only" category, where managers can build portfolios using only mutual fund schemes. Furthermore, there is a suggestion to allow discretionary portfolio managers to invest up to 10% of their assets under management into unlisted debt that is rated as investment-grade. While this offers more diversification, investors should be aware that unlisted debt can be harder to sell and value compared to listed securities, making liquidity management a critical factor for these portfolios.
Foreign Portfolio Investors (FPIs) may soon gain broader access to the Indian market. The regulator is considering allowing them to participate in non-agricultural commodity index derivatives and physically settled non-agricultural contracts. This move is intended to drive higher liquidity in commodity segments where international participation has previously been low.
Additional discussions will include a unified advertisement code for regulated entities, which may allow for celebrity endorsements under specific conditions. The board will also explore allowing depository receipts for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to be traded on international exchanges. The next step for these proposals will be the formal announcement of the board's decisions, which will clarify the timeline and specific operational requirements for these changes.