SEBI Chairman Tuhin Kanta Pandey has proposed a framework to stop companies from paying duplicate fines for the same compliance violation across different stock exchanges. The initiative aims to reduce the compliance burden while ensuring investor protection remains a priority. The regulator is also reviewing rules regarding the use of issue proceeds and related-party transactions.
The Securities and Exchange Board of India (SEBI) has announced a new plan to ensure companies listed on multiple stock exchanges do not face duplicate penalties for a single compliance error. SEBI Chairman Tuhin Kanta Pandey shared this proposal during the Institute of Directors' Annual Directors' Conclave 2026, marking a significant shift toward rationalizing the regulatory burden for Indian corporations.
Currently, firms listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), or other regional exchanges, may face separate fines from each exchange for the same regulatory infraction. The proposed framework seeks to eliminate this duplication, ensuring that the penalty structure is more proportionate and predictable. This change is designed to simplify operations for businesses without lowering the high standards of investor protection that the regulator demands.
Beyond addressing duplicate fines, SEBI is conducting a broader review of its regulatory framework. This includes updating the rules for how companies report the use of funds raised through IPOs or follow-on public offers, commonly referred to as issue proceeds. The regulator is also working to bring more clarity to related-party transactions—dealings between a company and its promoters or directors. The goal is to make these rules more practical for businesses while tightening the safeguards that protect shareholder value.
These policy changes are part of a larger move by SEBI to encourage a culture of 'stewardship' among Indian companies. Chairman Pandey emphasized that reducing compliance complexity does not mean weakening oversight. Instead, the intent is for company boards to proactively manage their responsibilities and ensure transparency, rather than simply checking boxes to comply with rules. This shift places greater pressure on company directors to act as true guardians of investor interests.
Investors and market participants should note that these updates are part of a wider regulatory cleanup. SEBI has also invited public comments on a separate proposal to revise the settlement framework—the process through which companies resolve legal disputes with the regulator. The deadline for submitting feedback on this settlement framework is September 4, 2026. Moving forward, the key monitorable will be how effectively these new rules reduce litigation and whether they lead to clearer disclosures regarding how companies spend the money they raise from the public.