The Securities and Exchange Board of India has introduced major regulatory reforms to boost market liquidity and simplify processes. Key updates include allowing Portfolio Management Services to invest in IPOs and primary debt, granting FPIs access to non-agricultural commodity derivatives, and updating accreditation norms for AIFs. These changes aim to modernize the financial framework for intermediaries and investors.
The Securities and Exchange Board of India (SEBI) announced a series of structural changes on September 24, 2026, aimed at modernizing the market framework for intermediaries and investors. These reforms cover areas ranging from portfolio management to commodity derivatives and settlement processes, designed to increase liquidity and provide clearer operational guidelines.
New Investment Options for Portfolio Managers
Portfolio Management Services (PMS) providers now have expanded investment avenues. Regulations now permit PMS managers to invest in Initial Public Offerings (IPOs) and primary-market debt instruments. To support this, the regulator introduced the Portfolio Management Services for Investment in Mutual Funds (PRIM) route, which carries a minimum investment threshold of ₹25 lakh. Furthermore, managers are permitted to allocate up to 10% of a client’s assets into investment-grade unlisted debt, provided they obtain explicit consent from the client. This move offers investors more diversification options but increases the need for careful selection of unlisted debt instruments.
FPI Access to Commodity Derivatives
Foreign Portfolio Investors (FPIs) can now participate in the commodity derivatives market, specifically in physically settled, non-agricultural contracts. This change is intended to deepen liquidity in these segments. To manage risks associated with physical settlement, SEBI has mandated that FPIs must square off or roll over their positions before the physical delivery phase begins. This framework seeks to integrate global capital while maintaining stability in domestic commodity exchanges.
Changes to AIF Accreditation and Settlements
SEBI has updated the accreditation norms for Alternative Investment Funds (AIFs). Individuals are now considered accredited if they hold ₹5 crore in securities-market assets, while corporate entities require a threshold of ₹20 crore. Alongside these changes, the regulator has improved the settlement process. The application window for settlements has been extended to 90 days, and a fast-track process has been created for claims valued under ₹10 lakh, which should help speed up resolution for smaller cases.
REITs, InvITs, and Advertising Norms
Publicly listed Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have been granted permission to issue Depository Receipts (DRs) in authorized overseas jurisdictions. This is expected to provide these trusts with easier access to international capital markets. Additionally, SEBI has introduced a unified advertising code for market intermediaries. This replaces various entity-specific rules with a single standard, which clarifies the conditions under which celebrity endorsements are allowed. Investors should monitor how these changes affect the operational costs and marketing strategies of financial firms in the coming quarters.