Capital markets regulator SEBI approved a wide-ranging set of regulatory reforms aimed at improving market efficiency, easing compliance requirements and enhancing investor protection across various segments of the financial markets.
The decisions were taken at SEBI’s board meeting and covered key areas including share buybacks, mutual funds, alternative investment funds (AIFs), municipal bonds and the transmission of securities to legal heirs.
In a significant move, the market regulator approved the reintroduction of open market share buybacks through stock exchanges from August 1, 2026.
The route had been discontinued earlier following changes in the tax regime. With the latest decision, listed companies will once again have the option to undertake buybacks either through the tender offer route or by purchasing shares through stock exchanges.
The board also approved amendments to mutual fund regulations that will allow fund houses to undertake intra-day borrowings to address temporary liquidity mismatches.
The borrowing facility can be used for operational requirements such as settlement timing differences, foreign exchange settlements and mark-to-market obligations in derivatives.
In another major decision, SEBI introduced the GARUDA framework, or Green-Channel: AIF Rollout Upon Document Acknowledgement, to accelerate the launch of Alternative Investment Fund schemes.
The regulator also approved a series of reforms aimed at deepening India’s municipal bond market.
Municipal bodies will now be permitted to raise funds for refinancing existing project debt. SEBI has also established a framework for pooled financing by multiple municipalities to support infrastructure funding.
The market regulator further approved measures to simplify the transmission of securities following the death of an investor.
The regulator has removed the mandatory requirement of probate of wills wherever succession laws permit and has allowed the use of a combined affidavit-cum-No Objection Certificate (NOC) to reduce paperwork.
Besides these reforms, the board also approved amendments relating to securitised debt instruments, the transfer of the Social Stock Exchange Capacity Building Fund to a Section 8 company, revisions to SEBI’s internal code of conduct and the selection of SME capital raising as the theme for an independent regulatory review during FY27.
