Sebi board meeting: Market watchers await policy and transparency reforms

In Wednesday's meeting, new Chairman Tuhin Kanta Pandey is expected to push reforms to boost investor confidence and market efficiency in capital markets

  • Published:
  • 17/06/2025 07:15 PM

SEBI Chairman Tuhin Kanta Pandey. Image: PTI Photo/Shashank Parade

The Securities and Exchange Board of India (Sebi) is set to hold its first board meeting of FY26 on June 18, with discussions likely to focus on the ease of doing business, regulatory transparency and transformative reforms. This will be the second board meeting under newly appointed Chairman Tuhin Kanta Pandey, who is expected to place a strong emphasis on effective reforms in capital markets to foster investor confidence and market efficiency.

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“Our focus remains on promoting ease of doing business in the securities market through regulatory simplification, faster approvals, and technology-driven oversight. We are committed to a framework of optimum regulation—one that ensures investor protection while allowing businesses to innovate and thrive,” Pandey had said at an Assocham event on May 22.

As part of the meeting’s agenda, decisions are expected to be taken on alternative investment funds (AIFs), real estate investment trusts (REITs), infrastructure investment trusts (InvITs), voluntary delisting of government-owned companies, and norms related to employee stock options (Esops).

AIF as co-investment opportunities

The board is likely to take a decision on providing flexibility to AIFs to offer co-investment opportunities to investors within the AIF structure. Co-investment refers to opportunities to make additional investments in unlisted securities of a company in which the AIF also has or is making investments. Such opportunities are offered to investors who meet certain criteria, such as minimum commitment size, strategic value of the investor, etc. In May, Sebi had floated a consultation paper seeking public comments on proposals to allow managers of AIFs to offer opportunities through the co-investment vehicle (CIV) model.

In FY20-21, the AIF industry had requested Sebi to allow co-investment facilities within the AIF structure by issuing a separate class of units to co-investors. Following this, Sebi had set up a working group to review compliance requirements under AIF regulations and provide recommendations to simplify them, to provide ease of doing business and reduce the cost of compliance.

REITS and InvITS

The Sebi board may consider proposals to enhance limits for investments by mutual funds (MFs) in REITs and InvITs, thereby providing more investment avenues and diversification to schemes. Sebi has been receiving recommendations from stakeholders to classify REITs and InvITs as equity, and their inclusion in equity indices, and a dedicated MF scheme category for REITs and InvITs. It could also consider recommendations for relaxing investment restrictions in REITs and InvITs for MF schemes.\

According to current regulations, an MF scheme cannot invest more than 10 percent of its net asset value (NAV) in REIT and InvIT units, subject to a maximum of 5 percent of its NAV in units of REIT and InvIT issued by a single issuer. Additionally, no MF, under all its schemes, can own more than 10 percent of units issued by a single issuer.

Voluntary delisting of PSUs

The Sebi board may take a decision on creating a separate carve-out for voluntary delisting of public sector undertakings (PSUs) where the shareholding of promoter or promoter group equals or exceeds 90 percent of the total shares issued. In May, Sebi had released a consultation paper to seek public comments in this matter.

Decisions in this regard will include factors like eligibility, requirement of complying with minimum public shareholding norms, fixed-price delisting process (with a 15 percent premium over the floor price), relaxing the requirement of seeking two-thirds approval from public shareholders for the delisting proposal, and exit price to public shareholders.

One of the key topics likely to be considered by the Sebi board is regarding Esop rules for startup founders after public listing of their companies. Under the current regulations, founders need to be classified as promoters at the time of listing. However, this means once founders are designated as promoters they become ineligible for Esops.

Last Updated :

June 17, 25 07:19:13 PM IST