Sebi Board Clears Major Reforms to Enhance Flexibility for High-Risk Investors

The Sebi board approved a new asset class for high-risk investors and relaxed regulations for passive mutual funds. Additionally, it introduced summary proceedings for swift intermediary violations handling, rationalized disclosure requirements, and allowed promoters to transfer rights entitlement to attract more investments.

The Securities and Exchange Board of India (Sebi) has approved significant reforms to cater to high-risk investors and ease regulations for passive mutual funds. The board cleared a proposal to introduce a new asset class bridging the gap between mutual funds and portfolio management services, enhancing asset construction flexibility.

Sebi also announced regulatory relaxations for passively managed mutual fund schemes, aiming to reduce compliance burdens. Further, it greenlit summary proceedings in intermediary regulations to expedite handling of securities violations, and rationalized disclosure norms in offer documents and shortened rights issue processing times.

The meeting also saw discussions on allegations against Sebi's chairperson Madhbai Puri Buch concerning investments linked to the Adani Group. Sebi and Buch have denied the claims. In other decisions, promoters can now transfer rights entitlements to selective investors during rights issues, potentially boosting market investments.

(With inputs from agencies.)