SEBI's Board Approves Sweeping Reforms Amid Allegations

SEBI cleared new asset class for high-risk investors, relaxed regulations for mutual funds, and streamlined intermediary violation processes. The meeting addressed allegations against its chairperson and approved 17 proposals to enhance investment framework. Reforms aim to bridge gaps between mutual funds and portfolio management services while ensuring market compliance.

The Securities and Exchange Board of India (SEBI) approved a comprehensive set of reforms to enhance the investment ecosystem. Among these, a new asset class was introduced for high-risk investors, aiming to bridge the flexibility gap between mutual funds and portfolio management services.

The regulator also relaxed the framework for passively managed mutual fund schemes, reducing compliance burdens. This marks SEBI's first board meeting since allegations by Hindenburg Research and the Congress party against its chairperson Madhabi Puri Buch. The accusations involved investments in offshore funds and controversial regulatory changes benefiting certain entities, claims which Buch and SEBI deny.

In total, 17 proposals were greenlit, including amendments to insider trading rules and the easing of criteria for investment advisers and research analysts. SEBI also streamlined procedures for addressing certain securities law violations and modified rights issue processes to attract greater market investment.

(With inputs from agencies.)