SEBI's New Regulatory Wave: Strengthening Financial Markets

The SEBI board has rolled out several new measures aimed at strengthening financial market governance. These include stricter regulations for SME IPOs, an overhaul of investment banking rules, and expanded definitions of Unpublished Price Sensitive Information. The changes are designed to reduce regulatory burdens and enhance investor protection.

The Securities and Exchange Board of India (SEBI) has announced a series of reforms to bolster the regulatory framework governing financial markets. The measures, approved on Wednesday, include tighter norms for SME IPOs, a comprehensive update of investment banking regulations, and a broader definition of Unpublished Price Sensitive Information (UPSI).

Additionally, SEBI aims to simplify doing business for Debenture Trustees, ESG rating providers, and investment vehicles like InvITs, REITs, and SME REITs. In a bid to enhance governance, SEBI has set specific timelines for fund deployment in new fund offers (NFOs) and eased compliance for Asset Management Company (AMC) employees. A new agency will be established for online verification of risk-return metrics related to investment advisors and algorithmic traders.

Striving for greater transparency and conflict-of-interest prevention, the board's decisions include electronic transactions for demat account holders and profitability criteria for SME IPOs. SEBI is also focusing on merchant banking, increasing thresholds for liquid net worth and imposing stricter limits on underwriting capacities. Other reforms target ESG rating providers, debenture trustees, and special purpose entities, aligning with the regulator's commitment to ensuring market resilience and investor confidence.

(With inputs from agencies.)