The Securities and Exchange Board of India (SEBI), at its Board Meeting held on June 19, 2026, approved a series of far-reaching regulatory reforms aimed at simplifying investor procedures, enhancing capital market efficiency, deepening debt markets, and strengthening governance standards. The decisions are expected to have significant implications for investors, mutual funds, alternative investment funds (AIFs), listed companies, municipalities, and market intermediaries.
Major Relief for Legal Heirs: Faster Transmission of Securities
One of the most investor-friendly measures approved by SEBI relates to the transmission of securities held by deceased investors. Recognising the difficulties faced by legal heirs and claimants, SEBI has introduced a comprehensive overhaul of the transmission framework.
A key reform is the introduction of a Quick Transmission Process (QTP) for small-value claims. Under this mechanism, transmission of physical holdings up to ₹10 lakh and dematerialised holdings up to ₹30 lakh can be processed with minimal documentation, significantly reducing procedural hurdles. The regulator has also enhanced the limits for simplified documentation from ₹5 lakh to ₹10 lakh for physical securities and from ₹15 lakh to ₹30 lakh for dematerialised securities per listed company.
SEBI has further removed the requirement of submitting PAN where it is already available for demat accounts, dispensed with the mandatory requirement of probate of wills in line with succession law amendments, and permitted a combined affidavit-cum-NOC in place of separate documents. These measures are expected to reduce delays, legal costs and administrative burdens for families dealing with inheritance-related securities transfers.
Open Market Share Buybacks Return After Tax Changes
In a major policy shift, SEBI has approved the re-introduction of open market buybacks through stock exchanges, a mechanism that was largely abandoned following changes in the taxation framework.
The regulator observed that the revised tax regime had altered the attractiveness of various buyback routes. To provide companies with greater flexibility, open market buybacks through stock exchanges will once again be permitted from August 1, 2026. Companies undertaking such buybacks will be required to complete the exercise within six months, with at least 40% of the earmarked funds deployed during the first half of the buyback period.
Importantly, SEBI has streamlined compliance requirements by removing the need for separate trading windows and purchaser identification displays. Promoters and their associates, however, will continue to face restrictions, with their holdings remaining frozen during the buyback period. The reforms are aimed at balancing ease of doing business with investor protection and market integrity.
Mutual Funds Allowed Intraday Borrowing
In another significant move, SEBI approved amendments to the mutual fund regulatory framework to permit intraday borrowing by mutual funds.
The reform seeks to address temporary liquidity mismatches that arise during the day due to settlement obligations, redemption payouts, derivatives mark-to-market settlements, and other operational requirements. The borrowing facility will be strictly limited to intraday needs and must ordinarily be repaid on the same day.
SEBI has made it clear that the facility cannot be used as a source of leverage. Asset Management Companies (AMCs) will be required to maintain appropriate documentation, governance mechanisms and board-approved policies governing such borrowings. The move is expected to improve liquidity management while safeguarding investor interests.
Faster Launch of AIF Schemes Through GARUDA Mechanism
SEBI has also approved the Green Channel – GARUDA (Gateway for Regulatory Approval Using Document Acknowledgement) mechanism for Alternative Investment Funds.
The framework is designed to accelerate the launch of AIF schemes by significantly reducing regulatory processing timelines. For non-accredited investor schemes, including venture capital funds and angel funds, the launch timeline has been reduced to ten working days from the filing of documents.
For accredited investor-only schemes and certain angel funds, SEBI has introduced a near-instant approval route, allowing schemes to be launched immediately upon grant of registration or filing of the placement memorandum. The initiative reflects SEBI’s broader objective of facilitating capital formation and improving ease of doing business for investment funds.
Social Stock Exchange Capacity Building Functions Shifted
The Board also approved the transfer of the administration, management and balance funds of the Capacity Building Fund (CBF) relating to the Social Stock Exchange from NABARD to the Social Stock Exchange Capacity Building Foundation (SSE-CBF), a Section 8 company specifically established for stakeholder capacity-building initiatives.
The move seeks to place responsibility for ecosystem development directly with the dedicated institution created for the purpose, thereby improving governance and accountability.
New Framework for Securitised Debt Instruments
SEBI approved multiple amendments to the regulatory framework governing Securitised Debt Instruments (SDIs).
The changes seek to align SEBI regulations with the Reserve Bank of India’s securitisation framework and encourage growth of the listed securitisation market. Among the key reforms are permitting RBI-regulated entities such as banks and NBFCs to undertake single-asset securitisation transactions, introducing additional concentration-risk disclosures, clarifying reporting responsibilities of servicers, refining governance norms for trustee boards, and empowering SEBI to appoint replacement trustees where existing trustees face suspension or cancellation of registration.
The reforms are expected to strengthen transparency while facilitating broader participation in securitisation transactions.
Municipal Bond Market Receives Fresh Push
In a significant move aimed at deepening India’s municipal debt market, SEBI approved amendments to the Municipal Debt Securities Regulations.
Municipalities will now be able to raise funds for refinancing existing debt obligations, a flexibility that was previously constrained. SEBI has also introduced a framework permitting pooled financing arrangements involving multiple municipalities, thereby improving access to capital for smaller urban bodies.
To encourage retail participation, issuers may offer incentives such as additional interest or discounts to specified investor categories, including senior citizens, women investors, serving and retired defence personnel, widows, and retail investors. The regulator has also permitted electronic modes of advertisement for public issues and relaxed certain post-issue financial reporting timelines to account for operational realities faced by municipal bodies.
SEBI Orders Independent Review of SME Capital Raising Framework
A notable policy development emerging from the Board meeting is the decision to undertake an independent review of the SME capital raising and securities market framework.
Acting on recommendations from the External Experts Advisory Committee (EEAC), SEBI approved an evidence-based assessment of regulations governing SME fundraising and market operations. The review comes amid increasing attention on governance standards, disclosures and investor protection in the rapidly growing SME segment.
New Code of Conduct for SEBI Members and Officials
On the governance front, SEBI approved a new Code of Conduct for Members of SEBI and amendments to the SEBI Employees’ Service Regulations.
The move follows recommendations of a High-Level Committee constituted to review conflict-of-interest norms, disclosure requirements and ethical standards applicable to SEBI officials and board members. The new framework is intended to strengthen transparency, accountability and public confidence in the securities regulator.
