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MUMBAI: At its 214th board meeting on June 19 2026 the first of FY27 SEBI approved nine regulatory changes aimed at reducing compliance costs and improving market efficiency across corporate transactions, pooled investment structures and fixed income markets. The meeting was chaired by Tuhin Kanta Pandey, a former Finance Secretary and the longest-serving Secretary of DIPAM who took charge as SEBI’s 11th chairman on March 1 2025. The reforms arrive alongside the Jio Platforms DRHP filed the same day and NSE’s DRHP filed two days earlier placing SEBI’s administrative calendar under significant concurrent pressure. Pandey confirmed SEBI uses fast-track processes and additional resources to review major filings without compromising depth of regulatory scrutiny.
Open Market Buybacks Return After Years
The most consequential decision of the meeting is the reintroduction of open market share buybacks through stock exchanges effective August 1 2026. In a buyback a listed company repurchases its own shares from the market. The open market route allows this through normal trading terminals at prevailing market prices, distinct from a tender offer where the company buys shares from shareholders at a fixed premium during a declared window.
The exchange-based route was previously discontinued because companies paid a 20 percent Buyback Distribution Tax that made it commercially unattractive. Following changes in Union Budget 2024 and the Income Tax Act 2025, effective April 2026 buyback proceeds are now taxed as dividend income in the hands of shareholders at their applicable income tax slab rates, while the original acquisition cost can be claimed as a capital loss. With the tax burden shifted to investors rather than the company SEBI has revived the route.
Under the new framework, companies must deploy at least 40 percent of the approved buyback capital within the first half of the execution period and complete the entire programme within 66 working days. Promoters and their associates are barred from participating and their holdings are frozen at the ISIN level for the duration. Orders are routed through normal trading windows with the buyer’s identity concealed to prevent speculative run-ups.
Merchant banker appointment for buybacks is now optional. If a company foregoes one, compliance responsibility shifts to its board, compliance officer and statutory and secretarial auditors. Makarand Joshi, Founder Partner of MMJC and Associates, noted that this “shifts responsibility to the company, stock exchanges, and statutory auditors” and will raise the bar on board-level and auditor accountability. By mid-2026, 22 companies had announced repurchases totalling approximately Rs 25,000 crore the highest volume since 2023 led by Wipro’s Rs 15,000 crore tender buyback and Bajaj Auto’s Rs 5,632.80 crore programme.
Mutual Funds Can Now Borrow Intraday
The second major decision allows mutual funds to use intraday borrowing to manage short-term cash timing mismatches during the trading day. Previously borrowing by asset management companies was limited primarily to meeting investor redemptions capped at 20 percent of a scheme’s net assets.
The new framework permits AMCs to draw intraday credit lines to bridge timing gaps between morning cash demands from forex settlements, margin calls and derivative mark-to-market obligations and evening inflows from asset sales or SIP credits.
SEBI Chairman Pandey explained the logic directly: “If you need money in the morning, your money is coming in the evening. In between that, if you don’t have borrowing, then from where will you get that money? So, by doing that borrowing, you will be able to repay that money in the evening.”
The reform protects retail investors from forced selling, where a fund liquidates core equity or bond holdings at a discount to meet morning obligations. Intraday lines must be squared to zero before market close. If any position converts to an overnight borrowing the existing 20 percent net asset cap applies automatically. AMCs must maintain audit trails and have board and trustee-approved policies for the facility.
India’s mutual fund industry managed Rs 81.58 lakh crore in assets as of May 31 2026 up sixfold from Rs 13.82 lakh crore in 2016. Total investor accounts stand at 27.66 crore and monthly SIP inflows reached Rs 30,954 crore. Pracheta Bhattacharya, Partner at J. Sagar Associates, confirmed the reform is “designed to facilitate operational efficiency rather than leverage” and that borrowings “must ordinarily be repaid before the close of business.”
AIF Launches Cut From 30 Days to 10
SEBI approved the Green-Channel AIF Rollout Upon Document Acknowledgement mechanism known as GARUDA, cutting the regulatory review window for new AIF scheme launches from 30 days to 10 working days. AIFs that cater exclusively to accredited investors and angel funds can launch immediately upon SEBI registration or direct PPM filing without requiring merchant banker review.
The AIF industry had cumulative commitments of Rs 15.74 lakh crore as of December 2025, a 30 percent CAGR over five years. Category II private equity and debt funds hold a 74 percent share of commitments. SEBI also clarified rules for AIF Co-Investment Vehicles, which allow Category I and II AIFs to offer parallel co-investment opportunities to accredited investors alongside the main fund. These vehicles are exempt from the Rs 20 crore minimum corpus and concentration limits but cannot use leverage and must exit investments in line with the main fund on a pro-rata basis.
Bond Markets and Securities Inheritance
SEBI approved reforms to municipal bond regulations to support refinancing and aligned securitised debt instrument rules with the RBI framework. SEBI Whole-Time Member Amarjeet Singh noted that of approximately Rs 5 lakh crore in outstanding debt, only Rs 54,000 crore is listed. “Our hope is that what we have done today will lead to more listing and trading of debt,” he said.
On securities inheritance SEBI simplified the transmission framework for legal heirs receiving securities after a shareholder’s death. The previous process required extensive documentation across multiple intermediaries and was a persistent source of investor complaints. The simplified framework standardises procedures across registrars and depositories to reduce the time and paperwork burden on grieving families.
The remaining decisions covered the transfer of the Social Stock Exchange Capacity Building Fund to a Section 8 company, a review of the SME capital-raising framework by an external advisory committee and adoption of an updated 2026 Code of Conduct for SEBI board members and employees to address conflicts of interest.
Arka Mookerjee, Partner at J. Sagar Associates, described the package as a “calibrated push towards faster capital formation, improved liquidity management and stronger market infrastructure while maintaining robust investor protection.” The test of that calibration will come when the August 1 buyback window opens and India’s largest-ever IPO pipeline moves from DRHP to listing.
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