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Sebi has approved major market reforms, including new PMS investment options, FPI access to commodity derivatives, overseas DRs for REITs and InvITs, and easier settlement norms.
Sebi Board Meeting 2026 Outcome.
Sebi Board Meeting 2026 Outcome: The Securities and Exchange Board of India (Sebi) has approved a series of major reforms covering portfolio management services (PMS), foreign portfolio investors (FPIs), REITs, InvITs, accredited investors and settlement proceedings. Here are the key decisions from the Sebi board meeting and what they mean.
Sebi Overhauls Portfolio Management Rules
The Sebi board approved the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replacing the existing 2020 regulations. Under the revised framework, portfolio managers will get greater flexibility to invest client money across domestic and overseas asset classes.
They will be allowed to invest in IPOs, primary market debt issuances and a broader set of overseas securities, subject to applicable regulations.
The new regulations will also permit portfolio managers to invest in overseas listed equity and debt, REITs, overseas mutual funds, exchange-traded funds (ETFs), index funds and foreign government securities.
PMS Can Invest In Unlisted Debt
Under the revised PMS framework, portfolio managers can invest up to 10 per cent of a client’s assets under management in investment-grade, unlisted non-convertible debt securities.
However, such investments will require the client’s consent. Sebi has also introduced a route for portfolio managers to invest in direct plans of Indian mutual fund schemes, including ETFs, index funds and Specialised Investment Funds.
The minimum investment threshold for this route has been set at Rs 25 lakh. “The introduction of PRIM (Portfolio Managers’ Route for Investing in Mutual Funds) is a visionary step and could be a game-changer for Indian investors,” Sandeep Jethwani, Co-founder, Dezerv, said.
Independent Fund Managers Introduced
The revised PMS framework also introduces the concept of Independent Fund Managers. These managers will be able to manage and operate client portfolios in association with registered portfolio managers. However, the registered portfolio manager will continue to retain responsibility and liability for their activities.
Sebi has also relaxed the educational qualification requirements for principal officers. Portfolio managers with assets under management of less than Rs 100 crore will also be exempted from the dealing-room requirement, provided they maintain adequate audit trails and internal controls.
The regulator said the revised PMS regulations have been reduced by 53 per cent in size, from 70 pages to 33 pages. The word count has also been reduced by around 42 per cent.
FPIs Get Access To Certain Commodity Derivatives
In another major decision, Sebi allowed foreign portfolio investors to participate in physically settled, non-agricultural commodity derivative contracts. The move comes with safeguards. FPIs will have to exit their positions at least three days before the expiry of the contracts and before the beginning of the tender period.
REITs, InvITs Can Issue Depository Receipts Overseas
Sebi also approved a framework allowing Real Estate Investment Trusts (REITs) and publicly listed Infrastructure Investment Trusts (InvITs) to issue Depository Receipts (DRs) in permissible overseas jurisdictions. The move is aimed at providing these investment vehicles with access to foreign capital and widening their investor base.
The board also approved amendments to the REIT and InvIT regulations. For certain matters, the voting requirement will now be based on 75 per cent of votes cast rather than 75 per cent of all outstanding units.
Sebi also revised the framework governing exit offers in cases involving a change in sponsor and clarified the treatment of dissenting unitholders.
Accredited Investor Pool To Be Expanded
Sebi widened the eligibility criteria for accredited investors. Individuals with securities market assets of Rs 5 crore will be eligible to qualify as accredited investors, while body corporates with securities market assets of Rs 20 crore will also be included.
These criteria will operate alongside the existing income and net-worth requirements. The move is expected to expand the pool of investors eligible for products and investment opportunities meant for accredited investors.
Celebrities Can Promote Financial Entities, But Not Products
Sebi approved a common advertisement code for specified market intermediaries. Under the framework, market intermediaries will be permitted to use celebrities for brand-level or entity-level advertising.
However, celebrities will not be permitted to endorse specific financial products or services. The distinction is aimed at allowing brand promotion while restricting celebrity-led promotion of individual financial offerings.
New Settlement Framework Approved
Sebi also approved new regulations governing settlement proceedings. The revised framework will introduce a new formula for calculating settlement amounts and a fast-track mechanism for cases involving settlement amounts of up to Rs 10 lakh.
The new framework will separately account for disgorgement of wrongful gains, loss avoided or loss caused to investors. This is intended to eliminate the existing double counting of such amounts while calculating settlement terms.
Makarand M Joshi, Founder partner, MMJC & Associates, said Sebi data showed that settlement applications rose to 703 in FY24-25 before moderating to 439 in FY25-26, of which 170 applications were disposed of.
“This reflects both the growing use of settlement and the need to make the mechanism more efficient,” he added.
Fourth Settlement Scheme For Illiquid Stock Options
The Sebi board also approved the fourth Settlement Scheme, 2026. The scheme will cover entities facing proceedings relating to non-genuine trades in illiquid stock options on the BSE conducted between April 1, 2014 and September 30, 2015.
Research Analysts Get Compliance Relief
Sebi also eased certain compliance requirements for research analysts and research entities. The regulator relaxed the requirement to maintain recordings of communications with institutional investor clients. The move is aimed at reducing the compliance burden for research entities while retaining the broader regulatory framework governing research activities.
Vault Managers’ Net Worth Requirement Raised
Sebi expanded the regulatory framework governing vault managers to cover bullion underlying other Sebi-specified instruments, including gold and silver ETFs and bullion derivatives.
At the same time, the minimum net worth requirement for vault managers has been increased from Rs 50 crore to Rs 75 crore. The regulator also strengthened requirements relating to storage, security, insurance, governance and risk management.
Overall, Sebi said the measures are intended to deepen market participation, widen investment avenues, improve ease of doing business and strengthen the regulatory framework across different segments of the securities market.
(With inputs from PTI)
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Ask News18SEBI approved the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, granting managers flexibility to invest in IPOs, primary market debt issuances, overseas listed equity and debt, REITs, and mutual funds. The framework also allows investing up to 10 percent of AUM in unlisted non-convertible debt with client consent and introduces Independent Fund Managers and the PRIM route with a Rs 25 lakh threshold.
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September 25, 2026, 08:20 IST
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