Sebi Unveils Major Market Reforms: AIFs, PSU Delisting, Broker Settlements In Focus

The Securities and Exchange Board of India (Sebi) on June 18 cleared a host of regulatory changes designed to improve investor confidence, ease fundraising norms, and streamline long-pending issues in the markets, according to a press meet. The decisions taken at the regulator’s latest board meeting covered a wide swathe of ground — from public sector delisting's and alternative investment funds (AIFs) to broker settlements linked to the NSEL case.

Easier Exit Route For PSUs, More Options For AIF Investors

Among the most significant announcements was a new framework to ease the voluntary delisting process for government-owned companies. If a public sector undertaking (PSU) has promoter shareholding of over 90 per cent, it can now use a fixed-price route to delist — provided the price includes at least a 15 per cent premium over the floor price. Sebi has also done away with the earlier requirement of getting two-thirds approval from minority shareholders in such cases.

This is meant to give clarity and certainty to the government when it wants to exit certain listed entities.

In parallel, Sebi introduced co-investment vehicles (CIVs) for category I and II AIFs, offering a new avenue for investors to co-invest alongside the fund. However, the exit timelines for these vehicles must remain in sync with the parent AIF to ensure fairness.

Relief For Brokers In NSEL Case, New Rules For Angel Investors

The market watchdog also gave its nod to a one-time settlement window for brokers who had traded on the now-defunct National Spot Exchange (NSEL). These brokers, many of whom have faced regulatory action for years, will now have an option to resolve legacy violations without further financial burden on investors.

On angel investing, Sebi tightened norms by making it mandatory for angel investors to be “accredited.” These accredited investors will also be treated as Qualified Institutional Buyers (QIBs) under certain fundraising norms, which could open up broader access to start-up investments, though with more checks and verification.

Derivatives Under Watch, Start-Up ESOPs Get More Breathing Room

Responding to a question on the surge in options trading, Sebi’s Ananth Narayan said, “Making money is not a sin.” But he added that Sebi would remain vigilant about any build-up of risk in the system.

Sebi also relaxed rules for start-ups issuing ESOPs, giving them more flexibility to retain employees ahead of a listing. Additionally, a separate group will now examine the possibility of unbundling the fee structure for clearing corporations, though no immediate move toward demerger is planned.

With these measures, Sebi has signalled that it wants to strike a balance, protecting investor interests while giving markets the room to grow.