Sebi Likely To Approve Open-Market Buybacks, Easier Borrowing Rules For MFs, Faster AIF Launches At June 19 Board Meeting

The Securities and Exchange Board of India (Sebi) will hold its board meeting on June 19, 2026, and is expected to take up a wide set of regulatory proposals across equity, debt, mutual funds, alternative investment funds (AIFs) and commodity markets.

According to reports, the agenda is likely to include the possible return of open-market buybacks, faster approvals for AIF schemes, easier intraday borrowing rules for mutual funds, steps to improve bond market participation, changes in agri-commodity derivatives, and updates to conflict-of-interest and governance norms.

The meeting comes at a time when Sebi has been focusing on easing compliance burdens while tightening safeguards to improve market integrity and broaden investor participation across capital markets.

Open-Market Buybacks May Return With Tighter Rules

Sebi may bring back open-market share buybacks through stock exchanges, a route that was stopped in 2023.

The change is being considered after the tax rules on buybacks were revised, with shareholders now paying capital gains tax on the proceeds. This has reduced earlier concerns about tax advantages between different buyback methods.

If approved, companies will again be allowed to buy back shares from the stock market, but with stricter conditions. Sebi is likely to tighten rules on promoter participation, improve disclosure requirements, and set clearer timelines for completing buybacks.

The regulator is also looking at reducing the execution period to about 66 working days from the date the offer opens. Other safeguards being discussed include freezing promoter shareholding during the buyback window and aligning the process with the T+1 settlement system.

Faster AIF Approvals Through Proposed ‘GARUDA’ Mechanism

Sebi is also expected to clear a new fast-track approval framework for AIFs under the proposed “Green Channel: AIF Rollout Upon Document Acknowledgement” (GARUDA) mechanism.

The framework is designed to significantly reduce the time taken to launch AIF schemes after regulatory filing. Standard AIFs may be allowed to go live within about 10 working days of submission, compared with the current waiting period that can extend up to 30 days.

For select categories such as accredited investor-only funds and angel funds, the launch process could be even faster, with near-immediate rollout permitted after registration or acknowledgement.

Sebi is also considering simplification of documentation requirements for private placement memoranda and reducing intermediary dependencies in the approval process.

Mutual Fund Borrowing Norms Likely To Be Relaxed For Liquidity Management

The board may also relax rules on intraday borrowing for mutual funds to help them manage short-term cash needs more easily. At present, mutual funds mainly use such borrowing to handle investor redemption requests. The proposed change would also allow them to use it for other needs like trade settlements, foreign exchange payments, derivatives margins, and day-to-day cash mismatches.

Funds may also be allowed to borrow even before incoming payments are fully confirmed, as long as the money is repaid by the end of the same trading day. If repayment is not made within the day, it will be treated as regular borrowing and will come under existing limits.

The move is expected to reduce forced selling during volatile periods and improve liquidity management across schemes under evolving mutual fund borrowing norms.

Expansion Of Bond Platforms To Boost Retail Participation

The regulator is also examining changes that could ease entry norms for online bond platform providers and allow them to offer a wider set of debt products. The proposal is aimed at expanding retail access to fixed-income instruments, including corporate bonds, through regulated digital platforms.

Currently, participation in the bond market is dominated by institutional investors. The regulator is looking to broaden the investor base, with the twin objective of improving liquidity and strengthening price discovery in the debt segment.

Other Proposals Likely To Be Discussed

The Sebi board may also consider a few other proposals at its June 19 meeting. These include steps to revive participation in agri-commodity derivatives markets and updates to the code of conduct for Sebi’s whole-time members and officials. The changes are aimed at strengthening conflict-of-interest rules and improving internal governance.