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SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

CS Isha Bathla Manager - Research and Advisory, Taxmann

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

CS Isha Bathla Manager - Research and Advisory, Taxmann

Contents 1.

Introduction

Key highlights of SEBI’s Board Meeting

Conclusion

Introduction

The Securities and Exchange Board of India (SEBI), in its 215th board meeting dated September 24, 2026, approved a wide range of regulatory measures. These measures aim to enhance ease of doing business, facilitate greater market participation, streamline regulatory processes, and strengthen investor protection and market integrity. These include (a) replacement of SEBI (Portfolio Managers) Regulations, 2020 with SEBI (Portfolio Managers) Regulations, 2026, (b) introduction of a Common Advertisement Code for specified SEBI-regulated entities, (c) wider FPI participation in exchange-traded commodity derivatives, (d) ease of doing business measures for InvITs and REITs, and (e) review of the Accredited Investor framework to facilitate participation by sophisticated investors in capital formation.

2. Key highlights of SEBI’s Board Meeting Some of the key highlights of SEBI’s Board Meeting are as follows:

2.1

Replacement of SEBI (Portfolio Managers) Regulations, 2020 with SEBI (Portfolio Managers) Regulations, 2026

The Board approved the proposal to introduce the SEBI (Portfolio Managers) Regulations, 2026, in supersession of the SEBI (Portfolio Managers) Regulations, 2020, with the following objectives: (a) Development of the Portfolio Management Services (PMS) industry (b) Ease of compliance (c) Consolidation of regulatory provisions and simplification of language (d) Removal of redundant provisions. Some of the key measures introduced under the 2026 Regulations are as follows: (a) Permitting investment in IPOs and primary market issuance in the debt market. (b) Enabling investment up to 10% of the client’s Assets under Management (AUM) in investment-grade, non-convertible, unlisted debt securities under Discretionary Portfolio Management Services (DPMS), with client consent. (c) Permitting greater flexibility for investment in exchange-traded derivatives up to 1.25 times the client’s AUM. (d) Enabling investment in foreign securities under DPMS and Non-Discretionary Portfolio Management Services (NDPMS). Permissible instruments include listed equity, debt, REITs, overseas mutual funds, Exchange Traded Funds (ETFs), Index Funds and foreign government debt, governed under the Foreign Exchange Management Act, 1999 and the Liberalised Remittance Scheme (LRS) of RBI. (e) Introduction of the Portfolio Managers Route for investing in Mutual Fund units (PRIM) for enabling portfolio managers to invest clients’ funds in direct plans of mutual funds including ETFs, Index Funds and Specialized Investment Funds (SIFs) of Indian Asset Management Companies (AMCs). SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

(f)

Permitting Eligible Fund Managers to manage and advise on investments of eligible investment funds in overseas securities. In case the eligible investment fund invests in Indian securities, the investment limit would remain aligned with the prevailing FPI framework.

(g) Introduction of the concept of Independent Fund Managers (IFMs) who will manage and operate the portfolio of clients in association with a registered portfolio manager. (h) Authority to operate a demat/trading account embedded in the standard IMA. The Power of Attorney (POA) requirement for bank accounts, as mandated by RBI, would continue. (i)

Relaxation of educational qualifications for the principal officer. Even a graduate will be eligible to function as Principal Officer.

(j)

Harmonization of timelines for various material and non-material reporting.

(k) Relaxed dealing room requirement for portfolio managers with AUM less than Rs. 100 crore (covering 48% of portfolio managers registered as on date). (l)

A standardized Investment Management Agreement (IMA) for ease of understanding of client.

(m) Promoting the transition to digital communication through a digital disclosure document. (n) Excluding statutory levies from the current operating expenses of 0.5% p.a.

Further, various grandfather clauses and transitory provisions have been removed or modified with clear expirations.

Comments The SEBI (Portfolio Managers) Regulations, 2026 seek to modernise and simplify the regulatory framework for portfolio managers by replacing the 2020 Regulations and consolidating provisions in a more streamlined manner. The framework focuses on developing the PMS industry and easing compliance by removing redundant requirements and introducing greater operational flexibility. The introduction of Independent Fund Managers, a standardised Investment Management Agreement, digital disclosure documents and harmonised reporting timelines is expected to simplify operations and improve investor understanding. Further, relaxation of principal officer qualifications and dealing room requirements for smaller portfolio managers is intended to reduce compliance burdens while retaining the regulatory framework for investor protection.

2.2

Review of SEBI (Settlement Proceedings) Regulations, 2018

The Board approved the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, which will replace the SEBI (Settlement Proceedings) Regulations, 2018. The Settlement Regulations, 2026 shall come into force on the day succeeding the 30th day from the date of their notification. Some of the key features of the Settlement Regulations, 2026 are as follows:

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

2.2-1 Settlement terms Settlement Terms will now comprise the Settlement Amount, disgorgement of wrongful gains (if applicable), and Remedial and Regulatory Terms (RRT) (earlier known as NonMonetary Terms), if applicable.

2.2-2 New Formula for computation of Settlement Amount Settlement Amount = Base Amount × (S + R + G + A − M) + Legal Costs. Base Amount linked to the minimum penalty provided for violation under securities laws, with multipliers based on the type of applicant, ‘S’ represents the stage of proceedings, ‘R’ the regulatory action factor, ‘G’ the gravity factor based on the nature of default, ‘A’ the aggravating factors and ‘M’ the mitigating factors.

2.2-3 Separate treatment for wrongful gains Wrongful gains, loss avoided or loss caused to investors will not be considered while determining the Base Amount. Such amounts, where quantified, will be disgorged separately. This removes the existing double counting of such amounts in computation of settlement terms.

2.2-4 Expanded access to settlement Before issuance of a show cause notice, SEBI will issue a settlement notice (Wells Notice) giving 60 days to file a settlement application. Such notice will not be issued where initiation of prosecution or passing of an interim order is contemplated. The period for filing a settlement application after service of a show cause notice increased from 60 days to 90 days. A monetary threshold (settlement amount does not exceed Rs 10 lakh) and violation-based (disclosure violations, etc.) fast-track settlement route has been introduced. Monetary threshold-based fast-track cases will proceed from the Internal Committee directly to the Panel of Whole-Time Members. For violation-based fast-track settlements, SEBI will issue a notice calling upon the entity against which enforcement proceedings are proposed to settle the matter by paying the amount stated in the notice, and the settlement order will be passed by the Panel of Members on payment of such amount by the noticee. Further, a one-time window of 90 days from the commencement of the Settlement Regulations, 2026 is available to entities that either did not apply earlier or had applications rejected, withdrawn, or returned under the 2018 Regulations. This window is limited to specified proceedings that are still pending before the Board and is subject to payment of an additional 20% settlement amount. Applications previously rejected may still be considered at the appellate stage, provided the grounds for rejection no longer apply. An additional 20% settlement amount will be applicable in such cases.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

Also, interest on the disgorgement amount will now be charged at 9% per annum from the date of the violation till the date of filing of the settlement application for proceedings pending before the Board. For other matters, interest will be charged at 9% per annum from the date of the violation till the date of the final order and at 12% per annum thereafter till the filing of the settlement application. Further, no interest will be charged on interest. The Regulations also provide for settlement of cases involving misrepresentation of financial statements or diversion of funds, subject to appropriate RRT, including disclosures and bringing back diverted funds.

Comments The Settlement Regulations, 2026 are expected to make the settlement framework simpler, less discretionary, easier to understand, and more predictable, while also fast-tracking less serious matters and ensuring that settlement continues to serve as an effective resolution mechanism with an appropriate deterrent against violators of securities laws.

2.3

Relaxing the requirement to maintain communications with clients by RAs

call

recordings

The Board considered and approved the proposal to amend the SEBI (Research Analysts) Regulations, 2014, to relax the requirement for Research Analysts and Research Entities to maintain call recordings of communications with institutional investor clients.

Comments The measure provides greater flexibility to Research Analysts and Research Entities by easing record-keeping requirements for communications with institutional investors. Since institutional investors are generally more sophisticated market participants, the relaxation is expected to reduce compliance burden and facilitate ease of doing business while maintaining investor protection.

2.4 Common Advertisement Code for Specified SEBI-Regulated Entities The Board approved a Common Advertisement Code (CAC) applicable to specified regulated entities, i.e., stock brokers, depository participants, portfolio managers, investment advisers, research analysts, online bond platform providers and mutual funds/ Asset Management Companies (AMCs). The CAC replaces the existing entity-specific advertisement frameworks prescribed under the respective SEBI regulations/master circulars and/or circulars issued by recognised stock exchanges/respective supervisory bodies. The key proposals include the following: (a) Permitting the use of celebrities for brand-level/entity-level promotion by regulated entities, subject to prior approval and prescribed safeguards.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

(b) Doing away with the requirement of mandatory prior approval (except for advertisements containing celebrity endorsements); however, post-issuance reporting will be required within three (3) working days. (c) Permitting regulated entities to advertise ratings and rankings assigned by the Past Risk and Return Verification Agency. (d) Recognising

the

need

distinguish

routine,

factual

and

investor-service

communications from promotional content, the framework provides an illustrative list of communications that will not be considered advertisements.

Comments The CAC aims to bring greater consistency and flexibility to advertising practices across SEBI-regulated entities while reducing unnecessary compliance requirements. Allowing celebrity endorsements with safeguards and exempting routine investor-service communications from the definition of advertisements may enable clearer, more effective communication with investors.

2.5

Wider FPI participation in Exchange-Traded Commodity Derivatives

With the objective of deepening liquidity in the commodity derivatives market, the Board has approved the participation by foreign portfolio investors (FPIs) in the following contracts: (a) Non-agricultural index derivatives contracts, irrespective of whether the underlying is cash-settled or not (b) Non-cash settled non-agricultural commodity derivatives contracts.

However, FPIs’ participation in non-cash settled non-agricultural commodity derivatives contracts will be subject to their exiting the commodity derivatives contracts before the delivery obligation arises. In this regard, a safeguard mechanism is proposed to ensure that FPIs exit their positions before entering the tender period, i.e., 3 days before the expiry of the contract. As an additional safeguard, FPIs shall not be permitted to increase their positions from T-3 days. As part of the safeguard mechanism, the FPI shall enter into an agreement with the Trading Member/Clearing Member (TM/TCM) before being enabled to trade on the exchanges. The agreement shall specify the manner in which the FPI’s positions will be handled. This shall include provisions for squaring off the FPI’s positions, i.e., closing the open positions by entering into an opposite transaction or transferring/devolving any residual open positions held by the FPI to the TM/TCM before the commencement of the Tender Period. Devolvement refers to the transfer of any remaining open position of the FPI to the Trading Member/Clearing Member where the FPI has not closed (squared off) the position before the specified deadline. Such residual positions shall be transferred to the TM/TCM at the Closing Price/Daily Settlement Price declared by the Exchange on the day of devolvement. The devolution

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

of the open position from the FPI to the TM/TCM would be considered as a trade with applicable statutory levies.

Comments The measure seeks to deepen liquidity and broaden participation in the commodity derivatives market by allowing FPIs to participate in specified non-agricultural commodity derivative contracts. While the move is expected to deepen the market and improve price discovery by bringing in a wider pool of institutional investors, the requirement for FPIs to exit their positions before the tender period ensures they do not assume physical delivery obligations.

2.6

Expanding and harmonizing regulatory framework governing Vault Managers

The Board has approved amendments to the SEBI (Vault Managers) Regulations, 2021, to expand and harmonise the regulatory framework governing Vault Managers. The SEBI (Vault Managers) Regulations, 2021 were introduced to establish a regulatory framework for Vault Managers providing vaulting services for gold underlying Electronic Gold Receipts (EGRs). The Regulations provide for registration and eligibility of Vault Managers, custody and safekeeping of gold, quality and purity requirements, record keeping and reconciliation, insurance, among others. As the Indian bullion market continues to evolve with the growth of bullion-related instruments such as Gold and Silver Exchange Traded Funds (ETFs) and derivatives on bullion, a need was felt to review the existing framework and establish a common and harmonised regulatory framework for vaulting services across all SEBI specified bullion related instruments having bullion as the underlying. The review also aimed to strengthen extant norms, including storage and safekeeping of bullion, segregation, reconciliation, security, insurance, and governance. Some of the major amendments are as under:

2.6-1 Expansion of the scope of SEBI (Vault Managers) Regulations, 2021 The scope of the Vault Managers Regulations shall be expanded beyond EGRs to cover vaulting services for bullion underlying SEBI-specified bullion-related instruments, including bullion underlying ETFs and derivatives on bullion. Definitions such as “Bullion” and “Bullion-related instruments” shall be inserted. The EGR-specific chapter shall be replaced with a product-neutral chapter for all “Bullionrelated instruments”, thereby specifying the provisions for applicability of the Regulations and the manner and procedures for providing vaulting services for such bullion-related instruments.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

2.6-2 Bullion delivery standards The term “Gold Standards”, which was EGR-specific, shall be replaced with the term “Bullion Delivery Standards”, thereby expanding the delivery-standard requirements to be followed for bullion underlying all SEBI-specified bullion-related instruments.

2.6-3 Net worth requirements The net worth requirements for Vault Managers shall be enhanced from Rs. 50 crore to Rs. 75 crore.

2.6-4 Security Policy related requirements Security requirements shall be strengthened to address risks including theft, burglary, fire, fraud, terrorism and cyber-attacks. Further, the risks covered under the requirement for having a security policy and procedure for dealing with losses shall be aligned.

2.6-5 Segregation of activities The provision on business-wise segregation of activities shall be expanded to cover vaulting services provided for all SEBI-specified bullion-related instruments. Additional provisions shall be inserted for instrument-wise and entity-wise segregation of bullion stored by Vault Managers under these regulations.

2.6-6 Compliance Officer A provision shall be inserted for the Vault Manager to appoint a Compliance Officer, along with specifying the broad duties of such Compliance Officer.

2.6-7 Consequential circular A consequential circular will be issued to operationalise the amended regulatory framework, including requirements relating to storage and safekeeping, quality standards, reconciliation, inspection, audit, insurance, security and infrastructure requirements, risk management and grievance redressal for Vault Managers providing vaulting services for EGRs and other SEBI-specified bullion-related instruments.

Comments The framework is expected to enhance investor protection and confidence in SEBIspecified bullion-related instruments through improved safeguards relating to storage and safekeeping of bullion, security, segregation, traceability, and reconciliation of bullion, enhanced financial and insurance safeguards, and stronger governance and riskmanagement requirements. The framework will also facilitate the orderly development of the bullion market and support the growth of bullion-related instruments while ensuring robust regulatory oversight of the bullion underlying such instruments.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

2.7

Issuance of Depository Receipts on units of REITs and InvITs

The Board considered and approved the proposal to amend the SEBI (Real Estate Investment Trusts) Regulations, 2014 and the SEBI (Infrastructure Investment Trusts) Regulations, 2014 to enable the issuance of Depository Receipts (“DRs”) on units of REITs and InvITs. This will help attract foreign capital to REITs and InvITs via DRs. The detailed framework will be specified separately via a Circular after notification of amendments. The framework covers issuance and listing of DRs on units of REITs and InvITs in the International Financial Services Centre (IFSC) in India, to begin with. Further, all foreign investors (including NRIs) can invest in such DRs.

Comments The amendment provides an additional route for raising foreign capital by enabling Depository Receipts on units of REITs and InvITs. Allowing such DRs to be issued and listed in the IFSC and accessed by foreign investors, including NRIs, is expected to broaden the investor base and improve access to international capital.

2.8 Ease of doing business measures for InvITs and REITs On August 6, 2026, SEBI released a consultation paper proposing measures towards ease of doing business for REITs and InvITs. Accordingly, SEBI has now approved measures to enhance ease of doing business for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs). In this regard, the Board approved amendments to the SEBI (Infrastructure Investment Trusts) Regulations, 2014 and the SEBI (Real Estate Investment Trusts) Regulations, 2014, for the following matters:

2.8-1 Threshold for unitholder approval for certain matters Certain matters under the InvIT/REIT Regulations currently require unitholder approval by 75% of all outstanding units irrespective of how many unitholders have voted. Securing approval of 75% of all units has become challenging due to diverse ownership of units and the absence of voting by some unitholders. To address this challenge, the basis of the threshold has been changed to 75% of total votes cast instead of 75% of all units. This is in alignment with the Companies Act, 2013, where thresholds are based on total votes cast for the resolution.

2.8-2 Framework for exit offer in case of change in sponsor The existing regulatory framework for REITs and InvITs contains provisions for (i) change in sponsor by virtue of entry and/or exit of a sponsor, (ii) change in control of existing sponsor, and (iii) conversion to Self-Sponsored Investment Manager. These provisions require approval of unitholders. If such approval is not received, an exit offer has to be provided to dissenting unitholders. This framework has been reviewed to specify the following for clarity and operational flexibility:

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

(a) Exit offer in case of exit of one of the sponsors in InvIT/REIT:

Currently, some REITs and InvITs have multiple sponsors, and it is possible that one such sponsor may exit and other sponsors may continue. In case of such exit of one sponsor, the exit offer can be provided by either ‘the outgoing sponsor or its group entities’ or ‘the continuing sponsor or its group entities’. (b) Change in definition of ‘Dissenting Unitholders’:

Presently, ‘dissenting unitholders’ include all unitholders who have not voted in favour of the resolution. As a result, unitholders who do not vote are also counted as dissenting. Based on industry feedback and public comments, dissenting unitholders are defined as unitholders who have voted against the resolution. Further, for the benefit of unitholders, the unitholders’ notice shall include an explicit disclaimer stating that any exit option will be offered only to unitholders voting against the resolution. (c) Maintenance of minimum public unitholding (MPU) post exit offer

Presently, the number of units tendered in the exit offer is accepted on a proportionate basis in order to maintain MPU post exit offer. This limits the number of tendered units that can be accepted and may not facilitate a complete exit for a dissenting unitholder. Accordingly, it has been specified that all units tendered must be accepted. Further, if MPU falls below the minimum threshold due to the exit offer, compliance with MPU norms shall be achieved within one year from completion of the exit offer. This will facilitate the complete exit of dissenting unitholders and provide specific timelines to achieve MPU compliance after the exit offer. This aligns with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, read with the Securities Contracts (Regulation) Rules, 1957.

Comments The measures aim to simplify decision-making and give REITs and InvITs greater operational flexibility by aligning unitholder approval thresholds with the votes actually cast and clarifying the exit offer mechanism in case of changes in sponsorship. By redefining dissenting unitholders, enabling acceptance of all units tendered under an exit offer and providing one year to restore minimum public unitholding, the amendments seek to improve regulatory clarity, facilitate smoother transactions and provide greater certainty to both sponsors and unitholders.

2.9 Recognition of remote common infrastructure as real estate A REIT can invest in common infrastructure whether the same is co-located or not. However, the definition of “real estate” included the term “common infrastructure” for ‘composite’ real estate projects. As a result, remote common infrastructure did not qualify as real estate. To promote environmental sustainability for REITs, the definition of real estate/property has been amended to include remote common infrastructure in real estate.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

Comments The amendment broadens the scope of assets that can qualify as “real estate” for REIT purposes by expressly recognising remote common infrastructure. This provides greater flexibility for REITs to invest in infrastructure that supports real estate assets, including infrastructure that is not co-located, while also encouraging more sustainable and efficient development of shared infrastructure.

2.10 Review of provisions related to mandatory listing of outstanding unlisted debt securities under LODR Regulations The Board approved the amendment to Regulation 62A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to do away with the requirement for mandatory listing of all outstanding unlisted non-convertible debt securities (“NCDs”) by an issuer who proposes to list its NCD for the first time. Currently, an entity that proposes to list its NCD on the stock exchange(s) must list all its outstanding unlisted NCDs, issued on or after January 1, 2024, within three months from the date of listing of the proposed NCD. Listing outstanding issues adds operational challenges (viz. ISIN limits, covenant monitoring system, etc.) and costs to issuers for the mandatory listing of already subscribed issues, while the information disclosed is common. Further, continuous disclosures under the listing agreement are common for various series of debt. The amendment provides that an entity shall be required to list only prospective issuances of non-convertible debt securities. This will encourage listing of debt securities by new issuers.

Comments The amendment eases the compliance burden on issuers proposing to list their nonconvertible debt securities for the first time. By removing the requirement to list existing outstanding unlisted NCDs and limiting the obligation to prospective issuances, the amendment reduces operational complexities and associated costs, particularly those relating to ISIN management, covenant monitoring and compliance with continuing disclosure requirements. This is expected to simplify the listing process and encourage more issuers to access the listed debt market, while ensuring necessary disclosures remain available to investors.

2.11 Simplification of SEBI Certification framework and greater flexibility for market professionals The Board considered and approved amendments to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007. The changes aim to improve regulatory clarity, ease of doing business and provide greater flexibility for market professionals. The key regulatory changes include:

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

(a) Relaxation in the cut-off date for age and experience-based exemption from the date of notification to the date of appearing in the exam or the date of obtaining Continuing Professional Education (CPE). (b) Introduction of courses and programmes, the completion of which shall be considered as a grant of certification. (c) The Regulations are renamed as SEBI (Certification of Specified Persons in the Securities Markets) Regulations, 2007.

Comments The amendments simplify the certification framework for securities market professionals by providing greater flexibility and regulatory clarity. Revising the cut-off date for age- and experience-based exemptions to the date of appearing for the examination or obtaining Continuing Professional Education (CPE) gives eligible professionals greater flexibility, while recognising specified courses and programmes as a route to certification broadens the available pathways to certification.

2.12 Strengthening investor protection across all forms of AIFs The Board considered and approved the proposal to amend the SEBI (Alternative Investment Funds) Regulations, 2012, to extend the protection currently available to investors in AIFs set up as a Trust to investors in all forms of AIFs. If an AIF is currently set up as a trust, the Fund Manager or its officers cannot use the trust’s assets to pay for their own losses, damages, or expenses, including costs of resolving investor disputes. The amendment now extends the said protection to all forms of AIF, irrespective of the form in which they are set up, and has been done with the objective of enhancing investor protection.

Comments The amendment strengthens the investor protection framework for Alternative Investment Funds by extending the existing protection available to investors of trust-structured AIFs to AIFs established in all forms. By restricting the use of AIF assets for meeting the personal losses, damages or expenses of fund managers or their officers, including expenses arising from investor disputes, the amendment provides a uniform level of protection across different AIF structures. It reinforces the principle that fund assets should be used for the benefit of investors and the AIF.

2.13 Review of Accredited Investor framework to facilitate participation by sophisticated investors in capital formation The Board approved the following amendments to the Accredited Investor (AccI) framework to simplify the accreditation process and expand the pool of eligible investors. The key decisions are as follows: SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

(a) Introduction of securities market exposure as an eligibility criterion: Investors will be permitted to qualify for accreditation based on securities market exposure of at least Rs 5 crore for individuals, HUFs, family trusts and sole proprietorships and Rs 20 crore for body corporates and other trusts. (b) Manager-led accreditation: As an additional and optional route, managers of Alternative Investment Funds (AIFs), Asset Management Companies (AMCs) offering Specialized Investment Funds (SIFs), and Portfolio Managers will be permitted to accredit investors. The existing route through Accreditation Agencies will continue. (c) Deemed accreditation for non-residents: Persons resident outside India, as defined under the FEMA, 1999, including FPIs, will be deemed to be accredited investors. This will enable sophisticated investors based outside India to access eligible Indian securities market products more easily and facilitate foreign capital inflows. (d) Accreditation of Limited Liability Partnerships: LLPs will be eligible for accreditation where each partner must be an AccI, in line with the existing framework for partnership firms.

Further, the manager-led accreditation framework will eliminate duplication in the verification process and reduce the time and cost associated with accreditation. Accreditation under both the manager-led and Accreditation Agency routes will be valid for three years. Manager-led accreditation will also be portable across AIF, SIF and PMS products within the same group, subject to appropriate safeguards.

Comments The amendments aim to make the Accredited Investor framework more accessible and efficient by expanding the eligibility criteria and simplifying the accreditation process. Allowing securities market exposure as an additional eligibility criterion broadens the pool of sophisticated investors. At the same time, manager-led accreditation by AIF managers, AMCs and Portfolio Managers is expected to reduce duplication, time and compliance costs. Further, deemed accreditation for non-residents, including FPIs, may further facilitate foreign investor participation in eligible Indian securities market products. The accreditation of LLPs and portability of manager-led accreditation across AIF, SIF and PMS products within the same group are also expected to provide greater flexibility and ease of access, subject to applicable safeguards.

2.14 Settlement Scheme, 2026 for trading activities in Illiquid Stock Options (ISOs) SEBI has decided to introduce a fourth Settlement Scheme (“the Scheme”) under Section 15JB of the SEBI Act, 1992, read with Regulation 26 of the SEBI (Settlement Proceedings) Regulations, 2018, to deal with the trading activities of certain entities in ISOs on BSE. Earlier, SEBI introduced three schemes in 2020, 2022, and 2024, respectively. The Competent Authority at SEBI approved the Scheme on the recommendations of the High Power Advisory Committee (HPAC) and placed it before the Board for information.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

The Scheme will provide a settlement opportunity to eligible entities in respect of their non-genuine trades executed in the stock options segment of BSE during the period from April 1, 2014 to September 30, 2015, where the related enforcement proceedings are pending before any authority/forum, viz., Adjudicating Officer/Hon’ble SAT/Hon’ble Courts/ Recovery Officer. The settlement amount under the Scheme is as follows: (a) 1 to 5 contracts: Rs. 1,44,000; (b) 6 to 50 contracts: Rs. 2,88,000; and (c) 51 contracts and above: Rs. 7,20,000 plus Rs. 14,400 per contract. For example, for 51 contracts, the settlement amount would be Rs. 14,54,400 (i.e., Rs. 7,20,000 + 51 × Rs. 14,400).

Modalities for making the application under the Scheme will be informed in due course.

3. Conclusion Overall, SEBI’s latest measures mark a shift toward a more flexible, business-friendly regulatory framework without diluting investor safeguards. The changes are likely to reduce compliance costs and operational hurdles for portfolio managers, issuers, REITs, InvITs and other regulated entities, while making it easier for new and sophisticated investors to participate in the securities market. At the same time, wider FPI participation in commodity derivatives, easier access to foreign capital through REITs and InvITs, and a broader Accredited Investor framework could deepen market liquidity and participation. Strengthening settlement mechanisms, bullion safeguards, and AIF investor protection further reflects SEBI’s focus on balancing ease of doing business with market integrity and investor protection.

SEBI’s 215th Board Meeting Major Reforms Reshape PMS, Settlement, Market Access and Investor Protection

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Law practitioner, a fellow member of the Institute of Chartered Accountants of India and also holds a Master's degree in Philosophy

Has previously worked with the KPMG

PhD from Utkal University, Doctoral Research on Social Accountability Standards for NPOs Author of several best-selling books for professionals, including the recent one titled 'Trust and NGO's Ready Reckoner' by Taxmann Drafted publications for The Institute of Chartered Accountants of India, New Delhi, such as FAQs on GST for NPOs & FAQs on FCRA for NPOs. Has been a faculty and resource person at various national and international forums

Chartered Accountant (All India 36th Rank)

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