JSA Analysis | SEBI Board Meeting – December 17, 2025 | Outcome

The Securities and Exchange Board of India (“SEBI”) an its board meeting held on December 17, 2025, approved significant regulatory reforms across the capital market regime aimed at simplifying compliance, enhancing clarity, and promoting ease of doing business among other things. The approved measures will be implemented through subsequent notifications. Key highlights of the proposed amendments include the following:

SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018

• The requirement of lock-in of shares at the time of Initial Public Offer (“IPO”)
  Regulation 17 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR”), which mandates a six-month lock-in on pre-issue share capital held by non-promoter shareholders (other than exempt categories), has been amended to account for shares which cannot be locked-in such as shares pledged prior to an IPO. Accordingly, depositories will be permitted to mark such securities as “non-transferable” for the relevant lock-in period while such shares remain pledged. Further, upon invocation or release of the pledge, the shares shall be automatically subjected to lock-in for the remaining period.
• Requirement of Abridged Prospectus.
  SEBI has approved the introduction of a draft abridged prospectus at the Draft Red Herring Prospectus (“DRHP”) stage, in addition to the requirement of an abridged prospectus at the Red Herring Prospectus (“RHP”) stage. Regulations 34, 131 and 255 along with Part E of Schedule VI of the SEBI ICDR will be rationalised to standardise and simplify disclosures in the abridged prospectus. Consequently, it has also been proposed to dispense with the requirement to prepare a separate offer document summary in the DRHP and RHP, subject to consultation with the Central Government.

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

• Amendment to regulation 39 of SEBI LODR for dispensing with Letter of Confirmation
  Regulation 39 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”), has been amended to dispense with the requirement of issuing Letters of Confirmation (“LoC”) in respect of investor service requests involving cases where securities certificates are held in physical form, including issuance of duplicate certificates, transmission, and transposition etc. Pursuant to the amendment, subject to due diligence, Registrars and Share Transfer Agents (“RTAs”) or listed entities, shall directly credit the securities to the investor’s demat account.
• Amendment to Regulation 40 of SEBI LODR for facilitating Transfer of Physical Securities
  According to the Regulation 40 of SEBI LODR, transfer of securities held in physical mode was discontinued with effect from April 01, 2019. SEBI has approved allowing holders of original physical share certificates and the original transfer deeds (executed prior to April 1, 2019) to lodge the securities during a specified window, subject to conditions set by the SEBI and due diligence by RTAs/listed companies. Cases involving disputes or fraud are excluded from such relaxation.
• Aligning the timeline for transfer of unclaimed amount by an entity having listed non-convertible securities with Companies Act, 2013
  Regulation 61A of the SEBI LODR requires that any interest/dividend/redemption payment on listed non-convertible securities, unclaimed for 30 days shall be transferred to an escrow account within seven days, and unclaimed amounts in the escrow account for seven years shall be transferred to the Investor Education and Protection Fund (“IEPF”)/ Investor Protection and Education Fund (“IPEF”). This regulation did not prescribe maturity of the non-convertible securities as a pre-condition for transferring unclaimed amounts on such securities. Accordingly, SEBI has approved amendments to the SEBI LODR for transferring such payments for listed non-convertible securities to the IEPF/IPEF only once seven years from the date of maturity of such securities.
• High Value Debt Listed Entities
  SEBI has approved changes to the regulatory framework governing High Value Debt Listed Entities (“HVDLEs”). The proposed amendment includes:
  • The threshold for identification as an HVDLE has been increased from ₹1,000 crore to ₹5,000 crore of outstanding listed non-convertible debt.
  • Regulation 62L (1) has been amended by replacing the term “income” with “turnover” for determining material subsidiaries.
  • Provisions in relation to board of directors and its committees: Prior shareholder approval by special resolution for continuation of a non-executive director beyond 75 years of age should be sought before the director crosses the age of 75 years. Exclusion of time taken for obtaining regulatory or statutory approvals from timeline for acquiring shareholder approval for director appointment. Nominee directors appointed by regulators, debenture trustees, courts or tribunals are exempt from seeking shareholder approval. Vacancies in board committees must be filled within three months. The board recommendations to shareholders must record explicit rationale.
  • Shareholder approval for sale or disposal of assets by a material subsidiary to another subsidiary within the same group has been dispensed with.
  • Entities emerging from the corporate insolvency resolution process are permitted three-month time to fill key managerial personnel vacancies, subject to the presence of at least one full-time key managerial personnel.
  • A framework has been approved for the appointment, re-appointment, removal and disqualification of secretarial auditors.
  • Provisions relating to related party transactions have been harmonised with provisions as applicable to equity-listed entities, while retaining debt-specific safeguards.

SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021

SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”) have been amended to permit issuers to offer additional interest or a discount in public issues of debt securities to specified investors (retail, senior citizens, women, armed forces personnel and their widows/widowers). Incentives apply only to the initial allottee and do not continue on transfer or transmission.

SEBI (Stock Brokers) Regulations, 1992

SEBI approved the replacement of the SEBI (Stock Brokers) Regulations, 1992 (“1992 Regulations”) with the SEBI (Stock Brokers) Regulations, 2025 (“SB Regulations 2025”). The new regulations will consolidate provisions, update key definitions under Regulation 2(1) of the 1992 Regulations, including clearing member, professional clearing member, proprietary trading member, proprietary trading and designated director. Further, the SB Regulations 2025 also permit electronic maintenance of records, provide for joint inspections, remove obsolete provisions, and position stock exchanges as first-line regulators.

SEBI (Mutual Funds) Regulations, 1996

SEBI approved the replacement of the SEBI (Mutual Funds) Regulations, 1996 with the SEBI (Mutual Funds) Regulations, 2026 (“MF Regulations 2026”). The revised framework will consolidate provisions on eligibility of mutual fund sponsors, roles and responsibilities of asset management companies and trustees, prudential investment limits, and valuation norms. The total expense ratio (“TER”) framework has been restructured by introducing a base expense ratio (“BER”), which excludes statutory and regulatory levies. Statutory charges such as Securities Transaction Tax, Goods and Services Tax, stamp duty, SEBI fees, and exchange charges are now to be charged on actuals, over and above the BER, with the TER defined as the aggregate of BER, brokerage, and such statutory or regulatory levies. Brokerage limits have been rationalised and delinked from statutory levies. Further, the additional five basis points expense allowance linked to exit loads has been withdrawn.

Measures for regulation of activities of Credit Rating Agency(“CRA”)

SEBI has amended the Credit Rating Agencies Regulations, 1999 (“CRA Regulations”) to allow CRAs to rate financial instruments regulated by other financial sector regulators (“FSR”) even without specific rating guidelines. Appropriate safeguards have been put in place which include segregation and labelling of SEBI-regulated instruments from those under other FSR in reports, press releases, websites, and marketing materials, providing upfront disclosures to new clients and notifying existing clients about activities under other FSRs, and clarifying that SEBI investor protection does not apply to such activities. Any net worth requirements imposed by other FSRs are in addition to SEBI’s requirements, and CRAs must maintain separate grievance mechanisms for activities under different regulators.

The co-authors are:

Madhurima Mukherjee Saha Partner

Tisa Padhy Associate

Adnan Danish Associate

Mahaveer Singh Company Secretary