The Securities and Exchange Board of India (SEBI), at its Board meeting held on 19 June 2026, approved a series of regulatory reforms spanning corporate actions, alternative investment funds, mutual funds and debt markets. While each reform addresses a distinct aspect of the securities market, collectively they reflect SEBI’s continued emphasis on strengthening India’s capital market ecosystem through greater operational efficiency, ease of doing business, improved market infrastructure and enhanced investor protection.
The approved measures are built upon consultation papers issued over the past few months, incorporating stakeholder feedback before their final adoption. For issuers, merchant bankers, fund managers, institutional investors and other market participants, these decisions provide valuable insight into the regulator’s evolving approach towards facilitating capital formation while maintaining market integrity.
This article examines four significant reforms approved by the SEBI Board and their broader significance for India’s capital markets.
Reintroducing Open Market Buy-backs Through Stock Exchanges
Buy-backs continue to be an important capital management tool for listed companies, enabling them to return surplus capital to shareholders, improve capital structure and signal confidence in the company’s financial position. Recognising changes in the taxation framework applicable to buy-backs and feedback received from market participants, the SEBI Board approved amendments to the SEBI (Buy-back of Securities) Regulations, 2018 to reintroduce open market buy-backs through stock exchanges with effect from 1 August 2026.
The approved framework introduces an additional avenue for companies to undertake buy-backs alongside the existing tender offer and book-building routes. At the same time, SEBI has incorporated several operational safeguards. Companies undertaking open market buy-backs through stock exchanges will be required to complete the buy-back within 66 working days, with at least 40% of the earmarked amount to be utilised during the first half of the buy-back period.
The Board has also approved dissemination of buy-back information to shareholders through electronic means in addition to newspaper advertisements, enhancing availability of information. Promoters and their associates will remain restricted from participating in the open market buy-back, and their holdings will remain frozen at the ISIN level during the buy-back period to prevent inadvertent trading.
Another notable change is the decision to make the appointment of a merchant banker discretionary. Where a company chooses not to appoint a merchant banker, the associated responsibilities will be allocated among the company, its compliance officer, statutory auditor, secretarial auditor and the stock exchanges.
Taken together, these amendments seek to provide companies with greater flexibility in undertaking buy-backs while reducing procedural complexity and continuing to preserve transparency and investor protection.
Accelerating Capital Formation Through the GARUDA Framework
Alternative Investment Funds (AIFs) have emerged as an increasingly important source of private capital across sectors including infrastructure, private equity, venture capital and private credit. As the AIF ecosystem continues to expand, reducing procedural timelines for launching investment schemes has become an important regulatory objective.
To facilitate faster deployment of capital, the SEBI Board approved the Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA) mechanism through amendments to the SEBI (Alternative Investment Funds) Regulations, 2012.
Under the approved framework, regular AIF schemes, being schemes other than Large Value Funds, Accredited Investor-only schemes and Angel Funds, will now be able to launch within ten working days following the prescribed filing process, representing a significant reduction in the timelines previously applicable.
The Board has also introduced a differentiated approach for Accredited Investor-only schemes and Angel Funds. Recognising the sophistication of accredited investors, these schemes have been exempted from the requirement of filing the Private Placement Memorandum through a merchant banker and may now be launched immediately upon grant of SEBI registration or filing of the Private Placement Memorandum, as applicable.
The GARUDA framework builds upon SEBI’s broader efforts towards improving ease of doing business in the alternative investment space. By shortening regulatory timelines without altering disclosure requirements or investor protection standards, the mechanism is expected to facilitate quicker deployment of capital while enabling fund managers to respond more efficiently to investment opportunities.
Facilitating Efficient Liquidity Management for Mutual Funds
Recognising these practical challenges arising from temporary liquidity mismatches during the trading day, the SEBI Board approved amendments to the SEBI (Mutual Funds) Regulations, 2026 permitting mutual funds to avail intraday borrowings for specified operational purposes.
Importantly, the approved framework is designed to facilitate operational efficiency rather than leverage. Intraday borrowings may be utilised only for managing temporary liquidity mismatches during the day and must ordinarily be repaid before the close of business. Where any borrowing extends beyond the day, it must remain within the existing regulatory borrowing limits and comply with the purposes already permitted under the Mutual Fund Regulations.
The framework also incorporates several safeguards. Asset Management Companies are required to maintain appropriate documentation and adopt board-approved policies governing the utilisation of intraday borrowing facilities. Further, the Board has expressly clarified that intraday borrowings shall not be used as a source of leverage.
By recognising operational realities while preserving prudential safeguards, the approved framework seeks to improve settlement efficiency without altering the fundamental risk profile of mutual fund schemes.
Strengthening India’s Listed Securitisation Market
The Board also approved significant amendments to the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008 with the objective of aligning the listed securitisation framework with the Reserve Bank of India’s securitisation regime and supporting the development of India’s listed securitisation market.
Among the key amendments is the permission for RBI-regulated entities to undertake single-asset securitisation transactions by exempting them from the existing 25% obligor concentration limit, accompanied by enhanced disclosure of concentration risk in the offer document.
The approved amendments further shift periodic disclosure and reporting responsibilities to the servicer, recognising that the servicer is responsible for the day-to-day administration and reporting of the underlying assets. Governance requirements relating to Special Purpose Distinct Entities have also been aligned with the RBI framework by limiting representation of RBI-regulated originators on the trustee board.
Additional amendments clarify the regulatory position regarding transactions involving originators and Special Purpose Distinct Entities belonging to the same group, while also empowering SEBI to appoint a replacement trustee where an existing trustee’s registration is suspended or cancelled, thereby ensuring continuity of securitisation structures in appropriate cases.
Collectively, these amendments seek to promote regulatory consistency, improve operational efficiency and facilitate the development of India’s listed securitisation market while maintaining appropriate investor protection safeguards.
Conclusion
The June 2026 SEBI Board decisions demonstrate a measured and consultative approach towards regulatory reform. Although the approved measures apply to different segments of the securities market, they share common objectives: improving capital formation, facilitating ease of doing business, strengthening market infrastructure and preserving investor confidence.
From providing listed companies with greater flexibility in undertaking buy-backs to enabling faster deployment of private capital through the GARUDA mechanism, improving liquidity management for mutual funds and strengthening the regulatory framework governing listed securitisation transactions, the reforms collectively seek to improve the efficiency of India’s capital markets without compromising investor safeguards.
As SEBI notifies the corresponding amendments and operational circulars, issuers, merchant bankers, fund managers, intermediaries and investors will need to closely evaluate the revised regulatory framework and its practical implications across different segments of the securities market.
This blog is authored by our Partners Arka Mookerjee and Pracheta Bhattacharya.
