SEBI Board Approves Sweeping Reforms: Transmission of Securities, Buy-back Regulations, AIF Framework and More , Key Decisions from the 214th Board Meeting

 The Securities and Exchange Board of India ("SEBI"), in its 214th Board Meeting held on 19th June, 2026 in Mumbai, approved a wide-ranging set of regulatory reforms covering transmission of securities, buy-back regulations, mutual fund borrowing norms, the Alternative Investment Funds framework, securitised debt instruments, and municipal debt securities, among other matters. A summary of the key decisions is set out below.

1. Simplification and Standardisation of the Framework for Transmission of Securities

With the objective of facilitating faster and easier transmission of securities to legal heirs and claimants of deceased investors, the Board approved comprehensive reforms to the existing transmission framework.

A new category titled Quick Transmission Processing (QTP) has been introduced for small-value claims, namely claims up to ₹10,000 for physical holdings and up to ₹30,000 for dematerialised holdings, enabling such claims to be processed with minimal documentation.

The limits for simplified documentation have been enhanced as follows:

• For physical holdings per listed company: increased from ₹5 lakh to ₹10 lakh
• For dematerialised holdings per beneficial owner: increased from ₹15 lakh to ₹30 lakh

The revised framework further introduces the following process simplifications:

• The requirement of submission of PAN has been removed, considering that PAN is already captured at the time of opening of demat accounts.
• The mandatory requirement of Probate of Will has been done away with, in line with recent amendments to succession laws.
• A combined affidavit-cum-NOC has been permitted in place of separate affidavit and NOC.
• A copy of the death certificate bearing a QR Code has been added as an eligible document, in addition to the original or attested copy, for ease of verification.
• For death certificates issued in foreign jurisdictions, additional modes of verification have been specified through overseas branches of Indian banks or foreign banks having correspondent banking relationships with Indian banks.

These proposals were deliberated with the Industry Standards Forum for Registrars to an Issue and Share Transfer Agents and the Association of Mutual Funds in India, and incorporate feedback received on the consultation paper issued on 12th March, 2026.

2. Re-introduction of Open Market Buy-back through Stock Exchanges and Review of SEBI (Buy-back of Securities) Regulations, 2018

The Board approved amendments to the SEBI (Buy-back of Securities) Regulations, 2018, to re-introduce the open market buy-back route through stock exchanges, in light of the revised taxation framework applicable to buy-backs and feedback received from stakeholders.

Key features of the approved amendments include:

• The open market buy-back route through stock exchanges, in addition to the tender offer route, shall be reintroduced with effect from 1st August, 2026.
• Information regarding open market buy-backs shall be disseminated to shareholders through electronic means, in addition to public announcements through newspaper advertisements.
• The buy-back process shall be completed within 66 working days from the opening of the buy-back, with at least 40% of the earmarked funds to be utilised during the first half of the buy-back period.
• Since promoters are not permitted to participate in open market buy-backs and given the revised taxation framework, such buy-backs shall now be treated as normal trading transactions. Accordingly, the requirement of a separate trading window and display of the company's identity as purchaser on the trading screen has been dispensed with.
• Shares or other specified securities held by promoters or their associates shall remain frozen at the ISIN level during the buy-back period.
• Buy-backs shall be undertaken in compliance with minimum public shareholding requirements.
• The interval between two buy-backs has been aligned with the Companies Act, 2013.
• The appointment of a Merchant Banker has been made discretionary. Where a company elects not to appoint a Merchant Banker, the activities otherwise undertaken by the Merchant Banker shall be discharged by the Company, Compliance Officer, Statutory Auditor, Secretarial Auditor and the Stock Exchanges.

The proposals were deliberated by the Primary Market Advisory Committee (PMAC), with public consultation papers issued on 2nd April, 2026 and 8th May, 2026.

3. Utilisation of Intraday Borrowing by Mutual Funds

The Board approved amendments to the SEBI (Mutual Funds) Regulations, 2026, permitting mutual funds to avail intraday borrowing to manage liquidity mismatches arising during the day, including differences in pay-in/pay-out settlement timings across asset classes, forex settlements, and payments towards mark-to-market of derivative positions, subject to specified safeguards.

This facility is in addition to the borrowing currently permitted up to 20% of net assets of a scheme for the purpose of meeting unitholder payouts such as redemptions. The quantum of intraday borrowing shall be limited to receivables sighted during the day; any borrowing beyond this threshold may be availed solely for meeting unitholder pay-outs as specified under Regulation 42(1) of the SEBI (Mutual Funds) Regulations, 2026.

Asset Management Companies shall be responsible for ensuring that intraday borrowings are repaid by end of day, and that any conversion to overnight borrowing remains within regulatory limits. Intraday borrowings shall not be used as a source of leverage, and AMCs/Trustee Boards are required to maintain adequate documentation and a duly approved policy for utilisation of this facility.

4. Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA) Mechanism

In continuation of SEBI's circular dated 30th April, 2026 reducing scheme launch timelines, the Board approved the GARUDA Mechanism through amendment to the SEBI (Alternative Investment Funds) Regulations, 2012.

• For Non-Accredited Investor Schemes (excluding Large Value Funds, AI-only schemes and Angel Funds), the timeline for launch of new schemes has been reduced to 10 working days.
• AI-only schemes and Angel Funds, comprising only Accredited Investors, have been exempted from filing the Private Placement Memorandum through a Merchant Banker, and may launch immediately upon grant of SEBI registration or filing of the PPM with SEBI.

The proposals were deliberated before the Alternative Investment Policy Advisory Committee on 28th April, 2026, with a public consultation paper issued on 11th May, 2026.

5. Transfer of Capacity Building Fund to Section 8 Company for Social Stock Exchange

The Capacity Building Fund (CBF), presently administered by the National Bank for Agriculture and Rural Development (NABARD) for capacity-building initiatives relating to the Social Stock Exchange (SSE), shall now be transferred to the Social Stock Exchange–Capacity Building Foundation (SSE-CBF), a Section 8 company recently incorporated for this purpose. The Board has approved the transfer of the balance amount, along with administration and management of the fund, from NABARD to SSE-CBF.

6. Amendments to SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008

The Board approved amendments to the SDI Regulations with the objective of aligning the framework governing listed securitisation transactions with the RBI's securitisation framework. Key changes include:

• RBI-regulated entities (such as banks and NBFCs) have been exempted from the existing 25% obligor concentration limit applicable at the time of issuance of Securitised Debt Instruments, subject to additional disclosure of concentration risk as a prominent risk factor in the offer document.
• The responsibility for periodic disclosures (such as monthly reports and performance data), presently placed solely on the Originator, has been shifted to the Servicer, recognising that the Servicer is the entity responsible for data collection and reporting.
• For Special Purpose Distinct Entities (SPDEs) where the Originator is an RBI-regulated entity, the Originator's representation on the Board of Trustees has been capped at a maximum of one representative.
• The provision governing transactions between an Originator and SPDE belonging to the same group has been clarified to specify that an SPDE shall not acquire debt or receivables from an Originator that is part of the same group as, or under the same control as, the Trustee.
• SEBI has been empowered to appoint a new trustee in place of an existing trustee whose registration is suspended or cancelled, while retaining SEBI's discretionary power to direct winding up of schemes in exceptional circumstances such as systemic risk or fraud.

These amendments follow the public consultation paper issued on 4th May, 2026, and the recommendations of the Corporate Bonds and Securitization Advisory Committee of SEBI.

7. Amendments to SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015

The Board approved amendments to the ILMDS Regulations aimed at development of the municipal bond market:

• Municipalities have been permitted to raise funds for refinancing of existing project debt, subject to disclosure of existing lenders and loans being refinanced in the offer document or placement memorandum.
• Specific disclosure requirements have been prescribed for fund-raising by two or more municipalities through a pooled finance vehicle, along with operational aspects such as the agreement between the pooled vehicle SPV and constituent municipalities and the escrow account mechanism.
• In line with the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, issuers have been permitted to offer incentives such as additional interest or discount on issue price to senior citizens, women, serving and retired defence personnel, widows and widowers of defence personnel, retail individual investors, and such other categories as may be specified by the Board.
• The face value or trading lot for municipal debt securities issued on a private placement basis shall be either ₹1 lakh or ₹10,000, with securities issued at ₹10,000 face value required to have a fixed maturity and no structured obligations.
• Electronic modes have been permitted for advertisements relating to public issues.
• Timelines for post-issue compliances have been extended: unaudited half-yearly financial results from 45 to 60 days from the end of the half year, and audited annual financial results from 60 to 90 days from the end of the financial year.

These proposals follow the public consultation paper issued on 13th May, 2026, and recommendations of the Corporate Bonds and Securitization Advisory Committee of SEBI.

8. Theme for Assessment Proposed by External Experts Advisory Committee (EEAC)

Pursuant to the Union Budget 2025-26 announcement establishing a mechanism to assess the impact of existing regulations, and as guided by the Financial Stability and Development Council and its Sub-Committee, SEBI had constituted the EEAC in December 2025. The Board has approved the theme "Assessment of the framework for SME Capital Raising in Securities Markets" for an evidence-based regulatory review for FY 2026-27.

9. Code of Conduct for Members of SEBI and Amendments to SEBI ESR Regulations

Pursuant to the recommendations of the High-Level Committee (HLC) on conflict of interest, disclosures and related matters concerning Board Members and officials of SEBI — approved by the Board at its meeting held on 23rd March, 2026 — the Board has now approved the Code of Conduct for Members of SEBI, 2026, along with consequential amendments to the SEBI (Employees' Service) Regulations, 2001. The final Code and amendments to the ESR Regulations shall be made available on the SEBI website following due process, including publication of the ESR amendments in the Official Gazette.

Conclusion

The decisions taken at the 214th SEBI Board Meeting reflect a continued focus on ease of doing business, investor protection, and the development of capital markets across multiple segments, ranging from securities transmission and buy-backs to AIFs, securitisation, and municipal debt. Market participants and intermediaries are advised to track the formal notifications and regulatory amendments as they are issued by SEBI in due course.

Source: SEBI Press Release No. 33/2026 dated 19th June, 2026