India's market regulator Securities and Exchange Board of India (SEBI) is set to clear a broad set of reforms spanning share buybacks, alternative investment funds, bond distribution and mutual fund liquidity at its June 19 board meeting, according to people familiar with the agenda.
The measures are aimed at improving market efficiency, easing compliance and widening investor participation, with a renewed focus on restoring flexibility for companies while tightening safeguards where required.
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A key proposal under consideration is the revival of open market share buybacks through stock exchanges, a route that was phased out after adverse tax treatment made it less attractive. The regulator is now looking to reintroduce the mechanism alongside stricter guardrails to prevent misuse.
These could include restrictions on promoter participation and tighter disclosures, effectively restoring an additional capital return option for listed firms while addressing governance concerns.
The board is also expected to take up changes aimed at accelerating the rollout of alternative investment fund (AIF) schemes. The proposed framework would shorten approval timelines significantly, allowing fund managers to launch products faster after regulatory acknowledgment.
This is part of a broader push to improve ease of doing business in private market vehicles and enhance capital formation through AIFs.
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Another area of focus is the bond distribution ecosystem. SEBI is likely to lower entry barriers for bond platform providers and enable wider product offerings, a move that could deepen retail participation in fixed income markets. By streamlining rules for these platforms, the regulator aims to expand access to debt instruments beyond institutional investors.
On the mutual fund side, the board may approve relaxed intraday borrowing norms for asset managers. The change is intended to give funds greater flexibility in managing short-term liquidity needs, particularly during periods of elevated redemption pressure. This could help reduce forced selling and improve overall market stability.
The proposed reforms collectively signal SEBI's intent to balance market development with investor protection.
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