{"id":107975,"date":"2026-06-13T11:26:14","date_gmt":"2026-06-13T05:56:14","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=107975"},"modified":"2026-06-13T11:26:14","modified_gmt":"2026-06-13T05:56:14","slug":"sebis-regulatory-overhaul-strengthening-corporate-governance-and-deepening-capital-markets","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/sebis-regulatory-overhaul-strengthening-corporate-governance-and-deepening-capital-markets\/","title":{"rendered":"SEBI\u2019s Regulatory Overhaul &#8211; Strengthening Corporate Governance and Deepening Capital Markets"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>SEBI\u2019s Regulatory Overhaul Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The SEBI, under Chairman Tuhin Kanta Pandey, has initiated a comprehensive review of several market regulations to enhance corporate governance, market efficiency, investor protection, and capital market depth.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The reforms cover areas such as disclosure norms, delisting regulations, derivatives markets, independent directors, foreign investor access, AI governance, and debt market development.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Why is SEBI Reviewing Market Regulations?<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s capital markets are expanding rapidly, driven by <\/span><b>technological innovation<\/b><span style=\"font-weight: 400;\">, rising retail participation, and increasing global investor interest.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To keep pace with evolving market realities, Securities and Exchange Board of India (SEBI) aims to:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Strengthen corporate governance standards.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Improve transparency and disclosure mechanisms.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Facilitate easier access for domestic and foreign investors.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Enhance market liquidity and risk management.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Support emerging sectors requiring long-term capital.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Integrate technological advancements such as Artificial Intelligence (AI) into market regulation.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Review of Listing and Delisting Frameworks<\/b><\/h2>\n<ul>\n<li><b>Strengthening disclosure norms: <\/b><span style=\"font-weight: 400;\">SEBI is reviewing the Listing Obligations and Disclosure Requirements (<\/span><b>LODR<\/b><span style=\"font-weight: 400;\">) framework to make it more responsive to emerging governance, compliance, and disclosure challenges.<\/span><\/li>\n<li><b>Reforming delisting regulations:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The regulator is also reassessing the delisting framework to ensure that capital markets provide both:<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Fair entry for companies seeking public capital.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Fair exit for firms wishing to delist.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">This is expected to improve market efficiency and investor confidence.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Enhancing the Role of Independent Directors (IDs)<\/b><\/h2>\n<ul>\n<li><b>Beyond traditional oversight:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI emphasized that <\/span><b>IDs<\/b><span style=\"font-weight: 400;\"> must move beyond merely questioning management decisions.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Their responsibilities should include contributing to strategic discussions on AI; cybersecurity; Environmental, Social and Governance (<\/span><b>ESG<\/b><span style=\"font-weight: 400;\">) issues; R&amp;D; and technological disruptions.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Capacity building initiative: <\/b><span style=\"font-weight: 400;\">To improve board effectiveness, SEBI plans to establish a scalable capacity-building network for IDs.<\/span><\/li>\n<li><b>Protection of Minority shareholders: <\/b><span style=\"font-weight: 400;\">IDs are expected to safeguard minority shareholder interests while promoting sustainable long-term value creation.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Other Proposals<\/b><\/h2>\n<ul>\n<li><b>Facilitating foreign investment:<\/b>\n<ul>\n<li><b>Simplified KYC norms:<\/b><span style=\"font-weight: 400;\"> SEBI plans to simplify Know Your Customer (KYC) requirements for: Foreign Portfolio Investors (FPIs), and Non-Resident Indians (NRIs).<\/span><\/li>\n<li><b>Risk-based disclosure framework: <\/b><span style=\"font-weight: 400;\">Disclosure requirements for foreign investors will be reviewed using a risk-based approach, providing greater clarity and ease of participation for global capital.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Deepening equity and derivatives markets:<\/b>\n<ul>\n<li><b>Review of short selling and securities lending:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI is comprehensively reviewing Securities Lending and Borrowing (SLB) framework, and Short-selling regulations.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The objective is to strengthen linkages between <\/span><b>cash and derivatives markets<\/b><span style=\"font-weight: 400;\">, improve liquidity, and facilitate better price discovery.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Development of long-term derivative products:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI intends to encourage longer-duration futures contracts, and longer-term options contracts.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">This will broaden hedging opportunities and deepen market participation.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Bond index derivatives: <\/b><span style=\"font-weight: 400;\">In collaboration with the Reserve Bank of India (RBI), SEBI plans to introduce derivatives based on bond indices, expanding the range of fixed-income market instruments.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Reforms in commodity derivatives:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI&#8217;s proposals aim to improve participation and risk management through:<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Extending early pay-in benefits to options contracts.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Reviewing position limits.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Gradual shift from cash settlement to physical settlement in selected agricultural commodity contracts.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">These measures are expected to improve market integrity and efficiency.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Review of municipal debt and portfolio management regulations:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI is also reassessing regulations related to municipal debt instruments, and Portfolio Management Services (<\/span><b>PMS<\/b><span style=\"font-weight: 400;\">).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The objective is to address operational challenges faced by stakeholders and ensure these frameworks continue to support market development.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Supporting Strategic and Emerging Sectors<\/b><\/h2>\n<ul>\n<li aria-level=\"1\"><b>Revamping the Innovators Growth Platform (IGP):<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI is reviewing the Innovators Growth Platform to facilitate capital raising for high-growth sectors such as AI, semiconductors, clean energy, biotechnology, advanced materials, and defence technology.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The objective is to improve access to long-term financing for innovation-driven industries.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Development of debt markets:<\/b>\n<ul>\n<li><b>Corporate bond market reforms: <\/b><span style=\"font-weight: 400;\">SEBI is working on a market-making framework for corporate bonds, greater liquidity in debt markets.<\/span><\/li>\n<li><b>Municipal bond market expansion: <\/b><span style=\"font-weight: 400;\">Efforts are underway to deepen the municipal bond market, enabling urban local bodies to access market-based financing for infrastructure development.<\/span><\/li>\n<li><b>Tokenization of corporate bonds: <\/b><span style=\"font-weight: 400;\">SEBI is exploring tokenization of corporate bonds, reflecting the increasing role of financial technology in capital markets.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>AI as a regulatory priority:<\/b>\n<ul>\n<li><b>Opportunities: <\/b><span style=\"font-weight: 400;\">AI can significantly improve market surveillance, fraud detection, risk assessment, and investor services<\/span><\/li>\n<li><b>Risks: <\/b><span style=\"font-weight: 400;\">SEBI recognizes concerns relating to algorithmic opacity, bias, data privacy, cybersecurity, accountability<\/span><\/li>\n<li><b>Regulatory framework: <\/b><span style=\"font-weight: 400;\">SEBI plans to issue detailed guidelines for the responsible use of AI in capital markets and integrate the International Organization of Securities Commissions (<\/span><b>IOSCO<\/b><span style=\"font-weight: 400;\">) AI Supervisory Toolkit into its regulatory approach.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SEBI\u2019s proposed reforms represent a <\/span><b>broad-based effort<\/b><span style=\"font-weight: 400;\"> to modernize India&#8217;s capital market architecture.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">By combining governance reforms, market deepening measures, technological oversight, and easier investor access, the regulator seeks to create a more resilient, transparent, and globally competitive financial ecosystem.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/indianexpress.com\/article\/business\/sebi-market-reforms-lodr-delisting-derivatives-rules-10736943\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The SEBI, under Chairman Tuhin Kanta Pandey, has initiated a comprehensive review of several market regulations to enhance corporate governance, market efficiency, etc.<\/p>\n","protected":false},"author":19,"featured_media":107986,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,8105,22,59],"class_list":{"0":"post-107975","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-sebis-regulatory-overhaul","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs-tag","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/107975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=107975"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/107975\/revisions"}],"predecessor-version":[{"id":107993,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/107975\/revisions\/107993"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/107986"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=107975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=107975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=107975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}