Sebi board meeting today. What’s on the agenda?

The Securities and Exchange Board of India (Sebi) is set to convene today for a crucial board meeting that could introduce several impactful regulatory changes.
On the agenda are discussions surrounding tighter norms for Futures & Options (F&O) trading, the introduction of a ‘New Asset Class,’ and the much-anticipated mutual fund lite regulations.
Investors and market participants are keenly watching, as these changes could reshape the landscape of stock market trading and investment.
The meeting comes at a time when both the Sensex and Nifty have fallen well over 1%, reflecting market anticipation ahead of the board’s decisions.
Among the key proposals is the launch of a new product that combines rights issues with preferential allotment of shares.
Sebi is also expected to greenlight a ‘New Asset Class,’ aimed at bridging the gap between mutual funds and portfolio management services (PMS). This asset class will likely come with a minimum investment limit of Rs 10 lakh, catering to high-net-worth individuals seeking diverse investment opportunities.
In addition, Sebi is set to address mutual fund lite regulations, which aim to streamline compliance for passively managed mutual fund schemes. These regulations could make it easier for retail investors to diversify their portfolios with lower compliance costs, boosting participation in the mutual fund market.
However, perhaps the most anticipated discussion surrounds tighter regulations for F&O trading, an area that has drawn increasing concern due to high levels of speculative trading.
Sebi’s proposed measures include restricting multiple option contract expiries, raising the size of option contracts, and introducing intraday monitoring of position limits. With over 6,000 responses already submitted on these proposals, the market is bracing for changes that could curb speculation while promoting more prudent retail participation in the derivatives segment.
Trivesh D., COO of Tradejini, noted the potential impact on the stockbroking industry, stating that the tightening of F&O norms could reduce retail participation, which has already led to significant losses for traders. “There’s a call for action to re-calibrate the market, and while this may hurt brokers’ revenue, it’s a necessary move for the greater good of public investors,” he said.
In addition to F&O reform, Sebi is also discussing easing Foreign Institutional Investor (FII) investments in India, a move that could bolster capital inflows after recent sell-offs. On the other hand, the mutual fund lite initiative aims to provide safer investment avenues for retail investors, potentially diverting them from riskier F&O trading.
This meeting is especially significant as it follows recent controversies involving Sebi Chairperson Madhabi Puri Buch, who has faced allegations of conflict of interest from both Hindenburg Research and the Congress party. Buch and her husband have denied any wrongdoing, and the Sebi board will likely address these concerns as well.
Beyond the market regulations, Sebi is expected to tackle internal issues raised by its employees regarding unprofessional work culture and discrepancies over house rent allowance. Following a contentious press release that was later withdrawn, Sebi will now look to resolve these issues amicably.