SEBI’s latest board meeting on December 17, 2025, has ushered in sweeping regulatory reforms aimed at simplifying compliance and enhancing market transparency. Below are the major announcements and what they mean:
1. 𝐍𝐞𝐰 𝐒𝐭𝐨𝐜𝐤 𝐁𝐫𝐨𝐤𝐞𝐫 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬
(i) A significant change is the formal designation of stock exchanges as the first-line regulators for monitoring broker compliance. Brokers will now report non-compliances, submit financial statements, and intimate record-keeping details directly to the exchanges, streamlining oversight and enabling quicker regulatory response.
(ii) The criteria for identifying qualified stock brokers have been rationalised, focusing on metrics like active client count and trading volume.
(iii) Changes have been made in certain definitions including clearing member and designated director.
(iv) SEBI has reorganized the regulations by deletion of duplicate or repetitive provisions and removal of obsolete and non-applicable historical provisions such as provisions pertaining to physical delivery of shares, etc.
2. 𝐍𝐞𝐰 𝐌𝐮𝐭𝐮𝐚𝐥 𝐅𝐮𝐧𝐝 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 2026
(i) Introduces a redefined Base Expense Ratio (BER), which now excludes all statutory levies. This provides clearer bifurcation between the fund management fee (BER) and statutory costs charged separately.
(ii) Brokerage caps have also been rationalised.
3. 𝐈𝐏𝐎 & 𝐃𝐞𝐛𝐭 𝐌𝐚𝐫𝐤𝐞𝐭 𝐑𝐞𝐟𝐨𝐫𝐦𝐬
(i) Ease lock-in requirements for pledged shares held by non-promoters. Under the new mechanism, such shares will be marked as “non-transferable” in depositories for the lock-in period, and even if the pledge is invoked or released, the shares will remain locked for the balance duration. This addresses a long-standing practical challenge for issuers and investors, ensuring regulatory compliance without disrupting legitimate pledge arrangements.
(ii) Additionally, SEBI has mandated the availability of a standardised abridged prospectus at the Draft Red Herring Prospectus (DRHP) stage, providing retail investors with a concise, focused summary of key offer details early in the IPO process.
(iii) Debt issuers can now offer incentives (e.g., extra interest) to women, senior citizens & defence personnel to boost public issuance.
Notably absent from today’s agenda was a highly anticipated proposal concerning mandatory disclosure of financial assets by senior SEBI officials. SEBI has deferred detailed discussion on the matter, with plans to revisit it at a later meeting after further stakeholder consultations and internal review.
Copy of the SEBI Board Meeting dated December 17, 2025 is enclosed herewith.