First SEBI Board Meeting Under New Chairman Tuhin Kanta Pandey

The Securities and Exchange Board of India (SEBI) is set to hold its first board meeting under the newly appointed Chairman Tuhin Kanta Pandey on March 24, 2025. This meeting is expected to introduce major ease-of-doing-business (EoDB) measures across multiple financial segments, including foreign portfolio investors (FPIs), registered investment advisors (IAs), research analysts (RAs), and Category II Alternative Investment Funds (AIFs).

Additionally, the SEBI board is likely to review a settlement scheme for stock brokers involved with unauthorized algorithmic trading platforms and finalize its budget for the financial year 2025-26.

Higher Threshold for Foreign Portfolio Investors (FPIs) Disclosures

A key topic on the agenda is the proposal to increase the disclosure threshold for FPIs.

Currently, FPIs with an Assets Under Management (AUM) of ₹25,000 crore or more in Indian markets must make detailed disclosures under SEBI’s August 24, 2023, circular.
The SEBI board is considering raising this threshold to ₹50,000 crore, effectively reducing compliance burdens on smaller foreign investors.
If approved, this move is expected to improve foreign investor sentiment, leading to higher capital inflows into Indian equities and debt markets.

Investment Advisors May Get Approval to Collect Annual Fees in Advance

The investment advisory sector is set to receive a significant boost with a potential revision of the advance fee collection limits for registered investment advisors (IAs) and research analysts (RAs).

The January 8, 2025, guidelines had imposed a three-month cap on advance fee collection, which faced backlash from the industry.
Many investment advisors argued that this restriction hurt their business model, impacting cash flow and sustainability.
SEBI is now considering allowing IAs and RAs to collect up to a year’s fee in advance, addressing industry concerns.
This decision could strengthen the investment advisory business and attract more professionals into the sector.

Changes in Social Stock Exchange (SSE) Regulations to Expand Non-Profit Participation

SEBI is expected to announce regulatory changes for Social Stock Exchanges (SSEs) to facilitate the participation of more non-profit organizations (NPOs).

Recently, the minimum application size for investors on SSEs was reduced from ₹10,000 to ₹1,000 to increase participation.
The board may consider expanding the eligibility criteria for NPOs looking to raise capital through SSEs.
A proposal under discussion includes allowing charitable trusts, societies, and limited liability companies (LLCs) registered under Section 25 of the Companies Act, 1956, to issue Zero Coupon Zero Principal (ZCZP) bonds.
SEBI may also extend the list of permitted social impact activities to include cultural and environmental projects, supporting broader fundraising opportunities for the sector.

Regulatory Relaxation for Category II Alternative Investment Funds (AIFs)

SEBI is likely to introduce investment flexibility for Category II AIFs, which primarily focus on unlisted securities.

Due to amendments in Listing Obligations and Disclosure Requirement (LODR) Rules, the unlisted debt securities universe has declined.
SEBI’s February 7, 2025, consultation paper suggested allowing Category II AIFs to invest in listed securities, provided these instruments have a credit rating of ‘A’ or below.
This policy shift aims to provide greater investment options to AIFs while ensuring they continue taking calculated risks in the market.

Settlement Scheme for Stock Brokers Involved in Unauthorized Algo Trading

The SEBI board meeting is also expected to finalize a settlement scheme for stock brokers linked to unauthorized algorithmic trading platforms.

Over 110 brokers, including major market participants, had received show-cause notices from SEBI for violating trading norms.
Under the proposed settlement scheme, brokers can pay ₹1-2 lakh as a settlement amount to resolve pending regulatory issues.
This initiative will provide regulatory clarity and stability to the affected brokers, allowing them to continue their operations with compliance assurance.

Approval of SEBI’s Budget for Financial Year 2025-26

In addition to regulatory discussions, the board will approve SEBI’s budget for FY 2025-26, focusing on:

Technology upgrades for better market surveillance.
Investor protection initiatives to enhance retail participation.
Infrastructure development for improved market operations.

Introduction of ₹250 SIP to Encourage Retail Investors

SEBI is also considering a new ₹250 Systematic Investment Plan (SIP) model to encourage higher retail investor participation in mutual funds.

This initiative aims to make mutual funds accessible to low-income investors, enabling long-term wealth creation with small contributions.
By reducing the entry barrier, SEBI seeks to expand the reach of mutual funds beyond metro cities into semi-urban and rural areas.

Highlights from the SEBI Board Meeting

The SEBI board meeting is expected to bring important regulatory reforms, improving ease of doing business in Indian markets. Key highlights include:

FPI disclosure threshold likely to increase from ₹25,000 crore to ₹50,000 crore.
Investment advisors may be allowed to collect a year’s fee in advance.
Expanded eligibility criteria for NPOs raising funds through Social Stock Exchanges.
Regulatory relief for Category II AIFs investing in listed debt securities.
Settlement scheme for stock brokers linked to unauthorized algo trading platforms.
Approval of SEBI’s budget for FY 2025-26.
Proposal to introduce a ₹250 SIP to boost retail investor participation in mutual funds.

With these anticipated policy changes, Indian financial markets could experience improved regulatory clarity, greater foreign investment, and stronger investor confidence.