Highlights

Contents

How the New Rule-Making Process Works Why This Matters for Investors & Market Participants Impact on IPOs, Mutual Funds & Stock Markets

Public consultation is now mandatory before modifying existing norms.
21-day window for public feedback on proposed changes.
SEBI will publish reasons for rejecting public suggestions.
Board review will include a systematic compilation of public comments.
Exemptions: SEBI chairperson may waive public consultation in urgent cases to protect investors or market stability.

How the New Rule-Making Process Works

Steps SEBI Will Follow for Regulatory Changes:
1. Publishing Proposed Changes

SEBI will post draft regulations on its official website.
It will include the objective, rationale, and expected impact of the changes.

2. Public Consultation (Minimum 21 Days)

Stakeholders can submit their feedback within 21 calendar days.

3. Publishing Response to Feedback

SEBI will review public comments and disclose reasons for rejecting any suggestions.

4. Final Consideration by SEBI Board

A summary of public feedback and SEBI’s responses will be included in the agenda paper.

5. Exceptions in Urgent Cases

If investor protection or market stability is at risk, the SEBI Chairperson can waive or shorten the public consultation period.

Why This Matters for Investors & Market Participants

More Transparency: Market regulations will no longer be modified without public knowledge.
Stakeholder Involvement: Investors, businesses, and experts can actively influence SEBI’s decisions.
Accountability: SEBI must justify why public suggestions were rejected.
Investor Protection: Urgent changes can still be made without delay if necessary.

Impact on IPOs, Mutual Funds & Stock Markets

For IPO Investors:

Stricter scrutiny of regulatory changes ensures fairer listing norms.
Companies may face more rigorous compliance requirements before IPO approval.

For Mutual Funds & Stock Traders:

Any changes in trading or fund regulations will require public feedback.
Investors and brokers can directly influence SEBI’s decisions.

For Companies & Market Participants:

Regulatory updates won’t come as a surprise, allowing businesses to adapt in advance.
Greater predictability in compliance requirements.

Final Take: A Big Win for Market Transparency

SEBI’s Procedure for Making, Amending, and Reviewing of Regulations, 2025 ensures that investors and market participants have a say in how regulations evolve. With mandatory public consultation, India’s financial regulatory process is now more transparent and investor-friendly than ever.