Sebi Brings Back Open-Market Buybacks, Eases Debt Listing Rules

Sebi approved a change allowing mutual funds to borrow intraday to bridge timing gaps between pay-in and pay-out settlements across asset classes and forex. This is on top of the existing 20% of net assets that funds can borrow for redemptions. Asset management companies must repay the intraday borrowing by the end of the day, and the regulator said it cannot be used as a source of leverage.

AIFs get a faster rollout

The regulator launched a green-channel system for alternative investment funds called GARUDA (Green-Channel: AIF Rollout Upon Document Acknowledgement). For non-accredited investor schemes, the timeline to launch new schemes drops to 10 working days. Schemes meant only for accredited investors and angel funds no longer need to file a private placement memorandum through merchant bankers and can launch immediately after Sebi registration or filing the PPM.

Municipal bonds get a push

Sebi relaxed rules for municipal bonds, allowing municipalities to raise funds to refinance existing project debt and letting two or more municipalities raise money through a pooled finance vehicle. Issuers can now offer incentives such as extra interest or discounts to senior citizens, retail investors, women and defence personnel.

Other changes

Sebi approved a new code of conduct for its own members, the 2026 Code, based on a high-level committee's recommendations on conflict of interest and disclosures. The regulator also simplified the process for transmitting securities to heirs, removing requirements for PAN and probate of a will in certain cases.

On the National Stock Exchange's settlement application related to the colocation and dark fibre case, Pandey said the application had cleared the high-powered advisory committee and called it "a matter of time before it is sorted."

Sebi is also studying the impact of its earlier measures in the derivatives market, with a report expected in July. Pandey said the regulator was considering removing barriers to longer-tenor derivatives contracts. A working group is reviewing the securities lending and borrowing framework.

Based on an external expert advisory committee's recommendations, the board approved an assessment of the framework for capital raising by small and medium enterprises.