The Securities and Exchange Board of India (‘SEBI’) in its 211th Board Meeting, held on September 12, 2025, has approved certain amendments to the Securities Contracts (Regulation) Rules, 1957, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the SEBI (Infrastructure Investment Trusts) Regulations, 2014, the SEBI (Real Estate Investment Trusts) Regulations, 2014, the SEBI (Alternative Investment Funds) Regulations, 2012, the SEBI (Foreign Portfolio Investors) Regulations, 2019, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the SEBI (Investment Advisor) Regulations, 2013, and the SEBI (Research Analyst) Regulations, 2014. The key amendments approved, inter alia, are summarised below.

Securities Contracts (Regulation) Rules, 1957

SEBI has approved and recommended changes to the Ministry of Finance to extend the timelines to comply with Minimum Public Shareholding (‘MPS’) requirements based on the post-issue market capitalisation enabling large issuers to achieve an Initial Public Offer (‘IPO’) in compliance with the MPS requirements and further bifurcation of post issue market capital (‘MCap’) slabs. Accordingly, certain additional parameters have been introduced under the Securities Contracts (Regulation) Rules, 1957, as follows:

SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018

The following amendments have been approved in relation to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘ICDR Regulations’), broadening the participation of institutional investors in the IPO process:

i.     increasing the anchor investor portion from one-third to 40%, of the issue size. This will include a reservation for life insurance companies registered with Insurance Regulatory and Development Authority of India (‘IRDAI’) and pension funds registered with the Pension Fund Regulatory and Development Authority (‘PFRDA’) and Mutual Funds
(‘MFs’) registered with SEBI. Of this:

a.     two-thirds of the anchor investor portion will be reserved for life insurance companies registered with IRDAI and pension funds registered with PFRDA. In the event of any undersubscription in this portion, the same will be available for allocation to domestic MFs; and

b.     one-third of the anchor investor portion will be reserved for domestic MFs.

ii.    The extant ICDR Regulations permit the following number of anchor investors depending on the size of allocation to the anchor investor portion:

a.     Category I: minimum of two and maximum of 15 investors for allocation up to INR 10 crores (approx. USD one million);

b.     Category II: minimum of two and maximum of 15 investors for allocation above INR 10 crores (approx. USD one million) and up to INR 250 crores (approx. USD 28 million), subject to minimum allotment of five crore per investor; and

c.     Category III: in case of allocation above INR 250 crores (approx. USD 28 million), minimum of five and maximum of 15 investors up to INR 250 crores (approx. USD 28 million) and an additional 10 investors for every additional INR 250 crores (approx. USD 28 million) or part thereof, subject to minimum allotment of five crore (approx. USD 563,000) per investor.

Pursuant to the meeting, the following two categories are permitted:

a.     Category I: minimum of five and maximum of 15 investors for allocation up to INR 250 crores (approx. USD 28 million), subject to minimum allotment of five crore per investor; and

b.     Category II: in case of allocation above INR 250 crores (approx. USD 28 million), minimum of five and maximum of 15 investors up to INR 250 crores (approx. USD 28 million) and an additional 15 investors for every additional INR 250 crores (approx. USD 28 million) or part thereof, subject to minimum allotment of five crore per investor.

SEBI (Infrastructure Investment Trusts) Regulations, 2014 and the SEBI (Real Estate Investment Trusts) Regulations, 2014

The following amendments have been approved in relation to the SEBI (Infrastructure Investment Trusts) Regulations, 2014 and the SEBI (Real Estate Investment Trusts) Regulations, 2014, for attracting capital by widening the investor base, and enhancing investments by MFs in the units of Infrastructure Investment Trusts (‘InvITs’) and Real Estate Investment Trusts (‘REITs’):

i.     revising the definition of ‘strategic investor’ to include: (a) all qualified institution buyers as defined under the ICDR Regulations, including public financial institutions provident funds, PFRDA registered pension funds with minimum corpus of INR 25 crores (approx. USD three million), Alternative Investment Funds (‘AIFs’), state industrial development corporation, etc.; (b) family trusts and SEBI registered intermediaries with a net worth of more than INR 500 crores (approx. USD 56 million); and (c) middle layer, upper layer and top layer non-banking finance companies registered with the Reserve Bank of India (‘RBI’); and

ii.    reclassifying REITs as ‘equity’ and retaining the classification of InvITs as ‘hybrid’ for the purposes of investments by MFs and specialized investment funds.

Accredited Investors Framework and Large Value Funds under SEBI (Alternative Investment Funds) Regulations, 2012

i.     Proposals Approved by SEBI: Following have been approved for AIFs, with respect to Accredited Investors (‘AIs’) and Large Value Funds (‘LVFs’):

a.     introduction of a separate category of AIF schemes exclusively for AI (‘AI-only Schemes’), offering scheme specific flexibility including less compliance around investor protection;

b.     extension of additional relaxations and operational flexibilities to LVFs for AIs; and

c.     provision for existing eligible AIF schemes to opt into AI-only Schemes or LVF classification, thereby availing associated benefits, subject to conditions prescribed by SEBI.

ii.    Rationale for Using Accreditation as a Measure of Investor Sophistication: SEBI noted that the current framework for assessing the sophistication of AIs, based solely on minimum commitment threshold, may be inadequate. Hence, SEBI plans to introduce an accreditation status, based on objective parameters and independent validation, which will provide a more robust measure of an investor’s ability to understand and bear investment risks.

iii.   Transition to Accreditation Based Eligibility: SEBI has approved a glide path approach for making the shift to accreditation-based eligibility. During this transition period:

a.     AIFs may continue onboarding investors based on the current minimum commitment threshold;

b.     concurrently, a new AI-only scheme will be introduced; and

c.     additional flexibilities will be granted to AI-only Schemes to promote the adoption of accreditation. Some key relaxations available for AI-only Schemes include exemption from the requirement of providing pari-passu treatment to investors and flexibility to extend the tenure up to five years (as opposed to two years for regular schemes). Further, AI-only Schemes will not be subject to a cap on the number of investors (which is 1000 investors for regular non-AI schemes).

iv.    Flexibilities for LVFs: LVFs being AI-only Schemes by definition can avail all the regulatory flexibilities extended to AI-only Schemes. Considering that LVF investors are accredited and have significantly larger contributions, SEBI has approved additional relaxations specific to LVFs including relaxation from requirement of adhering to the standard template for Private Placement Memorandum (‘PPM’) and relaxation from the requirement of conducting PPM audits.

v.     Reduction in Minimum Investment Threshold for LVFs: SEBI has approved the reduction of the minimum investment threshold for LVFs from INR 70 crore (approx. USD eight million) to INR 25 crores (approx. USD three million).

SEBI (Foreign Portfolio Investors) Regulations, 2019

i.     Amendments to FPI Regulations: The following amendments to the SEBI (Foreign Portfolio Investors) Regulations, 2019 (‘FPI Regulations’) have been approved in relation to facilitating ease of doing business for Foreign Portfolio Investors (‘FPIs’):

a.     permitting retail schemes registered in International Financial Services Centers (‘IFSCs’) with a resident Indian sponsor or manager to register as FPIs, akin to the framework for AIFs based in IFSCs;

b.     limits for sponsor contributions by resident Indian non-individuals in funds setup in IFSC to be subject to a maximum of 10% of corpus of the fund (or assets under management, in case of retail schemes); and

c.     permitting overseas MFs / Unit Trusts (‘UTs’) registering as FPIs to include Indian MFs as constituents, to operationalize SEBI’s Circular dated November 4, 2024, on ‘Investments in Overseas Mutual Funds/ Unit Trusts by Indian Mutual Funds’.

ii.    SWAGAT-FI Framework: SEBI has approved the introduction of the Single Window Automatic & Generalised Access for Trusted Foreign Investors (‘SWAGAT-FI’) framework for FPIs and Foreign Venture Capital Investors (‘FVCIs’) to, inter alia, reduce regulatory complexity, simplify compliance and enhance India’s global competitiveness as an investor-friendly destination. Eligible FPI applicants may opt to register as a SWAGAT-FI at the time of registration or may convert to such thereafter. A timeframe of six months has been provided for the full implementation of the SWAGAT-FI framework.

Foreign investors eligible for identification as SWAGAT-FIs include:

a.     Government and Government-related investors, such as central banks, Sovereign Wealth Funds (‘SWFs’), international or multilateral organizations/agencies, and entities controlled or at least 75% owned (directly or indirectly) by such entities; and

b.     Appropriately regulated Public Retail Funds (PRFs) with diversified investors and investments, managed independently and regulated by their home jurisdiction, including:

• MFs and UTs open to retail investors, operating as blind pools with diversified investments and independent investment managers;
• insurance companies investing proprietary funds without segregated portfolios; and
• pension funds regulated in their home jurisdictions.

SWAGAT-FIs will be, inter alia, entitled to the following relaxations:

• exemption from the FVCI regulation requiring at least 66% investment in eligible unlisted assets;
• registration validity, KYC review, and fee payment (USD 2,500) to be applicable for a 10-year block instead of the standard three-year cycle;
• exemption from the 50% aggregate contribution cap applicable to non-resident Indians, overseas citizens of India, and resident Indian individuals in FPIs; and
• option to use a single demat account for holding all securities acquired as FPI, FVCI, or foreign investor units.

iii.    India Market Access Website: SEBI has noted the launch of a new website titled, ‘India Market Access’ (indiamarketaccess.in), to serve as a dedicated platform for FPIs and FPI applicants. This website offers a consolidated and streamlined source of regulatory and procedural information to facilitate seamless entry and ongoing compliance for foreign investors in India’s securities market. Some of the resources that are provided on the website include a guide for FPI registration by way of a common application form, applicable SEBI and RBI regulations, guidelines on tax and repatriation procedures, information on roles and responsibilities of key market participants in the FPI ecosystem and other relevant information.

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The following amendments have been approved in relation to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’) for facilitating ease of doing business with respect to related party transactions (‘RPTs’):

i.     Introduction of scale-based thresholds based on the annual consolidated turnover (as per the last audited financial statements) of the listed entity for determining material RPTs for approval by shareholders:

ii.    Revision of threshold for prior approval of audit committee of listed entity for RPTs undertaken by subsidiaries as under:

a.    for subsidiaries with audited financials: 10% of the subsidiary’s annual standalone turnover or the scale-based threshold for material RPTs of the listed entity, whichever is lower; and

b.    for subsidiaries without audited financials for at least one year: 10% of the aggregate value of paid-up share capital and securities premium account of the subsidiary or the scale-based threshold for material RPTs of the listed entity, whichever is lower.

iii.   In line with the SEBI Master Circular for compliance with provisions of LODR Regulations dated November 11, 2024, provisions of LODR Regulations will be amended to include requirements relating to validity of omnibus approvals granted by shareholders, to keep requirements relating to omnibus approvals at one place.

iv.    Exemption on classification of retail purchases from any listed entity or its subsidiary being amended to apply to its directors or key managerial personnel or their relatives, provided there is no business relationship, and the terms are uniformly applicable to all employees as well as aforesaid persons.

v.     An explanation is to be inserted in Regulation 23(5) of the LODR Regulations to clarify that the term ‘holding company’ in Regulation 23(5)(b) of the LODR Regulations refers to and will be deemed to have always referred to ‘listed holding company’.