Archive · 19 Dec 2025
SEBI Approves Rule Changes and New Bill
SEBI, the stock market regulator in India, has made some important changes to the rules for companies that want to go public (IPOs) and for mutual funds.
For IPOs, they made it easier to lock in shares that have been pledged and introduced a simpler document that summarizes key information for investors.
For mutual funds, they changed the rules about fees and expenses to make things more transparent and reduce costs for investors.
They also made the rules simpler and easier to follow by removing outdated sections and digitizing communications.
Additionally, SEBI introduced a new Bill that requires board members to disclose any conflicts of interest, including those of their family members.
The Bill also aims to strengthen investor protection by introducing an Ombudsperson for grievance redressal and an Investor Charter.
These changes aim to make investing easier and more straightforward for everyone.
SEBI relaxed pre-IPO lock-in norms by allowing automatic lock-in of pledged shares, with depository agencies keeping a record of non-transferable securities.
A concise Offer Document Summary will replace the abridged prospectus for IPO disclosures, available from the Draft Red Herring Prospectus (DRHP) stage.
Mutual fund expense ratios will exclude statutory levies and the additional 5 basis points charge will be removed.
Brokerage charges for cash market transactions reduced to 6 basis points and for derivatives to 2 basis points.
SEBI simplified compliance requirements by digitizing investor communications and removing redundant reporting, reducing regulation size by 44% and word count by 54%.
The Securities Markets Code (SMC) Bill requires SEBI board members to disclose any direct or indirect interest, including family members, and recuse themselves from decision-making.
The SMC Bill introduces an Ombudsperson for investor grievance redressal and an Investor Charter to safeguard investor interests.
- Who
- Securities and Exchange Board of India (SEBI)
- What
- Approved changes to IPO and mutual fund regulations and introduced the Securities Markets Code (SMC) Bill.
- When
- Wednesday, 17 December 2025 (for rule changes) and Thursday, 18 December 2025 (for the Bill)
- Where
- India
- Why
- To enhance transparency, reduce costs, modernize regulations, and strengthen investor protection.
Pro-Investor
Pro-Issuer
Lock-in Norms
Pro-Investor
Ensures compliance and protects retail investors by maintaining lock-in periods for pledged shares.
Pro-Issuer
May increase compliance burden for issuers, especially non-promoters, and could deter some from participating in IPOs.
Disclosure Framework
Pro-Investor
Simplifies and standardizes IPO disclosures, making it easier for retail investors to understand and participate.
Pro-Issuer
Additional compliance requirements for issuers, including filing a draft abridged prospectus and an abridged prospectus.
- Regulator
- Securities and Exchange Board of India (SEBI)
- Lock-in Norms
- Automatic lock-in for pledged shares, with depository agencies keeping a record of non-transferable securities.
- IPO Disclosures
- Concise Offer Document Summary replacing abridged prospectus, available from the Draft Red Herring Prospectus (DRHP) stage.
- Expense Ratio
- Exclusion of statutory levies and reduction of additional 5 basis points.
- Brokerage Charges
- Reduced to 6 basis points for cash market and 2 basis points for derivatives.
- Compliance Changes
- Digitization of investor communications and elimination of redundant reporting, reducing regulation size by 44% and word count by 54%.
- Mutual Fund Assets
- Over Rs 80 lakh crore.
- Board Members
- Required to disclose any direct or indirect interest, including family members, and recuse themselves from decision-making.
- Surplus Transfer
- SEBI will transfer its surplus to the Consolidated Fund of India.
- Investor Protection
- Introduction of an Ombudsperson for grievance redressal and an Investor Charter.
Sources
IPO rules: SEBI approves tweaks to lock in norms, fund raising, disclosures
Sebi overhauls mutual fund rules, revamps expense ratio and brokerage framework - Telegraph India
SEBI board clears revamp of broker, MF rules; defers conflict-of-interest code
SEBI lowers expense fees of mutual funds
Sebi tweaks norms to boost investor participation — from IPO summary to easier lock-in rules, all details here
Sebi slashes brokerage fees for mutual funds by half
Sebi raises threshold for High Value Debt Listed Entities to ₹5,000 crore; aims to ease fundraise efforts
Sebi takes measures to deepen investors' participation in capital market
Centre to introduce Securities Markets Code Bill to replace three regulation laws
SEBI Board members to disclose their interest under new Securities Markets Code Bill
M&A overhaul: SEBI bats for level playing field for retail investors, says report
SMC Bill 2025: Govt proposes transfer of 3/4th of SEBI surplus to Consolidated Fund, caps probes at 6 months
Markets Code tabled in Lok Sabha: Key provisions of Bill that allows removal of Sebi Board member over conflict of interest
SMC proposes Ombudsman to address deficiencies by market service providers
SEBI allows sale of debt securities at lower face value of ₹10,000
