The Securities and Exchange Board of India (SEBI) has approved a series of important reforms that could make India’s capital markets more efficient and investor-friendly. The decisions, announced after the regulator’s latest board meeting, cover mutual funds, share buybacks, alternative investment funds and fundraising rules.
One of the biggest changes is the return of open-market share buybacks through stock exchanges. The route, which had fallen out of favour in recent years, will be reintroduced from August 1, 2026. Companies will once again be able to repurchase shares directly through exchanges, giving them greater flexibility in managing capital and returning money to shareholders. SEBI has also introduced safeguards, including limits on the buyback period and restrictions aimed at protecting investor interests.
In another significant move, mutual funds will now be allowed to use intraday borrowing facilities to manage temporary cash mismatches. The change is expected to help fund houses meet redemption obligations more smoothly without disrupting investment operations. Industry experts believe the move will improve liquidity management and reduce operational challenges for asset managers.
SEBI also approved measures to speed up fundraising for Alternative Investment Funds (AIFs). The regulator aims to simplify approval processes and help investment managers launch new schemes more quickly, improving access to capital for businesses and startups seeking alternative funding sources.
Additional reforms include steps to strengthen the municipal bond market, ease fundraising norms for smaller companies and deepen India’s credit markets through regulatory changes in securitisation. These measures form part of SEBI’s broader effort to improve ease of doing business while maintaining strong investor protection standards.
Market participants have largely welcomed the announcements, viewing them as practical steps towards creating a more flexible and efficient financial ecosystem. For investors, the reforms could translate into smoother market operations, improved liquidity and more opportunities across different investment segments in the years ahead.
