The Securities and Exchange Board of India (“SEBI)”, in its 211th Board meeting, has considered and approved the key reforms including –
- relaxing norms related to the Minimum Public Offer (“MPO”),
- amendments to the SEBI Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”),
- reviewing of Regulatory Framework for Registrars to an Issue and Share Transfer Agents (“RTAs”).
Key proposed changes will include the following:
Following changes have been recommended under Securities Contracts (Regulations) Rules, 1957 relating to Minimum Public Offer (MPO) and timelines to comply with Minimum Public Shareholding (MPS) for Issuers:
| Post Issue market cap | Existing Provision | Proposed Provision |
| Rs 50,000 Cr < MCap ≤ Rs 1,00,000 Cr | MPO of 10%
MPS of 25% to be achieved within 3 years from date of listing |
MPO of Rs 1,000 Cr and at least 8% of the post issue market cap.
MPS of 25% to be achieved within 5 years from date of listing |
| Rs 1,00,000 Cr < MCap ≤ Rs 5,00,000 Cr | MPO of Rs 5,000 Cr and at least 5% of the post issue market cap;
MPS of 10% to be achieved within 2 years and 25% within 5 years from date of listing |
MPO of Rs 6,250 Cr and at least 2.75% of the post issue market cap.
In case public shareholding is less than 15% as on the date of listing, MPS of 15% to be achieved within 5 years and 25% within 10 years from date of listing. In case public shareholding is 15% or above as on the date of listing, MPS of 25% to be achieved within 5 years from date of listing. |
| MCap > Rs. 5,00,000 Cr | MPO of Rs 5,000 Cr and at least 5% of the post issue market cap;
MPS of 10% to be achieved within 2 years and 25% within 5 years from date of listing |
MPO of ₹15,000 Cr and at least 1% of the post issue market cap, subject to a minimum dilution of 2.5%.
In case public shareholding is less than 15% as on the date of listing, MPS of 15% to be achieved within 5 years and 25% within 10 years from date of listing. In case public shareholding is 15% or above as on the date of listing, MPS of 25% to be achieved within 5 years from date of listing. |
Amendments with respect to Related Party Transaction (RPT) framework under SEBI (LODR) Regulations, 2015:
1. Introduction of scale-based thresholds considering the annual consolidated turnover of the listed entity as per last audited financial statements for determining material RPTs for approval by shareholders:
| Existing Threshold | Revised Scale-based Threshold | |
| Rs. 1000 crore or 10% of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity, whichever is lower. | Annual Consolidated Turnover of Listed Entity | Threshold |
| (I) Up to Rs. 20,000 Crore | 10% of theannual consolidated turnover of the listed entity | |
| (II) More than Rs. 20,001 Crore to up to Rs. 40,000 Crore | Rs. 2,000 Crore + 5% of the annual consolidated turnover of the listed entity above Rs. 20,000 Crore | |
| (III) More than Rs. 40,000 Crore | Rs. 3,000 Crore + 2.5% of the annual consolidated turnover of the listed entity above Rs. 40,000 Crore or Rs. 5000 Crore, whichever is lower. | |
2. Revision in the thresholds for getting prior approval from the Audit Committee of a Listed Company for RPTs carried out by its subsidiaries in case the value of transactions is more than Rs. 1 crore:
- For subsidiary having audited financial statements: 10% of the annual standalone turnover of the subsidiary as per the last audited financial statements of the subsidiary or the scale-based threshold for material RPT of listed entity, whichever is lower.
- For subsidiaries not having audited financial statements for a period of 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 related party transactions of listed entity, whichever is lower.
3. SEBI to issue a Circular for specifying minimum information to be provided to the Audit Committee and shareholders for the approval of RPT, which does not exceed 1% of annual consolidated turnover of the listed entity or Rs. 10 Crore, whichever is lower, whether individually or taken together with previous transactions during a financial year (including transaction(s) which are approved by way of ratification) providing relaxation to such RPTs from Industry Standards on Related Party Transactions, dated 26.06.2025.
4. Provisions with respect to validity of omnibus approval for RPTs, granted by the shareholders are to be incorporated SEBI (LODR) Regulations, 2015 in order to keep requirements relating to omnibus approval at one place.
5. Amendment in proviso for not to consider retail purchases from any listed entity or its subsidiary by its directors or key managerial personnel or their relatives, without establishing a business relationship, at the terms which are uniformly applicable/offered to employees as well as above mentioned persons as a RPT.
6. Insertion of explanation clarifying that the term “holding company” used in clause (b) of Regulation 23(5) of LODR refers to and shall be deemed to have always referred to “listed holding company.
7. Entities having listed non-convertible securities can send a letter providing the web-link to access the annual report to those holder(s) of non-convertible securities who have not registered their email id. The entity may at its discretion include a static Quick Response Code in the letter to access the annual report.
8. Board approved that timelines may be specified for entities having listed non-convertible securities, for sending the annual report to the holders of non-convertible securities, stock exchange and debenture trustee, as per provisions of Companies Act, 2013 or the provisions of the statute/ Act of Parliament under which such entity is constituted.
Review of Regulatory Framework for Registrars to an Issue and Share Transfer Agents (RTAs):
- Introduction of SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 2025 in place of SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 considering major changes including the following:
- Introduction of activity-based regulations for RTAs, wherein only the services provided by RTAs to listed companies will fall under SEBI’s regulatory purview. RTAs who wish to provide services to both listed and unlisted companies and continue to be registered with SEBI, may provide services to unlisted companies through a Separate Business Unit (SBU) with a disclaimer that this is not a SEBI regulated activity.
- Doing away with categorization of RTAs.
- Introduction of common definition for RTAs in place of existing separate definition for Registrars to an Issue as well as Share Transfer Agents and
- Net-worth requirement for RTAs.
- Revision in fee structure for RTAs-Due to decrease in functions undertaken by RTAs over years, it has been decided to remove the categorization of RTAs as the services provided by a Category-II RTA may as well be provided by a Category-I RTA.
- Common definition for RTAs, revised net worth and fee structure for RTAs to be introduced.
- Securities premium shall be considered part of net worth for RTAs.
- RTAs shall have institutional mechanism encompassing senior management oversight, robust surveillance systems, escalation & reporting mechanisms and whistle blower policy aimed at preventing and detecting fraud.
Introduction of the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework for FPIs and Foreign Venture Capital Investors (FVCIs).
Launch of ‘India Market Access’ Website for FPIs.
Regulatory fillip to Accredited Investors to Alternative Investment Funds (AIFs)
- Following proposals have been approved for AIFs:
- Introduction of a separate category of AIF schemes, limited exclusively to Accredited Investors only (AI-only schemes), and offering the scheme specific regulatory flexibilities in terms of less compliance around investor protection.
- Extension of additional relaxations and operational flexibilities to Large Value Funds (LVFs) for accredited investors.
- Provision for existing eligible AIF schemes to opt into AI-only or LVF classification, thereby availing associated benefits, subject to conditions prescribed by SEBI.
- Glide Path for Transition to Accreditation-Based Eligibility.
- Additional flexibilities will be granted to AI-only schemes, encouraging their proliferation within the ecosystem. Some key relaxations for AI-only schemes include exemption from pari-passu treatment to investors, and extension of tenure up to 5 years (as opposed to 2 for regular schemes).
- AI-only schemes will not have any cap on the number of investors. In regular AIF schemes, the extant limit of 1,000 investors will apply only in respect of non-Ais.
- Relaxations specific to LVFs, including exemptions from requirements such as the Standard Template for Private Placement Memorandum (PPM) and PPM audits.
- Minimum investment threshold for LVFs stands revised from INR 70 crore to INR 25 crore, as approved by the Board.
Following amendments have been approved by the Board under SEBI (Foreign Portfolio Investors) (FPI) Regulations, 2019:
- It has been proposed to allow retail schemes in International Financial Services Centres (IFSCs) with a resident Indian sponsor or manager, to register as FPIs.
- It has been proposed to amend SEBI FPI Regulations 2019, so that sponsor contributions shall now be subject to a maximum of 10% of corpus of the Fund (or AUM, in case of retail schemes).
Other Proposals :
- SEBI to establish Local Offices at State Capitals and other major cities in a phased and graded manner.
- Proposals approved for amendments to the SEBI (Investment Advisers) Regulations, 2013 and SEBI (Research Analysts) Regulations, 2014.
- Enhanced participation of Mutual Funds in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
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Source: SEBI
