The Securities and Exchange Board of India (SEBI) has announced a series of significant reforms aimed at enhancing market efficiency, reducing compliance burdens, and boosting capital formation. Key decisions include a 'Green Channel' for Alternative Investment Funds (AIFs), simplified procedures for transferring securities to deceased investors' heirs, and the re-introduction of open market buybacks through stock exchanges.
Streamlined Securities Transfer for Deceased Investors
SEBI has approved comprehensive amendments to facilitate quicker transmission of securities to legal heirs or claimants of deceased investors. A new 'Quick Transmission Processing' category has been introduced for small-value claims: up to Rs 10,000 for physical holdings and up to Rs 30,000 for dematerialised holdings, requiring minimal documentation.
The limits for simplified documentation have also been doubled: from Rs 5 lakh to Rs 10 lakh for physical holdings per listed company and from Rs 15 lakh to Rs 30 lakh for dematerialised holdings per beneficial owner. Notably, the requirement for submitting a PAN (Permanent Account Number) has been removed, as it's already available for demat accounts. The mandatory requirement of probate of will has also been done away with, aligning with recent succession law amendments.
For death certificates, a copy with a QR Code is now accepted for easier verification. For foreign-issued death certificates, verification through overseas branches of Indian banks or foreign banks with correspondent relationships is now permitted. SEBI stated that these measures are expected to "facilitate easier and faster transmission of securities and reduce costs and procedural hardship for claimants."
Green Channel for AIF Rollout
To reduce timelines for launching schemes and enable faster capital deployment by AIFs, SEBI has introduced the 'GARUDA' (Green Channel AIF Rollout Upon Document Acknowledgement) mechanism. For non-accredited investor schemes (excluding Large Value Funds, Accredited Investor-only schemes, and Angel Funds), the launch timeline for new AIF schemes has been reduced to 10 working days.
Accredited Investor (AI) only schemes and angel funds, comprising sophisticated investors, are now exempt from filing a private placement memorandum through a merchant banker. They are permitted to launch immediately upon SEBI registration or filing of the PPM with SEBI.
Re-introduction of Open Market Buybacks
SEBI has approved amendments to re-introduce open market buybacks through stock exchanges, effective August 1, 2026. This move follows revisions in the taxation framework and stakeholder suggestions aimed at providing greater flexibility. Given changes in taxation and the prohibition of promoters participating in open market buybacks, these will now be treated as normal trading transactions. The requirement for a separate trading window and displaying the company's identity as a purchaser has been removed.
Open market buybacks must be completed within 66 working days from the opening date, with at least 40 percent of earmarked funds utilized in the first half of the buyback period. The appointment of a merchant banker has been made discretionary for companies, aiming to reduce costs and streamline the process.
Developing the Municipal Bond Market
To further develop India's municipal bond market, SEBI has approved amendments to regulations governing municipal debt listing. Municipalities can now raise funds for refinancing existing debt of specific projects. The framework also enables two or more municipalities to raise funds via a pooled finance vehicle, with specific disclosure requirements and escrow account mechanisms to be detailed.
To encourage retail participation, issuers can now offer additional interest or discounts to specific investor categories, including senior citizens, women, defense personnel, and retail individual investors. The trading lot for privately placed municipal debt securities has been specified as Rs 1 lakh or Rs 10,000, with Rs 10,000 face value securities having fixed maturity without structured obligations.
Intraday Borrowing by Mutual Funds
SEBI also approved amendments to mutual fund regulations, allowing intraday borrowings to manage liquidity mismatches. Mutual funds can now avail intraday borrowing to bridge differences arising from pay-in or pay-out settlement timings, foreign exchange settlements, or mark-to-market payments for derivative positions, subject to safeguards. Asset Management Companies must repay intraday borrowings by day-end, and any conversion to overnight borrowing must adhere to regulatory limits. Importantly, intraday borrowings cannot be used as a source of leverage.