SEBI

Summary: Indian corporate governance law pulls independent directors in two directions. Schedule IV to the Companies Act, 2013, requires them to keep out of day-to-day management. At the same time, a recent line of orders from SEBI and the Securities Appellate Tribunal demands closer diligence from independent directors on audit committees. The boundary between the two, the Lakshman Rekha, turns not on how much an independent director engages but on the channel and character of that engagement. Diligence is about the quality of oversight. Overreach begins the moment an independent director substitutes their own judgement for management’s in executing a decision. A related difficulty concerns independent directors who serve as managing directors elsewhere and carry their executive instincts into boardrooms where they are meant to oversee only. The shift from an executive to a non-executive mindset usually takes years, and that lag is a complication Boards cannot afford to ignore.

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Purpose is No Defence: Supreme Court’s ruling and the Roadmap for Insider Trading Compliance

Summary: By affirming that insider-trading liability under the 2015 PIT Regulations turns on possession of information and not the purpose behind the trade, the Court has shut the door on ‘legitimate reason’ defences that SAT and earlier precedents had left ajar. Designated persons, compliance officers, listed companies and sponsors must now carefully navigate next steps to avoid breaches and regulatory scrutiny.

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A New Chapter in Settlement Regime: A Closer Look at the Draft Settlement Regulations, 2026

Summary: SEBI issued a Consultation Paper on August 14, 2026, proposing complete overhaul of the existing settlement mechanism through the Securities and Exchange Board of India (Settlement of Proceedings) Regulations, 2026. This post discusses the rationale behind SEBI revisiting the settlement framework and outlines the key changes proposed for public consultation.

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Summary: SEBI has recently proposed an overhaul of the Portfolio Managers Regulations, opening doors that have stayed shut until now. Discretionary portfolio managers may soon be allowed to invest in pre-IPO securities and unlisted debt, while portfolio managers more broadly may be permitted to invest in overseas markets. A new, low-entry “MF-PMS” category is proposed for mutual-fund-only portfolios, alongside looser derivative limits for discretionary portfolio management and a fresh route for independent fund managers to operate under registered PMS players. But it’s not just about new investment avenues, Principal Officer qualifications, net worth requirements, and even the definition of “related party” are all set to change too. If implemented, these reforms could reshape how discretionary and non-discretionary portfolio management services operate in India, making the industry more innovative and investor-friendly.

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Securities Markets Code, 2025: Simplifying the fault line

Summary: The Securities Markets Code Bill, 2025, introduced Clause 92 and Clause 93 as parallel provisions to govern fraudulent and unfair practices and market abuse, respectively. The Parliamentary Standing Committee, in its recently released report on the Bill, found that the distinction between the two clauses was unclear, and allowing the Securities and Exchange Board of India to expand the definition of criminal market abuse through delegated legislation raised serious constitutional concerns. The Committee has recommended a series of targeted amendments to Clause 93 to confine criminal liability to conduct that is grave, willful, and systemic in nature, to delete the residuary rule-making power under Clause 93(g), and to ensure that these changes are carried through into the Prevention of Money-Laundering Act, 2002, schedule. This blog examines each of these recommendations and their practical significance for market participants, intermediaries, and their advisors.

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NFRA Reimagined: What the 2026 Amendment Bill means for Boards, Audit Committees, and Auditors

Summary: NFRA is fast becoming the new benchmark of governance for audit quality, financial reporting and audit committee oversight. This blog examines how the Corporate Laws (Amendment) Bill, 2026 proposes to strengthen NFRA’s framework, why this matters for boards, audit committees, in-house counsel and auditors, and what companies should do to prepare.

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Rethinking Open-Offer Financing: The Impact Of RBI’s Acquisition Financing Liberalisation

Summary: Indian banks are now permitted to finance acquisitions of ‘control’ over target companies, marking the most significant liberalisation of acquisition financing in India in decades. However, where the target is a listed company, the mandatory open offer obligations under the SAST Regulations introduce a series of interpretive questions regarding the interplay between the CF Directions 2026 and the open offer financing obligations.

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Listing of Insurance Brokers in India: The Need for an Explicit Framework

Summary: The blog notes that while India’s insurance framework does not prohibit broker listings, due to the absence of explicit IRDAI guidance, the insurance brokers may have limited access to public markets. While recent reforms (such as perpetual registration) address some hurdles, the 25% investor cap under brokers regulations may create a tension with SEBI’s minimum public float requirement. The piece suggests that it may be helpful for IRDAI to consider a clear, conditions-based listing framework for brokers, drawing on existing models for insurers and the proposed pathway for TPAs.

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Procuring Investor Consent by AIFs: SEBI’s New Playbook for Voting and Conflict Management

Summary: On June 30, 2026, SEBI released a consultation paper proposing a standardised consent mechanism and an expanded conflict-of-interest framework for Alternative Investment Funds.

The AIF Regulations mandate investor consent for material decisions but are silent on methodology, resulting in inconsistent market practices. SEBI now proposes a framework offering AIFs a choice among three voting methods – Deemed Consent, Present and Voting, and Express Voting. Further, the current “associate” definition, anchored to a 15% shareholding threshold, fails to capture transactions where conflict is self-evident. SEBI proposes introducing a “related party” definition adapted from Section 2(76) of the Companies Act, 2013, deployed specifically within conflict provisions. This widens the net of transactions requiring 75% investor approval.

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Summary: This blog examines the regulatory framework governing Global Access Providers (GAPs) at IFSC, GIFT City, analysing SEBI’s circular of May 2025, which permits registered broker-dealers to operate within IFSC through a separate business unit and IFSCA’s revised GAP framework of August 2025. It covers the definitions of GAPs and Introducing Brokers, permissible clientele, operational models and permissible products, including FEMA and LRS constraints for resident Indian investors, as India’s regulated pathway for resident Indians to access global markets.

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