Press Release No.18/2026, Dated: 23.03.2026
At its meeting held on 23 March 2026, the Securities and Exchange Board of India (SEBI) approved a series of regulatory reforms aimed at improving ease of doing business, strengthening market efficiency, and enhancing regulatory clarity.
1. Measures Relating to Alternative Investment Funds (AIFs)
1.1 Retention of Liquidation Proceeds
SEBI has permitted AIFs to retain liquidation proceeds under specified conditions, providing operational flexibility during fund wind-down and distribution processes.
1.2 Introduction of ‘Inoperative Fund’ Framework
An ‘inoperative fund’ framework has been introduced to address situations where funds are unable to proceed with operations or deployment, ensuring better regulatory handling and compliance clarity.
2. Reforms for Foreign Portfolio Investors (FPIs)
2.1 Net Settlement Mechanism
SEBI has approved the introduction of net settlement for FPIs, which will:
- Improve capital efficiency
- Reduce settlement-related operational complexities
- Enhance overall market liquidity and ease of transactions
3. Changes in Social Impact Investment Framework
3.1 Reduction in Minimum Investment Threshold
The minimum investment threshold for Social Impact Funds has been reduced, with the objective of:
- Increasing investor participation
- Promoting impact investing and social finance
- Broadening access to such investment avenues
4. Amendments to InvITs and REITs Regulations
SEBI has approved amendments relating to:
- Infrastructure Investment Trusts (InvITs)
- Real Estate Investment Trusts (REITs)
These changes are aimed at improving operational flexibility, governance standards, and investor participation in these instruments.
5. Revisions to ‘Fit and Proper’ Criteria
SEBI has also approved amendments to the ‘fit and proper’ criteria, which govern eligibility and integrity standards for market participants, to enhance regulatory clarity and consistency.
6. Objective of the Reforms
The measures collectively aim to:
- Enhance ease of doing business in the securities market
- Improve regulatory clarity and consistency
- Promote market efficiency and investor participation
- Strengthen the overall regulatory framework across investment vehicles
These decisions reflect SEBI’s continued efforts to balance market development with robust regulatory oversight.
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