SEBI board meeting reforms approved on March 15, 2024 covered T+0 settlement, FPI disclosure relief, IPO amendments, and a uniform framework for verifying market rumours. The 204th SEBI board meeting also tightened due diligence rules for alternative investment funds and cleared subordinate units for privately placed InvITs. SEBI confirmed each decision in its official press release PR No. 5/2024. Here are the ten reforms from the SEBI board meeting that matter most for Indian capital markets.
SEBI Board Meeting Greenlights T+0 Settlement Beta
The headline decision was the launch of a beta version of optional T+0 settlement covering 25 scrips and a limited set of brokers. Same-day settlement now runs alongside the existing T+1 cycle on both BSE and NSE. The regulator scheduled formal stakeholder reviews at three months and six months from go-live. Until those reviews complete, T+1 remains the default settlement cycle for most trades.
Legal analysts at Lexology noted T+1 was only fully rolled out in January 2023. The regulator’s move to launch T+0 just over a year later marks notable acceleration in clearing infrastructure. Meanwhile, SEBI’s December 2024 follow-up later expanded T+0 to the top 500 stocks by market capitalisation, effective January 31, 2025.
FPI Disclosure Relief for Concentrated Holdings
Another SEBI board meeting reform targeted foreign portfolio investors holding more than 50% of their India equity assets in a single corporate group. Such FPIs can now skip extra disclosure requirements, provided three conditions are met. First, the concentrated holdings must sit in a listed company without an identified promoter. Second, those FPI holdings outside the parent must stay below 50% of India AUM. Third, aggregate FPI holdings in the no-promoter company must remain under 3% of total share capital.
The change targets a long-standing pain point flagged by the industry. Many global funds had faced burdensome filings on legitimate concentrated positions. Now compliance teams get breathing room without losing market integrity safeguards.
Material Change Disclosure Split Into Two Tracks
The SEBI board meeting also overhauled how FPIs notify designated depository participants of material changes. SEBI split the disclosure into two tracks. Type I changes still need notification to the DDP within seven working days, but supporting documents now have a 30-day window. Type II changes carry a single deadline of 30 days for both notification and documentation.
Previously, all material changes required full disclosure within seven working days regardless of type. According to Taxmann’s analysis, the split reduces administrative friction without weakening oversight. As a result, FPIs gain time to file properly verified documents.
IPO Fundraising Sees Five Big Changes
From the same SEBI board meeting, the board approved amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. To begin with, the 1% security deposit for public and rights issues is gone. Next, promoter group entities and non-individual shareholders with more than 5% post-offer capital can contribute to minimum promoter contribution without being labelled promoters.
In addition, equity from compulsorily convertible securities held one year before DRHP filing now counts toward MPC, TaxGuru reported. Furthermore, the offer for sale resize threshold now depends on only one criterion: rupee value or share count, as specified in the draft offer document. Finally, force majeure extensions for bid closing dates drop from three days to just one.
Market Cap Compliance Moves to Six-Month Average
A separate amendment changed how listed entity size is measured for compliance purposes. Listed entities will now have their compliance thresholds measured against the six-month average market capitalisation ending December 31. Previously, the calculation took a single-day snapshot on March 31. The shift smooths out short-term price swings that often pushed companies in or out of compliance brackets.
SEBI also extended the deadline for filling senior management vacancies requiring statutory approval. The new timeline is six months instead of three months.
SEBI Board Meeting Sets Uniform Rumour Verification Rules
The board approved a single framework for verifying market rumours, developed jointly with the Industry Standards Forum representing ASSOCHAM, CII and FICCI. Listed entities must verify rumours within 24 hours of a material price movement trigger. Promoters, directors, key managerial personnel and senior management must respond promptly when the listed entity asks for clarification.
Unverified information in print or electronic media will not count as “generally available information” under the SEBI (Prohibition of Insider Trading) Regulations, 2015. SEBI later extended the implementation deadlines, as previously reported on FintechBits, giving top 100 firms until June 1, 2024 and top 250 firms until December 1, 2024.
AIFs Face Stricter Due Diligence Duties
This SEBI board meeting reform aims to stop alternative investment funds from being used to circumvent regulations enforced by other financial sector regulators. AIFs, their managers and their key management personnel must now conduct specific due diligence on both investors and investments. The rule covers inbound capital and outbound deployment.
SEBI framed the move as a defence of the broader AIF ecosystem rather than a compliance squeeze on legitimate funds. The regulator had flagged cases where AIF structures were allegedly used to route funds in ways that would breach RBI lending norms.
Subordinate Units Cleared for Privately Placed InvITs
Rounding out the SEBI board meeting package, the board cleared a framework for privately placed Infrastructure Investment Trusts to issue subordinate units. These instruments help bridge valuation gaps between sponsors and the InvIT when assets transfer between them. The amendment formalises a tool the 2014 InvIT Regulations had hinted at but never operationalised.
Sponsors and infrastructure investors gain a cleaner mechanism for deals that previously stalled on valuation mismatches. For now the scope covers only privately placed InvITs, leaving publicly placed InvITs under the existing rules.
For more on Indian financial sector developments, see FintechBits coverage of the Paytm Payments Bank licence findings and the wider regulatory updates section.
