The Securities and Exchange Board of India (SEBI) is reviewing capital requirements for stock brokers and examining reforms to price discovery mechanisms for IPOs and relisted securities as part of its next phase of market reforms, Chairman Tuhin Kanta Pandey said on Monday.
Speaking at the ICICI Securities India Investor Conference, Pandey said, “We are currently reviewing the framework for variable net worth requirements for stock brokers, so that capital requirements better reflect operational scale and risk.”
The regulator is also examining improvements to the pre-open call auction mechanism for IPOs and relisted securities to ensure more stable and efficient market openings. SEBI is working to ease compliance for research analysts, including rationalising call recording obligations in institutional interactions.
For mutual funds, SEBI is proposing a more practical framework for intraday borrowing, not just as a contingency tool, but as “an efficient mechanism for managing temporary liquidity mismatches.”
“The objective across these reforms is simple. Reduce friction. Improve clarity. And enable growth — without diluting safeguards,” Pandey said.
A working group is finalising operational details for a market-making framework aimed at improving liquidity in the corporate bond market. SEBI and the Reserve Bank of India are also working on introducing derivatives linked to corporate bond indices.
The regulator is simultaneously pursuing measures to improve access for overseas investors. SEBI is working with custodian banks and the RBI to substantially reduce timelines for foreign portfolio investor (FPI) registration and onboarding.
The reform push comes against the backdrop of rising household participation in financial markets. “India’s growth story today is not just about economic expansion. It is about formalisation. It is about the financialisation of savings. And importantly, it is about trust in institutions,” Pandey said.
“Capital markets are increasingly becoming a core avenue for household savings and wealth creation,” he said.
Household financial savings rose to 21.7 per cent of GDP in FY25 from around 20 per cent in FY23, while the number of investors in the securities market has reached about 145 million. Mutual fund assets have grown from ₹12 lakh crore to over ₹80 lakh crore, while market capitalisation has increased from 69 per cent of GDP a decade ago to around 128 per cent today.