In 2025, swapped a sprint for a marathon.
For much of 2024, the capital markets regulator’s approach was considered aggressive, with SEBI rolling out a string of tighter norms for derivatives, corporate governance and compliance across market participants.
With a new chairman, Tuhin Kanta Pandey, taking charge in March 2025, SEBI adopted a more calibrated approach, seeking to balance investor protection with ease of doing business for intermediaries and issuers.
The shift was visible both in boardroom decisions and market response. SEBI overhauled the three decades old stock brokers’ and mutual fund regulations.
It also relaxed minimum public float requirements and extended compliance timelines for big listings, giving firms more time to meet public shareholding norms and lowering minimum offer sizes in select cases.
These moves signalled a pause on rules seen as overly burdensome. But the pause did not translate into leniency.
The derivatives market remained a major focus. A surge in retail participation in futures and options prompted SEBI to strengthen margin requirements, refine position limits and push for tighter risk disclosures and surveillance. The objective was to rein in excessive activity around weekly expiries and complex strategies that regulators believe have amplified retail losses and volatility.
Speculation about a possible ban on weekly derivative contracts gathered pace towards the end of the year, forcing the chairman to step in and publicly dismiss the idea. Any further measures, he said, would be data-driven and follow detailed consultation.
“There could still be more tightening in derivatives,” said a senior broking executive. “The Jane Street episode exposed gaps in the system. Discussions around suitability tests and incentives for longer-dated contracts and participation in the cash market are clearly underway.”
Lessons from Jane Street fiasco
SEBI’s probe into alleged expiry-day manipulation by global trading firm Jane Street showed the regulator’s willingness to act against sophisticated proprietary desks. The firm has deposited significant alleged unlawful gains as part of the ongoing investigation, which will be heard next in January.
The scrutiny also intensified in small and medium enterprise (SME) IPOs. After several crackdowns on speculative listings that often saw sharp post-listing falls and governance lapses, SEBI tightened eligibility criteria, promoter lock-in rules and post-listing obligation for SME issuers. The intention was to ensure that only firms with basic financial substance and credible governance enter public markets.
Enforcement extended beyond issuers. SEBI took action against finfluencers and unregistered advisory platforms, including Baap of Charts, Adhvut Sathe and Asmita Patel.
Reforms
At the same time, several transformational proposals were slowed or softened. The common contract note was finally implemented in June after four delays, combining exchange-wise notes into a single document to ease operational challenges for FPIs. Other reforms, such as the closing auction session to replace VWAP pricing and proposals around the financial autonomy of clearing corporations, remain under discussion.
A similar story played out with the T+0 settlement. While SEBI pushed for faster settlement cycles to reduce systemic risk, the implementation by qualified stock brokers was pushed back indefinitely due to technological and operational constraints.
SEBI also revisited IPO allocation norms, the block deal framework, mutual fund fee structures, insider trading rules and related-party transaction disclosures.
“2025 saw the most deliberate effort from SEBI to elevate M&A since the 2011 SAST regulations. This overhaul seemingly intends to shift India from a promoter-dominated M&A environment to a market-driven, rules-based system where transparency, price integrity, and governance drive value creation,” said Anurag Tyagi, Partner, Deal Value Creation Services at BDO India.
Looking ahead, several proposals, including reviews of securities lending, takeover norms and short-selling rules, could move forward in 2026. The year may also finally see progress on marquee events such as the long-awaited NSE IPO. The coming year may test whether delayed reforms can finally move from rulebooks to reality.