Key facts
- Sebi plans to simplify KYC for foreign portfolio investors (FPIs).
- Disclosure norms will be reviewed based on risk.
- Longer-tenure equity derivatives contracts are planned.
- Securities lending, borrowing, and short-selling frameworks are under review.
- The role of independent directors in corporate governance will be enhanced.
The Securities and Exchange Board of India (Sebi) is planning significant changes to ease know-your-customer (KYC) requirements for foreign portfolio investors (FPIs) and enhance clarity for global capital. Sebi Chairman Tuhin Kanta Pandey announced on Friday that the regulator will review disclosure norms through a risk-based approach, aiming to improve market access and attract international investment, particularly during periods of global uncertainty.
In addition to KYC reforms, Sebi intends to develop longer-tenure futures and options contracts within the equity derivatives segment to encourage deeper participation beyond short-dated products. The regulator is also undertaking a comprehensive review of its frameworks for securities lending and borrowing, as well as short-selling, with the goal of boosting liquidity and strengthening the linkages between cash and derivatives markets.
Pandey emphasized that clearer processes facilitate faster capital movement, sharper disclosures reduce uncertainty, and easier access improves confidence. He also highlighted the importance of independent directors in corporate governance, stating their role extends beyond questioning to contributing to board discussions on emerging challenges like AI, cybersecurity, ESG, R&D, and technological change, while also protecting minority shareholder interests and supporting long-term value creation.
Sebi plans to collaborate with market participants to establish a structured ecosystem for training and capacity building for independent directors. Several key regulations, including the Listing Obligations and Disclosure Requirements (LODR) framework, are being reviewed to better align with evolving governance and disclosure needs. The delisting framework, municipal debt regulations, and portfolio management services norms are also under scrutiny to address practical issues faced by stakeholders and support market development.