SEBI announces major market reforms in its 212th board meeting

In December 2025, the Securities and Exchange Board of India (SEBI), at its 212th board meeting held in Mumbai, Maharashtra, approved a series of regulatory reforms aimed at simplifying market regulations, lowering transaction costs and enhancing cost transparency.

Key Highlights

Regulatory Replacement: The Board approved the proposal to replace SEBI (Stock Brokers) Regulations, 1992 with SEBI (Stock Brokers) Regulations, 2025 (“SB Regulations”) to remove redundant provisions and ease of compliance.

Rationalisation of brokerage limits:

Cash market transactions: The existing brokerage cap of 12 bps includes statutory levies. The cap on brokerage, net of statutory levies amounts to 8.59 bps, which has nowbeen reduced to 6 bps (exclusive of levies).

Derivative  transactions: The  existing  brokerage  cap  of  5  bps includes statutory levies. The cap on brokerage, net of statutory levies amounts to 3.89 bps, which has now been reduced to 2 bps

• The additional 5 bps currently permitted to be charged to schemes with exit loads as a transitory measure has now been removed.

Revision of Expense ratio framework: Expense ratio limits, now called Base Expense Ratio (BER), shall exclude all statutory levies.

• Statutory and regulatory levies such as STT (Securities Transaction Tax)/CTT (Commodity Transaction Cost), GST (Goods and Services Tax), Stamp Duty, SEBI Fees, Exchange Fees, etc., incurred for execution of trades shall be charged on actuals, over and above permissible brokerage limits.
• Total Expense Ratio shall now be the sum of BER, brokerage, regulatory levies and statutory levies.

First-line regulators: Stock exchanges will now be the first-line regulators for stockbrokers.

• This means that stockbrokers will report non-compliance and furnish financial statements to exchanges.

Pledged share lock-in: The SEBI board also approved a proposal to allow pledged shares to be treated as locked in for the prescribed period, even if depositories are unable to technically impose a lock-in due to the pledge.

• In the event of invocation of a pledge, the shares transferred to the pledgee shall remain locked in for the remaining lock-in period; upon release, they shall continue to remain locked in with the pledger.

Other Key Highlights:

Unclaimed Amount transfer: Presently unclaimed amounts are transferred to the Investor Education and Protection Fund (IEPF) / Investor Protection and Education Fund (IPEF) after 7 years of remaining unclaimed.

• Issuers of nonconvertible securities will now need to transfer the unclaimed amounts only once after completion of 7 years from the date of maturity of the security instead of multiple transfers when interest/ dividend/ redemption payment becomes due.

MF Regulations 2026: The SEBI Board, at its meeting held on December 17, 2025, approved the changes  proposed,  pursuant  to  the  review  of  the  SEBI  (Mutual  Funds) Regulations, 1996. The new SEBI (Mutual Funds) Regulations, 2026, are designed  to  offer  stakeholders  greater clarity,  improved  readability,  and enhanced structural coherence.

Credit Rating Agencies (CRA): CRAs have been allowed to rate financial instruments falling under the purview of other financial sector regulators (FSR), even if rating guidelines have not been provided by the respective FSR.

High Value Debt Listed Entities (HVDLE): The threshold for HVDLE has been raised to Rs 5,000 crore (Cr) from Rs 1,000 Cr.

About Securities and Exchange Board of India (SEBI):
The SEBI, a market regulator was constituted as a non-statutory body on April 12,1988 through a resolution of the Government of India (GoI) and was established as a statutory body in 1992.
Chairman – Tuhin Kanta Pandey
Headquarters – Mumbai, Maharashtra