Major regulatory changes from SEBI (Securities and Exchange Board of India) in 2026 have significantly reshaped the functioning of India’s capital markets, including mutual funds, InvITs, brokers, and investor protection systems. These updates are extremely important for aspirants preparing for RBI Grade B, SEBI Grade A, CAIIB, JAIIB, and other banking and regulatory exams, as they are frequently tested in current affairs and regulatory sections.
Covering areas such as market data usage norms, demat nomination reforms, IPO relaxation rules, and cybersecurity enhancements, SEBI Circulars 2026 aim to strengthen transparency, improve compliance, and build a safer and more efficient financial ecosystem in India.
What are SEBI Circulars 2026 and why are they important?
SEBI Circulars 2026 are regulatory guidelines issued by the Securities and Exchange Board of India to regulate capital markets and protect investors. These updates cover mutual funds, InvITs, index providers, brokers, fintech platforms, and demat account rules. They are highly important for competitive exams as questions are frequently asked from recent regulatory reforms and compliance frameworks. These circulars also strengthen cybersecurity, transparency, and risk management in financial markets.
- Infrastructure Investment Trusts (InvITs) regulations
- Index provider governance framework
- Market data usage restrictions
- IRRA system discontinuation
- Cybersecurity and AI risk monitoring
- Demat nomination rule updates
Download SEBI Circulars Practice Quiz
Download the SEBI Circulars Practice Quiz PDF, which includes important questions along with key SEBI circular updates for the upcoming exams. Go through these circulars and practice the questions to understand the latest regulatory changes issued by the Securities and Exchange Board of India. This will help you strengthen your preparation and stay updated with important developments in capital markets and regulatory frameworks.
Attempt SEBI Circulars Practice Quiz
Attempt the SEBI Circulars Practice Quiz to test your understanding of key regulatory updates, capital market norms, and SEBI guidelines essential for competitive exams.
1. Under SEBI regulations, InvITs are allowed to borrow beyond 49% of their net assets. What is the primary purpose for which SEBI permits such excess borrowing?
2. Which of the following best describes the normal borrowing limit for InvITs under SEBI regulations?
3. SEBI allows InvITs to refinance existing debt. However, which portion of the debt is strictly NOT permitted to be refinanced?
4. An InvIT manager wishes to repair a significant stretch of a toll expressway it holds as an asset. Under SEBI’s excess borrowing provisions, this activity would be classified as:
5. Market data may be used for educational purposes under SEBI’s new rules effective July 1, 2026. Which of the following uses is explicitly PROHIBITED?
6. As per SEBI’s market data usage rules effective from July 2026, what is the minimum data lag applicable to general users accessing market data for educational content?
7. NISM is permitted to use market data that is only 1 day old, but strictly for which purpose?
8. IRRA (Investor Risk Reduction Access Platform) was created to serve which primary function in the securities market?
9. SEBI discontinued the IRRA platform primarily because:
10. The Security Operations Center (SOC) for markets is jointly operated by which two entities?
11. ZTNA, used in the context of SEBI’s cybersecurity framework, stands for:
12. Under SEBI’s significant index framework, an index qualifies as ‘significant’ when the AUM it tracks exceeds which threshold?
13. SEBI reviews the list of significant indices how many times per year, and on which dates?
14. An index that was once classified as ‘significant’ will be removed from that category if it fails to meet the AUM threshold for how long?
15. Under SEBI’s index provider regulations, a significant index provider must register with SEBI within how many months?
16. After being classified as a significant index provider, a firm must set up a separate legal entity for its index operations within:
17. Which of the following practices has SEBI explicitly prohibited for index providers?
18. In the context of InvIT borrowings, if an InvIT manager takes a fresh loan to repay an earlier loan, this transaction is termed:
19. Under SEBI’s demat account nomination rules, in which scenario is nomination MANDATORY?
SEBI May 2026 Circular Practice Quiz Free e-book
20. What is the maximum number of nominees allowed in a demat account under SEBI’s updated nomination rules?
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1. SEBI issued a one-time relaxation extending the validity of IPO observation letters that were set to expire between 1 April 2026 and 3 September 2026. What is the new extended deadline for these observation letters?
2. According to SEBI’s one-time relaxation on IPO observation letters, if a company chooses to use the extension, which of the following is a mandatory condition that must be fulfilled?
3. The primary reason cited by SEBI for granting a one-time relaxation on IPO observation letter validity was:
4. Under SEBI’s IPO observation letter relaxation framework, the concern about minimum subscription not being achieved directly leads to which scenario?
5. Under SEBI’s revised Minimum Public Shareholding (MPS) framework, what is the minimum public shareholding that a listed company must maintain?
6. Which entity raised concerns about sudden dilution affecting market price, prompting a revision to the Minimum Public Shareholding (MPS) framework?
7. Under SEBI’s revised MPS framework, companies are classified into 6 categories based on:
8. Under SEBI’s revised MPS framework, companies are given how many years to achieve compliance, depending on their market capitalization category?
9. In SEBI’s revised MPS framework, which of the following is NOT counted as ‘public’ shareholding?
10. SEBI’s revised MPS framework granted a general relaxation extending the compliance window from 1 April 2026–30 September 2026 to which new date?
11. Under SEBI’s revised MPS framework, what is the minimum post-issue market capitalization threshold in the lowest defined category?
12. For the ₹1600 crore market capitalization category under SEBI’s revised MPS framework, approximately how many years are companies given to achieve compliance?
13. As per SEBI guidelines on depository operations, if a lock-in cannot be created on specified securities, what action must the depository take?
14. The purpose of SEBI’s guideline requiring depositories to mark certain securities as ‘Non-transferable’ (when lock-in cannot be created) is to:
15. Under SEBI’s depository update on lock-in securities marking, which of the following is specifically stated in the circular about the securities to which this applies?
16. Which entity is primarily responsible for implementing the ‘Non-transferable’ marking under SEBI’s updated depository framework?
17. Under SEBI’s Social Stock Exchange (SSE) framework, Social Impact Assessors are required to evaluate the social impact of which entities?
18. Which of the following entities can act as a Social Impact Assessor under SEBI’s SSE framework?
19. A mandatory requirement for Social Impact Assessors under SEBI’s SSE framework is that they must hold:
20. SEBI revised the minimum application size for instruments issued under the Social Stock Exchange. What is the current minimum application size after the latest revision?
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SEBI Latest Circulars
Below is the list of SEBI Latest Circulars that has been released in 2026 till now, check it out.
| Particulars | Download Now |
| Ease of doing investments | Download PDF |
| Revision of Monthly Cumulative Report | Download PDF |
| Status of SPVs post conclusion or termination of Concession Agreement | Download PDF |
| Permitted use of fresh borrowings for InvITs where Net Borrowings exceeds forty-nine percent of the value of InvIT assets | Download PDF |
| Norms for sharing and usage of price data for educational purposes | Download PDF |
| Discontinuation of Investor Risk Reduction Access (IRRA) platform | Download PDF |
| ‘Significant Indices’ under SEBI (Index Providers) Regulations, 2024 | Download PDF |
| Advisory on Emerging Advanced Artificial Intelligence (AI) Tools for Vulnerability Detection | Download PDF |
What are InvITs and how does SEBI regulate borrowing limits?
InvITs (Infrastructure Investment Trusts) are collective investment vehicles similar to mutual funds that pool money from investors and invest in infrastructure projects like roads, highways, and power plants. SEBI regulates their borrowing limits to ensure financial discipline and prevent excessive risk-taking. These limits help maintain stability while still supporting infrastructure growth in India.
| Section | Details |
| Borrowing Structure | Normal limit: up to 49% of net assets; beyond 49% only under SEBI conditions; extra borrowing allowed only for infrastructure purposes |
| Key Infrastructure Assets | Roads, expressways, irrigation projects, power generation, urban infrastructure |
| Importance | Supports national infrastructure development and improves connectivity and economic growth |
What are the conditions for excess borrowing in InvITs?
SEBI allows InvITs to borrow beyond 49% of net assets only for specific infrastructure-related purposes. These conditions ensure borrowed funds are used productively and not for speculative investments. This maintains discipline in infrastructure financing and protects investor interest.
- Permitted uses of excess borrowing:
- Capital expenditure for new infrastructure projects
- Construction of new assets like highways and power plants
- Major repair and maintenance work
- Debt refinancing under strict SEBI guidelines
- Example:
- Building new highways like Delhi–Mumbai Expressway
- Repairing and upgrading existing expressways
What are SEBI refinancing rules for InvITs?
SEBI has clearly defined refinancing rules to ensure transparency and proper debt management in InvITs. These rules prevent misuse of borrowed funds and ensure that repayment structures remain clear and disciplined.
- Key refinancing rules:
- Only principal amount can be refinanced
- Interest payments must be made separately
- No indirect transfer of interest liability
- Ensures clean and transparent debt structure
- Simple example:
- Old loan: ₹100 crore principal
- New loan replaces only ₹100 crore principal
- Interest must still be paid separately by InvIT
What are SEBI market data usage rules in 2026?
SEBI has introduced strict rules on the use of market data to prevent misuse and misleading financial advice. These rules ensure that data is used only for education and training purposes and not for trading recommendations or stock tips.
| Category | Allowed Data Age | Purpose |
| General Users | 30-day old data | Educational use only |
| NISM Institutions | 1-day old data | Training programs only |
- Key restrictions:
- No buy/sell recommendations allowed
- No stock tips or trading calls
- No naming securities in a suggestive way
- No investment advisory usage
- Effective date: 1 July 2026
What is IRRA platform and why was it discontinued?
IRRA (Investor Risk Reduction Access) was introduced as a backup trading system during broker failures or cyber incidents. It allowed investors to continue trading during technical disruptions. However, SEBI discontinued IRRA in 2026 due to improved cybersecurity infrastructure across exchanges like NSE and BSE.
| Category | Details |
| Earlier Purpose | Backup trading access during system failure or cyberattack |
| Reason for Discontinuation | Strong cybersecurity systems, redundancy, and real-time monitoring |
| Current Safeguards | SOC monitoring, Zero Trust model, advanced cyber defense systems |
What are SEBI significant index regulations?
SEBI has regulated index providers to ensure transparency in passive investing, as indices like Nifty and Sensex form the base of mutual funds and ETFs. These rules improve governance and accountability of index calculation systems.
| Category | Details |
| Definition | Index with AUM above ₹20,000 crore (evaluated over 6 months) |
| Review Cycle | Twice a year (30 June and 31 December) |
| Removal Rule | If AUM stays below threshold for 3 years |
| Requirements | SEBI registration within 6 months + separate legal entity within 2 years |
| Purpose | Investor protection, transparency, and governance improvement |
What are SEBI cybersecurity and AI concerns?
SEBI has highlighted increasing risks from AI-based cyber tools that can detect system vulnerabilities and be misused for attacks. To counter this, SEBI has strengthened cybersecurity frameworks across financial institutions.
- Key SEBI measures:
- Continuous cybersecurity audits
- Daily system monitoring
- Strengthening Security Operations Centers (SOC)
- Implementation of Zero Trust Network Access (ZTNA)
- Core principle: “Never trust, always verify”
- Every access request must be verified
- No automatic trust for users or devices
- Strict authentication required
What are SEBI demat account nomination rules?
SEBI has updated demat account nomination rules to simplify inheritance and reduce legal disputes in case of investor death. These rules strengthen investor protection and ensure smooth transfer of securities.
| Category | Details |
| Single Account | Nomination mandatory |
| Joint Account | Nomination optional |
| Maximum Nominees | Up to 3 nominees allowed |
| Distribution | Equal share if not specified |
| Effective Date | 1 September 2026 |
What is the one-time relaxation in IPO observation letter validity?
SEBI introduced a one-time relaxation in IPO observation letter validity due to weak market conditions and low subscription risk. This step helps companies raise capital without facing expiry-related delays or refund complications.
| Particular | Details |
| Issue | IPO observation letter expiry concern |
| Earlier Validity | 1 April 2026 to 3 September 2026 |
| New Validity | Extended up to 30 September 2026 |
| Reason | Weak market sentiment and low subscription risk |
What changes have been introduced in Minimum Public Shareholding (MPS) rules?
SEBI revised MPS rules to ensure smoother compliance for large companies like LIC and other major listed entities. Instead of sudden dilution, companies now follow a phased timeline based on market capitalization.
| Market Cap Slab | Compliance Timeline |
| ≥ ₹1600 crore | ~3 years |
| ₹1600 – ₹4000 crore | 3–5 years |
| ₹4000 – ₹50,000 crore | 5–7 years |
| ₹50,000 crore – ₹1 lakh crore | 7–8 years |
| ₹1 lakh – ₹5 lakh crore | 8–9 years |
| > ₹5 lakh crore | Up to 10 years |
What are SEBI rules for depository marking of lock-in securities?
SEBI clarified that when technical systems cannot apply a lock-in, depositories must mark such securities as “Non-transferable”. This ensures regulatory compliance even when traditional lock-in marking is not possible.
- If lock-in not possible → mark as “Non-transferable”
- Ensures transfer restrictions remain effective
- Applies across all depositories
- Strengthens investor protection
What are the new rules for Social Stock Exchange (SSE) and Impact Assessors?
SEBI has strengthened the Social Stock Exchange framework to improve transparency in NGO funding and social impact reporting. Social Impact Assessors now play a key role in evaluating project effectiveness.
- Assessors must be NISM-certified
- Mandatory SEBI/SRO registration
- Reduced application size: ₹2 lakh → ₹1000
- Minimum subscription reduced from 75% to 50%
- NPO listing validity up to 3 years
- Zero coupon instruments introduced
What is SEBI’s new FPI net settlement mechanism?
SEBI introduced net settlement for Foreign Portfolio Investors (FPIs) to simplify trading and reduce currency conversion issues. This improves efficiency in cross-border transactions.
- Outright trades: Net settlement allowed
- Non-outright trades: Gross settlement mandatory
- No cross-security netting allowed
- Each trade settled individually
- STT applied on gross value
What are changes for debenture trustees under SEBI rules?
SEBI has mandated structural reforms for debenture trustees to improve transparency and avoid conflicts of interest in debt markets. Trustees must separate regulated and non-regulated activities.
| Requirement | Details |
| Separate Entity | Required for non-regulated activities |
| Objective | Avoid conflict of interest |
| Applicability | All debenture trustees |
| Deadline | Extended up to 27 October 2026 |
What is PARVA framework introduced by SEBI?
PARVA (Past Risk and Return Verification Agency) ensures verification of performance claims made by investment advisers and research analysts. This prevents misleading return claims in the market.
| Aspect | Details |
| Purpose | Verify past performance claims |
| Agency | CARE Ratings (interim) |
| Data Center | NSE |
| Deadline | Within 3 months (~3 Aug 2026) |
| Objective | Prevent misleading marketing claims |
What is SEBI AIF fast-track mechanism?
SEBI introduced a fast-track process for Alternative Investment Funds (AIFs) to speed up scheme launches and fundraising. This improves capital deployment efficiency in the market.
- Scheme launch allowed after 30 days of filing PPM
- First close must occur within 12 months
- Faster capital mobilization
- Better regulatory clarity
FAQs
InvITs can borrow up to 49% of net assets under normal conditions.
Because stock exchanges now have strong cybersecurity and redundancy systems.
₹20,000 crore over a 6-month evaluation period.
Minimum public shareholding of 25% is mandatory.
It verifies past performance claims of investment advisers and research analysts.
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