With the appointment of Tuhin Kanta Pandey in March, SEBI took a more calibrated approach, seeking to strike a balance between investor protection and ease of doing business for intermediaries and issuers | Photo credit: SHASHNK PARADE/PTI
For much of 2024, the capital markets regulator’s approach was seen as aggressive, with SEBI rolling out a set of stricter standards for derivatives, corporate governance and compliance among market participants.
With a new chairman, Tuhin Kanta Pandey, taking charge in March 2025, SEBI opted for a more calibrated approach, seeking to strike a balance between investor protection and ease of doing business for intermediaries and issuers.
The shift was visible both in boardroom decisions and in the market’s response. SEBI has revised the thirty-year-old regulations for stockbrokers and mutual funds.
It also relaxed minimum public share requirements and extended compliance deadlines for major listings, giving companies more time to meet public share ownership standards and in certain cases lowering minimum offering sizes.
These steps marked a pause in rules that were considered overly burdensome. But the pause did not translate into leniency.
The derivatives market remained an important point of attention. A surge in retail participation in futures and options prompted SEBI to tighten margin requirements, refine position limits and push for stricter risk disclosure and supervision. The aim was to rein in excessive activity around weekly expirations and complex strategies that regulators say have increased losses and volatility at the retail level.
Speculation about a possible ban on weekly derivatives contracts mounted towards the end of the year, forcing the chairman to intervene and publicly dismiss the idea. Any further action, he said, would be data-driven and after detailed consultation.
“There could be further tightening in derivatives,” said a senior broker. “The Jane Street episode has exposed holes in the system. Discussions about eligibility testing and incentives for longer-term contracts and money market participation are clearly ongoing.”
Lessons from the Jane Street fiasco
SEBI’s probe into alleged maturity manipulation by global trading firm Jane Street showed the regulator’s willingness to take action against sophisticated proprietary agencies. The company has filed significant alleged illicit profits as part of the ongoing investigation, which will be heard in January.
Supervision was also intensified for IPOs of small and medium-sized enterprises (SMEs). After several crackdowns on speculative listings, which often saw post-listing declines sharply and governance lapses, SEBI has tightened the eligibility criteria, promoter lock-in rules and post-listing obligation for SME issuers. The intention was to ensure that only companies with fundamental financial substance and credible governance would enter the 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 delayed or softened. The joint contract note was finally implemented in June after four delays, combining the exchange notes into a single document to ease operational challenges for FPIs. Other reforms, such as the closing auction session to replace VWAP prices and proposals on the financial autonomy of clearing houses, remain under discussion.
A similar story played out with the T+0 settlement. While SEBI pushed for faster settlement cycles to reduce systemic risk, implementation by qualified stockbrokers was postponed indefinitely due to technological and operational constraints.
SEBI has also revised the IPO allotment norms, block deal framework, mutual fund fee structures, insider trading rules and disclosure of related party transactions.
“2025 saw SEBI’s most deliberate attempt to take M&A to the next level since the SAST regulations of 2011. This overhaul is ostensibly designed 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 revisions to securities lending, underwriting standards and short-selling rules, could move forward in 2026. This year could also finally see progress on major events such as the much-awaited NSE IPO. The coming year could be a test of whether delayed reforms can finally be translated from the rules into reality.
Published on December 28, 2025
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