SEBI loosens flows, flags governance
India’s SEBI is opening social funds to retail and easing FPI/AIF rules while keeping status quo on F&O — and the chair publicly flagged board‑governance issues in the HDFC Bank case, signaling regulatory tradeoffs between access and oversight. That mix matters for fund‑flow modelling, retail participation rates, and governance risk pricing. (moneycontrol.com) (cnbctv18.com)
SEBI held its 213th board meeting on March 23, 2026, a session chaired by Tuhin Kanta Pandey and described as his fifth board meeting since assuming office on March 1, 2025. (cnbctv18.com) The board slashed the minimum individual investment for Social Impact Funds from ₹200,000 to ₹1,000, aligning the SIF threshold with smaller-ticket instruments on the Social Stock Exchange. (cnbctv18.com) Foreign Portfolio Investors were approved to net-settle cash-market funds to reduce funding and foreign‑exchange slippage, with the net‑settlement regime scheduled to take effect on December 31, 2026. (cfo.economictimes.indiatimes.com) AIF rules were amended to allow schemes to retain liquidation proceeds post‑tenure under specified conditions and to create an “inoperative fund” classification that carries lighter compliance until registration is surrendered. (cfo.economictimes.indiatimes.com) The board approved a beefed‑up conflict‑of‑interest and disclosure framework that brings the Chair and whole‑time members within an ‘insider’ regime and mandates options such as liquidation, freezing, or defined sale paths for their equity holdings, along with a digital conflicts‑tracking system and an Office of Ethics and Compliance. (moneycontrol.com) Chairman Pandey explicitly urged that independent directors’ resignations be substantiated and recorded in board minutes, saying resignations must state confrontable grounds — remarks delivered in the context of the recent HDFC Bank board exit. (moneycontrol.com) SEBI framed the FPI netting fix as a liquidity‑cost measure aimed at index‑rebalancing days and positioned the SIF cut to broaden SSE retail participation; both changes alter short‑term funding profiles and capacity constraints that quantitative fund‑flow and rebalancing models must now incorporate. (moneycontrol.com)
