Driving Investor Confidence: Insights from SEBI’s 2025 Board Meeting

The board meeting of SEBI on March 24, 2025, gave a deep sense of Optimism about the regulatory challenges in the Indian stock market. Under the leadership of Chairman Tuhin Kanta Pandy, the meeting laid out a robust plan to enhance transparency and provide a more flexible opportunity.

In this article, let's find out the what are the key decisions and what are its potential impact on the Indian stock market.

Increasing Market Transparency

One of the most significant decisions made during the meeting was to raise the threshold of foreign portfolio inventions (FPI). Previously, the FPIs were required to disclose the details once their assets under management (AUM) reached Rs 25,000 crores. The new threshold of the FPIs has now been increased to Rs 50,000 crores in equity AUM.

Additionally, the FPIs that have more than 50% of their AUM invested in a single corporate group will now need to provide granular ownership data.

The changes done by SEBI are a great step to bring clarity to the complex landscape of foreign investments. This was done in particular light of the 122% surge in the average daily cash market turnover from Rs  53,434 crore in FY 2022-23 to Rs 1,18,757 crore in FY 2024-25. It will not only help to enhance the scrutiny on foreign holdings but also serve a way to keep check on the obscure ownership structure.

Enhancing Regulatory Governance And Broadening Investment Horizon 

SEBI has taken a major step to create a high-level committee on the conflict of interest matters. This committee will help to review the conflict of interest norms which are applicable to board members and officials. It will help to ensure the ethical standards and accountablity at the highest levels.

This move by SEBI came amid growing calls to increase internal governance and reinforce the credibility of institutions. The committee is expected to deliver their recommendations in three months, and this will help to enhance the integrity of the regulatory framework.

The next agenda of the SEBI meeting was to liberalise the investment norms for Category II AIFs. It was also discussed in the meeting to revise the fee structure for (IAs and Research analysts.

Under the amendmen,t Category II AIFs can purchase listed debt securities with ratings between A and below. Recent changes in the Listing Obligations and Disclosure Requirments no longer prohibit AIFs from using unlisted debt instruments and have led to this change. The modification seeks to improve investment adaptability while redirecting funds toward stable borrowers who obtain lower ratings from credit agencies. IAs, along with RA,s can now receive fees for a span of one year despite previous limits of two or one quarter. These adjustments apply to individuals and HUF clients, which aligns Indian practices with global standards and promises greater cash flow certainty for advisors.

Turnover Surge & FPI Disclosure Threshold Revisions (2024–2025)

In the last one year, the combined NSE and BSE cash market turnover has shown a doubling effect, reaching Rs 1,18,757 crore per day. Market cash turnover experienced a remarkable growth of 122%, its previous value of Rs 53,434 Crore. The SEBI performed a major modification to the FPI disclosure system in the recent meet.

Conclusion

The SEBI board meeting has made some significant changes in the regulatory framework. Doubling the FPI disclosure threshold, promoting cleaner governance practices and enabling greater AIF flexibility has helped to enhance the investor optimism in the market

These reforms are poised to reinforce India’s status as a resilient, investor-friendly emerging market—capable of absorbing larger capital flows and maintaining fair market practices.