SEBI weighs regulatory changes across broking, IPOs and mutual funds

📌 Summary:

• SEBI Chairman Tuhin Kanta Pandey said the regulator is evaluating a broad set of reforms across stock broking, IPOs, research analysts and mutual funds
• Variable net-worth requirements for stock brokers are being revised to make capital requirements more risk-sensitive and reflective of operational scale
• IPO price discovery to be improved via a pre-open call auction mechanism for IPOs and relisted securities, aiming to reduce volatility and stabilise market openings
• Compliance norms for research analysts to be eased (e.g., rationalising call-recording rules) without compromising transparency/accountability
• Mutual funds to be allowed intraday borrowing as an efficient liquidity-management tool (not just a contingency measure)
• SEBI and RBI are jointly working to introduce derivatives on corporate bond indices; EBP platform expanded to REITs/InvITs, and a working group is setting up a market-making framework to deepen the corporate bond market
• Context: on June 5 the Centre scrapped capital gains and withholding tax on FPI investments in government bonds to attract foreign inflows, stabilise the rupee and bridge a looming BoP deficit

🎯 UPSC Relevance: GS3 Economy / GS2 Statutory Bodies — capital market regulation, deepening of the corporate bond market, investor protection vs ease of doing business, role of SEBI

📝 Prelims Facts:

• SEBI is a statutory body established under the SEBI Act, 1992; regulates securities markets
• REITs/InvITs = Real Estate / Infrastructure Investment Trusts; EBP = Electronic Book Provider platform
• FPI = Foreign Portfolio Investor; pre-open call auction aids price discovery before regular trading

🔑 Key Term: Market-making — an arrangement where designated participants continuously quote buy/sell prices to provide liquidity, here aimed at the corporate bond market