India’s market regulator is planning to revise the master circular for stock exchanges within the “next few months”, said Tuhin Kanta Pandey, chairman, the Securities and Exchange Board of India (Sebi), on Monday.
“Master circular for stock exchanges will be consolidated, simplified, and rationalized chapter by chapter within the next few months for better clarity and the ease of doing business,” he said during an address to the Confederation of Indian Industries (CII) Southern Region in Chennai.
Sebi proposals
The regulator proposed simplifying the regulatory framework for stock exchanges and clearing corporations to improve the ease of doing business by removing outdated rules, reducing compliance costs, and consolidating various directives in an October consultation paper.
The master circular, which today governs the administration and operations of India’s stock exchanges, has evolved into a sprawling rulebook over the years, as circulars, amendments, and segment-specific directions have accumulated across both equity and commodity derivatives markets. The paper proposed a chapter-wise restructuring of all existing circulars issued up to July 2025.
Key ideas included merging separate master circulars for equity and commodity-derivatives exchanges into a single unified circular, issuing a distinct master circular for clearing corporations, and scrapping provisions such as exchange-code requirements.
The paper also proposed a three-year lookback period for claims against defaulting brokers and merging the separate Investor Protection Funds (IPFs) for the equity and commodity derivatives segments into a single, unified fund for each exchange.
Public feedback on the consultation paper was wrapped up on 29 October.
The overhaul forms part of the regulator’s broader agenda of “optimum regulation”, referring to leaner but more effective regulations that ease compliance while still safeguarding investors and market integrity.
“While making changes in regulations, we will consult widely with all stakeholders for a balanced outcome,” said Pandey.
Other priority areas
The regulator has also undertaken a comprehensive review of mutual fund regulations, stockbroker norms, the listing obligations and disclosure requirements (LODR) framework, and settlement rules recently. This forms part of a broader push to revamp outdated regulations and promote ease of doing business.
Beyond the overhaul of the master circular, Pandey outlined several priority areas that Sebi will pursue to further deepen India’s capital markets. A key focus is strengthening the corporate bond market, which has expanded to nearly ₹55 trillion, about 60% of bank credit, reflecting a growing reliance on market-based financing.
To broaden participation, Sebi has reduced the minimum face value of bonds, expanded electronic book-building platforms to cover real estate investment trusts (REITs) and Infrastructure Investment Trusts (InvITs), and is working to attract more retail investors to fixed-income instruments through targeted awareness initiatives.
“A comprehensive awareness programme on bonds is needed to bring retail investors to this market,” he said.
The Sebi chief said developing the commodities market, both agricultural and non-agricultural, also remains a priority.
On foreign portfolio investors (FPIs), Sebi is preparing to deliver an end-to-end digital registration framework intended to reduce approval timelines from “months to days”. The new system, built on fully paperless, digitally signed workflows, aims to significantly ease onboarding for overseas investors.
The regulator is also working on simplifying know-your-customer (KYC) requirements for non-resident Indians (NRIs), a long-standing demand from global intermediaries and wealth managers who have flagged operational friction in current processes.
