SEBI reviews short-selling framework, plans AI guidelines to deepen capital markets
SEBI Chairman Tuhin Kanta Pandey announced plans to review India’s short-selling framework, introduce bond index derivatives, and issue AI guidelines to deepen capital market participation. The regulator also aims to simplify market access for foreign investors, modernize debt market infrastructure, and enhance liquidity in equity and commodity derivatives.
India’s market regulator, the Securities and Exchange Board of India (SEBI), has outlined key reforms to strengthen capital markets under Chairman Tuhin Kanta Pandey. A comprehensive review of the short-selling and securities lending and borrowing (SLB) framework is underway to improve liquidity and link cash and derivatives markets more effectively. SEBI is collaborating with the Reserve Bank of India (RBI) to introduce bond index derivatives, expanding hedging opportunities in fixed-income markets. The regulator is also exploring longer-tenure futures and options contracts in equity derivatives while refining commodity derivatives by extending early pay-in benefits and reviewing position limits. To support innovation-driven sectors, SEBI is revising the Innovators Growth Platform to facilitate fundraising in AI, semiconductors, clean energy, biotechnology, and defense technology. On the debt front, the regulator is developing a market-making framework for corporate bonds and modernizing infrastructure through corporate bond tokenization. Efforts to deepen the municipal bond market and streamline KYC norms for foreign investors—including non-resident Indians—are also part of SEBI’s roadmap. The regulator is reviewing delisting rules and Listing Obligations and Disclosure Requirements (LODR) to align governance standards with evolving market needs.
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