PR No.33/2025
SEBI Board Meeting
The 210th meeting of the SEBI Board was held in Mumbai today.
The SEBI Board, inter-alia, approved the following:
1. Amendments to SEBI (ICDR) Regulations, 2018 and SEBI (SBEB) Regulations, 2021 relaxing certain requirements related to public issue, with the objective of Ease of Doing Business
2. Board approved the amendment to SEBI (ICDR) Regulations, 2018 to mandate dematerialization of existing securities of select shareholders prior to filing of DRHP in order to promote dematerialisation of securities in the listed domain.
3. Simplification and streamlining of Placement Document for Qualified Institutions Placement
4. Introduction of special measures to facilitate Voluntary Delisting of certain Public Sector Undertakings (PSUs)
5. Amendments to regulatory framework for Social Stock Exchange for Ease of Doing Business
6. Amendments to Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992 for rationalisation and Ease of Doing Business
7. Measures for regulation of activities of Debenture Trustee (“DT”) including measures for Ease of Doing Business
8. Measures to enhance Ease of Doing Business for the activities of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
9. Amendments to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007 (“CAPS Regulations”) to specify certification requirements and associated timelines
10. Board allows Custodians to provide other financial services under same legal entity for ease of doing business
11. Board approves Category I & II AIFs to offer co-investment opportunities within the AIF structure, to enhance ease of doing business for AIFs
11.1 With an objective to enhance ease of doing business for Alternative Investment Funds (“AIFs”), the Board approved the proposal to permit Category I & II AIFs to offer Co-investment scheme (‘CIV scheme’) under SEBI (Alternative Investment Funds) Regulations, 2012. This will further facilitate AIFs and investors to co-invest and will support capital formation in unlisted companies through AIFs.
11.2 ‘Co-investment’ means investment made by a manager or sponsor of the AIF or by investor of Category I and II AIFs in unlisted investee companies where such a Category I or Category II AIF(s) makes investment. To illustrate, if a scheme of an AIF is making an investment in a company for, say ?100 crore, as part of the scheme’s portfolio, on behalf of investors in the pool. If the need of the company is ?300 crore, the manager of the AIF, may offer this additional investment opportunity to any investor of the scheme of AIF who may want to invest in addition to their investment through the AIF.
11.3 Presently, co-investment for AIF investors is facilitated through Co¬investment Portfolio Managers under PMS Regulations (“PMS route”). A Working Group set up to review compliance requirements under the AIF Regulations highlighted certain operational issues with respect to co¬investment through the extant PMS route, such as Investment Managers requiring both AIF and PMS registrations, and unlisted investee companies having to deal with a large number of shareholders. To address these issues, the Working Group recommended providing a route for co¬investment within the AIF structure.
11.4 Co-investment Scheme introduced under AIF Regulations, as approved by the Board, will have the following key features:
11.4.1 “Co-investment scheme” shall means a scheme of a Category I or Category II AIFs, which facilitates co-investment to accredited investors of a particular scheme of an AIF, in unlisted securities of an investee company where the scheme of the AIF is making investment or has invested
11.4.2 A separate CIV scheme shall be launched for each co-investment in an investee company subject to safeguards to ensure that the scheme is used only for bona fide purposes.
11.4.3 Certain regulatory requirements applicable to other AIF schemes shall be relaxed for CIV schemes.
11.5 It may be recalled that a consultation paper was issued on May 09, 2025, inviting public comments on allowing co-investment through Co-investment scheme structure. Public comments substantially supported the proposals, and some suggestions have been taken on board. SEBI also incorporated the recommendations of the Alternative Investment Policy Advisory Committee.
11.6 This policy initiative will allow Category I & II AIFs to facilitate co-investment to accredited investors through Co-investment scheme (‘CIV scheme’) within AIF Regulations, in addition to the existing option for co-investment available through the PMS route.
12. Board approves proposal to review regulatory framework for Angel Funds under AIF Regulations to rationalise their fund raising and enhance ease of doing business
12.1 In the context of abolishment of the Angel Tax, SEBI reviewed the need for regulating Angel Funds under the AIF framework. Based on overwhelming feedback received from stakeholders, the Board approved the decision to continue to regulate Angel Funds under the said framework while also rationalising the same.
Proposals to address risk and compliance issues:
12.2 One of the core principles of SEBI is to ensure sustainable capital formation across securities market and facilitate investments into start-ups. At the same time, there is also a need to ensure that only those investors with risk capability are shown offers to invest in unlisted start-ups through Angel Funds. Unlike other AIFs where investment decision is taken by the Manager, Angel investments are made after explicit investor consent for each investment. Hence, existing regulations require that only Angel Investors that meet certain conditions can invest in Angel Funds. Currently, there is no verification (other than by the fund manager) as to whether an investor qualifies as an Angel Investor or not. In addition, Angel Investor criteria was defined in 2013, and economic thresholds (such as INR 2 cr. net worth for individuals and INR 10 cr. for body corporates, etc.) need to be updated to reflect the changed market indicators since then.
12.3 In addition, as a part of market practice, some Angel Funds do offer opportunities in unlisted securities to a large number of investors, beyond the thresholds specified under Companies Act.
12.4 Given the above background, the Board approved that Angel Investors will now need to be Accredited Investors (AI). Note that in AI, there is independent verification of investor status, with thresholds that update to the current market levels. In addition, the Board approved a proposal to amend ICDR so that AIs will be included as Qualified Institutional Buyers (QIBs) for the limited purpose of investments into Angel Funds only. This would allow Angel Funds to show opportunities to a wider pool of eligible investors, while staying in conformity with Companies Act.
12.5 AI adoption has been minimal till now, given that it is not a regulatory mandate for any product. In this context, the accreditation process has already been eased (such as reduced documentation for the AI process), and further steps have now been proposed. We have issued a consultation paper on this issue yesterday.
12.6 Earlier investments by non-AIs are being grandfathered, and there is a glide path of one year for full implementation of these measures.
12.7 With a more widespread adoption of AIs, the larger AIF ecosystem itself can benefit. SEBI is in discussions with the industry on how ‘AI only’ pools can lead to lighter regulation, to ensure improved ease of doing business for all stakeholders. This is, therefore, a start to more optimum regulation all around.
Proposals to provide operational ease, clarifications, and ease of doing business:
12.8 With the above background, some of the key features of the revised regulatory framework are as under –
12.8.1 Ease of doing business measures for Angel Funds include: (i) relaxation of floor and cap for investment in an investee company
from INR 25 lakh-10 crore to INR 10 lakh-25 crore respectively (ii) removal of concentration limit of 25% of total investments of Angel funds in an investee company (iii) allowing contributions from more than 200 AI investors in an investment (iv) enabling follow on investment in an investee company which is no longer a start-up.
12.8.2 For fairness: Angel Fund shall offer each investment opportunity to all its investors and allocate investment among consenting investors in the manner as explicitly disclosed in its PPM.
12.8.3 For skin in the game: Sponsor/ manager shall maintain a minimum continuing interest in each investment of the Angel Fund, at higher of 0.5% of investment amount or INR 50,000.
12.9 These proposals have been formulated after following due consultation process, taking into account the inputs/recommendations of Alternative Investment Policy Advisory Committee and that of the stakeholders on the consultation papers dated November 13, 2024 and February 21, 2025.
13. Board approves a proposal to relax regulatory compliances for FPIs investing only in Government Securities (G-Secs) to facilitate ease of doing business
14. Facilitating ease of doing business for Portfolio Managers by simplifying the format for Disclosure Document
14.1 The Board approved an amendment to the SEBI (Portfolio Managers) Regulations, 2020 to delete Schedule V from the Regulations, containing the format of ‘Model Disclosure Document’ along with restructuring of disclosures and issuing the same, in a simplified manner, through a circular.
14.2 The disclosure document is issued by every Portfolio Manager as a compendium of essential information, which enables investors to take better and well informed investment decisions.
14.3 It may be recalled that SEBI has taken various policy initiatives to facilitate ease of doing business for Portfolio Managers as well as investors such as streamlining digital onboarding process for investors of Portfolio Managers, collective oversight of distributors of Portfolio Managers through Association of Portfolio Managers in India (‘APMI’) etc.
14.4 As an ongoing effort to further enable ease of doing business for the Portfolio Managers and enhanced information dissemination to investors, it has been decided, in consultation with APMI, to restructure the Disclosure Document for Portfolio Managers. Presently the disclosure document contains sixteen aspects, which shall be divided, into two separate parts viz. Dynamic and Static. The Dynamic section would include the content that undergoes frequent changes whereas, the Static section would include disclosures that do not change frequently.
14.5 The disclosure document format is presently specified in the Regulations, and any change in the format is only possible through amending the Regulations. Thus, the Board approved the deletion of the format of the
model disclosure document from the Regulations, restructuring of disclosures and issuance of the same through a Circular.
14.6 While this policy change will not result in any change in the content of the disclosure document, it will provide operational convenience to the Portfolio Managers, as only the updated section of the disclosure document will need to be circulated to the clients. It will also provide ease of understanding for investors to identify any material changes clearly highlighted in the communication.
15. Settlement Scheme for certain Stock Brokers who traded on NSEL Platform
16. SEBI Board takes note of Settlement Scheme to aid settlement of violations of winding up provisions by migrated Venture Capital Funds
17. Amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) as a measure to encourage dematerialization of securities as well as to streamline certain processes in view of current regulatory landscape.
18. Modification of certain provisions in view of current regulatory landscape, viz. deletion of requirement of maintaining proof of delivery by the listed entity under Para B(1) and B(2) of Schedule VII.
19. The Board approved the use of liquid mutual funds and overnight funds for compliance with deposit requirement mandated for Investment Advisers (IAs) and Research Analysts (RAs) in their regulations, as a measure of ease of doing business.
19.1 This proposal will allow lAs and RAs to use liquid mutual funds and overnight funds as an additional option to the bank fixed deposit (FD) for the purpose of compliance with deposit requirements under their respective Regulations.
19.2 In terms of the provisions under SEBI (Investment Advisers) Regulations, 2013 (‘IA Regulations’) and SEBI (Research Analysts) Regulations, 2014 (‘RA Regulations’) respectively, IAs and RAs are required to maintain a deposit with a scheduled bank. Such a deposit is required to be lien marked to the Administration and Supervisory Body (ASB) for IAs and RAs. IAs and RAs through their associations have represented that they are facing certain operational difficulties in opening the FD accounts such as non¬uniform interpretation of third-party FD procedures across different bank branches and lien marking of the same in favour of ASB. IAs and RAs have suggested that as an alternative to FD, units of liquid mutual fund lien marked in favour of ASB may also be permitted.
19.3 While approving the proposal, the Board noted that-
19.3.1 The liquid mutual funds are by nature liquid and may be considered low-risk and less volatile instruments. Further, lien can be marked on liquid mutual fund.
19.3.2 The operation of lien and invocation of lien on units of liquid mutual fund remains within the securities market ecosystem bringing in more efficiency.
19.3.3 Mutual fund folios can be opened and operated digitally as well as in demat mode. Asset Management Companies provide such facilities on their websites and apps that can be accessed through internet on mobile phones/computers.
19.3.4 Board also noted that similar to liquid mutual funds, overnight funds could also be a good alternative.
19.4 It may be recalled that the consultation paper on allowing the ‘use of liquid mutual funds for compliance of the deposit requirements’ was issued on May 09, 2025. The board has approved the decision after taking due consideration of the public comments received on the consultation paper.
19.5 It may also be recalled that SEBI in December 2024 had introduced various measures for ease of doing business for IAs and RAs. These measures include easing the eligibility criteria of qualification from post-graduation to graduation, allowing certification through continuing professional education model, removing the experience requirements. The net-worth requirement for IAs and RAs was also discontinued and was replaced with requirement of deposit.
Further, in March 2025 Board meeting, fee related restrictions on IAs and RAs were relaxed to allow IAs and RAs to charge fees in advance upto a period of one year.
19.6 This decision has further provided ease of doing business for IAs/RAs as part of the continuous efforts of SEBI to address genuine concerns of IAs and RAs.
Mumbai
June 18, 2025
