SEBI’s June 18 Meeting: Big Reforms on the Table

The Securities and Exchange Board of India (SEBI) is scheduled to hold a major board meeting on Wednesday, June 18, 2025. It’s not just another routine sit-down; this agenda is packed with potential game-changers aimed at strengthening India’s financial markets, boosting investor confidence, and aligning with international norms.

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Making ESOPs Work for Start-Up Founders

One of the headline proposals? Providing start-up founders with more flexibility in employee stock option plans (ESOPs). Right now, if you’re a promoter-founder, you can’t exercise ESOPs granted within a year before your IPO. SEBI wants to fix that. The plan is to revise the 2021 Share-Based Employee Benefits Regulations so that founders can hold and utilise these stock options even after going public.

This change could help retain top talent and ensure founders stay focused on long-term success, rather than just the IPO finish line.

Easier Delisting Path for PSUs

SEBI also aims to simplify the delisting process for Public Sector Undertakings (PSUs), particularly those in which the government holds a stake of over 90%. The proposal would lower approval hurdles (like the strict two-thirds public shareholder requirement) and set a premium price for the delisting.

Supporters argue that this could streamline the process for offloading underperforming public sector undertakings (PSUs). However, there’s a catch: minority investors will need strong protections to avoid being squeezed out.

AIF Co-Investing and Gilt Market Relief for FPIs

SEBI is eyeing two significant shifts here. First, allowing Alternative Investment Funds (AIFs) to create separate co-investment vehicles. This means big institutional players can invest alongside main funds more easily, something already popular in global markets.

Second, they aim to ease compliance for Foreign Portfolio Investors (FPIs) who invest solely in government bonds. Think simpler KYC checks and fewer reporting headaches. It’s a move to attract more long-term, stable money into Indian debt markets.

Clearing Corporations: Possible Break-Up Ahead?

SEBI might finally take action on a long-standing concern: stock exchanges owning clearing corporations. Critics say this setup creates conflicts of interest. On the table are two options: either completely separate (demerge) clearing corporations from exchanges or cap how much ownership exchanges can have.

However, insiders say this reform may get pushed back due to its complexity and pushback from major players.
Cracking Down on SME Listings

There is also a push to streamline the SME listing process. Some smaller companies have been listed with weak disclosures and shaky post-IPO performance. SEBI’s looking to:

• Extend lock-in periods for promoters
• Raise profitability requirements
• Demand better financial transparency

The goal? More responsible listings and better investor confidence in the SME space.

Simplifying QIPs and Opening Up Private Placements

Qualified Institutional Placements (QIPs) might soon get easier. SEBI plans to reduce paperwork and limit disclosures to only the essentials. Additionally, the board may eliminate the 200-investor cap for private placements and broaden the definition of a Qualified Institutional Buyer (QIB), potentially including accredited investors.

These changes could make it simpler for growing companies to raise capital quickly.

REITs & InvITs Get an Upgrade

SEBI is also looking to reclassify Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) as equity instruments. That means they could be included in major equity indices. Also on the cards is allowing mutual funds to invest more in them, potentially raising the current limit from 10% to 20%.

Supporters argue this could bring more liquidity into the real estate and infrastructure sectors. Still, some fund managers are wary about the increased exposure risk.

NSEL Case: Settlement on the Horizon?

SEBI might introduce a settlement scheme for brokers tied to the long-running National Spot Exchange Ltd (NSEL) crisis. More than 300 show-cause notices are still pending, and this new approach, based on SEBI’s consent rules, could finally resolve many of them.

These moves come under the leadership of new chairman Tuhin Kanta Pandey, who took charge in March 2025. Since stepping in, he has launched several reforms, including tightening conflict-of-interest rules, requiring e-platforms for large private debt deals, and enhancing FPI transparency.

SEBI has already rolled out new UPI mandates for mutual funds and brokers and introduced “SEBI Check” IDs to reduce payment fraud. Additionally, electricity futures have just been launched, and open interest rules for derivatives have been tightened.

Oh, and equity derivatives? They now only expire on Tuesdays and Thursdays to reduce wild market swings.

Market Mood: Cautious but Hopeful

So far, the market’s feeling cautiously optimistic. One Mumbai-based broker said if SEBI pulls this off, it could deepen India’s capital markets. Others believe that reforms such as co-investment frameworks and more lenient QIP norms will be beneficial for start-ups and SMEs seeking to grow.

That said, not everything will pass without debate. Delisting rules and clearing corporation ownership may face stiff resistance.

What’s Next?

This board meeting could be a turning point. If most of the proposals are implemented, India’s markets will be more transparent, investor-friendly, and in line with global standards. But don’t expect overnight changes. These proposals still need to go through the formal amendment process, including feedback and review under SEBI’s 2025 regulatory procedures.

Bottom line? June 18 could mark the start of one of SEBI’s most transformative years yet. Everyone, from retail traders to global investors, will be watching closely. Please let me know if you would like this to be shortened, converted into a presentation, or adapted for social media or investor communications.