Business News: SEBI Issues New Guidelines For SMEs, Mutual Funds, Bankers and More

Business News: SEBI’s most recent board meeting saw the introduction of some significant reforms aimed at improving market governance and transparency. A key change affects SME IPOs, as tighter standards now require issuers to establish a minimum operating profit of Rs 1 crore in at least two of the previous three fiscal years. Furthermore, funds raised for general corporate activities are limited to 15% or Rs 10 Cr, and promoters are not allowed to use public issue funds for debt repayment. SEBI has also formed the Past Risk and Return Verification Agency to assess risk-return matrixes submitted by investment advisors and algorithm developers. This effort will be undertaken as a pilot, with full adoption depending on feedback.

SEBI New Guidelines

Other reforms include reduced net worth criteria for merchant bankers, currently set at Rs 50 Cr for Category 1 and Rs 10 Cr for Category 2. Non-SEBI activities will be separated into distinct legal organizations within a two-year schedule. Insider trading restrictions have been strengthened by including 17 new events as unpublished price-sensitive information and allowing for deferred inputs of certain occurrences into the structured digital database within two days. Mutual fund reforms have also been implemented, limiting the investment amount and lock-in term for selected AMC workers and establishing a 30-day time frame for deploying NFA assets. Collectively, these steps are expected to strengthen market integrity and investor trust.