SEBI UPDATES
SEBI EXTENDS TIMELINE FOR ANGEL FUNDS TO COMÁLY WITH ACCREDITED INVESTOR MANDATE
Securities and Exchange Board of India (“SEBI”), vide its circular dated September 7, 2026, has extended the timeline for angel funds to comply with the Accredited Investor mandate prescribed under the revised regulatory framework for angel funds contained in Chapter 8 of the SEBI Master Circular for Alternative Investment Funds (“AIFs”) dated June 3, 2026 (“AIF Master Circular”).
The SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) were amended on September 9, 2025, to prescribe a revised regulatory framework for angel funds, pursuant to which angel funds granted registration post September 10, 2025, were mandated to on-board and offer investment opportunities exclusively to Accredited Investors (as defined in the AIF Regulations).
The circular provides that Para 8.1.2 of the AIF Master Circular has been modified to provide that angel funds granted registration post September 10, 2025 shall:
- implement the Accredited Investor mandate on or before March 31, 2027 (previously September 8, 2026) and shall not offer investment opportunities to more than 200 non-Accredited Investors during this period;
- not accept contributions for investment in an investee company from non-Accredited Investors after March 31, 2027; and
- allow existing investors to continue to hold investments already made in the angel funds as per the terms of the private placement memorandum and/or other fund documents.
All other provisions of Chapter 8 of the AIF Master Circular remain unchanged.
To read the circular click here
KEY HIGHLIGHTS OF THE 215TH SEBI BOARD MEETING
SEBI, at its 215th board meeting held on September 24, 2026, has approved various regulatory and policy proposals as specified in its press release no. 59/2026 (“Press Release”) across market intermediaries, alternative investment funds, Real Estate Investment Trusts (“REITs”) and Infrastructure Investment Trusts (“InvITs”), foreign portfolio investors (“FPIs”), settlement proceedings and capital markets.
The key decisions include:
- Comprehensive review of portfolio managers Regulations: SEBI has approved the SEBI (Portfolio Managers) Regulations, 2026 in supersession of the SEBI (Portfolio Managers) Regulations, 2020. Key developmental measures include permitting investment in initial public offer (IPOs) and primary market debt issuances, enabling investment in specified unlisted debt securities, permitting investment in foreign securities, introducing the Portfolio Managers Route for Investing in Mutual Fund units (PRIM), introducing the concept of Independent Fund Managers, and various ease-of-compliance measures.
- New settlement framework: SEBI approved the SEBI (Settlement Proceedings) Regulations, 2026 which makes the settlement framework simpler, less discretionary, easier to understand more predictable and also fast track. The revised framework introduces a new formula for computation of settlement amounts, separate treatment of wrongful gains, expanded access to settlement, fast-track settlement mechanisms and revised provisions relating to disgorgement and settlement applications.
- Relaxation for research analysts or research entities: SEBI approved the proposal of amending the SEBI (Research Analyst) Regulations 2014, to relax the requirement of maintaining call recordings of communications with institutional investor clients by research analysts and research entities.
- Common advertisement code: As part of ease of doing business initiative, SEBI approved a common advertisement code applicable to regulated entities replacing the existing entity-specific advertisement frameworks individually prescribed regulations/ master circulars.
- Expanded participation for FPIs: FPIs have been permitted to participate in non-agricultural index derivatives contracts and non-cash settled non-agricultural commodity derivatives contracts, subject to specified safeguards, including mandatory exit before the tender
- Amendments to Vault Managers Regulations: SEBI approved amendments to the SEBI (Vault Managers) Regulations, 2021 to expand the framework beyond electronic gold receipts to cover vaulting services for bullion underlying specified bullion-related instruments, including bullion ETFs and The amendments also enhance net worth, security, segregation and governance requirements.
- Issuance of depository receipts on REIT and InvIT units: SEBI approved the proposal of amending the SEBI (REITs) Regulations, 2014 and SEBI (InvITs) Regulations, 2014 to provide an enabling framework for issuance of depository receipts on units of REITs and InvITs with a view to attracting foreign capital. Ease of doing business measures include a relaxed unitholder approval threshold for certain matters, greater operational flexibility in the exit offer framework on a change of sponsor, and recognition of remote common infrastructure as real estate.
- Relaxation of mandatory debt listing requirements: SEBI approved the amendments to Regulation 62A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to remove the requirement for an issuer listing non-convertible debt securities for the first time to compulsorily list all outstanding unlisted non-convertible debt securities.
- Enhanced investor protection for AIF investors: SEBI approved the proposal to amend AIF Regulations to extend protections currently available to investors of trust-structured AIFs to investors of all forms of AIFs.
- Review of Accredited Investor framework: SEBI approved amendments to the Accredited Investor framework with the objective of simplifying the process of accreditation, and expanding the pool of eligible investors.
- Settlement Scheme, 2026 for illiquid stock options matters: SEBI approved a fourth settlement scheme relating to trading activities of certain entities in illiquid stock options on BSE, providing eligible entities an opportunity to settle pending enforcement proceedings in accordance with the prescribed settlement amounts and framework.
To read the Press Release click here
SEBI EASES COMPLIANCE REQUIREMENTS FOR FPIs INVESTING ONLY IN GOVERNMENT SECURITIES
SEBI, vide its notification dated September 7, 2026, has eased regulatory compliance requirements for FPIs investing exclusively in government securities. The circular amends the Master Circular for FPIs, Designated Depository Participants and Eligible Foreign Investors dated May 30, 2024 (“FPI Master Circular”).
Previously, only FPIs investing exclusively in government securities under the Fully Accessible Route (“FAR”) were exempt from the requirement to furnish investor group details.
Subsequently, the Reserve Bank of India (“RBI”), vide its circular dated June 5, 2026, withdrew concentration limit applicable to FPI investments in government securities under the general route. In light of this change, SEBI has clarified that the requirement to identify an investor group for FPIs investing exclusively in government securities is no longer relevant and has accordingly removed the requirement.
Accordingly, the FPI Master Circular has been amended to provide that FPIs investing only in government securities are not required to furnish investor group details, irrespective of whether such investments are made under FAR or the general route.
The provisions of this circular shall come into force with immediate effect.
To read the circular click here
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