SEBI board meeting today; here is why it is crucial and keenly awaited

The board, as per news reports, is expected to discuss and approve various policy measures and issues at the meeting and may also address serious allegations leveled by US-based short-seller Hindenburg Research against SEBI chairperson Madhabi Puri Buch, as well as the protests by the regulator's employees against top management. 

Hindenburg, which had in January 2023 accused Adani Group of using tax havens to sidestep local market regulations, had in August alleged that SEBI chairperson Buch's previous investments and dealings may be behind the slow probe against the conglomerate.

The US-based firm made a series of allegations against Buch, including holding 99% shares in a company "actively providing advisory/consultancy services till date" and her husband Dhaval Buch earning income from companies that were being adjudicated by her.

However, following the development, SEBI chief Madhabi Puri Buch and her husband Dhaval Buch denied these allegations, saying they were "incorrect, motivated, and defamatory.".

On the policy front, SEBI may clear the decks for the launch of a new asset class—aimed at bridging the gap between mutual funds (MFs) and portfolio management services (PMS)—along with the MF Lite framework for passive fund houses.

The new product category will cater to investors willing to take riskier bets. The minimum ticket size for such investments will be ₹10 lakh—lower than the minimum threshold of₹50 lakh specified for PMS.

The regulator's board may also discuss other key proposals, such as stricter trading norms for the futures and options (F&O) segment. In its latest study, the SEBI pointed out that around 93% of retail investors lost money to the tune of ₹1.8 trillion in the derivatives segment in the past three years.

Another topic for discussion will be the ease of doing business and the harmonisation of ICDR and LODR norms. While ICDR rules apply to the issuance of capital and disclosure requirements, LODR norms comprise listing obligations and disclosure requirements regulations, as per reports.

The SEBI board is also likely to review the merchant bankers' regulations that define which activities they can take and which they cannot. Additionally, the net worth criterion for merchant bankers is likely to be raised from ₹5 crore to ₹50 crore. 

The board is also expected to discuss and approve regulations related to investment advisors (IA) and research analysts (RA), a move set to remove the condition of passing the base certification every three years and to relax the existing minimum qualification requirements for registration as IA or RA from a post-graduation to a graduate degree.