SEBI Board Meeting: PMS, FPI, Settlement & Ad Code Proposals

Overview: SEBI is expected to consider several regulatory proposals at its September 24, 2026 Board meeting, including changes to portfolio management services (PMS), settlement proceedings, foreign portfolio investor (FPI) access to exchange-traded commodity derivatives and advertising norms for regulated entities. Other proposals concern depository receipts for REITs and InvITs and the regulatory framework for vault managers. These measures remain proposals and should not be treated as final compliance requirements until SEBI issues the relevant decisions or regulations. According to The Hindu Businessline report, the proposed measures cover investment products, FPI participation, advertising practices and regulatory proceedings. 

SEBI Board to Consider Wide-Ranging Regulatory Proposals

The Security Exchange Board of India is set to consider a range of regulatory proposals at its September 24 Board meeting that could affect portfolio managers, foreign portfolio investors, financial intermediaries and other regulated entities. The proposals follow a series of consultation papers issued by SEBI in recent months and cover areas ranging from PMS investments and commodity derivatives to settlement proceedings and advertising standards.

The proposals are not yet final rules. Businesses should therefore continue to follow the existing SEBI regulations and applicable circulars. However, the expected Board discussions, as reported by The Hindu Businessliness, are relevant for regulated businesses because some of the proposals could eventually require changes to products, internal processes, disclosures, marketing material and compliance systems.

For financial businesses, the immediate question is not compliance with the proposed rules, but whether the changes could affect existing products, processes and compliance systems if they are approved.

Key SEBI Proposals Under Review

PMS Framework May See a Comprehensive Overhaul

SEBI has proposed a comprehensive review of the Portfolio Managers Regulations, 2020.

The proposals include a possible mutual-fund-only PMS framework and an expansion of the investment universe available to portfolio managers. The proposed changes also cover specified unlisted securities and certain overseas investments.

If approved, the revised framework could affect the way eligible portfolio managers structure their products, determine permitted investments and meet client-level and regulatory requirements.

Settlement Proceedings May Get a More Structured Framework

SEBI has proposed changes to the SEBI (Settlement Proceedings) Regulations, 2018.

The proposal seeks to introduce a more structured method for determining settlement amounts, including consideration of factors such as the stage of proceedings, regulatory history and aggravating or mitigating circumstances.

SEBI has also proposed a fast-track mechanism for specified cases where the settlement amount is up to ₹10 lakh. If introduced, the mechanism could change the way eligible matters are processed and settled.

Wider FPI Access to Commodity Derivatives Proposed

SEBI has proposed wider participation by FPIs in specified exchange-traded non-agricultural commodity derivatives. The proposal covers non-agricultural commodity index derivatives and certain physically settled contracts, subject to prescribed conditions.

For physically settled contracts, the proposed framework includes requirements relating to squaring off or rolling over positions before the tender or staggered delivery period. If approved, FPIs and their intermediaries may need to review their trading, risk-management and operational processes to align with the final framework.

Common Advertising Code for Regulated Entities

SEBI has also proposed a common advertising code for specified regulated entities.

The objective is to bring greater consistency to advertising and promotional practices while retaining requirements relevant to individual categories of regulated entities. The framework could affect entities such as mutual funds, brokers, investment advisers and research analysts.

If finalised, businesses may need to review marketing material, approval procedures, disclosures and internal advertising-compliance checks.

REITs, InvITs and Vault Managers

The proposed agenda also includes measures concerning depository receipts against units of REITs and publicly listed InvITs. SEBI issued a consultation paper on the subject in August 2026.

Another proposal seeks to review and expand the scope of the SEBI (Vault Managers) Regulations, 2021.

These proposals form part of SEBI’s wider review of regulatory frameworks covering different segments of the securities market.

Why This Matters for Businesses

The proposed SEBI reforms could eventually affect investment products, FPI participation, advertising practices and regulatory compliance. While none of these proposals should currently be treated as an immediate compliance requirement, businesses can assess their potential operational impact in advance.

• PMS firms: The proposed overhaul of the Portfolio Managers Regulations could expand the permitted investment universe to specified unlisted and overseas securities. PMS businesses should monitor the final framework for eligibility, permitted investments, registration and client-level compliance requirements.
• FPIs: The proposed changes could widen FPI participation in specified non-agricultural commodity derivatives. If approved, FPIs and their intermediaries may need to review trading, risk-management and operational processes, particularly where physically settled contracts are involved.
• SEBI-regulated entities: The proposed common advertising code could bring greater consistency to marketing and promotional practices across specified regulated entities. Businesses may eventually need to review their advertising material, approval procedures, disclosures and internal compliance controls.
• Businesses involved in SEBI proceedings: The proposed changes to settlement proceedings could alter the calculation and processing of eligible settlement matters. Businesses involved in regulatory proceedings should monitor the final framework for any changes affecting settlement amounts, documentation and timelines.

These remain proposals and are not immediate compliance requirements. Businesses should continue following existing SEBI regulations, circulars and applicable guidelines while monitoring the Board’s decisions and any subsequent notifications.

FAQs

Setindiabiz Support

SEBI regulatory developments can have a direct impact on the products, investment structures, marketing practices, documentation and compliance systems of financial businesses. Even where a proposal is not yet effective, an early compliance review can help businesses identify areas that may require attention if the framework is approved.

Setindiabiz helps businesses assess applicable regulatory and compliance requirements, organise regulatory documentation and maintain ongoing statutory compliance. Where regulatory changes affect the structure or operations of a business, early assessment can help identify the compliance steps that may be required once the final framework is notified.