Sebi Expands Accredited Investors Framework, Approves Ad Code
India's Securities and Exchange Board (Sebi) has broadened its definition of accredited investors through new asset criteria for individuals and corporates, while simultaneously approving a unified advertisement code for market intermediaries. The regulatory moves, which also introduce a settlement scheme for non-genuine illiquid stock option trades, are designed to streamline accreditation procedures and boost listings of non-convertible debt securities.
Sebi has implemented a comprehensive overhaul of its accredited investors framework, according to board announcements. The regulator widened the definition of accredited investors by introducing new asset-based criteria applicable to both individual investors and corporate entities. This expansion aims to simplify and democratize access to certain market segments previously restricted to a narrower investor base.
In parallel, Sebi's board approved a common advertisement code governing how market intermediaries conduct promotional activities. The framework permits celebrity endorsements for brand promotions while placing restrictions on specific product advertisements. This dual approach seeks to balance market promotion needs with investor protection concerns.
Additionally, the regulatory body introduced a new settlement mechanism specifically designed to address non-genuine trades occurring in illiquid stock options markets. This initiative targets a recognized gap in market infrastructure and trading practices.
These regulatory changes carry significant implications for India's capital markets ecosystem. Broadening accredited investor definitions may increase participation in alternative investment products and facilitate deeper market liquidity. The advertisement code standardization reduces compliance complexity for intermediaries while maintaining safeguards against misleading promotions. Enhanced settlement procedures for illiquid derivatives improve market integrity and reduce counterparty risks. Collectively, these measures signal Sebi's commitment to market development while encouraging issuers, particularly debt security issuers, to tap capital markets more readily. The framework revisions reflect evolving regulatory sophistication in balancing market growth with investor safeguards.
Source: Markets-Economic Times
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