Capital markets regulator Securities and Exchange Board of India (SEBI) on Friday, 19 June 2025, approved a sweeping package of regulatory reforms spanning share buybacks, mutual funds, alternative investment funds (AIFs), municipal bonds, and securities transmission — the broadest single-session overhaul in recent memory. The decisions were taken at the SEBI board meeting in Mumbai and are aimed at improving market efficiency, easing compliance burdens, and strengthening investor protection.

Open Market Buybacks Return from August 2026

In one of the most consequential decisions, SEBI approved the reintroduction of open market share buybacks through stock exchanges, effective 1 August 2026. The route had been suspended after changes in the tax regime rendered it less viable. Listed companies will now have the option to execute buybacks via the tender offer route or by purchasing shares directly through stock exchanges — restoring a flexibility that many corporates had lobbied to recover.

Mutual Fund Liquidity and Intra-Day Borrowing

The board approved amendments to mutual fund regulations permitting fund houses to undertake intra-day borrowings to manage temporary liquidity mismatches. The facility can be deployed for operational needs including settlement timing differences, foreign exchange settlements, and mark-to-market obligations in derivatives. The move is designed to reduce the operational strain on fund managers during high-volatility windows without exposing unitholders to structural leverage risk.

GARUDA Framework to Fast-Track AIF Launches

SEBI introduced the GARUDA framework — an acronym for Green-Channel: AIF Rollout Upon Document Acknowledgement — to accelerate the launch of Alternative Investment Fund schemes. The green-channel mechanism is expected to cut the time between document submission and scheme launch, making India's fast-growing AIF ecosystem more responsive to institutional demand. India's AIF industry has seen rapid expansion over the past three years, and the new framework addresses a persistent bottleneck in the regulatory clearance pipeline.

Municipal Bond Market Reforms

SEBI also approved a series of measures to deepen India's municipal bond market. Municipal bodies will now be permitted to raise funds for refinancing existing project debt — a significant expansion of the permissible use of proceeds. Additionally, the regulator has established a framework for pooled financing by multiple municipalities, enabling smaller urban local bodies to access capital markets collectively for infrastructure funding. This comes amid a broader push to channel private capital into urban infrastructure ahead of India's rapidly growing city populations.

Simpler Securities Transmission and Other Reforms

To ease the burden on legal heirs, SEBI has removed the mandatory requirement of probate of wills wherever succession laws permit and has allowed the use of a combined affidavit-cum-No Objection Certificate (NOC) to reduce paperwork in the transmission of securities following an investor's death. The board further approved amendments relating to securitised debt instruments, the transfer of the Social Stock Exchange Capacity Building Fund to a Section 8 company, revisions to SEBI's internal code of conduct, and the selection of SME capital raising as the theme for an independent regulatory review during FY27. Taken together, the reforms signal a regulator intent on reducing friction across the full spectrum of market participants — from retail investors navigating inheritance paperwork to institutional fund managers seeking faster product launches.