SEBI Plans Stricter MII Governance, Mutual Fund Rationalisation

The Securities and Exchange Board of India (SEBI) is set to consider several proposals at its September 12, 2025, board meeting.

The proposal includes stronger MII governance through the appointment of two Executive Directors, clearer definitions of Managing Directors (MD) and technology officer roles, and allowing MDs to serve as Non-Executive Directors in select non-commercial bodies. The regulator may also ratify changes in client code modifications, including relaxations for foreign portfolio investors and flexibility for market makers linked to ETFs. Mutual fund activities may be rationalised, with clearer categories and limits on permissible functions of asset managers.

The Board is also expected to review relaxations in public shareholding norms for large IPOs, disclosure requirements, and related party transactions, alongside inputs from its conflict-of-interest committee.