Comprehensive Analysis of SEBI's Latest Regulatory Updates (June 2025)

. SEBI Enhances Disclosure Standards for Related Party Transactions (RPTs)

On June 26, 2025, the Securities and Exchange Board of India (SEBI) issued a circular introducing new standards for disclosures related to Related Party Transactions (RPTs). These guidelines aim to bring greater transparency and accountability in corporate governance. As per the circular (SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/93), all listed entities must now furnish specific minimum information to their Audit Committees and shareholders before approving RPTs.

These disclosure norms are set to become effective from September 1, 2025, and will replace all earlier frameworks. The rationale behind these changes lies in curbing the misuse of intra-group dealings and ensuring that all stakeholders have access to detailed and consistent information when voting on such transactions. The new rules also aim to strengthen investor confidence and improve the quality of financial reporting.

2. SEBI Mandates Rebalancing of Mutual Fund Portfolios for All Passive Breaches

In another significant development dated June 26, 2025, SEBI extended the scope of mandatory rebalancing timelines for mutual fund portfolios. Previously applicable only to breaches due to asset allocation drift, the new regulation mandates that all forms of passive breaches in actively managed mutual funds must be corrected within 30 days.

This move ensures consistency and accountability in mutual fund management. It also aims to protect investor interests by minimizing deviation from fund mandates. By enforcing uniform rebalancing norms, SEBI ensures that portfolio managers cannot avoid compliance under the guise of passive errors, thus promoting disciplined fund management.

3. SEBI Confirms Raids in Ongoing Pump-and-Dump Trading Investigations

SEBI confirmed that it conducted multiple search and seizure operations across different regions in June 2025. These actions were taken as part of its investigation into suspected pump-and-dump schemes, where operators manipulate stock prices to attract unsuspecting investors before offloading their holdings.

These raids underscore SEBI's commitment to tackling market manipulation and ensuring fair trading practices. The regulator aims to restore investor trust and market integrity through robust enforcement actions. By actively monitoring and investigating suspicious trading activity, SEBI sends a strong message to potential violators.

4. Revised Certification Norms for RPTs: Promoter Role Removed

In a notable reform, SEBI modified the certification requirements concerning RPTs. Earlier, company promoters were required to certify that related party transactions served the best interests of the company. However, under the new rules, this responsibility now lies solely with the Chief Executive Officer (CEO) or Whole-Time Director and the Chief Financial Officer (CFO).

This shift in responsibility emphasizes the role of professional management in corporate decision-making and reduces the influence of promoters in matters involving potential conflicts of interest. The change aligns with global best practices in corporate governance, ensuring that RPTs are scrutinized through an unbiased managerial lens.

5. Jio BlackRock Secures SEBI Approval for Stock Broking Venture

The joint venture between Jio Financial Services and BlackRock has received regulatory approval from SEBI to commence stock broking operations in India. This strategic collaboration aims to democratize investment opportunities and bring advanced technology-driven trading solutions to Indian investors.

With BlackRock's global expertise and Jio's expansive digital ecosystem, the JV is poised to disrupt the traditional brokerage landscape. The approval marks a significant milestone in India's evolving financial services sector, with expectations of heightened competition and innovation in retail investing platforms.

6. SEBI Tightens Oversight on Broker Compliance and Corrective Measures

Effective July 1, 2025, SEBI has directed all stock exchanges to intensify their scrutiny of trading members, particularly concerning the implementation of corrective actions post-inspection. If any broker fails to rectify identified deficiencies within 45 days, exchanges are empowered to impose strict sanctions, including banning new client onboarding or disabling trading terminals.

This move is part of SEBI's broader agenda to enhance regulatory compliance and market safety. It addresses long-standing issues of procedural lapses by brokerage firms and seeks to protect retail investors from associated risks. This directive is expected to raise operational standards and foster a culture of timely compliance.

7. SEBI Proposes Structural Reforms in Exchange Governance

SEBI, on June 24, 2025, released a consultation paper proposing key changes in the governance structure of Market Infrastructure Institutions (MIIs), including stock exchanges and depositories. Under the proposed model, MIIs must appoint dedicated senior officers responsible for trading and compliance oversight. These officers would hold board-level positions and report directly to SEBI every quarter.

The proposal aims to decentralize authority from the Managing Directors (MDs) of exchanges, promoting better checks and balances. It seeks to enhance institutional accountability and improve regulatory coordination. If implemented, this reform will significantly alter the internal governance landscape of India's financial market infrastructure.

Conclusion

SEBI's June 2025 regulatory initiatives reflect its proactive approach to strengthening investor protection, enhancing transparency, and improving market integrity. From tightening mutual fund norms to reforming exchange governance structures, these updates underscore SEBI's evolving regulatory vision to align Indian capital markets with global standards. Stakeholders, including companies, investors, and intermediaries, must adapt promptly to these changes to ensure continued compliance and operational excellence.