SEBI Chief Tuhin Kanta Pandey Outlines LODR Overhaul and SME Framework Overhaul at FE BFSI Summit 2026

Addressing the fifth edition of the FE Modern BFSI Summit in Mumbai, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey outlined the regulator's strategic priorities for Indian capital markets, highlighting an impending overhaul of the Listing Obligations and Disclosure Requirements (LODR) framework alongside major reforms to the Small and Medium Enterprises (SME) listing platform.

Setting the agenda under the pillars of "simpler rules, deeper markets, responsible innovation, and wider access," Pandey noted that India’s rapidly growing capital markets require a calibrated regulatory environment capable of sustaining expansion without diluting governance standards.

Key Regulatory Priorities Outlined

The market watchdog is adopting a principle of "optimum regulation," under which regulatory compliance burdens are tailored to the risk profile, nature of market activities, and investor sophistication.

• Comprehensive LODR Review: SEBI is restructuring the LODR framework to eliminate redundant clauses, resolve ambiguities, and ease operational compliance for listed entities. The first phase focuses on heightened monitoring of issue proceeds, requiring companies to provide greater transparency and accountability regarding capital usage.
• Overhaul of the SME Ecosystem: Acknowledging persistent challenges on SME platforms—including trading friction, odd lots, high market-making expenses, underwriting bottlenecks, and migration hurdles to the mainboard—SEBI is working on a revised regulatory structure. The initiative balances capital access for emerging enterprises with checks against fund diversion, shell company transactions, and price manipulation.
• Corporate Bond Deepening: The regulator is preparing measures to encourage broader retail participation in corporate debt instruments and enhance liquidity in the secondary fixed-income segment.
• Foreign and Institutional Access: Initiatives are underway to simplify digital onboarding, streamline Know Your Customer (KYC) documentation, and lower friction for eligible global investors entering Indian markets.
• Intermediary Harmonisation: SEBI is evaluating recommendations submitted by a dedicated working group regarding the harmonisation of regulations between mutual fund distributors and registered investment advisers.

Expansion of the Indian Capital Market

Highlighting the scale of domestic financial market growth over the past decade, Pandey pointed out that India's total market capitalisation has surged nearly fivefold to ₹472 lakh crore. During the same period, the domestic unique investor base crossed the 15-crore threshold, while mutual fund assets under management reached approximately ₹83 lakh crore.

Pandey stressed that while expanding capital mobilization remains critical for India's economic growth targets, safeguarding market integrity is a non-negotiable prerequisite to retaining retail trust and long-term investor participation. Comprehensive consultation papers detailing the specific amendments to the LODR regulations and SME framework are expected to follow.

Tags: SEBI BSE SME NSE Emerge Capital Markets Tuhin Kanta Pandey