SEBI proposes unified investor protection fund, tighter rules for exclusively listed firms

The Securities and Exchange Board of India (SEBI) has proposed a series of regulatory reforms to simplify compliance for stock exchanges and strengthen investor protection mechanisms. The draft measures, presented to SEBI’s Secondary Market Advisory Committee (SMAC), aim to enhance ease of doing business and streamline claim settlements.

A key proposal is the introduction of a three-year lookback period for Investor Protection Fund (IPF) claims in cases of broker defaults. The move seeks to prevent

stale or repetitive claims and ensure faster redressal for genuine investors.

SEBI has also suggested merging the separate IPFs for equity and commodity segments into a single unified fund. The integrated structure will harmonise contributions, utilisation, and governance across both market segments while maintaining safeguards for commodities.

The regulator believes the unified framework will simplify fund management and create consistency in investor protection norms.

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In addition, SEBI has proposed stricter compliance requirements for promoters of exclusively listed companies to enhance transparency and corporate accountability.

“The proposals reflect SEBI’s continued focus on strengthening market integrity while reducing procedural complexities,” said an industry official aware of the matter.

The regulator has sought feedback from market participants through SMAC before amending the existing regulations governing stock exchanges and clearing corporations. Once approved, the measures are expected to improve operational efficiency and boost investor confidence in India’s capital markets.