SEBI Grade A Current Affairs — 24 September 2026

SEBI's board meeting is scheduled to take up nearly a dozen regulatory proposals, including a revamp of Portfolio Management Services rules, broader access for Foreign Portfolio Investors, and reforms covering Alternative Investment Funds and Real Estate Investment Trusts. The agenda signals a wide-ranging regulatory update touching multiple intermediary categories and investment vehicles simultaneously, making it one of the more consequential board meetings in recent months for India's capital markets framework.

This board meeting brings together several regulatory threads that SEBI has been consulting on through discussion papers and committee recommendations. Understanding each instrument on the agenda matters for the exam:

**Portfolio Management Services (PMS):** Currently, only clients with a minimum investment of ₹50 lakh can access PMS. SEBI may revise eligibility thresholds, reporting norms, or fee structures. PMS is distinct from mutual funds — it offers individualised portfolio management, not pooled investment.

**Foreign Portfolio Investors (FPIs):** FPIs are registered entities that invest in Indian securities markets from abroad. SEBI regulates their registration, KYC norms, and investment limits. Widening access typically means relaxing eligibility criteria or simplifying the registration process.

**Alternative Investment Funds (AIFs):** AIFs are privately pooled vehicles regulated under the SEBI (AIF) Regulations, 2012. They cover hedge funds, private equity, venture capital, and infrastructure funds across three categories. Reforms here often touch on accredited investor norms, borrowing limits, or reporting.

**REITs (Real Estate Investment Trusts):** REITs are registered with SEBI and allow retail investors to access income-generating real estate. Past reforms have lowered the minimum investment from ₹50,000 to ₹10,000–₹15,000 and reduced the lot size. New reforms may address governance, sponsor obligations, or distribution norms.

Each of these instruments has precise regulatory thresholds, registration authorities, and governing regulations — exactly the granular details SEBI Grade A examiners test.

Real Estate Investment Trusts (REITs) allow retail investors to own units in income-generating commercial properties — offices, malls, warehouses — without buying physical real estate. SEBI regulates REITs in India under its 2014 REIT Regulations. Currently four listed REITs operate in India: Embassy, Mindspace, Brookfield, and Nexus Select Trust. REITs must distribute at least 90 percent of net distributable cash flows to unit-holders, making them a dividend-like instrument accessible through stock exchanges at relatively low ticket sizes.

A REIT is a trust that pools investor money to own, operate, or finance income-producing real estate. The concept originated in the United States in 1960 and reached India when SEBI notified the REIT Regulations in 2014, with the first Indian REIT — Embassy Office Parks — listing on NSE and BSE in April 2019.

Structurally, a REIT has three tiers: the Sponsor (who sets it up), the Manager (who makes investment decisions), and the Trustee (who holds assets on behalf of unit-holders). At least 80 percent of the REIT's assets must be in completed, revenue-generating properties; up to 20 percent can be in under-construction assets, listed securities, or other permissible instruments.

The mandatory 90 percent distribution rule makes REITs attractive for income-seeking investors, similar to how mutual funds distribute dividends. Units are listed and traded on stock exchanges, providing liquidity unlike direct property ownership. SEBI has progressively reduced the minimum investment threshold — originally ₹2 lakh, then ₹50,000, and now as low as ₹10,000-₹15,000 per lot for some REITs — democratising access.

For exam purposes, the key distinctions are: REITs vs InvITs (Infrastructure Investment Trusts — same structure but for infrastructure assets like roads and pipelines), SEBI as the sole regulator, the 90 percent distribution mandate, and the asset composition rules. REITs generate returns through rental income distributions and capital appreciation of units.

SEBI Chairman Tuhin Kanta Pandey stated the regulator is examining whether margin requirements for longer-term derivatives contracts can be reduced. The proposal comes despite persistently high losses among retail participants in the futures and options segment. SEBI has been tightening F&O norms since 2024, including raising lot sizes and limiting weekly expiries. This signals a possible calibrated easing for longer-dated contracts, which carry different risk profiles compared to near-term expiry instruments.

Margin requirements in derivatives trading are the upfront deposits traders must maintain to cover potential losses. SEBI mandates these through its regulatory framework for exchanges like NSE and BSE. Higher margins reduce leverage and limit speculative activity; lower margins make participation cheaper but increase risk exposure.

The proposed differentiation is conceptually important: longer-term derivatives contracts (say, monthly or quarterly expiries) tend to have lower daily volatility relative to near-expiry contracts, where gamma risk spikes sharply. A risk-calibrated margin framework would charge lower margins where time-value decay is more gradual and position risk is relatively contained.

This proposal exists within a broader regulatory arc. In 2024, SEBI introduced sweeping F&O reforms — increasing minimum contract lot sizes, reducing weekly expiries to one per exchange, and tightening upfront premium collection norms — all following a SEBI study that found over 93% of individual F&O traders incurred losses between FY22 and FY24. The new chairman's signal suggests SEBI is not abandoning this reform but refining it: discouraging short-term speculation while potentially encouraging longer-term hedging participation by lowering its cost.

For exam purposes, the key regulatory levers SEBI uses in derivatives markets include: margin requirements (SPAN + exposure), contract specifications (lot size, expiry), position limits, and disclosure mandates. Each of these has been active reform areas in recent SEBI circulars.