SEBI Proposes Major Overhaul Of Stock Exchange, Clearing Corporation Rules

The Securities and Exchange Board of India (SEBI) has proposed a broad revamp of the regulatory framework governing stock exchanges and clearing corporations, seeking to simplify compliance requirements and consolidate multiple regulations into a streamlined structure.

In a consultation paper released on Monday, the regulator invited public comments on the proposals until 13 July 2026. The move forms part of SEBI’s ongoing ease of doing business initiative and marks the fourth review exercise focused on market infrastructure institutions (MIIs).

The regulator said it plans to simplify the existing Master Circular for Stock Exchanges and Clearing Corporations by removing outdated provisions, reducing reporting requirements and consolidating several circulars into a simpler framework.

Single Master Circular Proposed

Among the key changes, SEBI has proposed issuing a single master circular for stock exchanges by combining provisions currently applicable to stock exchanges and commodity derivatives exchanges. The regulator also plans to introduce the following:

• A separate master circular for clearing corporations.

• A consolidated circular covering common information technology requirements for market infrastructure institutions.

• Rationalised reporting requirements for exchanges and clearing corporations.

According to SEBI, these measures are intended to reduce duplication and make regulatory compliance easier for market participants.

Compliance Requirements Under Review

SEBI has proposed reducing the number of periodic reports submitted by market infrastructure institutions. Certain reports that have become redundant may be discontinued. Also, some reporting responsibilities could be shifted to oversight committees within the institutions.

The regulator has also suggested reviewing the existing system and network audit framework applicable to exchanges and clearing corporations.

Other proposals include:

• Discontinuing the registration requirement for investment managers providing Direct Market Access (DMA) services.

• Introducing a single-window registration framework for brokers offering Smart Order Routing (SOR).

• Reviewing disclosure requirements for investors in commodity derivatives.

• Revisiting the position limits norms across products.

• Updating the client code modification framework.

• Merging investor protection funds for equity and commodity derivatives segments.

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Options And Commodity Market Norms In Focus

SEBI has also proposed discontinuing close-to-money (CTM) norms for option contracts as part of the review. In the commodity derivatives segment, the regulator plans to reassess disclosure requirements for investors and review position limit regulations across different products.

The latest consultation follows earlier discussions on simplifying regulations relating to administration, trading activities and exchange-traded derivatives within market infrastructure institutions.

SEBI said the objective is to create a more efficient and principles-based regulatory framework while providing greater operational flexibility to stock exchanges and clearing corporations. The final framework will be notified after the regulator reviews feedback received from market participants and other stakeholders.

Sources:

The Economic Times

SEBI