Markets regulator Sebi board is set to meet on Monday to deliberate on a wide-ranging agenda, including a proposal to ease fund settlement norms for foreign portfolio investors (FPIs), and changes to regulatory frameworks for market intermediaries, people familiar with the matter said.

A key item on the agenda is a proposal to allow Foreign Portfolio Investors (FPIs) to net funds for same-day cash market trades, instead of settling each trade individually.

Under the existing framework, an FPI needs to settle equity cash market trades on a gross basis, funding each purchase transaction independently of any sale transactions, even on the same day.

Sebi has proposed permitting “netting of funds”, which would allow FPIs to use proceeds from same-day sales to offset purchase obligations, thereby requiring them to meet only the net payable amount.

The move is aimed at enhancing operational efficiency and reducing the cost of funding for them, especially on index rebalancing days. Also, it is expected to minimise forex-related costs arising from timing mismatches between inflows and outflows.

The proposal follows concerns that the current gross settlement system imposes additional funding requirements on FPIs for at least one extra day, increasing transaction costs.

This will be the fifth board meeting chaired by Sebi Chairman Tuhin Kanta Pandey since he assumed office on March 1, 2025.Apart from FPI-related reforms, the board will review a series of governance and regulatory proposals. These include a comprehensive overhaul of the “fit and proper person” criteria for market intermediaries, to enhance procedural clarity and fairness, the people familiar with the matter said.

Under this, Sebi is considering a proposal to abolish the reference to initiation of winding-up proceedings as a disqualification in a bid to ensure that only a final winding-up order, and not mere initiation of proceedings, is considered while assessing whether a person is fit and proper.

Also, the regulator is looking to explicitly include the right to a hearing in the rules. Although the practice of giving a reasonable opportunity of being heard already exists, it has been proposed to be clearly stated in the rules to remove any procedural ambiguity.

The board will also take up ease-of-doing business proposals related to real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).

Another significant agenda item is the consideration of a report submitted by a high-level panel on conflict of interest and transparency, they added.

The regulator will discuss the panel’s report, which proposes comprehensive reforms to bring in transparency by way of greater disclosure and a “zero-tolerance” culture to address conflict of interest of top officials of Sebi.

Although there is a need for educational reforms in schools, the process in which the present administration is carrying them out is not acceptable, Senior Professor Venerable Pathegama Gnanissara Thero noted.

Ven. Gnanissara Thero made these remarks while delivering the keynote address at the book launch of a biography written about Venerable Daramitipola Ratnasara Thero.

The Gnanissara Thero further emphasized that it is impossible to develop the country while destroying its culture and eroding its Buddhist heritage.

Expressing further views, Ven. Pathegama Gnanissara Thero said:

“We accept that school education reforms are necessary. But the change being proposed is not the right one… They go to the Chief Prelates and say, ‘We only shared the link; we never asked anyone to visit it.’ The Chief Prelates are not irrational like some rulers. They possess wisdom that sees past, present, and future. They are observing these acts. What kind of country can be built by wiping out the nation’s culture and eliminating the Buddhist heritage embedded in society?”

Participating in the event, Ven. Medagoda Abayathissa Thero stated that there had even been a plan within the current government to interfere with the Pirivena Education Act.

Abayathissa Thero further explained that the Chief Prelates had not granted permission to interfere with the Pirivena Act, but had only allowed reforms to the Pirivena education system.

Commenting further, Ven. Abayathissa Thero Thero said:

“They went so far as to plan to interfere even with the Pirivena Act. The Chief Prelates did not give permission to tamper with the Pirivena Act. They only allowed reforms to Pirivena education. Therefore, I respectfully urge the monks to remain vigilant. If there are obstacles or threats that could lead to a crisis for the Buddhist order, we cannot remain silent. If it is destroyed, there will be no place left for us to rebuild it.”

The implementation of the proposed new education reforms would destroy both the country’s future generations and the current government, Venerable Induragare Dhammaratana Thero stated.

Professor Induragare Dhammaratana Thero made this remark while attending a Sangha Council meeting held in Colombo today.

The Sangha Council meeting, organized to clarify the objectives of the new education reforms, was held this afternoon (29) at the Colombo Foundation Institute.

At the meeting, Professor Venerable Induragare Dhammaratana Thero emphasized the need for extended discussion, consultation with subject experts, and consideration of the experience of seasoned administrators before making such fundamental changes.

The Thero warned that the proposed changes to the education curriculum could become the biggest crisis facing the country today.

Dhammaratana Thero added that implementing these reforms in the current manner would harm future generations, potentially destroy the government, and is akin to trying to force a round peg into a square hole.

 

An apex body of Sri Lanka’s apparel exporters on Friday demanded reforms at the Colombo port and claimed that traders are losing their competitiveness in the region due to its efficiency plagued by delays.

“While Sri Lanka struggles with inefficiency, our regional competitors are moving ahead. India’s new Vizhinjam Port and others in Singapore and Dubai now offer seamless digital coordination, faster vessel turnaround, and fully automated systems.

“As a result, some of the transshipment traffic that once came through Colombo is now being diverted,” the Joint Apparel Association Forum (JAAF) statement said.

The JAAF pointed out how over the past few months, several shipping lines have started bypassing Colombo, sometimes just a day or two before arrival.

The bypassing of Colombo of ships laden with containers carrying fabric, zippers, buttons, or trims meant either unloaded at another port or arrived days later, the JAAF statement released by its chief Yohan Lawrence said.

“For manufacturers working on tight schedules, even a small delay can cause missed production deadlines, late deliveries, or the need to airfreight finished goods at much higher cost to meet deadlines agreed with customers.”

JAFF stresses that the real issue lies in how the port operates. Delays in moving containers between terminals, outdated manual systems, and slow coordination between port agencies have all combined to create a serious bottleneck.

JAAF calls on the government “to focus on operational reform streamlining digital pre-clearance, improving cargo tracking, and ensuring seamless coordination between terminals.”

There was no immediate comment from the government.

The development comes weeks after Sri Lankan traders faced a new tariff on exports to the US, one of the largest destinations for the island nations.

Earlier, the US announced a 20 per cent tariff on Sri Lankan exports, effective August 7.

The rate, down from earlier announced 44 per cent, had placed Sri Lanka on par with key competitors in the garments export industry such as Bangladesh and Vietnam, top government negotiator Harshana Suriyapperuma had said then.

Source: PTI

–Agencies

Representatives of the United Nations Technical Electoral Needs Assessment Mission held a series of consultation meetings at Parliament premises, with key parliamentary stakeholders to assess opportunities for international support to strengthen electoral processes in the country.

The UN delegation met with Prime Minister Dr. Harini Amarasuriya and a group of Members of Parliament representing the Government, the Department of Communication of Parliament said in a statement.

They also held separate discussions with Opposition Leader Sajith Premadasa and Opposition MPs, as well as with members of the Women Parliamentarians’ Caucus and the Parliamentary Caucus for Youth.

Upon request of the Election Commission of Sri Lanka, this United Nations Technical Electoral Needs Assessment Mission visited the country and the mission focused on gathering insights from a wide range of stakeholders including government representatives, political parties, election observers, civil society, and development partners. Discussions centered on enhancing the efficiency, transparency, and inclusivity of Sri Lanka’s electoral system.

Accordingly, key topics addressed included strengthening transparency and integrity in elections, increasing women’s political representation, promoting political literacy and voter education, advancing the digitalization of the electoral process, empowering voters, protecting voting rights, and tackling challenges faced by youth and women in politics.

The United Nations delegation commended the role of the Election Commission and acknowledged the credibility and transparency of Sri Lanka’s electoral framework. They also expressed the UN’s willingness to extend technical assistance to support ongoing and future electoral reforms, it said.

The delegation comprised senior officials from UN Headquarters, including Ms. Michele Griffin, Director of the Electoral Assistance Division; Mr. Dan Malinovich, Electoral Policy Specialist; Ms. Amanda Stark, Political Affairs Officer in the Asia and the Pacific Division; and Ms. Mikyong Kim, Political/Electoral Affairs Officer.

Market regulator Securities and Exchange Board of India (Sebi) on Friday unveiled a series of reforms on Friday, including relaxing norms related to the minimum public offer and minimum shareholding requirement, ease of access to Foreign Portfolio Investors (FPIs) and granting equity status to REITs. The moves came after its board meeting earlier in the day.

This was Sebi’s 211th board meeting and Chairman Tuhin Kanta Pandey’s third since he took over as a Sebi chief in March.

10 key takeaways

1) Minimum public offer and shareholding requirement for IPOs

Sebi approved changes in the minimum public offer (MPO) and timeline for meeting minimum public shareholding (MPS) requirements. The current Securities Contracts (Regulation) Rules (SCRR) mandated issuers with a post issue market capitalisation above Rs 1,00,000 crore to offer to the public Rs 5,000 crore and at least 5% of the post issue market cap.Read More: Sebi eases minimum public offer norms, minimum public shareholding timelines for large IPOs

2) FPI access

The capital markets regulator approved a single-window clearance system to make it easier for foreign investors to access Indian markets.

Read More: Sebi eases FPIs entry into Indian markets through single-window clearance

3) Widens IPO anchor book

In a move aimed at broadening the pool of long-term institutional investors in initial public offerings (IPOs), the Securities and Exchange Board of India (Sebi) on Friday amended the ICDR Regulations to extend anchor investor participation beyond domestic mutual funds. Sebi has also increased the overall reservation for the anchor portion from one-third to 40%.

Also Read: Sebi widens IPO anchor book to include insurers and pension funds, raises reservation to 40%

4) REITs get equity status

Market regulator Securities and Exchange Board of India (Sebi) on Friday approved re-classification of Real Estate Investment Trusts (REITs) as equity, paving way for a higher participation of mutual funds in them. The regulator also retained the ‘hybrid’ classification for InvITs for the purpose of investments by MFs and specialised investment funds.

Also Read: Sebi board meeting: REITs get equity status, move set to boost mutual fund investments

5) Exit load for mutual funds cut to 3%

In a bid to strengthen investor protection and improve transparency while deepening financial inclusion, market regulator Securities and Exchange Board of India (Sebi) has slashed maximum permissible exit load from 5% to 3%. Sebi noted that most schemes currently charge between 1% and 2% as exit load.

Also Read: Sebi cuts exit load cap to 3%, revises incentives for mutual fund distributors

6) Related Party Transactions

The regulator has approved amendments related to norms on Related Party Transactions (RPT). These changes include introduction of scale-based thresholds based on annual consolidated turnover of the listed entity, for determining material RPTs. Some other amendments include revised thresholds for approval by the Audit Committee, for RPTs undertaken by subsidiaries and simpler disclosure requirements for smaller RPTs.

7) Separate category of AIF schemes

Introduction of a separate category of AIF schemes, limited exclusively to Accredited Investors only (AI-only schemes), and offering the scheme specific regulatory flexibilities in terms of less compliance around investor protection. Extension of additional relaxations and operational flexibilities to Large Value Funds (LVFs) for accredited investors.

Sebi also approved provision for existing eligible AIF schemes to opt into AI-only or LVF classification, thereby availing associated benefits, subject to conditions prescribed by it.

8) Launch of ‘India Market Access’ website for FPIs

Sebi launched a new website titled ‘India Market Access’ (www.indiamarketaccess.in), developed as a dedicated platform for current and prospective FPIs.

This move comes after FPIs highlighted difficulties in navigating India’s regulatory landscape, citing the challenge of accessing information spread across different regulations and institutions. The lack of a centralised platform often made compliance processes difficult to comprehend.

9) Regulatory outreach and response

To strengthen its regulatory outreach and better serve India’s growing investor base, Sebi will establish local offices in major state capitals and cities in a phased manner. In the first phase, offices will come up in Chandigarh, Jaipur, Lucknow, Guwahati, Bhubaneswar, Vijayawada, Hyderabad, and Bengaluru.

10) Review of provisions governing market infrastructure institutions (MII)

Sebi approved key measures to enhance governance of MIIs such as stock exchanges and clearing corporations. Two Executive Directors (EDs) will now be appointed as heads of “Vertical 1: Critical Operations” and “Vertical 2: Regulatory, Compliance, Risk Management, and Investor Grievances.” They will serve as Key Management Personnel (KMPs) and sit on the Governing Board, reporting to the MD but appraised by the Nomination and Remuneration Committee.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Calling it the biggest reform since the introduction of the Goods and Services Tax (GST) in 2017, Sanjiv Bajaj, Chairman and Managing Director of Bajaj Finserv, said the government’s sweeping GST rate cuts will deliver a powerful boost to demand, lending, and financial services. He believes the move will strengthen consumption across both urban and rural markets while supporting small businesses, MSMEs, and financial institutions alike.

“This is probably the single largest reform since the start of GST. I see this as a very significant tailwind that should help drive growth in the coming quarters and years,” Bajaj told ET Now in an exclusive interaction. He added that the reform would benefit not only consumers but also businesses in housing, construction, insurance, infrastructure, and financial services.

Revival of consumer demand

Over the last year, urban consumer demand had shown signs of fatigue, with spending on big-ticket items slowing down. Bajaj noted that the slowdown was partly due to external uncertainty, particularly around global trade tensions, and also due to tighter rules on unsecured lending. “In the last quarter, we started seeing some improvement. Now, with this GST cut, confidence and disposable income will get a big boost,” he said.

With the festive season approaching, Bajaj expects demand for consumer durables—such as mobile phones, air conditioners, televisions, and washing machines—to rebound strongly. He also foresees an uptick in two-wheeler sales, which have been sluggish for several months, as well as in entry-level cars. “The timing of this reform is ideal. It will help trigger not just festive buying but also set the stage for sustained demand in the months ahead,” he explained.

Big implications for insurance

One of the most impactful changes has been the GST exemption for health and term insurance products. Bajaj believes this could significantly expand insurance coverage in India. “There will be a direct price reduction, making health and life insurance more affordable. This puts money back into the consumer’s hands and should help expand insurance penetration,” he said.

He also urged hospitals to pass on the benefits of GST cuts on inputs to patients, ensuring the ecosystem as a whole contributes to affordability. Bajaj added that insurance companies now have a responsibility to pass on tax savings to customers through pricing adjustments. “It is not just about maximizing profit per policy. India is a huge market. The more we expand, the more financially inclusive we become,” he stressed.The Bajaj Finserv chief also noted that cheaper premiums could encourage insurers to design new products for the middle- and lower-income segments, spurring innovation in the sector.

Support for MSMEs and housing

Bajaj pointed out that MSMEs, many of whom operate with tight cash flows, would benefit from lower GST on key inputs, boosting their confidence and profitability. With rising sales during the festive period, he expects many MSMEs to approach capacity limits and eventually step up investments. “This could finally trigger the next investment cycle, which has been waiting for the right demand trigger,” he said.

The GST cut also has implications for housing and infrastructure. With reduced costs in construction materials, Bajaj expects an uptick in demand for housing finance and MSME loans, which will benefit lenders such as Bajaj Finance and Bajaj Housing Finance.

Lending risks under control

Bajaj acknowledged concerns over defaults in the MSME lending space but emphasized that Bajaj Finance’s default rates remain well below the industry average. “We flagged this risk earlier, but our defaults are still about half the industry levels. With GST putting more money in the hands of SMEs and MSMEs, logically, defaults should reduce. But we need to wait for a few quarters to see the full impact,” he said.

He added that unsecured lending, which was a major concern for the Reserve Bank of India (RBI) over the last two years, is now back to pre-Covid levels after regulatory tightening.

Move to strengthen financial ecosystem

Beyond immediate consumption gains, Bajaj sees the reform as a step towards expanding India’s formal financial system. By streamlining registration and reducing inverted duty structures, more businesses and individuals are expected to join the GST network, improving compliance and broadening the tax base.

“This reform provides more horsepower not just for the short term but directionally for the years ahead. It is not just about rate cuts but about strengthening the financial ecosystem,” Bajaj said.

For Sanjiv Bajaj, the GST rate cut is more than a fiscal tweak—it is a structural reform that boosts consumer confidence, expands insurance coverage, supports MSMEs, and sets the stage for the next investment cycle in India.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Mumbai: India’s stock market is abuzz with expectations of the Goods and Services Tax (GST) simplication, with brokerages flagging autos, cement, consumer goods, retail, hotels and financials as the biggest potential beneficiaries.

In autos, analysts note that vehicles in the 28% tax slab could see lower rates, lifting demand for two-wheelers, passenger vehicles and tractors. Stocks such as Hero MotoCorp, Maruti Suzuki, M&M and Escorts Kubota are seen as the key gainers.

“Autos especially two-wheelers stand to benefit the most since price cuts can meaningfully influence buying decisions, while RBI’s rate cuts may further support vehicle credit growth,” said Christy Mathai, equity fund manager, Quantum AMC.

The Nifty’s Auto index advanced the most across sector indices on Monday, jumping 4.2%. Maruti Suzuki soared 8.9%, HeroMotoCorp surged 6% and M&M gained 3.5%. Consumer Durables, Realty and Metals indices rose between 1.8% and 3.4%.

While the cement sector stands to gain from improved affordability, a lower tax burden in consumer and retail may spur discretionary spending, lifting demand across FMCG, lifestyle and staples.

“For consumer durables such as air conditioners, companies are still grappling with high inventory, which will need to be cleared before new tax benefits translate into stronger demand,” said Mathai. “While cement may see lower GST as well, though the extent of benefits to end real-estate and infrastructure users remains uncertain.”Financials, particularly lenders with large retail loan books, are seen as indirect winners as a GST cut may drive credit growth in autos, housing and consumption. “Insurance could also gain if the long-pending GST reduction on health and general insurance is implemented,” said Mathai.

Prime Minister Narendra Modi’s bombshell Independence Day announcement to overhaul India’s GST structure by Diwali has sent shockwaves through Dalal Street, with over 40 stocks across sectors from autos to cement now firmly in brokerages’ crosshairs as potential big winners. The market’s euphoric response on Monday saw massive rallies across auto, financial, real estate, consumer, and cement stocks as investors scrambled to position themselves ahead of what analysts are calling the most significant indirect tax reform since GST’s 2017 launch.

Modi’s GST reforms 2.0 promise to collapse the existing four-slab structure into just two main brackets – 5% and 18%, excluding sin goods. The implications are staggering as almost 99% of goods currently in the 12% slab will transition to 5%, while 90% of items in the 28% bracket will drop to 18%, according to market estimates.

“Here too, households can expect sizable savings, owing to some higher-ticket consumption items bracketed in the 28% tier. The proposals and finer details are likely to be approved by the GST Council in early 3QFY26. The Finance Ministry has indicated Rs 50,000 crore of tax revenue impact, which appears manageable,” Motilal Oswal said in a research note.

The reforms are designed to lower retail prices by 4-5%, providing much-needed relief to household budgets while stimulating consumption across categories.

Auto sector: The biggest beneficiary

Jefferies has identified two-wheelers, small cars, and commercial vehicles as the sector’s biggest winners, with GST rates potentially dropping from 28% to 18% – a massive 10 percentage point reduction. “All the listed 2W OEMs – Bajaj, Hero, TVS and Eicher – should be beneficiaries of this cut,” Jefferies noted, highlighting the sector’s uniform benefit potential.

Maruti emerges as the standout winner in passenger vehicles. “Maruti should be the biggest beneficiary of this potential cut” for small cars currently taxed at 29-31%, Jefferies said. The brokerage also sees Maruti benefiting from potential hybrid vehicle rate cuts.

Commercial vehicle makers Ashok Leyland, Tata Motors, and Eicher are positioned to gain from the 28% to 18% rate reduction, while tractor manufacturers Mahindra and Escorts could see rates drop from 12% to 5%.

Cement: Rs 20,000-25,000 crore revenue impact

The cement sector faces a potential game-changer with GST rates dropping from 28% to 18%. Jefferies estimates this could result in a revenue impact for the government of Rs 200-250 billion.

“A key sentiment positive for the sector; lower GST from 28% to 18% can lead to 7.5%/8% lower prices,” Motilal Oswal said, identifying Ultratech and JK Cement as key beneficiaries.

For real estate developers, cement cost savings could translate to “40-50bps margin improvement” as cement constitutes 4-5% of house prices in top cities.

Consumer & durables: Broad-based benefits

Air conditioners emerge as major winners with rates potentially dropping from 28% to 18%. Jefferies specifically named Voltas, Blue Star, and Amber as positive beneficiaries, while Motilal Oswal highlighted how “Havells also benefits as ~24% of its topline comes through Lloyd’s.”

In consumer staples, companies like Dabur and Emami could benefit as “most Ayurveda products are in the 12% tax bracket which could likely go down to 5%,” Jefferies noted.

Banking & financials: Indirect beneficiaries

Banks stand to gain from increased consumption and credit demand. Motilal Oswal expects “household confidence and demand for debt to increase, driving credit growth into double digits in 2HFY26” with ICICI Bank, HDFC Bank, and IDFC First Bank as key beneficiaries.

“EMI obligation for consumer durables should reduce, benefitting NBFC lending in this segment,” the brokerage said, specifically naming Bajaj Finance.

Sectoral rotation: Consumption over capex

Emkay Global sees the reforms strengthening the sectoral rotation theme consumption over capex with potential CPI inflation easing by 50-60bps over a year.

However, the brokerage warned: “The net impact on aggregate demand will hinge on how the government offsets the resulting revenue loss. If fiscal targets are to be maintained, this gap is likely to be bridged by reducing other expenditures.”

List of stocks likely to benefit from GST rate cut:

Across sectors, brokerages have identified over 40 stocks as potential beneficiaries:

Autos: Maruti, Tata Motors, Ashok Leyland, Bajaj, Hero, TVS, Eicher, Mahindra, Escorts

Consumer & Durables: Voltas, Havells, Blue Star, Amber, Whirlpool, HUL, Britannia, Dabur, Emami, ITC, Varun Beverages, Patanjali Foods

Cement: Ultratech, JK Cement

Banking/Finance: ICICI Bank, HDFC Bank, IDFC First Bank, Bajaj Finance

Insurance: Niva Bupa, Max Life, HDFC Life, Star Health

Retail/Apparel: Relaxo, Shoppers Stop, Trent, Vedant Fashion, Bata, Metro

Hotels: Lemon Tree, Indian Hotels, Chalet

Others: Delhivery, Swiggy, Eternal, Titan