A series of significant rule changes could soon reshape how India's stock markets work. Market regulator SEBI is moving on several fronts at once — preparing to redraw the rulebook for everything from the cash market to the futures and options (F&O) segment. Speaking at the ET NOW Markets Summit 2026 in Mumbai, SEBI Chairman Tuhin Kant Pandey laid out the full blueprint. The aim, he said, is to make the market stronger, more transparent and friendlier to investors — boosting liquidity, lowering risk and giving small investors better protection.
F&O focus set to shift from short term to long term
The biggest change Pandey flagged concerns derivatives trading in the equity segment. The problem, as the regulator sees it, is that most traders today stick to short-term contracts — and that very tendency drives up both volatility and risk in the market. SEBI wants to rebalance this. So the regulator's emphasis will now move toward encouraging long-term F&O contracts. The payoff: investors will be able to hedge their positions over longer stretches, the market will gain stability, and managing risk will become far easier than before.
Short selling and SLB rules also under review
A second major step is a review of the rules governing Securities Lending and Borrowing (SLB) and short selling. The thinking here is to build tighter coordination between the cash market and the derivatives market. Pandey argued that once the two move in better sync, buying and selling shares will become smoother still — leaving investors with greater transparency and firmer trust in the market.
New bond-market products in the works with RBI
The reforms are not confined to equities. SEBI and the Reserve Bank of India (RBI) are jointly exploring the scope for new derivative products tied to the bond market. If these plans take shape, investors could find fresh options for both investing and managing risk.
Easier capital-raising for emerging startups
Part of the roadmap is aimed squarely at the country's new-age businesses. SEBI is considering changes to the rules of its Innovators Growth Platform (IGP). The direct beneficiaries would be companies working in sectors such as AI, semiconductors, clean energy, biotech, defence and advanced technology, for whom raising capital from the stock market would become easier. The move is expected to inject fresh strength into India's fast-expanding startup ecosystem.
Delisting and LODR processes to be simplified
Finally, SEBI is preparing to update the rules that apply to listed companies in line with international standards. Alongside this, the process of removing a company from the stock market — delisting — will be made simpler and faster than it is today.
