Sebi's 2025 Shake-Up: New rules for Mutual Fund Lite, derivatives, and finfluencers on the horizon

Key measures proposed by the market regulator are expected to see the light of day in 2025, with regulations kicking in for Mutual Fund Lite, the derivatives market and financial influencers. Experts said they foresee several challenges for Sebi and market participants, including tighter norms for initial public offerings by small and medium enterprises, the push for enhanced retail investor protection, and attempts to improve regulatory coordination to maintain market stability. Ravi Prakash, associate partner at Corporate Professionals, expects significant regulatory changes in 2025, including the broader application of the Sebi Regulations with refinements for proportional enforcement, and stricter compliance for algorithmic trading to prevent misuse. Global protocols Shruti Jain, chief strategy officer at Arihant Capital Markets, highlighted the potential legal challenges and litigation risks for financial market entities facing challenges in compliance with global data security protocols, particularly considering increasing cyberattacks and stricter laws like the General Data Protection Regulation of the European Union, which governs how personal data is collected, processed, and transferred.