Breaking Down SEBI’s March 2025 Circulars: Governance, ESG & Disclosure Norms

In an environment where trust, transparency, and timing are the determinants of success, being in harmony with regulatory requirements is no longer in good practice—it's a business necessity. March 2025 was a key month for India's capital markets, as SEBI launched a string of reforms to strengthen disclosure norms, accelerate capital raising procedures, strengthen ESG disclosure, and curb governance loopholes in listed entities and intermediaries. These changes weren't announced in isolation—they represent the regulator's vision to bring India's financial environment in line with best international practices while tackling risks specific to our dynamic domestic economy. Whether you're at the helm of a listed company, responsible for managing investor portfolios, or ensuring compliance, grasping these changes is critical to making sound decisions, sidestepping blind spots, and ultimately safeguarding stakeholder value. In this article, we decode SEBI's new circulars and boardroom instructions—not merely to tell, but to empower your next step.

SEBI guidelines reflect evolving regulatory reforms in India's capital markets as of March 2025.

1. SEBI Extends Three-Month Cybersecurity Compliance Deadline for Regulated Entities

Following industry pleas for more time, the deadline for compliance with the Cybersecurity and Cyber Resilience Framework (CSCRF) has been pushed back by three months to June 30, 2025, for all SEBI-regulated entities (Res), except Market Infrastructure Institutions (MIIs), KYC Registration Agencies (KRAs), and Qualified Registrars to an Issue and Share Transfer Agents (QRTAs). The extension is intended to enable a smoother shift towards greater cyber resilience while ensuring regulatory compliance among financial institutions. Stock exchanges and depositories have been instructed to disseminate the directive to stakeholders to promote extensive awareness and compliance. Released under Section 11(1) of the SEBI Act, 1992, the circular emphasises the regulator's efforts to enhance financial infrastructure security, reduce systemic cyber risks, and protect investor interests.

2. SEBI Makes Advertiser Verification Mandatory for Registered Intermediaries on Social Media

With increasing securities market frauds on Social Media Platforms (SMPs) like YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), and Telegram, SEBI has come out with a new regulatory framework for greater transparency, investor protection, and market integrity. SEBI registered intermediaries who wish to publish advertisements on platforms such as Google and Meta are now required to go through advertiser verification by enrolling with their SEBI SI Portal-associated email Ids and mobile numbers. This policy was introduced in consultation with Social Media Platform Providers (SMPPs) for curbing false financial promotions, false trading courses, and fraudulent offers of risk-free or guaranteed returns. Market players have been directed to get their contact information updated on the SEBI SI Portal by 30th April 2025, so they remain compliant with the new digital advertising due diligence standards. The step enhances supervisory vigil, increases investor faith, and minimises the chances of financial deception in the fast-changing digital world.

3. SEBI Board Approves Overhaul of Main Regulation to Better Secure Market Integrity

The 209th SEBI Board Meeting of March 24, 2025 ended on a series of revolutionary decisions for enhancing market transparency, governance standards, and protection of investors. Major approvals included:

Enhancing Market Infrastructure Governance: SEBI amended the process of appointment of Public Interest Directors (PIDs) in Market Infrastructure Institutions (MIIs), did away with obligatory cooling off periods for PIDs, and required Governing Board approval for the recruitment of critical executives like Chief Risk Officers (CRiOs) and Chief Technology-Officers (CTOs), enhancing governance in key market functions.

High-Level Committee (HLC) on Conflict of Interest & Disclosures: A committee of industry leaders, legal professionals, and regulatory old-timers will review conflict of interest practices, financial disclosure, and governance frameworks for SEBI Members and Officials, and enshrine fiduciary duty and ethical behavior. The HLC will report its suggestions within three months for board level discussion and adoption.

1. Key Amendments to SEBI’s LODR Circulars (March 28, 2025)

A sharper lens on governance, especially where scale meets responsibility.

SEBI’s recent changes to the LODR framework are not merely administrative updates—they reflect a deeper regulatory philosophy: large capital structures demand higher governance accountability. With India’s debt markets expanding, SEBI is moving swiftly to ensure that governance frameworks keep pace with financial ambition.

HVDLE Threshold Increased to ₹10,000 Crore

By raising the cutoff for High-Value Debt Listed Entities (HVDLEs) from ₹5,000 crore to ₹10,000 crore, SEBI has put down a marker—only genuinely large-scale debt issuers will now be asked to keep up with the governance standards of listed equity companies. For those crossing that threshold, the message is clear: your footprint in the financial system is large, and so are your responsibilities. This shift also takes regulatory burden off mid-sized issuers of debt, giving them breathing room with the larger operators remaining in sharper focus.

SMEs Now Pulled Under RPT Compliance

SMEs are now pulled under the coverage of Related Party Transaction (RPT) disclosures for the very first time—another major shift that strikes the right balance between growth and governance. With the scaling up by SMEs and equity participation drawn in, risk of opaque deals rises. SEBI’s decision ensures that even at the SME level, investor confidence is safeguarded. What’s unique is the flexibility: compliance kicks in only once thresholds are met, and is reversible if metrics dip for three consecutive years—showing SEBI’s understanding of the SME lifecycle.

BRSR Now ESG-Aligned

SEBI’s revamp of the Business Responsibility and Sustainability Reporting (BRSR) framework goes beyond box-ticking. It’s about aligning Indian listed companies with global ESG disclosure norms, making them comparable, investable, and accountable on the global stage. This isn't just about optics—investors worldwide are increasingly ESG-driven, and companies that resist transparency may find themselves out of favor in institutional portfolios.

2. Streamlining Capital Raising: SEBI’s ICDR Reforms

Speed, trust, and transparency in rights issues take center stage.

SEBI understands that in fast-moving markets, capital raising must match the agility of business needs. That’s the essence of its March 2025 changes to the ICDR regulations—cutting red tape while strengthening investor safeguards.

Quicker Rights Issue Turnarounds

Rights issues have traditionally been slower and more complex than other routes like QIPs or preferential allotments. SEBI’s latest changes remove operational delays by refining disclosure timelines and reducing procedural redundancies. The intent? Make rights issues a more competitive and accessible tool, especially for promoters and existing investors looking to strengthen their stake without dilution.

24-Hour Disclosure Rule for Promoters

SEBI has now made it obligatory for the promoter group entities and the promoters to report market transactions within 24 hours in case of rights issues. This is looked as tough, but it is based on investor protection. During raising of capital, every action of the insiders is capable of influencing the market perception. In real time, providing openness cuts down on information asymmetry and level playing field.

Mandatory Monitoring Agency for All Issue Sizes

One of the most radical changes: even small issues of rights these days need a third-party monitoring agency to monitor the application of funds. Previously, only big issues required monitoring. But SEBI has turned the logic around—it's not size, it's investor confidence at all levels. That is especially essential in an environment where retail participation is increasing, and trust is a currency which no issuer can afford to lose.

3. Highlights from SEBI’s 209th Board Meeting

When the regulator speaks, the market listens—and adapts.

SEBI’s 209th board meeting in March 2025 wasn’t just a routine exercise. It was a reflection of the regulator's sharp awareness of how the markets are evolving—and where the pressure points are. From tightening governance to balancing disclosure and ease-of-doing-business, this was a strategic set of recalibrations.

Foreign Portfolio Investors (FPIs): Threshold for Disclosure Now ₹50,000 Crore

If you're dealing with or handling foreign capital, this shift is important. SEBI raised the AUM disclosure limit from ₹25,000 crore to ₹50,000 crore for FPIs. Why? To balance things out. Big concentrations of capital move markets profoundly, and SEBI desires more transparency—but not at the expense of overloading smaller, compliant participants. The message is clear: if you're large enough to move markets, you're large enough to disclose your structure, purpose, and beneficiaries.

AIFs: A Little Room to Breathe, But With Caution

Category II Alternative Investment Funds (AIFs) have it somewhat easier now. They can apply certain rated listed debt securities at par with unlisted ones—a technical but valuable adjustment that makes compliance less irritating. But no, this has nothing to do with dilution. It's SEBI conceding that the market has sufficiently grown up that it can see the value of subtlety in assessing risk. Watch for this space to develop further, particularly as AIFs play an increasingly essential role in India's private capital machine.

Market Infrastructure Institutions (MIIs): Governance Gets Tighter

This one's for the big backstage players—stock exchanges, clearing corporations, and depositories. SEBI has strengthened rules over the appointment of key management personnel, added cooling-off periods, and fortified board-level independence. The message? If you operate the market's plumbing, you need to be beyond suspicion. Governance here isn't a best practice—it's system stability.

4. Urge Cybersecurity and Secure Algo Trading

Because in this age, trust is not based on regulation—but on resilience.

Markets aren't swayed anymore by humans—they're swayed by code, algorithms, and more and more, AI. And with that, the call for cybersecurity isn't a footnote; it's center stage.

CSCRF Timeline Extended

SEBI has pushed the deadline for regulated entities to implement the Cybersecurity and Cyber Resilience Framework (CSCRF). But this is not a softening. It's a recognition that creating strong digital defenses is time-consuming, a matter of planning, and a matter of cultural transformation. SEBI desires readiness, not hurried checkboxes.

Safer Algo Trading for Retail Investors

Retail investors getting into algo trading? Double-edged sword. SEBI is trying to ensure this space is safe by adding risk-mitigation measures. Consider circuit breakers, pre-trade risk assessment, and audit trails. It's a space to observe—because making such powerful tools accessible must be accompanied by guardrails that shield both the amateur and the system.

5. Social Stock Exchange: Democratizing Impact Investing

Doing good need not be expensive to do.

In a welcome step, SEBI has reduced the minimum application size for Zero Coupon Zero Principal (ZCZP) instruments on the Social Stock Exchange—from ₹10,000 to a mere ₹1,000. This small tweak can make a huge splash.

Why? It opens the doors to retail investors to finance nonprofit and social enterprises, making philanthropy investable and quantifiable. For social organisations, it's increased participation. For investors, it's a gateway to impact finance with transparency.

6. Suggested Derivatives Market Reforms

Order out of disorder—without smothering opportunity.

India's equity derivatives market is one of the most active in the world—but also among the most speculative. SEBI is intervening to introduce a bit of much-needed discipline.

Simplifying Expiry Days

SEBI has suggested that all equity derivative contracts must now mature only on Tuesdays or Thursdays. Why? To minimize clustering of risk and volatility between days. Sounds like a small thing—but for traders, fund managers, and clearing houses, this brings clarity, rhythm, and breathing space.

Minimum Tenor of One Month

Short-term, speculative contracts can distort markets. By proposing a minimum tenor of one month for equity derivative contracts, SEBI is nudging the market toward longer-term, strategy-driven participation over impulsive speculation.

It’s not about slowing business down; it’s about making sure the acceleration is safe, transparent, and future-ready. Take rights issues—faster now, yes, but under sharper scrutiny. SMEs are gradually being brought into governance frameworks, giving them time to grow without ignoring accountability.

And if you thought impact investing was still a niche game, think again. Lowering the minimum application size on the Social Stock Exchange is SEBI’s way of saying: everyone deserves a seat at the table—even in capital markets for good.

In short, these reforms reflect a regulator that’s maturing with the market. Strategic, steady, and stakeholder-conscious. For companies, investors, and intermediaries, this isn’t the time to “tick the box” on compliance—it’s the time to understand it, align with it, and use it as a lever for long-term credibility.

Because the future belongs to those who don’t just adapt to regulation—but anticipate it.

Our Directors’ Institute- World Council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out efficiently, helping you make a significant contribution to the board and raise corporate governance standards within the organization.