SEBI approves intraday borrowing for mutual funds and eases municipal bond rules

On June 19, 2026, the Securities and Exchange Board of India (SEBI) board in Mumbai approved a suite of regulatory reforms. The measures allow mutual funds to undertake intraday borrowings to bridge liquidity mismatches, subject to safeguards and same‑day repayment, and clarify that the facility cannot be used as leverage. SEBI also reintroduced open‑market share buybacks through stock exchanges, effective August 1, 2026, with a 66‑working‑day completion window and a requirement that at least 40 % of earmarked funds be deployed in the first half. Additionally, the regulator approved the GARUDA mechanism to accelerate the launch of new Alternative Investment Fund schemes.

SEBI aligned securitisation norms with the Reserve Bank of India framework, exempting RBI‑regulated banks and NBFCs from the 25 % obligor concentration limit for single‑asset deals, shifting periodic disclosure duties to servicers, and limiting originator representation on SPDE boards. The agency also gained authority to replace trustees of securitisation vehicles. Amendments to municipal debt securities regulations enable municipalities to refinance project debt, mandate detailed lender disclosures, allow pooled‑finance vehicles, provide incentives for retail investors, set specific face‑value and trading‑lot sizes, permit electronic advertising, and extend post‑issue compliance timelines.