Sebi Proposes Automatic Approval Route for Exchanges and Depositories to Deploy Funds Without Prior Nod

Key facts

• The Securities and Exchange Board of India (Sebi) proposed an automatic approval route allowing market infrastructure institutions to deploy funds and undertake activities related to their core functions without prior Sebi approval, subject to financial limits and governance safeguards.
• The proposed framework caps aggregate fund deployment under the automatic route in a financial year at the lower of 5 per cent of the MII's net worth as of March 31 of the preceding financial year or the regulatory minimum net worth requirement, and net worth after deployment must not fall below 1.5 times the prescribed minimum.
• Route B covers activities similar to MII functions carried out through entities regulated by other financial sector regulators in India, provided Sebi has earlier approved such activity.
• Governance safeguards include approval by the MII's governing board, conflict-of-interest prevention measures, board-approved standard operating procedures, and half-yearly reports to Sebi within 30 days of each half-year's end.
• Sebi has sought public comments on the proposals till November 12, 2026.