SEBI Streamlines Master Circulars to Enhance Ease of Doing Business for Exchanges
The Securities and Exchange Board of India (SEBI) has embarked on a major rationalization exercise of its regulatory framework applicable to Stock Exchanges, Clearing Corporations and Commodity Derivatives Exchanges. Through a structured consultative process, SEBI is revisiting the Master Circular for Stock Exchanges & Clearing Corporations and the Master Circular for Commodity Derivatives to make compliance simpler, more efficient and less costly for market intermediaries.
This initiative is aligned with SEBI’s stated objective of achieving “optimal regulation”, where regulatory clarity and investor protection are balanced with operational flexibility and lower compliance frictions for regulated entities.
Background and Regulatory Context
SEBI issues Master Circulars to consolidate and harmonize various circulars, guidelines and directions issued from time to time. Over the years, these Master Circulars have expanded significantly, often leading to:
- Overlapping provisions
- Outdated or redundant requirements
- Multiple, duplicative reporting obligations
- Increased costs of compliance and monitoring
To address these concerns and to promote ease of doing business, SEBI has initiated a comprehensive review of:
- Master Circular for Stock Exchanges & Clearing Corporations
- Master Circular for Commodity Derivatives
The review is being carried out through a public consultation process, engaging market infrastructure institutions (MIIs), market intermediaries and other stakeholders.
SEBI’s Consultative Approach
SEBI has opted for a modular consultation strategy, breaking down the review into focused themes that impact Exchanges. Accordingly, four separate Consultation Papers have been issued, each addressing a key area of Exchange functioning:
1. Administration of Exchanges
- Status: Consultation completed
- Coverage: Governance, board oversight, committees, policy frameworks and day‑to‑day administration of Stock Exchanges and Commodity Derivatives Exchanges.
- Objective: To streamline administrative requirements, remove outdated governance prescriptions and delegate certain oversight functions to in-house committees or MIIs where appropriate.
2. Trading at Stock Exchanges
- Status: Consultation completed
- Coverage: Trading rules, market access norms, reporting by Exchanges, and other aspects connected with the trading process in securities and commodity derivatives.
- Objective: To simplify trading-related regulations, rationalize filings and reduce unnecessary or overlapping compliances imposed on Exchanges.
3. Exchange Traded Derivatives
- Status: Consultation completed
- Coverage: Regulatory framework governing derivatives listed and traded on Exchanges, including contracts, position limits, monitoring mechanisms and related controls.
- Objective: To modernize derivatives regulations, ensure alignment with current market practices, and recalibrate obligations of Exchanges and Clearing Corporations in monitoring and supervision.
4. Trading Software and Technology for Exchanges
- Status: Consultation ongoing
- Coverage: IT infrastructure, trading platforms, network architecture, system resilience, cybersecurity norms and associated technology standards applicable to MIIs.
- Objective: To consolidate and rationalize IT-related provisions, update technology requirements in line with current risk environment, and avoid duplicative IT reporting.
Public comments on the fourth consultation paper (Trading Software and Technology for Exchanges) may be submitted to SEBI up to July 13, 2026.
Key Structural Changes Proposed
SEBI’s proposals, emerging from the first three completed consultations and the ongoing fourth, involve a restructuring and simplification of how obligations are organized across circulars. The major structural reforms proposed include:
Single Master Circular for Exchanges
SEBI plans to introduce a single consolidated Master Circular for Exchanges that will: