The Securities and Exchange Board of India (SEBI) has issued a circular dated Jun 5, 2026 on emerging advanced Artificial Intelligence tools to address the risk of exploitation of system vulnerabilities using AI driven tools. The circular is addressed to all key SEBI-regulated entities including AIFs, stock exchanges, clearing corporations, depositories, mutual funds, AMCs, credit rating agencies, merchant bankers, stock brokers, investment advisers, research analysts, portfolio managers, RTAs and other market intermediaries.
SEBI has noted that AI-driven vulnerability identification tools Jun introduce heightened cybersecurity risks for regulated entities by enabling rapid and large-scale identification and potential exploitation of existing vulnerabilities. Such tools Jun also create concerns around data confidentiality, application integrity and reliability of outputs.

SEBI has vide Circular no. SEBI/HO/DDHS/DDHS-PoD-2/I/11700/2026 dated May 15, 2026, specified the permissible end-use of borrowings for Infrastructure Investment Trusts (InvITs) where net borrowings exceed 49% of the value of InvIT assets pursuant to the amendment made in Regulation 20(3)(b)(ii) of the SEBI (Infrastructure Investment Trusts) Regulations, 2014 on April 17, 2026 for strategic purposes such as enhancing of existing assets, non-routine maintenance and principal refinancing so to enhance or provide a critical support to existing projects.

RBI has issued the Fifth Amendment Directions, 2026 to amend the Commercial Banks – Prudential Norms on Capital Adequacy Directions, 2025. Based on a review, it is proposed to amend the provision relating to inclusion of quarterly profits in Common Equity Tier 1 (CET1) capital by a Commercial Bank. The amendment will be effective from May 18, 2026.

RBI has issued the Sixth Amendment Directions, 2026 to amend the Commercial Banks – Prudential Norms on Capital Adequacy Directions, 2025. The amendment deletes sub-paragraph 21(i)(b), thereby removing Investment Fluctuation Reserve (IFR) from the list of items eligible for inclusion in Tier 2 Capital. This amendment harmonizes Indian regulations with Basel III, specifically aligning with capital charge for market risk. By doing away with unnecessary IFR buffers where market risk is already covered by capital, the RBI aligns directly with international risk-weighted capital adequacy standards. The amendment will be effective from May 18, 2026.

RBI had earlier required banks to maintain an IFR as a prudential buffer against potential losses from investment portfolio valuation changes. Following recent reforms in the investment and market risk framework, RBI has reviewed the necessity of this reserve.

The amendment brings important clarifications in the presentation and disclosure framework. Firstly, the definition of ‘Revenue and Other Reserves’ under Schedule 2(IV) has been revised. The RBI now clearly defines ‘Revenue Reserve’ as any reserve other than capital reserve and explicitly excludes provisions made for depreciation, asset diminution, renewals, or known liabilities from being treated as reserves.

IRDAI, through its circular dated May 25, 2026, has amended the Master Circular on Corporate Governance for Insurers, 2024. The amendments strengthen governance over remuneration of Key Management Persons (KMPs) by linking compensation with financial soundness, policyholder outcomes, claims servicing, grievance redressal and overall governance standards. The amendment is effective immediately from May 25, 2026.