India's capital market regulator, the Securities and Exchange Board of India (Sebi) has said that it will consider reforms to its regulations governing mutual funds and initial public offers (IPOs).

The regulator will hold its board meeting on August 16, where it is expected to discuss and approve various proposals relating to regulations. Among the cards is a proposal to offer a 'safety net' guarantee and tax incentives for new investors in the market. The safety net will ensure that a portion of the investment made by the retail investors is guaranteed for a fixed period of time.

The time period for such a guarantee could be around six months and the company will have to ensure the payment even if the value of shares falls below the allotment price. SEBI is also considering introducing e-IPO that will allow investors to bid and purchases primary market shares electronically without the need for physical documentation.

As for mutual funds, the regulator will consider relaxing norms to allow more flexibility to fund houses. Some players have also demanded a right to levy an additional charge of 2 per cent from investors in mutual fund schemes.