India
Legislative and Regulatory Amendments
- Securities and Exchange Board of India (SEBI)
Timelines for Disclosures by Social Enterprises on Social Stock Exchange
SEBI issued a circular extending the deadline for annual disclosures and the annual impact report by social enterprises on the Social Stock Exchange for FY2023-24 up to 31 Jan 2025.
Date of Release: 7 Oct 2024
Implementation on: 7 Oct 2024
Applicable to: Social Enterprises
Specific Due Diligence of Investors and Investments of AIFs
SEBI issued a circular specifying the due diligence to be conducted by Alternative Investment Funds (AIFs), their managers, and Key Management Personnel regarding investors and investments of the AIF, aimed at preventing the circumvention of the regulatory frameworks outlined in the circular.
Date of Release: 8 Oct 2024
Implementation on: 8 Oct 2024
Applicable to: Alternative Investment Funds
The SEBI introduced measures to speed up the availability of sales proceeds to Foreign Portfolio Investors (FPIs) on settlement day as with domestic institutional participants. These measures aim to enhance operational efficiency, respond to concerns raised by FPIs and reinforce India’s position as a preferred and efficient investment destination for FPIs, reflecting the regulator’s commitment to creating an investor-friendly ecosystem.
Date of Release: 16 Oct 2024
Implementation on: 16 Oct2024
Applicable to: Foreign Portfolio Investors
SEBI issued a circular to clarify that investors can continue using 3-in-1 type accounts (linked online trading, demat, and bank accounts) for making applications in public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities, and securitised debt instruments.
Date of Release: 18 Oct 2024 Implementation on: 18 Oct 2024 Applicable to: Registered Stockbrokers and others
Inclusion of Mutual Fund units in the SEBI (Prohibition of Insider Trading) Regulations, 2015
SEBI issued a circular outlining the measures for the inclusion of mutual funds under the SEBI (Prohibition of Insider Trading) Regulations, 2015.
Date of Release: 22 Oct 2024
Implementation on: 1 Nov 2024
Applicable to: Mutual Funds
Association Of Persons Regulated by The Board and Their Agents with Certain Persons
SEBI issued a circular mandating that SEBI-regulated entities should not have any direct or indirect association with unregistered individuals or entities providing unauthorised investment advice or making performance claims. Exceptions are allowed for associations through specified digital platforms or those focused solely on investor education. Entities must terminate non-compliant contracts within three months, aiming to safeguard investors and ensure a transparent securities market.
Date of Release: 22 Oct 2024
Implementation on: Within 3 months from 22 Oct 2024
Applicable to: SEBI-regulated entities, including stock exchanges, clearing corporations, and depositories
Modification in Annexure to Common Application Form (CAF)
SEBI amended the Master Circular for Foreign Portfolio Investors (FPIs), Designated Depository Participants (DDPs), and Eligible Foreign Investors to provide greater flexibility of having up to hundred percent aggregate contribution by NRIs, OCIs, and RI individuals in the corpus of FPIs based in International Financial Services Centres in India and regulated by International Financial Services Centres Authority.
Date of Release: 22 Oct 2024
Implementation on: 22 Oct 2024
Applicable to: FPIs, DDPs, Custodians, and Depositories
Clarification With Respect to Advertisement Code for Research Analysts (Ras)
SEBI issued a circular to clarify inquiries regarding the applicability of the advertisement code provisions to Research Reports issued by Research Analysts (RAs). In this regard, it is clarified that Research Reports and research recommendations from an RA are not considered advertisements unless any content within the research report promotes products or services offered by the RA.
Date of Release: 24 Oct 2024
Implementation on: 24 Oct 2024
Applicable to: Research Analysts
Periodic Reporting format for Research Analysts and Proxy Advisers
SEBI issued a circular to introduce standardised format for periodic reporting formats for RAs and Proxy Advisors (PAs), which are provided at Annexure I and II.
Date of Release: 25 Oct 2024
Implementation on: 25 Oct 2024
Applicable to: Research Analysts and Proxy Advisers
SEBI issued a circular introducing modifications to compliance requirements for Investment Advisers (IAs), as a step towards ease of doing business. In particular, non-individual IAs can now obtain annual compliance certificates for client-level segregation from any auditor instead of a statutory auditor, simplifying the process. Additionally, IAs are granted 30 days to submit half-yearly periodic reports to IAASB, aiming to ease compliance while maintaining regulatory standards.
Date of Release: 25 Oct 2024 Implementation on: 25 Oct 2024 Applicable to: Investment Advisers
Investments in Overseas Mutual Funds/ Unit Trusts by Indian Mutual Funds
SEBI issued a circular regarding investments in overseas mutual funds and unit trusts by Indian mutual funds. Mutual Funds are permitted to invest in overseas securities, which also includes investment in overseas Mutual Funds/Unit Trusts (“MF/UTs”). The circular sets out the requirements that Mutual Funds must follow when investing in overseas MF/UTs.
Date of Release: 4 Nov 2024
Implementation on: 4 Nov 2024
Applicable to: Mutual Funds and Asset Management Companies
Disclosure of expenses, half yearly returns, yield and risk-o-meter of schemes of Mutual Funds
SEBI issued a circular titled “Disclosure of expenses, half yearly returns, yield and risk-o-meter of schemes of Mutual Funds.” The circular outlines the disclosure requirements regarding various expenses and risks pertaining to mutual funds.
Date of Release: 5 Nov 2024
Implementation on: 5 Dec 2024
Applicable to: Mutual Funds and Asset Management Companies
Advisory on Communication with SEBI Officials
SEBI issued a circular titled “Advisory on communication with SEBI Officials.” The circular outlines the requirements that registered intermediaries / regulated entities are advised to follow when communicating with SEBI Officials. This includes seeking clarification on the implementation of operational measures or the interpretation of various policies related to securities markets.
Date of Release: 7 Nov 2024
Implementation on: 7 Nov 2024
Applicable to: Registered Intermediaries and Regulated Entities
Procedure for reclassification of FPI investment to FDI
SEBI issued a circular titled “Procedure for reclassification of FPI investment to FDI.” Regulations 20(7) and 22(3) of the SEBI (Foreign Portfolio Investors) Regulations 2019 provide that in case a Foreign Portfolio Investor (FPI) fails to divest its holdings (in excess of the prescribed threshold), within five trading days, the entire investment in the company by such FPI, including its investor group, shall be considered as investment under the Foreign Direct Investment (FDI), as per the procedure specified by the Board. In this regard, the circular modifies the procedures for reclassification of FPI investment to FDI.
Date of Release: 11 Nov 2024
Implementation on: 11 Nov 2024
Applicable to: Foreign Portfolio Investors
Master Circular for Issue of Capital and Disclosure Requirements
SEBI issued a master circular titled “Master Circular for Issue of Capital and Disclosure Requirements.” The master circular provides a chapter-wise framework for compliance with various obligations under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. It enables the stakeholders to have access to all circulars/directions issued by the SEBI over time in one consolidated location.
Date of Release: 11 Nov 2024
Implementation on: 11 Nov 2024
Applicable to: Brokers and others
Simplified registration for Foreign Portfolio Investors (FPIs)
SEBI issued a circular titled “Simplified registration for Foreign Portfolio Investors (FPIs).” The circular outlines the simplifications to be made in the registration process for FPIs, aiming to facilitate ease of onboarding and reduce duplication of information. The implementation standards, along with the fields that can be auto populated or disabled, will be formulated by the pilot Custodians and Designated Depository Participants Standards Setting Forum (CDSSF) in consultation with SEBI. In this regard, Depositories, Custodians, and Designated Depository Participants are advised to make the necessary changes to their systems to implement these proposed changes.
Date of Release: 12 Nov 2024
Implementation on: 12 Feb 2025
Applicable to: Foreign Portfolio Investors, Designated Depository Participants and Custodians and Depositaries
SEBI issued a circular regarding the relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit-based employee benefit scheme, alignment of timelines for making distribution by Real Estate Investment Trusts (REITs), and the format of Quarterly Report and Compliance Certificate for REITs. The circular shall be applicable with immediate effect.
Date of Release: 13 Nov 2024
Implementation on: 13 Nov 2024
Applicable to: REITs
Valuation of repurchase (repo) transactions by Mutual Funds
SEBI issued a circular titled “Valuation of repurchase (repo) transactions by Mutual Funds.” The circular introduces modifications to the provisions under Chapter 9 of the SEBI Master Circular dated 27 June 2024 on Mutual Funds regarding the valuation of repo transactions including tri-party repos with a tenor of up to 30 days. The provisions of the circular shall come into effect from 1 January 2025.
Date of Release: 26 Nov 2024
Implementation on: 1 Jan 2025
Applicable to: Mutual Funds and Asset Management Companies
SEBI issued a circular to clarify that it is not mandatory for digital platforms to be recognised as a Specified Digital Platform (SDP), and such platforms are not regulated by SEBI. While the regulations prohibit associations with entities providing advice or making performance claims about securities unless registered with SEBI, the provision allows regulated entities to associate with SDPs to ensure compliance with certain regulations.
Date of Release: 4 Dec 2024
Implementation on: 4 Dec 2024
Applicable to: Regulated entities
Updated Investor Charter of SEBI
The SEBI announced that it has updated its “Investor Charter” to enhance investor protection, market transparency, and trust and confidence among investors. Key updates include ensuring confidentiality of investor information and providing the right to exit at fair and reasonable terms from the securities market related products or services. Furthermore, SEBI has strengthened the grievance redressal mechanism and alternative dispute resolution mechanisms with the launch of SCORES 2.0 and SMART Online Dispute Resolution.
Released on: 6 Dec 2024
Implementation on: 6 Dec 2024
Applicable to: Investors
SEBI issued a circular expanding the optional T+0 rolling settlement cycle in Equity Cash Markets, initially introduced in March 2024. The expansion includes increasing eligible scrips to the top 500 by market capitalisation, allowing all stockbrokers to participate, and introducing a block deal window for T+0 settlements. Provisions for QSBs and custodians to support investor participation are also included.
Date of Release: 10 Dec 2024 Implementation on: Dates indicated for each provision
Applicable to: Recognised Stock Exchanges, Clearing Corporations, Depositories, QSBs, and Custodians
SEBI issued a circular confirming that Corporate Debt Market Development Fund (CDMDF) falls under Category I AIF in terms of Regulation 3(4)(a) of AIF Regulations.
Date of Release: 13 Dec 2024 Implementation on: 13 Dec 2024 Applicable to: Alternative Investment Funds
Pro-rata and pari-passu rights of investors of AIFs
SEBI issued a circular outlining the circumstances under which the requirement to maintain investors’ rights pro-rata to their commitment to the scheme is not applicable. It also specifies the requirements that AIFs, Managers of AIFs, and their Key Management Personnel must follow when issuing differential rights to select investors.
Date of Release: 13 Dec 2024 Implementation on: 13 Dec 2024 Applicable to: Alternative Investment Funds
SEBI issued a circular to introduce modifications to the regulations governing Offshore Derivative Instruments (ODIs) and FPIs with segregated portfolios, aiming to address regulatory arbitrage between the two.
Date of Release: 17 Dec 2024
Implementation on: Effective immediately except for certain provisions as specified in the circular
Applicable to: Foreign Portfolio Investors, Designated Depository Participants and Custodians, Depositories, and the Stock Exchanges and Clearing Corporations
Directions to stock exchanges in Commodities Derivative Segment
The SEBI issued directions to stock exchanges having commodity derivatives segment to continue the suspension of trading in derivative contracts for commodities, as specified in the directive, until January 31, 2025.
Released on: 18 Dec 2024
Implementation on: 18 Dec 2024
Applicable to: Stock Exchanges having Commodity Derivatives Segment
Upload of Draft Scheme Information Documents
SEBI issued a circular to introduce the revised requirement for uploading Draft Scheme Information Documents (SIDs) on its website. SIDs with SEBI observation letters must now be uploaded for at least 8 working days (reduced from 21 days) to invite public comments on disclosure adequacy, after which Asset Management Companies (AMCs) may file final offer documents. This change aims to streamline information dissemination, improve efficiency, and enhance investor confidence.
Date of Release: 20 Dec 2024
Implementation on: 20 Dec 2024
Applicable to: Mutual Funds, Asset Management Companies, Trustee Companies/Boards of Trustees of Mutual Funds, and the Association of Mutual Funds in India.
Transfer of Shareholdings Among Immediate Relatives and Transmission of Shareholdings
SEBI issued a circular to provide clarification with respect to the transfer of shareholding among immediate relatives and the transmission of shareholding in respect of Investment Advisers (IAs), Research Analysts (RAs), and Know-Your-Client (KYC) Registration Agencies.
Date of Release: 27 Dec 2024
Implementation on: 27 Dec 2024
Applicable to: Registered Investment Advisers, Registered Research Analysts, and KYC Registration Agencies
SEBI issued a circular detailing the provisions for the newly introduced MF Lite framework for passive mutual fund schemes. This framework is designed to encourage new players, enhance market liquidity, and promote investment diversification by exempting passive funds from certain provisions applicable to active schemes.
Date of Release: 31 Dec 2024 Implementation on: 16 Mar 2025 Applicable to: Mutual Funds and Asset Management Companies
Clarifications to Cybersecurity and Cyber Resilience Framework
SEBI issued a circular to clarify the circular titled “Cybersecurity and Cyber Resilience Framework (CSCRF) for its Regulated Entities (REs),” which was issued on 20 Aug 2024.
Date of Release: 31 Dec 2024 Implementation on31 Dec 2024
Applicable to: Alternative Investment Funds, Collective Investment Schemes, Credit Rating Agencies, Custodians, Investment Advisors, Research Analysts, Mutual Funds, Asset Management Companies, and others.
- Reserve Bank of India (RBI)
Internal Risk Assessment Guidance for Money Laundering/ Terrorist Financing Risks
The RBI placed on its website ‘The Internal Risk Assessment Guidance for Money Laundering/ Terrorist Financing’ for its regulated entities. The Guidance Note is intended for the regulated entities (REs) of the Reserve Bank, particularly for the dealing staff and the Anti-Money Laundering (AML) / Countering Financing of Terrorism (CFT) / Counter Proliferation Financing (CPF) practitioners of the REs. It intends to support AML/CFT/CPF compliance efforts of the REs as well as to enhance the ability of the financial sector to detect and deter ML/TF/PF by providing certain key principles, methodology, etc.
Date of Release: 10 Oct 2024
Implementation on: 10 Oct 2024
Applicable to: Regulated Entities
The RBI announced the finalisation of the operational framework for reclassification of Foreign Portfolio Investment made by Foreign Portfolio Investors (FPI) to Foreign Direct Investment (FDI) under Foreign Exchange Management (Non-debt Instruments) Rules, 2019 in case of any breach of the investment limit by the FPIs concerned. This operational framework would enhance the ease of doing business in India.
Date of Release: 11 Nov 2024
Implementation on: 11 Nov 2024
Applicable to: Foreign Portfolio Investors
The RBI and the Maldives Monetary Authority (MMA) signed a Memorandum of Understanding (MoU) in Mumbai for establishing a framework to promote the use of local currencies viz., the Indian Rupee (INR) and the Maldivian Rufiyaa (MVR) for cross-border transactions. The MoU is encouraging the use of INR and MVR in current account transactions, permissible capital account transactions and any other economic and financial transactions as agreed upon by both countries. This framework would enable exporters and importers to invoice and settle in their respective domestic currencies, which would enable the development of trading in INR-MVR pair in foreign exchange market. The use of local currencies would optimise costs and settlement time for transactions.
Date of Release: 21 Nov 2024
Implementation on: 21 Nov 2024
Applicable to: Indian Companies
The RBI announced the setting up of a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector. In the released announcement there is a table disclosing the composition of the committee. FinTech Department, Central Office, and RBI will provide the secretarial support to the Committee. The Committee may also invite domain experts, industry representatives, RBI departments and other stakeholders, as may be required, for consultations and/or to participate in its deliberations. The Committee will submit its report within six months from the date of its first meeting.
Date of Release: 26 Dec 2024
Implementation on: 26 Dec 2024
Applicable to: Financial Sectors
Consultations
- Securities and Exchange Board of India (SEBI)
SEBI issued a draft circular proposing that stockbrokers may deal in G-Secs in the Negotiated Dealing System-Order Matching (NDS-OM) of the competent regulatory authority to facilitate retail participation in purchase and trading of Government Securities (G-Secs).
Consultation Period: 4 Oct 2024 – 25 Oct 2024
Applicable to: Stockbrokers
Consultation Paper on Recognition as Specified Digital Platform
SEBI issued a consultation paper on the provisions of the draft circular outlining the preventive and curative measures that must be demonstrated by a digital platform for recognition as a Specified Digital Platform (SDP).
Consultation Period: 22 Oct 2024 – 12 Nov 2024
Applicable to: Specified Digital Platform
Valuation of Repurchase Transactions by Mutual Funds
SEBI issued a circular proposing that the valuation of investments by mutual funds in repo transactions with a tenor of up to 30 days be mandated to occur on a mark-to-market basis. This approach will align with the valuation norms for investments by mutual funds in other money market and debt instruments.
Consultation Period: 24 Oct 2024 – 14 Nov 2024
Applicable to: Mutual Funds
SEBI issued a consultation paper on specifying timelines for deployment of funds collected by Mutual Funds in New Fund Offers (NFO), as per asset allocation of a scheme.
Consultation Period: 30 Oct 2024 – 20 Nov 2024
Applicable to: Mutual Funds
SEBI issued a consultation paper proposing a modification to the requirement for uploading initial draft Scheme Information Documents (SIDs) on its website. The proposal aims to reduce the number of working days that draft SIDs submitted by Asset Management Companies (AMCs) must be available on the SEBI website.
Consultation Period: 30 Oct 2024 – 20 Nov 2024
Applicable to: Asset Management Companies
Consultation Paper on Ease of Doing Business for Small and Medium REITs
SEBI issued a consultation paper on proposals related to review of regulatory framework for Small and Medium REITs (SM REITs). In particular, SEBI seeks feedback on its proposals related to the following: (1) standardising the disclosures in scheme offer document; (2) public issue process for scheme of SM REIT; and (3) alignment of provisions for SM REITs vis-à-vis REITs.
Consultation Period: 30 Oct 2024 – 13 Nov 2024
Applicable to: Small and Medium REITs
Consultation Paper on Introduction of Regulatory Framework for Restricted Return InvITs
SEBI issued a consultation paper proposing a regulatory framework for restricted return InvITs. Further details are provided in the circular.
Consultation Period: 30 Oct 2024 – 13 Nov 2024
Applicable to: Infrastructure Investment Trusts
Consultation Paper on Proposals for REITs and InvITs
SEBI issued a consultation paper on certain proposals related to REITs, SM REITs, and INVITs. The proposals are made under two categories: (1) ease of doing business measures; and (2) investor protection measures.
Consultation Period: 30 Oct 2024 – 13 Nov 2024
Applicable to: REITs and Infrastructure Investment Trusts
Consultation Paper on Proposals for Ease of Doing Business by ESG Rating Providers
SEBI issued a consultation paper on the proposed amendment in provisions related to ESG Rating Providers (ERPs) in SEBI (Credit Rating Agencies) Regulations, 1999. In particular, SEBI seeks feedback on the following: (a) The requirement to share a draft ESG rating report with the issuer in the case of ERPs following a subscriber-pays model; (b) The handling of appeals and representations by the rated issuer in the case of ERPs following a subscriber-pays model; (c) The dispensing of the requirement to disclose the ESG ratings to the stock exchange(s) where the issuer or the security is listed, in the case of ERPs following a subscriber-pays model; and (d) The specification of Activity-Based Regulation for ERPs.
Consultation Period: 31 Oct 2024 – 15 Nov 2024
Applicable to: ESG Rating Providers
Alignment of Interest of the Designated Employees of the AMC with the Interest of the Unitholders
SEBI issued a consultation paper reviewing the requirements for aligning the interests of Designated Employees of Asset Management Companies (AMCs) with those of unitholders.
Consultation Period: 6 Nov 2024 – 21 Nov 2024
Applicable to: Asset Management Companies
SEBI issued a consultation paper proposing a review of the definition of Unpublished Price Sensitive Information (UPSI) under the SEBI (Prohibition of Insider Trading) Regulations, 2015. The proposal seeks to align the definition of UPSI in the PIT Regulations with events from Paragraphs A and B of Part A of Schedule III, as defined under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Consultation Period: 9 Nov 2024 – 30 Nov 2024
Applicable to: Capital Market
Consultation Paper on Review of Regulatory Framework for Angel Funds in AIF Regulations
SEBI issued a consultation paper to seek public views on the need for channelling capital from angel investor pools through a regulated structure. If the need for a regulatory environment for Angel Funds is acknowledged, this paper also aims to gather feedback on proposals to streamline the regulatory framework for Angel Funds to: (i) rationalise their fundraising processes, (ii) strengthen disclosure and governance requirements, and (iii) provide operational clarity and investment flexibility.
Consultation Period: 13 Nov 2024 – 28 Nov 2024
Applicable to: Angel Funds
SEBI issued a consultation paper on proposed amendments regarding the assignment of responsibility for the use of artificial intelligence tools by market infrastructure institutions, registered intermediaries, and other entities regulated by SEBI.
Consultation Period: 13 Nov 2024 – 28 Nov 2024
Applicable to: Market Infrastructure Institutions, Registered Intermediaries and other SEBI regulated entities.
Consultation Paper on Online Monitoring of System Audit of Stockbrokers
SEBI issued a consultation paper on the proposal of creating online monitoring and supervision mechanism (web-based portal) by stock exchanges to monitor system audit process of stockbrokers on concurrent basis.
Consultation Period: 3 Dec 2024 – 26 Dec 2024
Applicable to: Stockbrokers
SEBI released a report on measures to ease doing business, specifically regarding the settlement of accounts for clients who have not traded in the past 30 days. It is proposed that the funds of such clients be settled on the upcoming settlement dates of the monthly running account settlement cycle, as specified by the exchanges in their annual calendar.
Consultation Period: 5 Dec 2024 – 26 Dec 2024
Applicable to: Stockbrokers
Consultation Paper on Introducing Close Auction Session in Equity Cash Segment
SEBI issued a consultation paper on introducing a close auction session in the equity cash segment. Currently, the Indian securities market does not support execution at closing prices, leading to potential tracking differences in passive funds. Some major passive funds tracking international indices have suggested implementing a closing auction mechanism to determine the closing price of stocks in India.
Consultation Period: 5 Dec 2024 – 26 Dec 2024
Applicable to: Equity Capital Market
Proposed Framework for Devolvement of In-The-Money Single Stock Option Contracts into Futures
SEBI issued a consultation paper proposing a framework for devolving In-The-Money (ITM) single stock option contracts into futures one day prior to expiry. This change is intended to mitigate potential risks associated with scenarios where significant obligations may arise due to physical settlement requirements in single stock derivatives, particularly when an out-of-the-money (OTM) option unexpectedly becomes in-the-money (ITM) due to sudden price movements near market close on expiry day.
Consultation Period: 5 Dec 2024 – 26 Dec 2024
Applicable to: Capital Market
Draft Circular on Provisions Related to Association with Persons Carrying on Prohibited Activities
SEBI issued a consultation paper on the draft circular providing clarity on provisions related to association of persons regulated by the Board, MIIs and their agents with persons carrying on prohibited activities.
Consultation Period: 6 Dec 2024 – 27 Dec 2024
Applicable to: Registered Intermediaries and others
SEBI issued a draft circular proposing measures to reduce Unclaimed Assets (UAs) in the Indian Securities Market through harnessing DigiLocker as a Digital Public Infrastructure.
Consultation Period: 10 Dec 2024 – 31 Dec 2024
Applicable to: Securities Market
Consultation Paper on Mutual Fund Investment Tracing and Retrieval Assistant
SEBI issued a consultation paper on a draft circular addressing concerns about unclaimed assets through the development of RTAs, which is a platform that provides investors with a searchable database of inactive and unclaimed mutual fund folios at the industry level.
Consultation Period: 17 Dec 2024 – 7 Jan 2025
Applicable to: Mutual Funds
This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.