Investor Protection Fund interest use clarified: carry forward, capped research funding, and temporary ISF substitution permitted.
Permits carry forward of unutilized Investor Protection Fund (IPF) interest to the next financial year; allows use of IPF interest for commodity-market research with prior written trustee approval, quarterly or half-yearly Board reporting and a cap of ten percent of IPF interest; enables use of IPF for clients of non SEBI registered members if bye laws permit; and authorises use of IPF interest for Investor Service Fund (ISF) expenditures for three years from April 1, 2018, subject to bye law amendments, member notice, website dissemination and reporting to SEBI.

Investor grievance redressal: mandatory annual arbitrator training and non refundable late filing fee to expedite complaints.
Exchanges must provide at least one day of annual training to each arbitrator and impose a non-refundable additional fee on members who file claims after prescribed time lines, even if the arbitration award favors the member; exchanges must amend bye laws, notify members, publish the clarifications on their websites and report implementation, with the measures effective immediately.

Category II FPI investment: clarified eligibility, portfolio commonality, broad based investor requirements, and prohibition on segregated insurer portfolios.
Collective investment vehicles of private/merchant banks must comply with KYC and beneficial owner identification, exclude Resident Indian/NRI/OCI beneficial owners, avoid jurisdictions identified by FATF for deficiencies, prohibit opaque or bearer share structures, and maintain a broad based common portfolio (except for ODIs) with no investor exceeding forty nine percent; insurance/reinsurance companies must maintain undivided common portfolios and segregated structures are prohibited; other regulated Category II persons may invest proprietary funds and may invest client funds as ODI issuing FPIs or after meeting broad based and common portfolio conditions, with all FPI restrictions and due diligence requirements continuing to apply.

Separate limit for Interest Rate Futures: dedicated FPI long-position allocation with exchange monitoring and breach rectification.
The circular allocates a separate long-position limit for FPIs in Interest Rate Futures, modifies prior SEBI circular provisions accordingly, and prescribes that only net long positions of FPIs in each IRF instrument be aggregated for the cap while excluding net shorts. It further imposes an individual FPI long-position cap, requires stock exchanges to monitor and publish aggregate FPI net long positions daily, trigger alerts as utilisation nears the allocation, and mandates that FPIs causing any breach must square off excess positions within a short prescribed timeframe or by contract expiry. Existing Government securities limits remain exclusively for Government securities.

Minimum public shareholding: open market sales and qualified institutions placement now permitted to aid compliance.
The Circular permits additional methods to meet minimum public shareholding requirements by authorising open market sale by promoters of up to two percent of paid-up equity subject to trading volume limits, required pre-sale disclosure to stock exchanges, promoter undertakings not to repurchase on sale dates, and compliance with insider trading and takeover rules; and by authorising allotment through Qualified Institutions Placement under existing ICDR rules.

Daily Contract Settlement Value calculation for interest rate futures clarified; VWAP-based pricing with layered theoretical-price fallbacks and disclosure requirement.
SEBI requires the Daily Contract Settlement Value for interest rate futures to be computed from the volume weighted average futures price of the last half hour multiplied by a fixed multiplier; absent last half hour trading, a theoretical futures price is used based on NDS OM two hour VWAP of the underlying bond, with fallback options of a FIMMDA referenced theoretical price or the day's VWAP, previous day's theoretical price usable up to five trading days, and mandatory disclosure of the theoretical price model by exchanges.

Eligible collateral rules allow IFSC clearing corporations to accept bank guarantees and foreign securities with minimum cash composition required.
Clearing corporations in the International Financial Services Centre may accept as eligible collateral cash and cash equivalents (including specified foreign currencies, term deposit receipts and bank guarantees issued by IFSC bank branches), Indian securities held with foreign depositories, foreign securities including units of liquid mutual funds, and gold for trades in all product categories, provided cash and cash equivalents form at least half of total liquid assets. Clearing corporations must amend systems and bye laws, notify members and publish the change, and report implementation status monthly to the regulator.

Compensation for failed IPO allotments due to bank errors: formula, claim window, and redress timeline for retail investors.
Compensation is required where RIIs are denied IPO allotment due to SCSB failures, calculated by (highest opening listing price minus issue price) x shares that would have been allotted x allotment probability; registrars must share allotment basis files with SCSBs. RIIs may file claims within three months of listing; SCSBs must resolve claims within fifteen days or pay interest at 15% per annum for delays beyond that period. No compensation if listing price is below issue price; issues subscribed between ninety and one hundred percent merit compensation for all attributable shares. The policy is effective immediately.

Custodian change and due diligence relief for FPIs enables streamlined custodian transfers and reduced re-documentation burdens.
SEBI eases FPI access norms by allowing Global Custodians to request local custodian/DDP changes on behalf of authorised FPIs, eliminating prior SEBI approval where transferee custodian/DDP records no objection and notifies SEBI, and permitting transferee DDPs to rely on prior due diligence while requiring adequate due diligence at the next continuance. The circular dispenses with resubmission of PCC/MCV Declarations and investor-group information at continuance if unchanged, allows free-of-cost transfers and multiple custodians for FPIs under the MIM structure with the same PAN, clarifies share-class approval requirements for common versus segregated portfolios, permits regulated private/merchant banks to act for clients subject to beneficial-owner disclosure assurances, and extends conditional registration to converting India-dedicated funds.

Independent trustee tenure extended under phased compliance, permitting temporary continuation and limited audit continuity for transition.
Independent trustees and independent directors who had served nine years or more as of the prior cutoff may be retained through a phased two-year transition; auditors who have audited a mutual fund for nine years or more may continue until the end of the specified financial year. All other provisions of the earlier circular remain unchanged. The relaxations are issued under Section 11(1) of the SEBI Act and Regulation 77 of the SEBI (Mutual Funds) Regulations to protect investors and regulate the securities market.

Total Expense Ratio disclosure: AMCs must publish daily TER and notify investors three working days before base TER increases.
AMCs must publish daily TER of all schemes in a downloadable spreadsheet and update the website at least three working days before any increase in the base TER; investors must be notified by email or SMS at least three working days prior, while decreases due to increased daily net assets need no prior notice but must be communicated immediately. Changes must be recorded with written rationale, intimated to the AMC Board, and placed before trustees quarterly. The circular also requires AMCs to provide the exact weblink to the TER disclosure and applies to new schemes immediately and existing schemes from the stated effective date.

Additional TER for beyond-top cities revised to permit extra expense charging on a wider set of city inflows.
The circular expands the geographic cohort eligible for an additional TER of up to thirty basis points by substituting references to top-15/beyond-top-15 cities with top-30/beyond-top-30 across the cited SEBI circulars, while retaining existing eligibility tests based on the higher of a specified share of gross new inflows or a proportion of average assets under management; the amendment is effective from the stated applicability date and preserves other provisions unchanged.

Additional expense charge prohibited for mutual fund schemes without exit load; AMCs must discontinue such levies immediately.
Where a mutual fund scheme, including close-ended schemes, does not levy an exit load or exit load is not applicable, the AMC is not eligible to charge the additional expenses permitted under Regulation 52 (6A)(c); schemes currently levying such charges must discontinue them immediately.

Online registration requirement for stock exchanges: registrations, renewals and statutory filings must be submitted via the SEBI intermediary portal for compliance.
A mandatory online registration mechanism requires applicants for recognition or renewal as a Stock Exchange under Regulations 4 and 12 to submit applications and upload prescribed documents via the SEBI Intermediary Portal, while retaining hard copies for SEBI. All statutory filings, including Annual Financial Statements, Returns, Monthly Development Reports, Rules and Bye-laws, must also be filed electronically through the portal; the system is operational and immediate compliance by recognised Stock Exchanges is directed.

Online registration requirement: Depositories must submit recognition applications and regulatory filings through the SEBI Intermediary Portal for compliance.
SEBI has mandated that applications for recognition as a Depository and all related filings, including annual financial statements, returns, monthly development reports and rules or bye laws changes, be submitted online through the SEBI Intermediary Portal with uploaded scanned copies of prescribed declarations and supporting documents, while maintaining hard copies for production; the portal is operational and depositories must comply immediately.

Independent oversight committee for product design mandates supervision of new and modified commodity contracts and reporting to exchange management.
Mandates an Independent Oversight Committee for Product Design to oversee new and modified commodity products and the ongoing review of approved contracts; to examine SEBI inspection observations on product design; and to assess adequacy of resources devoted to product design. Heads of departments handling these matters must report to the committee and the Managing Director, and may appeal exchange action to the committee within a period set by the governing board. Exchanges must amend bye-laws, inform members and publish the provisions, effective within thirty days.

Online filing requirement mandates uploading offer documents and scheme/takeover/buyback filings to the SEBI intermediary portal.
Mandatory online filing requires draft offer documents, draft letters of offer, draft schemes of arrangement and filings for takeovers and buy backs to be uploaded to the SEBI Intermediary Portal; merchant bankers and recognized stock exchanges must simultaneously file physical and online copies during the transition and thereafter migrate to online only submissions, with portal access, user manual and helpline provided.

Strategic investor participation in InvITs and REITs requires binding subscription agreements, escrowed payment, disclosure and temporary lock-in.
Strategic investors may subscribe to InvIT and REIT public issues for not less than 5% and not more than 25% of the offer, under a binding unit subscription agreement specifying subscription price which must be deposited in a special escrow account before opening the public issue. The strategic investor price shall not be less than the public issue price; if the public price is higher the investor must pay the difference within two working days, while no refund is provided if the public price is lower and allotment occurs at the agreed subscription price. The unit subscription agreement is disclosable in the offer document and units allotted to strategic investors are locked-in for 180 days from listing.

Prevention of Unauthorised Trading: implementation deferred with exchanges required to notify brokers, amend bye laws and report compliance.
SEBI postpones the effective date of its guidelines on prevention of unauthorised trading to April 01, 2018 and disallows further extensions. Stock exchanges must notify brokers, publish the circular, amend relevant bye laws, rules and regulations in coordination to ensure uniform implementation, and report implementation status in Monthly Development Reports to SEBI. The measure is issued under SEBI's powers to protect investors and regulate the securities market.

Intra-day crystallised losses to be real-time blocked from free collateral, triggering risk-reduction if insufficient collateral.
Intra-day crystallised losses on transactions subject to upfront margining must be monitored and blocked in real time from a member's free collateral, with client-level offset against crystallised profits permitted; losses are to be calculated on weighted average prices and not adjusted from exposure free liquid networth. If losses exceed available free collateral, the member must be placed into risk reduction mode as specified by the regulator. Clearing Corporations must implement these measures within three months, notify members, publish the provisions, and report implementation status in monthly development reports.