Electronic book mechanism now governs private placements of specified debt securities, imposing platform, disclosure and bidding obligations.
The circular mandates use of an Electronic Book Mechanism for private placements of debt securities and NCRPS meeting specified thresholds and permits voluntary use for other debt instruments. Recognised stock exchanges acting as Electronic Book Providers (EBPs) must offer an anonymous, on-line bidding platform, maintain audit trails and IT resilience, publish standardized issue data, and coordinate KYC, enrollment, bidding, allotment (ascending-yield priority with pro-rata at cut-off) and pay-in through clearing corporations. Issuers, arrangers and participants have specified disclosure, enrolment, KYC and withdrawal obligations, with debarment and cooling-off provisions for defaults and withdrawals.

Mutual fund scheme performance must be benchmarked to Total Return Index; use composite CAGR where TRI is unavailable.
Performance benchmarks for mutual fund schemes must be aligned with the scheme's investment objective and measured using the Total Return Index (TRI). If TRI data do not cover the entire history of a scheme, funds must compute a composite CAGR combining PRI values for the earlier period and TRI values thereafter, using the prescribed formula and disclosing the date ranges used. This requirement applies to all schemes from February 1, 2018.

Transaction charge parity required: exchanges must cap fee differentials within turnover slabs to ensure uniformity and transparency.
The circular substitutes a provision requiring exchanges to ensure that the ratio between highest to lowest transaction charges in the turnover slab of any contract is not more than 2:1, standardising fee differentials. Exchanges must amend relevant bye-laws, notify members, and publish the provision on their websites, with implementation from the specified commencement period; the directive is issued under the regulator's powers to protect investors and regulate the market.

Schemes of Arrangement: revised filing, independent valuation, public shareholding safeguards and mandatory lock-in and listing timelines.
Amendments require draft schemes for wholly owned subsidiary mergers to be filed with stock exchanges for disclosure; mandate that valuation reports and fairness opinions be supplied by an Independent Chartered Accountant and an Independent SEBI-registered Merchant Banker absent material conflicts; impose a minimum public-holding safeguard in the post-scheme shareholding on a fully diluted basis; prescribe staged lock-in of pre-scheme share capital for unlisted issuers seeking listing with limited exceptions and permitted pledges or inter-se promoter transfers; and require completion of listing and commencement of trading within a specified period after the court order with prior newspaper disclosures.

Exemption from open offer obligations: standardised application format and trust-deed conditions streamline SEBI processing of acquisition proposals.
Regulation 11(1) permits the Board to grant an exemption from open offer obligations and Regulation 11(3) requires acquirers to file an application with a sworn affidavit. SEBI prescribes a standard application format (Annexure A) requiring detailed disclosures about acquirers, target company, proposed acquisition, triggered provisions, and supporting documents, and sets out a Schedule of specific trust-deed conditions and undertakings where a Trust is the acquirer, while clarifying that compliance does not guarantee exemption and applications will be considered case-by-case.

FPI investment limits in government securities revised, raising caps while preserving existing allocation and monitoring conditions.
Revises FPI caps in government debt effective January 1, 2018 by increasing the upper ceilings for central government securities overall and for Long Term FPIs, and by raising both general and long term State Development Loan limits; existing allocation and monitoring conditions continue to apply and custodians are to notify FPI clients.

Shareholding disclosure: PAN-based consolidation required to prevent duplicate reporting of specified securities holdings.
Disclosures of holdings of specified securities must include the PAN of the first holder in joint holdings and the shareholding of promoters, promoter group, public shareholders and non-public non-promoter shareholders must be consolidated by PAN and folio number to avoid multiple disclosures, applying to both physical and dematerialized holdings.

Mutual fund categorization rules revised to permit portfolio-level duration adjustments with trustee documentation required and changed credit eligibility.
The circular requires use of average full market capitalization over the prior six months when consolidating stock lists, mandates that Macaulay duration be measured at the portfolio level with scheme descriptions reflecting portfolio-duration ranges, permits temporary reduction of portfolio Macaulay duration down to one year under anticipated adverse interest-rate movements subject to offer-document disclosure, written justification, trustee review and reporting, revises credit-quality eligibility so Corporate Bond Funds target AA+ and above while Credit Risk Funds target AA and below (excluding AA+), and amends Banking/PSU and Floater fund allocation floors.

Independent trustees tenure limits and cooling-off requirements reinforce mutual fund governance and auditor independence.
The circular limits service of independent trustees and independent directors to two terms of up to five consecutive years with a three-year cooling-off and no association during that period; existing incumbents are capped at ten years with transitional allowances. It similarly restricts appointment of a mutual fund auditor to two terms of up to five consecutive years with a five-year cooling-off, bars incoming auditors linked by common partners or network affiliation to the outgoing firm during cooling-off, and applies equivalent transitional caps and allowances.

Record retention obligations require brokers to preserve client order evidence and permit alternative proof when records are unavailable.
Brokers must retain evidence of client order placement, including telephone recordings for phone instructions, and preserve those records for the minimum arbitration period and until dispute resolution where disputes arise. SEBI may require specific records to be kept longer. The burden of proof to produce records for disputed trades lies with the broker, but in exceptional cases where records cannot be produced the broker may justify non-production and alternative evidence such as post-trade confirmations or receipts/payments may be considered. Stock exchanges must notify brokers, amend governance rules, publish the circular, and report implementation to SEBI.

Enhanced supervision reporting: brokers must submit month-end ISIN-wise balances and pledging details, exchanges to notify clients.
Stock brokers must report end-of-day securities balances ISIN-wise and consolidated, plus ISIN-wise pledged securities and funds raised, as of the last trading day of the month, submitting those data within seven calendar days. Exchanges must forward full ISIN-wise data to clients by email and consolidated data by SMS to mobile numbers uploaded by brokers; exchanges must notify brokers, publish the circular, and amend bye-laws for uniform implementation. The provisions apply one month from the circular's date and are issued under SEBI's regulatory enforcement powers to protect investors.

Securities lending framework revised: updated tenure options, position limits, rollover and corporate action treatments for SLB contracts.
The circular revises the SLB framework to allow Approved Intermediaries to offer contract tenures from short durations up to 12 months; prescribes a tiered position limit regime comprising a market wide limit as a percentage of free float capital, a per clearing member (and institutional investor) cap tied to that market wide limit, and a lower client level cap; prescribes dividend, stock split and other corporate action treatments including foreclosure on ex date for certain events; and formalizes rollovers allowing multiple extensions subject to an overall 12 month cap and prohibiting netting between borrowed and lent positions.

Hybrid Security reporting requirement introduced for FPI investments, mandating daily and AUC disclosure across debt, equity and hybrid.
Creation of a third reporting category Hybrid Security to capture FPI investments in REITs and InvITs and reflect them in daily FPI net investment data and monthly/fortnightly AUC reports. Depositories must implement systems for daily custodian reporting and publish AUC by debt, equity and hybrid categories; the directive is effective immediately under the regulator's statutory powers.

Issuer definition expanded to include Indian foreign currency raisers, qualifying foreign issuers, and supranational issuers.
The amended issuer definition in the SEBI (IFSC) Guidelines covers: (i) Indian entities raising capital in foreign currency with requisite FEMA or exchange control approvals; (ii) foreign incorporated entities permitted by their home laws or constitutional documents to issue securities outside their country of incorporation or place of business; and (iii) supranational, multilateral or statutory organizations/institutions/agencies permitted by their constitutions to issue securities.

Online registration for clearing corporations now requires exclusive portal filings, including renewals and statutory reports via the intermediary portal.
All applications for recognition and renewal as clearing corporations and all other statutory filings must be submitted exclusively through the SEBI Intermediary Portal, including renewals under Regulation 4 and 12 and recurring filings such as annual financial statements, monthly development reports, rules, bye laws and returns; the portal is operational, available via the regulator's website, and supported by a user manual and helpdesk.

Block deal windows revised with defined sessions, price references, order price limits and mandatory delivery requirements.
Two block deal windows are prescribed: a Morning Block Deal Window (08:45-09:00) using the previous day's closing price as reference, and an Afternoon Block Deal Window (14:05-14:20) using the VWAP of cash trades from 13:45-14:00 as reference (VWAP to be disseminated between 14:00-14:05). Orders must be within 1% of the applicable reference price, meet the prescribed minimum order size, and result in delivery. Exchanges must disseminate trade details same day after market hours and apply normal trading, settlement, surveillance and risk-containment requirements. The framework is effective January 1, 2018.

IFSC membership eligibility expanded: Indian or foreign entities may form companies to serve as trading and clearing members.
The amendment to Guideline 8(2) permits any entity based in India or in a foreign jurisdiction to form a company in an IFSC to act as a trading member of a stock exchange and/or a clearing member of a clearing corporation.

Settlement mode for commodity derivatives: physical delivery favored; cash settlement allowed only with impracticability or reliable benchmark price.
Primary settlement preference for commodity derivatives is physical delivery; cash settlement is allowable only where physical delivery is impracticable (intangible or perishable commodities, or inadequate storage/transport) or where a reliable, exchange vetted benchmark spot price exists. Exchanges may list both settlement types for the same commodity if they facilitate different price discovery and must amend rules and notify market participants accordingly.

Minimum public shareholding enforcement: exchanges to impose penalties and freeze promoter holdings until compliance is restored.
Non-compliance with the Minimum Public Shareholding requirements obliges recognised stock exchanges to issue notices and impose daily monetary penalties, direct depositories to freeze promoters' and promoter group shareholdings, and restrict promoters and directors from accepting new directorships in other listed entities until compliance. Persistent non-compliance escalates penalties and freezing of all securities in promoters' demat accounts; exchanges may also consider compulsory delisting. Upon satisfaction of compliance, exchanges must instruct depositories to unfreeze securities, lift restrictions, and publish compliance status.

Mutual fund scheme categorization standardizes categories and mandates reclassification and compliance timelines for asset managers.
Mutual funds must classify open-ended schemes into standardized groups (Equity, Debt, Hybrid, Solution Oriented, Other) with uniform descriptive types and specified asset-allocation or strategy thresholds; solution oriented schemes carry mandated lock-ins. SEBI defines large, mid and small cap by ranked full market capitalization and requires AMFI to publish a semi annual stock list that funds must use and rebalance to within one month. Only one scheme per category is permitted subject to limited exceptions; AMCs must submit reclassification proposals with trustee approval and implement mergers, wind-ups or fundamental attribute changes within prescribed compliance timelines.