Interest rate futures on 2 and 5 year notional GoI securities allowed; cash settled with polling settlement, VaR margins, and position limits.
SEBI permits cash settled futures on 2 and 5 year notional coupon GoI securities with standardized contracts (Rs.2 lakh, quoted like underlying, up to 12 month tenor, initial three serial months). Settlement uses FIMMDA polling of selected primary dealers to derive an average settlement yield from a disclosed basket (eligible maturities 1.5-2.5 years for 2 year and 4.5-5.5 years for 5 year contracts) with outlier removal; exchanges must publish basket composition and theoretical price models. Risk management requires 99% one day VaR based initial margins subject to minimum percentages, specified extreme loss and calendar spread margins, exponential moving average volatility ( =0.94), and client/trading member position limits.

Prohibition on payment of incentives bars distribution-connected parties from offering incentives in public debt issues.
Persons connected with the issue, including distributors, are prohibited from offering any incentive, direct or indirect, in cash, kind, services or otherwise to any person for making an application for allotment of specified debt securities; legitimate fees or commission for services rendered in relation to the issue are exempt. Recognized stock exchanges must notify and disseminate the prohibition to their members, the measure being issued under the regulator's market-protection and debt-issuance regulatory powers to protect investor interests and curb issuance cost distortions.

In-Person Verification mandatory across intermediaries; one intermediary's IPV may be relied upon by another for KYC compliance.
Intermediaries must complete initial KYC, upload client KYC data and send supporting documents to a KRA within ten working days, maintain electronic records, ensure no duplication when uploading existing-client data conforming to the uniform KYC form, and implement internal controls for data security. KRAs must provide data/images to intermediaries, confirm receipt to clients within ten working days, prevent duplicate client entries through coordinated systems, maintain an audit trail of KYC transactions, and conduct annual independent audits with action taken reports to their board and to SEBI. IPV is mandatory, recorded on the KYC form, and may be relied upon across intermediaries.

Dematerialisation requirement enables shifting from trade-for-trade to rolling settlement when non-promoter holdings are substantially dematerialised.
SEBI directs stock exchanges to consider shifting securities with connectivity to both depositories from Trade for Trade Settlement to Rolling Settlement only if at least 50% of holdings other than promoters are dematerialised, evidenced by a certificate from the RTA or, where no RTA exists, from a practicing company secretary or chartered accountant, and provided no other reasons justify continuation of TFTS; exchanges must report actions taken to SEBI in their Monthly/Quarterly Development Reports.

Debenture Trustees must submit revised half yearly compliance reports and cannot include trust deed clauses that dilute investor rights.
Debenture Trustees must submit a revised half yearly electronic report covering compliance status, investor grievance redressal, details of debenture issues, defaults, and a compliance certificate; the Compliance Officer shall send the report within three months of each half year (effective from the half year ending March 2012), the board must review and record deficiencies and corrective measures, and any trust deed clauses that dilute or conflict with the mandatory provisions of Schedule IV are null and void.

Outsourcing risk management requires board approved policies, due diligence, binding contracts and regulator access for outsourced services.
SEBI requires intermediaries to adopt Board approved outsourcing policies and a comprehensive risk management programme, refrain from outsourcing core business and compliance functions, and complete a self assessment of existing arrangements. Intermediaries must conduct due diligence on third parties, preserve central records, mandate legally binding contracts specifying service levels, monitoring, confidentiality, IT security, business continuity, exit rights and regulator access, and remain fully liable and accountable for outsourced activities while ensuring investor protection and reporting suspicious transactions to the Financial Intelligence Unit.

Infrastructure Debt Fund reporting: MCR format updated to require inclusion of IDF scheme data and revised reporting obligations.
The prescribed Monthly Cumulative Report format is revised to require mutual funds to include Infrastructure Debt Fund schemes in the MCR layout, capturing IDF investment data as set out in the annexure; mutual funds must adopt the revised reporting format from the regulator's specified reporting month, thereby updating their reporting obligations and compliance expectations for IDF scheme disclosures.

Centralized KYC registration enables single-client KYC verification across intermediaries, reducing duplication and enabling regulated data sharing.
The Regulations establish a centralized KYC Registration Agency regime requiring a SEBI-registered intermediary to perform initial KYC and upload authenticated client details to the KRA system so other intermediaries can verify and download those details, avoiding repetitive KYC. Stock exchanges and depositories must notify intermediaries, amend rules for implementation, monitor compliance via internal audits and inspections, and report implementation status to SEBI, with data security and a code of conduct forming essential compliance obligations.

Annual system audit requirement ensures exchanges and depositories report IT security and compliance to regulator.
Mandates a Annual System Audit for exchanges and depositories, revising the audit process, auditor selection, TOR and report guidelines; requires placement of audit reports and compliance status before the Governing Board, submission of the report and entity comments to the regulator, and an MD/CEO declaration certifying IT system security; entities already auditing may follow the 2008 framework, others must adopt the new framework; issued under Section 11(1) to protect investor interests and regulate the securities market.

Draft Letter of Offer format updated; merchant bankers must use the revised format for regulatory takeover filings.
The circular revises and prescribes an updated format for submission of the Draft Letter of Offer under the takeover regulations; merchant bankers are instructed to follow this updated format when submitting the Draft Letter of Offer to the regulator, and the revised template and instructions are made available on the regulator's website under the legal framework and takeovers categories.

Increase in FII debt limit enables additional investment via competitive bidding with entity caps and bidding rules.
Increase in FII investment ceilings for government securities and listed corporate bonds will be allocated through a BSE competitive bidding process, subject to SEBI bidding rules with specified modifications: per-entity allocation caps for incremental limits and for unutilized long-term government debt, a minimum bid amount, custodians' obligation to remit bidding fees within a short period after the auction, and adherence to the existing utilization timeframe for allotted limits.

Repo participation by mutual funds subject to exposure caps, AAA-only credit, six-month tenor and mandated disclosure.
Mutual funds may undertake repos in corporate debt securities subject to RBI directions and SEBI approval, with each scheme's gross exposure to such repos capped at 10% of net assets and cumulative exposure (repos plus equity, debt and derivatives) not exceeding 100% of net assets. Repos are restricted to AAA-rated corporate debt securities and repo borrowing tenors cannot exceed six months. Trustees and AMCs must adopt guidelines on counterparty category and rating, collateral tenor and haircuts, comply with the Seventh Schedule where applicable, and disclose repo transaction details in half-yearly portfolio statements, trustee reports and the Scheme Information Document.

In-person verification by sub-brokers may be relied on by exchange subsidiaries, subject to the subsidiary's ultimate verification responsibility.
Subsidiaries of stock exchanges acting as stock brokers may rely on in-person verification performed by their sub-brokers (who are also registered as stock brokers of the parent exchange), but the subsidiaries retain ultimate responsibility for ensuring IPV and must obtain and retain the requisite IPV documents for their records.

Public shareholding reporting: recognised stock exchanges must submit standardized quarterly shareholding reports and compliance undertakings.
Recognised stock exchanges must submit a standardized quarterly shareholding report (Annexure A) to the regulator within fifteen days from the end of each quarter, including top ten shareholders, acquisitions, category-wise shareholding (Trading Members, Associates, Public), disclosures for persons acting in concert, and an undertaking by the Managing Director/Executive Director confirming compliance with Regulation 11(1); exchanges must also report implementation status in their Development Report.

Takeover disclosure formats require specified pre- and post-acquisition holdings, acquisition mode, dates, and diluted capital details.
Formats prescribe mandatory fields for Regulation 29(1) and 29(2) disclosures: identification of Target Company, acquirer and PACs, promoter status, listings; numerical pre and post transaction holdings for shares with voting rights, non equity voting rights, and convertible instruments expressed against total and diluted share/voting capital; mode of acquisition/sale; relevant dates; equity and total voting capital before and after the transaction; total diluted share/voting capital after the transaction; signature and date by the acquirer/authorised signatory.

Dematerialisation requirement enables shifting from trade-for-trade to rolling settlement when non-promoter holdings are sufficiently dematerialised.
Companies that have connectivity with both NSDL and CDSL may be shifted from Trade for Trade Settlement to normal Rolling Settlement if at least 50% of other than promoter holdings are dematerialised (certified by the RTA or, if none, by a practicing Company Secretary/Chartered Accountant) and there are no other grounds for continuation of TFTS; stock exchanges must report the action in their Monthly/Quarterly Development Reports.

Uniform KYC form required for securities intermediaries; Part I standardizes core client identification, Part II captures additional specifics.
The circular mandates use of a single standardized KYC application form (Annexure 1) as Part I for core customer due diligence across specified SEBI-registered intermediaries, with intermediary-specific additional data to be collected in Part II. Depositories and AMFI will prescribe Part II requirements for their participants; depositories must amend bye laws, notify participants and verify compliance. Intermediaries must implement the uniform KYC and prescribed POI/POA, PAN and entity-specific documentary requirements for new clients from January 1, 2012.

Disclosure obligations: listed entities must publish comparative quarterly and audited annual financial results with prescribed review and filing timelines.
Amendments require listed issuers to disclose comparative quarterly figures including the immediately preceding quarter, submit last-quarter figures with audited annual results, and accompany unaudited interim results with auditors' limited review reports. Issuers must provide full annual reports electronically to shareholders who register email addresses, abridged hard copies to others and full hard copies on request. A new obligation mandates publication of detailed voting results in a prescribed format within 48 hours of meetings, initially for top entities by market capitalization.

100% promoter demat holding compliance extended; stock exchanges must implement systems, amend rules and report monthly.
Extension of the deadline for 100% promoter holding in demat form by one quarter to the quarter ending December 2011; stock exchanges must implement systems and guidelines, amend bye laws and rules immediately, notify member brokers and publish the circular online, and submit monthly reports to SEBI on implementation.

FII investment limits in long term infrastructure debt revised with bifurcated lock in, residual maturity and bidding allocation rules.
Revises FII investment framework for corporate long term infrastructure debt by creating two categories with distinct residual maturity and lock in requirements: a one year residual/one year lock in category permitting FII inter trading but no sales to domestic investors during lock in, and a three year residual/three year lock in category that includes Infrastructure Debt Fund investments. FIIs may access the three year category without prior approval until a utilisation threshold, after which allocations proceed by competitive bidding; the shorter lock category is to be allocated via a time limited exchange bidding process with per entity caps, minimum bid sizes, and fee remittance deadlines. Embedded put/call dates are treated as maturity for residual maturity reckoning.