Tripartite agreement implementation deferred to start of the new financial year; exchanges must notify members and publish the circular.
SEBI postponed the effective date for implementation of the Model Tripartite Agreement between brokers, sub brokers and clients to permit required software and administrative adjustments and to align implementation with the new financial year. Exchanges are instructed to notify member brokers and publish the circular on their websites. The circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect investor interests and regulate the securities market.

Change in status of sub brokers requires prior approval, coordinated surrender or fresh registration, and liability undertakings.
Procedures require prior SEBI approval and payment of prescribed fees for changes in status or constitution of sub brokers; prior approval lasts six months during which the outgoing sub broker must apply for surrender and the surviving/incoming sub broker must seek fresh registration, both filed through the Exchange with recognition/de recognition letters and a joint undertaking accepting liability for pre change obligations. Surrender applications must include the Exchange's de recognition letter, disabling certificate, two public advertisements, original registration certificate, fees, and an undertaking, and Exchanges must forward such applications to SEBI with confirmations on pending proceedings and fee payment.

Notice period for corporate actions increased for securities with derivatives, requiring longer advance notice to stock exchanges.
Companies whose shares carry listed derivatives or form part of an index with derivatives must give extended advance notice to stock exchanges for corporate actions limited to mergers, de mergers, splits and bonus issues. Stock exchanges must implement the change immediately, amend bye laws and listing agreements where necessary, notify companies and publish the circular for investor access.

FII investment limits: separate cap for government debt and an additional sub ceiling for corporate debt under ECB rules.
SEBI prescribes separate ceilings for FII debt investments: a cap applies to dated Government securities and T bills (under both 100% debt and 70:30 routes), and a cumulative sub ceiling is fixed for FII investments in corporate debt that is additional to the government debt sub ceiling within the overall ECB ceiling; custodians are required to notify FII clients of these limits.

MAPIN registration requirement for foreign institutional investors clarified; Form B modified and documentation eased, and fee payment consolidated.
FIIs and their sub-accounts must obtain a Unique Identification Number under the MAPIN regime; SEBI issued a revised Form B and clarifications expanding acceptable proof of address to include SEBI application and approval letters (or SEBI custodian-change letters), specified that Part B need not include net-worth for FIIs/sub-accounts, required relationship entries and notarized power of attorney for authorised representatives in Part C, noted that GDR/FDI investors are not specified investors, and allowed custodians to remit registration fees by consolidated demand draft.

ECB investment cap applies only to dated government securities and T bills, excluding corporate debt for limit monitoring.
The ECB cap on FII debt investments is limited to dated Government Securities and Treasury Bills under both the 100% debt route and the general 70:30 route; corporate debt and other securities are excluded and will not be reckoned against the cumulative debt investment ceiling, with FIIs' 100% debt route investments in dated Government Securities and T Bills monitored against individual allocated limits.

Implementation deadline for Model Tripartite Agreement extended to allow brokers and sub brokers additional time for compliance.
The circular postpones the operative date for the Model Tripartite Agreement between brokers, sub brokers and clients from December to January to address software, system and administrative constraints; exchanges must notify member brokers and publish the circular, and the extension is issued under SEBI's regulatory powers to protect investors and regulate the securities market.

Straight Through Processing mandatory for institutional trades settled via custodians; electronic contract notes supplant physical issuance.
Straight Through Processing is mandatory for institutional trades that are settled through a custodian; trades settled directly between an institution and a broker without a custodian are not covered by this STP mandate. Where an institutional trade receives an electronic contract note in the prescribed STP format, brokers are prohibited from issuing a physical contract note for that trade to prevent duplication and inefficiency.

Unique Identification Number requirement: sub-brokers must obtain UIN or cease acting, with exchanges enforcing compliance.
Sub-brokers designated as specified intermediaries must obtain a Unique Identification Number for themselves and related persons by the regulatory deadline; failure to do so bars them from acting as sub-brokers and attracts penal sanctions under the Regulations, and stock exchanges are directed to ensure compliance.

FII investment limits in government debt adjusted, with daily monitoring and prior approval required once headroom is exhausted.
SEBI raised the cumulative FII debt cap to US $1.75 billion and increased the 70:30 route limit in dated Government securities and treasury bills to US $200 million, with daily monitoring and public disclosure of outstanding positions. A US $25 million headroom allows investments without prior approval; beyond that FIIs/Sub Accounts must obtain SEBI allocation approval, which will be granted on a first come first serve basis and remain valid for seven days. Individual 100% debt FII limits will be realigned and advised separately.

Corporate governance standards require listed companies to adopt revised board, audit and disclosure rules with mandated compliance reporting.
The revised Clause 49 mandates corporate governance standards for listed companies, including board composition with defined independent directors and minimum non-executive representation; an empowered, predominantly independent Audit Committee with specified expertise, powers and duties; detailed disclosure requirements covering related party transactions, accounting treatment departures, risk management and director remuneration; subsidiary oversight obligations; CEO/CFO certification of financial statements and internal controls; and mandatory quarterly compliance reporting and an annual corporate governance section with an external compliance certificate.

Investor Protection Fund guidelines set uniform governance, funding, claims process and minimum compensation limits for investor claims.
Comprehensive guidelines standardize constitution, governance and operation of the Investor Protection Fund/Customer Protection Fund (IPF/CPF) at stock exchanges. The IPF/CPF must be administered by a Trust with specified representation, segregated assets and exchange secretariat support. Funding sources are prescribed, exchanges must invite claims within a minimum notice period and determine legitimacy via arbitration or Defaulters Committee, excluding broker/associate and speculative claims. Exchanges set compensation limits with minimum floors and periodic review; the IPF/CPF Trust disburses compensation up to the single-claim maximum as claims crystallise and auction realisations are credited to the fund after satisfying claims.

Mandatory admission of debt instruments on both depositories strengthens investor protection and requires issuers to comply.
Mandatory admission of issuer debt instruments on both depositories is required to ensure centralised dematerialised holding and improved investor protection. Issuers remain non compliant and stock exchanges and depositories are instructed to notify and secure compliance. The directive is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, directing coordinated action by exchanges, depositories and custodians to implement the admission requirement.

Unique identification requirement for specified investors mandates UIN allotment and biometric enrollment before permitted market participation.
SEBI requires specified investors to obtain a Unique Identification Number (UIN) from the Designated Service Provider (NSDL) by the prescribed deadline; natural person applicants must submit electronic biometric impressions and a photograph and must furnish true information. Specified investors without a UIN are prohibited from transacting in listed securities or units of collective investment schemes after the effective date, and must notify any changes in particulars to the MAPIN database within thirty days. Contraventions attract measures under the Regulations.

Unique client code requirement: mutual funds and FIIs must use parent code at order entry with post close allocations.
Mandate requiring Mutual Funds and Foreign Institutional Investors to enter the parent unique client code at order entry and perform allocation to individual mutual fund schemes and FII sub accounts in the post closing session. Stock exchanges must implement mechanisms to enable such post closing allocations, amend bye laws and rules as necessary, notify member brokers/clearing members, disseminate the circular, and report implementation status in the monthly development report under the regulator's statutory powers.

Dual depository connectivity allows shifting scrips from trade-for-trade to normal rolling where no other grounds exist.
Companies in Annexure A established connectivity with both depositories by 30.06.2004 but remain in the Trade for Trade Segment (TFTS); stock exchanges may shift such scrips to the Normal Rolling Segment (NRS) provided no other specific grounds justify continuation in TFTS, and must report the action taken in the Monthly Development Report for November 2004, Section II item no. 13.

Public representative continuity clarified: incumbents to remain on subsidiary boards until successors are appointed formally.
SEBI clarifies that existing public representatives on subsidiary company boards will continue in office until their successors are formally appointed, addressing queries on clause (f) of the Reconstitution of Governing Board provision in the earlier circular SMD/Policy/Cir-4/2003.

Securities Transaction Tax integration in STP messaging requires new COUN qualifier and placement before settlement amount.
Integration of the Securities Transaction Tax into STP messaging requires an AMT block using qualifier "COUN" to identify the STT amount in the format qualifier//currency code amount; the AMT block is to be placed before the Settlement Amount block, mandatory in IFN515 and optional in IFN540, IFN541, IFN542 and IFN543. Rejection of IFN515 on STT amount must record reason in Tag70D Narrative with Tag24B set to "NARR".

Securities Transaction Tax rules set VWAP and settlement mode valuation, mandate collection by exchanges and mutual fund trustees, and require prescribed returns.
The draft STT Rules prescribe valuation methods for taxable securities transactions (VWAP for netted trades, trade price for trade for trade, and specified auction treatment), designate stock exchanges and mutual fund trustees as responsible for collection and remittance, require returns in prescribed Forms with schedule data on specified computer media by 30 June following the financial year, and set rounding, payment, notice, refund and appeals procedures including Forms No.1-5 and signatory and verification rules.

Uniform client documentation requirement standardises broker forms, mandates broker client identification duties and directs exchanges to adopt formats.
SEBI prescribes a uniform set of model documents-Client Registration Form, Member-Client Agreement, Tripartite Agreement for cash segment, Uniform Risk Disclosure Document and Broker-Sub-broker Agreement-allowing additional non-conflicting clauses. Brokers must satisfactorily identify clients and may obtain extra information; specified institutional entities are exempt from the Client Registration Form and may agree on agreements and risk disclosures. All requirements are effective immediately except the tripartite agreement effective December 1, 2004. Exchanges must amend bye-laws, disseminate documents to members and report implementation to SEBI monthly.