Delivery Instruction Slip controls tightening to prevent unauthorized transfers; enhanced DP verification and issuance limits mandated.
Safeguards require controls on Delivery Instruction Slips (DIS) and depositor-depository procedures to prevent unauthorized transfers from Beneficial Owner accounts. DPs must not accept pre-signed or blank DIS, must limit booklet and loose DIS issuance, cancel slips when loss is reported, and issue new booklets only after substantial use or validated loss. DPs must verify signatures, record verification details on instruction slips, and cross-check with BOs for transfers that move all ISIN balances from inactive accounts or multiple ISINs from active accounts. Depositories must amend rules, notify DPs, monitor compliance and report implementation.

Dematerialisation requirement enables shift from Trade-for-Trade to rolling settlement upon prescribed non promoter dematerialisation and certification.
Establishment of connectivity with both depositories permits shifting securities from the Trade for Trade Segment to rolling settlement provided prescribed levels of non promoter holdings are held in dematerialised form and certified by the Registrar and Transfer Agent or, if no separate RTA exists, by a practising Company Secretary or Chartered Accountant; shifting must not occur where other grounds justify continuation in Trade for Trade. Stock exchanges must report actions taken in the Monthly/Quarterly Development Report (Section II, item no. 13).

FII regulatory amendment notifies revised compliance and procedural framework for foreign institutional investors; circular attaches the notification.
Amendment to SEBI (Foreign Institutional Investors) Regulations communicates a regulatory change affecting foreign institutional investors and custodians, transmits the official gazette notification as an annexure, makes the amendment text available on the regulator's website, and directs recipients to take necessary action under the revised regulatory framework.

Exclusive investor grievance e-mail mandated for intermediaries to enable complaint registration and follow-up under a regulatory directive.
All registered Merchant Bankers, Registrars to an Issue/Share Transfer Agents, Debenture Trustees, Bankers to Issue and Underwriters must designate an exclusive e-mail ID of the grievance redressal division or compliance officer for investor complaints, enable follow-up and monitoring of those complaints, and prominently display the e-mail ID and related contact details on their websites and investor materials.

FII investment limits in government securities increased, reallocating headroom toward 100% debt FIIs and notifying custodians.
SEBI increases the cumulative ceiling for FII investment in Government Securities and T Bills, adding the incremental headroom to the existing allocation for 100% debt FIIs while maintaining the 70:30 FIIs allocation unchanged; corporate debt limits remain unchanged. The circular provides revised per category and aggregate permissible limits for government securities/T bills and corporate debt and asks custodians to inform their FII clients.

Dematerialisation requirement enables shifting from trade-for-trade to rolling settlement upon certified dematerialisation of prescribed holdings.
Companies with connectivity to both depositories may be shifted from Trade-for-Trade to Rolling Settlement provided a prescribed proportion of non-promoter holdings are dematerialised and certified by the RTA or, if none, by a practicing company secretary/chartered accountant, and provided there are no other grounds for continuation in Trade-for-Trade; stock exchanges must report actions taken in their development reports.

Overseas investment limit for mutual funds updated; individual fund cap linked to net assets and subject to a fixed maximum.
Mutual funds may invest in ADRs, GDRs, foreign securities and overseas ETFs within an overall overseas investment ceiling of US$3 billion, subject to an individual sub ceiling not exceeding 10% of a fund's net assets as on March 31 of the relevant year and capped at US$150 million per fund; all other conditions from the prior circular remain unchanged and the directions are issued under Section 11(1) of the applicable Act and Regulation 77 of the Mutual Funds Regulations.

Foreign investment limits in infrastructure securities require FDI prior approval; FII limited to secondary market and no board seats.
Policy permits aggregate foreign investment in infrastructure companies in securities markets with distinct FDI and FII allocations; FDI requires prior FIPB approval, FII restricted to secondary market purchases and barred from board representation; no foreign investor, including persons acting in concert, may exceed the prescribed shareholding threshold; SEBI and RBI to amend regulations and recognised stock exchanges remain subject to the public shareholding limit under the Securities Contracts (Regulation) Regulations, 2006.

Investor grievance redressal: Entities must designate exclusive e-mail IDs for complaints and display them prominently online.
SEBI directs stock exchanges, brokers, listed companies, depositories and depository participants to designate an exclusive e-mail ID for investor complaints, display it prominently on websites and materials, amend bye-laws and listing agreement clauses as needed, disseminate the requirement to members/DPs, include the e-mail ID in outreach campaigns, and report implementation status to SEBI in the Monthly Development Report under Section 11(1).

Custodian of Securities amendment requires FIIs and custodians to use the prescribed annexure format for regulatory compliance.
SEBI issued a circular enclosing the SEBI (Custodian of Securities) (Second Amendment) Regulations 2006 and the gazette notification, informing Foreign Institutional Investors and custodians that the prescribed compliance format required under regulation 3(iii)(b)(4) is enclosed as Annexure A and that the notification and related materials are available on the regulator's website for necessary action.

Disbursement rules: surplus from a defaulter broker's multiple memberships must be credited to the exchange IPF/CPF to protect investors.
Where a defaulter broker has multiple exchange memberships, any amount remaining after satisfying eligible claims of the exchange, SEBI and other exchanges shall be credited to the IPF/CPF of the exchange; exchanges must amend bye laws, notify members, and report implementation to operationalise this disbursement sequence.

FII debt investment limits reallocated between account types, with headroom allocation rules and mandatory custodial reporting enforced.
Revision reallocates aggregate FII debt ceilings between 100% debt accounts and general 70:30 FIIs/Sub-Accounts, setting distinct permissible limits for Government securities and Corporate Debt while preserving overall caps. Separate headrooms for 100% debt accounts will be allocated on a first-come-first-serve basis with a seven-day utilisation window; approvals beyond specified thresholds for 70:30 accounts follow the pre-existing approval procedure. Fortnightly custodial reporting in the prescribed format to SEBI is required to monitor allocation and utilisation; Upper Tier II instrument limits remain unchanged.

Corporate bond reporting requires prompt reporting to an authorized platform and real-time public dissemination, with settlement bilateral.
SEBI directs BSE to operate an authorized corporate bond reporting platform from January 1, 2007 to capture trades in listed debt securities; all issuers, intermediaries and contracting parties must report trades (intermediaries report executed transactions) within thirty minutes and settlement information within one trading day. The platform will provide access (including VPN for non-members), publish reported data in real time, operate specified hours, and serve only as a reporting facility while bilateral settlement obligations remain with intermediaries and parties.

Venture capital share transfer exemption clarified: applies where VC-held investee later lists and shares transfer to promoter under agreement.
The exemption under regulation 3(1)(ia) applies where a VCF or FVCI transfers the shares of a venture capital undertaking that was unlisted at the time of investment and subsequently became listed, to the promoter of that same venture capital undertaking pursuant to an agreement. Transfers by a VCF or FVCI of shares of any other listed company are excluded from the exemption. Transfers of shares of an unlisted venture capital undertaking to its promoters are covered by an existing exemption and were not the intended subject of regulation 3(1)(ia).

Tariff transparency for depository participants requires annual submission and public web disclosure for investor comparison.
Depository Participants must submit their tariff/charge structure to their depository annually by 30 April and notify any changes when effected; depositories must implement systems, formats and periodicity to collect this data, publish comparative tariff/charge information on their websites, amend applicable bye laws and business rules, notify DPs of the requirement, and report implementation status to SEBI in the Monthly Development Report.

Dematerialisation requirement: securities shift to rolling settlement where majority non promoter holdings are dematerialised and no other grounds persist.
Securities with connectivity to both depositories may be shifted from Trade for Trade Segment to rolling settlement provided a majority of non promoter holdings are in dematerialised form, supported by a certificate from the Registrar and Transfer Agent or, if no separate RTA exists, from a practising company secretary or chartered accountant, and provided there are no other grounds for continuation in the Trade for Trade Segment.

Account statement dispatch rules require periodic statements for systematic investment plans and prompt free issuance on investor request.
SEBI requires mutual funds to dispatch account statements for SIP/STP/SWP quarterly within ten working days of quarter-end, with the first statement within ten working days of initial investment; upon investor request funds must supply statements free within five working days and may email monthly soft copies if mandated. Funds must also issue statements to investors inactive for six months, together with Portfolio Statements or Annual Reports, reflecting the latest closing balance and unit value, with electronic delivery permitted where mandated.

Dematerialisation requirement: securities with connectivity to both depositories may shift from trade-for-trade to rolling settlement.
Shifting trading from the Trade-for-Trade segment to rolling settlement is permitted for securities with connectivity to both depositories provided at least 50% of non-promoter holdings are in demat mode, supported by a certificate from the Registrar and Transfer Agent or, where no separate RTA exists, from a practicing Company Secretary or Chartered Accountant, and provided there are no other grounds for continued TFTS trading.

Permanent Account Number requirement for NRIs/PIOs to operate BO and trading accounts; deadline December 31, 2006.
Mandatory Permanent Account Number (PAN) compliance is required for operation of BO accounts and trading; NRIs/PIOs/foreign nationals previously allowed limited purpose BO/trading accounts without PAN must obtain PAN by December 31, 2006 or face account inoperability. Income Tax Department guidance permits PAN applications from persons outside India and foreign citizens based on passport and foreign bank account proofs, with procedural codes, AO guidance, courier charges, and disclosure requirements for service providers.

Conflict of interest restriction: mutual fund key personnel barred from venture capital fund governance; VCFs must confirm compliance promptly.
A regulatory directive prohibits Key Personnel of mutual funds-defined to include the chief executive (by whatever designation), chief investment officer, fund managers and departmental heads of an asset management company or investment manager-from serving on the board or in governance or investment roles of venture capital funds. Venture capital funds must confirm compliance within the period prescribed in the circular; the guidelines are issued by the Board under its statutory authority.