Pre-issue publicity restrictions: public communications must be factual, consistent, and disclose filing status until allotment of securities.
Amendments require that from board approval until filing a draft offer document, public communications be consistent with past practices or prominently disclose a proposed issue; from filing until allotment such communications must state filing status and availability of offer documents online, contain only factual information, exclude extraneous material and avoid projections; issuers must promptly disclose material developments that may affect the company by public notice in the newspapers used for pre-issue advertising.

Lock-in exemption for venture capital pre-IPO shares restricted; minimum holding required before filing draft prospectus to qualify.
Amendments restrict the pre-IPO lock-in exemption for SEBI registered Venture Capital Funds and Foreign Venture Capital Investors so that only shares held for at least one year as on the date of filing the draft prospectus qualify; periods during which convertible instruments were held as fully paid up are included for computing the holding period, convertible instruments being deemed fully paid up only when all amounts payable have been paid and no further payment is envisaged.

Dematerialisation requirement enables shift from trade for trade to rolling settlement when non promoter holdings are dematted and certified.
SEBI directs stock exchanges to shift securities of companies connected to both depositories from TFTS to rolling settlement only if at least fifty percent of non promoter holdings are in dematerialised form, certified by the company's RTA or, if none, by a practicing Company Secretary or Chartered Accountant, and provided there are no other reasons to continue trading in TFTS; exchanges must report actions taken in the Monthly/Quarterly Development Report (Section II, item no. 13).

Uniform cut-off timings for NAV applicability ensure consistent valuation and investor protection across mutual fund schemes.
The circular prescribes uniform cut-off timing rules for NAV applicability across mutual fund schemes (excluding international schemes and exchange-traded transactions), distinguishing operative NAV determination for liquid fund schemes and for other schemes based on receipt time and payment instrument type; mandates uniform application to all investors, timely deposit of subscription instruments with bank facilities, remedial liability for losses from non-compliance, time-stamping at disclosed official points with tamper-proof machines per Schedule II, record preservation, and specified compliance and disclosure reporting to trustees and the Board.

Payment of fees by stock brokers: option to adopt amended fee schedule from October or April with consent deadlines.
Stock brokers within subclauses (c) and (d) of clause 1 of Schedule III A may opt to pay fees under the amended Schedule III A either from October 01, 2006 or from April 01, 2007; written consent in the specified Annexure 1 format must be submitted to the stock exchange on or before October 31, 2006 for the October option, or on or before February 28, 2007 for the April option. The corrigendum corrects an earlier circular's erroneous indication of April 01, 2006 as the later effective date.

Broker fee payment obligations clarified: amended schedule mandates reporting, remittance procedures, and monthly remittance deadlines.
The amended schedules require brokers to opt into the new fee framework by specified dates and to designate in writing which exchange will collect fees for their reported off-market transactions; exchanges must obtain these declarations. Exchanges shall remit collected fees by banker's cheque or demand draft and submit broker-level information in prescribed annexure formats for cash and derivative segments. Exchanges must amend bye-laws to facilitate collection, notify members, publish the changes, and report implementation; fee collection begins 1 October 2006 with scheduled remittance deadlines thereafter.

Uniform NAV cut-off timings determine applicable NAV for mutual fund purchases, redemptions, switches and sweeps.
Uniform cut-off timings determine the NAV applicable to mutual fund transactions (excluding international schemes and exchange trades). Mutual funds must uniformly apply cut-off timings, promptly deposit subscription instruments into banks, and the asset management company must indemnify losses from non-compliance. Distinct prospective NAV rules govern liquid funds and other schemes for purchase, repurchase, switch and sweep transactions. Official points of acceptance must be disclosed, time-stamping machines deployed with specified safeguards, and compliance reported in periodic trustee and compliance reports; guidelines are to be disclosed in offer documents.

Reporting requirements for trading system disruptions: exchanges must notify a standing committee, adopt remedial measures, and report to the regulator.
All instances of hanging, slowdown, breakdown or other problems in the computerised trading system must be reported to a Standing Committee which will examine each incident and report to the Governing Board/Council. The Board/Council shall deliberate and adopt remedial measures; stoppages beyond five minutes require explanation and reporting to the regulator and a public press release. Exchanges must amend bye laws, notify members and disseminate the provisions on their websites, and report implementation status to the regulator.

Mandatory PAN requirement for securities accounts: verification, limited-purpose accounts, exemptions, and account freezes until PAN produced.
The circular mandates the Permanent Account Number (PAN) for cash market trading and BO accounts, prescribes custodial verification and certification of PAN for specified institutional clients, allows temporary accommodations (including limited purpose BO accounts for certain NRIs/PIOs and acceptance of PAN allotment letters), exempts certain UN/multilateral entities and Sikkim residents subject to documentary proof, and directs depositories and exchanges to amend rules, communicate changes, and freeze accounts that fail to produce PAN within prescribed periods.

Position limits in derivatives: market-wide limits tied to free-float holdings and participant caps relative to open interest.
Re-introduction rules require stocks dropped from derivatives trading to satisfy full eligibility for three consecutive months before exchanges may reintroduce contracts; first-time introductions still need regulator approval. Market wide position limits for single stock derivatives are linked to free-float market capitalisation and set as a proportion of non-promoter holdings, applying to aggregate open positions across futures and options. Participant position limits for trading members, FIIs and mutual funds in index derivatives are set by a floor amount or a proportion of total market open interest, with existing hedging provisions retained.

Dematerialisation requirement for non-promoter holdings enables transfer from trade-for-trade to rolling settlement upon certification and reporting to regulator.
SEBI permits shifting securities with connectivity to both depositories from Trade-for-Trade to rolling settlement only after dematerialisation of non-promoter holdings is certified by the Registrar and Transfer Agent or, if none, by a practicing Company Secretary or Chartered Accountant, and where no other grounds exist for continuing trade-for-trade. Exchanges must report actions taken in the Monthly/Quarterly Development Report (Section II, item 13).

FII investment limits in Upper Tier II instruments set with separate cap, allocations, and approval-triggering threshold.
A separate capped framework governs FII investments in Upper Tier II instruments: investments are excluded from the general corporate debt ceiling but fall under a distinct aggregate limit allocated between 100% debt FIIs and general 70:30 FIIs/sub-accounts. A reserved headroom allows general 70:30 FIIs/sub-accounts to invest up to that threshold without approvals; beyond it, allocations follow the Board's established approval procedure. The Board may withdraw unused allocations to satisfy demand, and custodians must notify FII clients.

Dematerialisation requirement: exchanges may move securities from Trade-for-Trade to rolling settlement if demat holdings and no other grounds.
SEBI permits shifting listed securities from the Trade for Trade Segment to rolling settlement where issuers have depository connectivity and at least fifty percent of non promoter holdings are dematerialised, evidenced by a certificate from the RTA or a practicing Company Secretary/Chartered Accountant if no RTA exists; exchanges must ensure no other grounds for TFTS continuation and report actions in the Monthly/Quarterly Development Report, Section II item no. 13.

SEBI FII amendment regulations published: foreign institutional investors and custodians notified to review and implement the changes.
The circular notifies Foreign Institutional Investors and custodians that a Gazette Notification amending the FII regulations has been issued, is enclosed with the circular, and is available on the regulator's website for recipients to consult and take necessary action to align operations and compliance with the amended provisions.

Dematerialisation requirement for non promoter holdings must be met before shifting securities from trade for trade to rolling settlement.
SEBI directed exchanges to shift listed securities from Trade for Trade to rolling settlement where both depository connectivities exist and the dematerialisation of non promoter holdings meets the prescribed threshold, evidenced by a certificate from the Registrar and Share Transfer Agent or, if no RTA, from a practicing Company Secretary/Chartered Accountant; exchanges must confirm absence of other grounds for continued TFTS and report actions to SEBI in the Monthly/Quarterly Development Report.

Capital protection oriented scheme: portfolio based protection requires rating, disclosure, close ended structure and no pre maturity repurchases.
Capital protection oriented schemes must be designated and disclosed as oriented to capital protection but not guaranteeing returns, with protection arising from portfolio structure rather than external guarantees. The proposed portfolio must be rated by a SEBI registered credit rating agency, reviewed quarterly, with trustees and the AMC reporting on portfolio structure in half yearly and bi monthly reports respectively, the debt component carrying highest investment grade, schemes being close ended, and no repurchases before maturity.

Annual Information Return filing requirement mandates accurate singular AIR submission by each mutual fund and correction via supplementary report.
Mutual funds must file an Annual Information Return reporting specified transactions in electronic form with PANs; common filing defects include missing/invalid PANs, incomplete names and addresses, incorrect location and transaction codes, and misclassification of parties. A single AIR is required per mutual fund (not per scheme); mutual funds are directed to verify prior-year filings and submit a supplementary information report where necessary, under SEBI's regulatory mandate to protect investor interests and ensure accurate reporting.

Foreign investment limits for mutual funds: investments allowed subject to eligibility, disclosure, dedicated management and due diligence.
Mutual funds may invest in ADRs/GDRs, overseas equity, highly rated foreign debt, AAA government securities and units of overseas funds within an aggregate industry ceiling and individual fund sub-ceilings; overseas ETFs are permitted for qualified funds meeting specified eligibility and sub-limit conditions. Funds must appoint a dedicated Fund Manager, satisfy due diligence and disclosure requirements, report performance and exposures to trustees and SEBI, and apply prescribed expense treatment for foreign fund investments.

Appointment of custodian required for portfolio managers, with exemptions for small managers and advisers under amended regulations.
Amendments redefine "principal officer" as an employee designated by the portfolio manager and set eligibility by either a professional qualification in finance, law, accountancy or business management, or at least ten years' related securities-market experience. A new rule mandates that every portfolio manager appoint a custodian for securities managed or administered by it, with exemptions for managers below a prescribed assets-under-management threshold and for those performing purely advisory functions. The amendments come into force on publication in the Official Gazette.

Mutual fund reporting obligations updated to require revised MCR and ASR formats including unit capital and new scheme reporting.
Revised reporting requirements require all registered mutual funds to submit MCR and ASR in modified formats including unit capital data, with ASR aggregated across schemes. New-scheme details must be reported in the MCR for the month in which allotment occurs. The circular is issued under statutory powers to protect investors and regulate the securities market.