Technology-based monitoring of system audits requires exchanges to implement secure audit portals and empanel independent system auditors.
Exchanges must develop web portals to manage the system audit lifecycle of stock brokers, ensure secure auditor access via OTP, capture auditor geo-location to confirm physical visits, and enable online submission of standardised audit reports and Action Taken Reports. Exchanges shall empanel auditors under prescribed eligibility criteria emphasising individual qualifications, ensure auditor independence with appointment limits and potential cooling-off periods, and enforce de-empanelment for repeated deficiencies. The portal is to be ready within six months and the framework applies from the audit period FY 2025-26.

Performance evaluation of statutory committees of MIIs requires external triennial reviews and annual internal evaluations.
External evaluation of Statutory Committees of MIIs must be performed by an Independent External Agency appointed with SEBI's prior no-objection, selected for domain expertise and absence of conflict of interest, on a triennial basis (first review for FY 2024 25). Minimum external assessment criteria and weightages are Roles, Responsibilities and Duties (40%), Effectiveness of Meetings (30%), and Governance Aspects (30%); a standardized rating framework with sample quantitative and qualitative KPIs will be used. MIIs must also perform annual internal evaluations and submit reports to their Governing Board within three months of each financial year-end.

Prohibition on association: intermediaries and agents must avoid links with unregistered advisers or unauthorized performance promoters.
Persons regulated by the Board, MIIs and their agents must not directly or indirectly associate with any person who provides unregistered advice or recommendation on securities or who makes unauthorized claims about returns or performance; association includes transactions of money, client referrals, IT interactions, sharing client information, or similar linkages. Regulated entities are responsible, to the extent of their association, to ensure associated persons and agents do not engage in these prohibited activities and must take appropriate action if services are misused. Investor education is excluded only if it contains no advice or implied performance claims.

Technical glitch reporting requirement centralized via iSPOT portal, mandating MIIs to submit preliminary and RCA reports online.
SEBI requires Market Infrastructure Institutions to submit the preliminary and RCA report of technical glitches via the web based portal iSPOT, integrated with the SEBI Intermediary portal and accessible with existing SI credentials. The circular amends relevant Master Circular clauses to mandate iSPOT use, takes effect February 3, 2025, and directs MIIs to update systems and bye laws to ensure timely submission and centralized recordkeeping for monitoring and compliance.

Due diligence certificate requirement: debenture trustees must submit prescribed certificates at draft filing and at listing application.
SEBI requires Debenture Trustees to provide prescribed due diligence certificates for unsecured debt securities at two stages: at draft offer document/placement memorandum filing (Annex A) confirming disclosures, covenants and undertaking to execute the debenture trust deed before listing application; and at listing application filing (Annex B) confirming execution of the debenture trust deed as per the offer document/placement memorandum and that the issuer's disclosures and ongoing obligations to security holders are true, fair and adequate.

Information Ratio disclosure required for equity mutual funds to report risk adjusted performance and provide standardized explanations.
Mutual funds must disclose the Information Ratio (IR) as a measure of Risk Adjusted Return for equity oriented schemes on AMC websites daily, with AMFI providing comparable, downloadable, machine readable aggregation. IR is defined as (Portfolio Rate of Returns less Benchmark Rate of Returns) divided by the standard deviation of excess return, using the scheme's Tier 1 benchmark and daily arithmetic returns and volatility. AMCs and AMFI must provide standardized explanatory hyperlinks and investor education materials, with disclosures implemented via a prescribed spreadsheet template.

Timeline for ESG rating review: BRSR-triggered reviews permitted to conclude within a longer specified period after publication.
ERPs must review ESG ratings upon material developments affecting an entity's ESG profile and generally complete such reviews immediately, and within ten days of the event; however, where the material development is publication of the BRSR, the review must be completed not later than forty-five days from publication.

Interest waiver: procedure for recovery proceedings-eligibility, exclusions, required documentation, and decision within specified timeline post-demand.
Applications for waiver or reduction of interest in recovery proceedings must be filed to the Recovery Officer with proof meeting the three Section 220(2A) conditions (hardship, circumstances beyond control, cooperation). Relief applies only for periods after service of the demand notice and only where the principal amount is fully paid. The Board has delegated decision-making to a Panel of Executive Directors for smaller interest amounts and to a Panel of Whole-time Members otherwise; specified exclusions apply and incomplete or ineligible applications are to be returned. Applicants must be heard and the Competent Authority must decide within twelve months of receipt of a complete application.

Nomination facilities in securities accounts are streamlined with stricter verification, simplified transmission, and clearer nominee rights.
Nomination facilities for demat accounts and mutual fund folios are revised to standardise transmission rules, strengthen identity verification, and reduce unclaimed assets in the securities market. The framework reiterates survivorship, simultaneous death, HUF transmission, nominee status as trustee for legal heirs, pro rata distribution among surviving nominees, and creditor discharge before transmission. It also prescribes online and physical nomination safeguards, mandatory nominee identifiers, optional nominee KYC during the investor's lifetime, and a limited-document transmission process that excludes affidavits, indemnities, undertakings, attestation, or notarisation.

Research analyst compliance: new certification, deposit, disclosure, segregation and audit obligations require phased implementation and client protections.
SEBI's guidelines require research analysts and entities to obtain prescribed NISM certifications, maintain specified bank deposits with lien to RAASB tied to client counts, segregate research and distribution activities at client level, disclose terms and AI usage, furnish model portfolio disclosures, comply with KYC and five year record retention, conduct annual compliance audits reporting adverse findings and publish audit status on websites, and observe specified phased timelines for bringing existing and new RAs into compliance.

Investment adviser compliance: new SEBI rules tighten deposits, fees, AI disclosures, audit and recordkeeping obligations.
SEBI's circular implements amendments to the Investment Advisers Regulations, 2013 by prescribing tiered deposit requirements tied to client counts with lien to IAASB, conditions for dual registration of research analysts as investment advisers with arms length segregation, criteria and disclaimers for part time IAs, principal officer and entity form transition deadlines for partnership firms, appointment and certification requirements for independent compliance officers, mandatory disclosures and client undertakings for advice on non SEBI products and AI usage, revised fee modes and ceilings with flexibility to change modes, client level segregation rules, standardised MITC in agreements, timestamped call recording retention for execution consents, enhanced annual compliance audit and publication obligations, and website reporting requirements, with specified phased compliance dates.

Revision of timelines to working days for credit rating processes streamlines rating reviews and press-release obligations.
CRAs must treat specified procedural periods in the Master Circular as working days, immediately converting press-release publication, rating-review dissemination after issuer statements, INC migration after NDS non-submission, and follow-up/press-release triggers for missing debenture trustee confirmations into working-day timelines, to ensure uniformity in handling rating actions and disclosures.

Settlement of inactive client funds shifted to monthly running account settlement cycle; trading before that restores client settlement preference.
For clients with a credit balance who have not traded in the thirty calendar days since their last transaction and whose funds remain with the Trading Member beyond that period, the entire credit balance shall be returned to the client on the upcoming settlement date of the monthly running account settlement cycle as notified by exchanges, irrespective of the settlement cycle preferred by the client; if the client trades after thirty calendar days but before that upcoming monthly settlement date, settlement will follow the client's indicated quarterly or monthly preference.

Mutual Funds Lite framework introduces a relaxed regulatory regime for passive funds, easing compliance and simplifying disclosures.
The Mutual Funds Lite framework creates a lighter regulatory regime for specified passively managed schemes-index funds, ETFs, FoFs and eligible overseas passive funds-limiting phase one eligibility to designated domestic equity and debt indices, gold and silver ETFs and single-underlying overseas funds. It prescribes sponsor eligibility and conduct safeguards (including private equity sponsor criteria, lock-in of initial capital and restrictions on related-party off-market transactions), reallocates governance duties between trustees and AMC boards with certain trustee committee relaxations, and simplifies disclosure, filing and investment scope while maintaining targeted transparency measures such as tracking difference and Debt Index Replication Factor disclosures.

Integrated Filing consolidates governance and financial quarterly disclosures for listed entities, with specified timelines and auditor restrictions.
Integrated Filing consolidates specified governance and financial periodic filings into two quarterly formats-Integrated Filing (Governance) and Integrated Filing (Financial)-with timelines of 30 days for governance and 45 days (60 days for year-end) for financial filings; it prescribes quarterly disclosure items (including certain acquisitions, low-threshold fines and tax litigation updates), requires quantification of ratified related party transactions in financial filings, updates Master Circular formats into Annexure 1, substitutes Annexure 18A with Annexure 5 for timelines, and clarifies Secretarial Auditor disqualifications and prohibited services.

Cybersecurity and Cyber Resilience Framework compliance extended with regulatory forbearance and data localisation provisions held in abeyance.
The circular clarifies CSCRF compliance: regulatory forbearance is granted for non compliance during the forbearance period if entities can demonstrate meaningful implementation steps and will be given an opportunity to show progress before any regulatory action. Compliance dates for KYC registration agencies and depository participants are extended to a later date, and the Data Localisation provisions of the Data Security Standard (PR.DS.S2) are held in abeyance pending further consultations. The clarifications are effective immediately.

SEBI Master Circular updates trading, margin trading, market making, call auction and OFS frameworks for stock exchanges.
SEBI issues a consolidated Master Circular effective on issuance, rescinding listed prior circulars while preserving prior acts and applications, and consolidating operative rules for exchanges and clearing corporations covering trading (bulk/block deals, circuit breakers, price bands, call auctions, IPO/re listing controls), margin trading (eligibility, margins, collateral, leverage, disclosures), market making and liquidity schemes, settlement and risk management, trade annulment procedures, and the framework for Depository Receipts and related compliance and reporting obligations.

Subscription to non-convertible securities allowed during trading window closure, subject to Board-specified framework and conditions.
Trading window restrictions under the Prohibition of Insider Trading framework shall not apply to subscription to the issue of non-convertible securities where such subscription is carried out in accordance with the framework specified by the Board; this extends the list of transactions already exempted and is effective immediately, with stock exchanges required to notify and disseminate the circular.

Change in control: transfers among immediate relatives and transmissions won't trigger control change, subject to fit and proper checks.
Clarifies that transfer among immediate relatives and transmission of shares in unlisted body corporate intermediaries shall not be treated as change in control; proprietary concerns' transmission that alters legal formation or ownership will be treated as change in control requiring prior approval and fresh registration; partnership firms face non control treatment for inter se transfers in multi partner firms but induction of a new partner or dissolution scenarios in two partner firms will amount to change in control; transferees gaining controlling interest must meet fit and proper criteria.

Public consultation period for draft scheme documents reduced to a shorter minimum, permitting quicker filing of final offer documents.
SEBI reduces the mandatory public display period for draft Scheme Information Documents on which observations have been issued to a minimum of eight working days for receiving public comments on disclosure adequacy, after which AMCs may launch the scheme and file final offer documents (SID and KIM) in line with the Master Circular; certain clauses are modified or deleted and SEBI observation validity remains governed by the Master Circular.