SEBI issues a consolidated master circular updating LODR compliance, disclosures, enforcement and reporting frameworks.
Master Circular consolidating SEBI circulars on compliance with the LODR Regulations, 2015 (updated to September 30, 2024) providing a chapter wise compliance framework with prescribed formats and procedures for listing agreements, periodic and annual disclosures (shareholding pattern, corporate governance reports, financial results, RPTs, IDRs, BRSR), event based disclosures (material events, defaults, auditor resignations, divergence in banks' asset classification), methods to achieve Minimum Public Shareholding, e voting facilitation, and a uniform enforcement regime including fines, freezing of promoters' holdings, 'Z' category trading, suspension, revocation and possible compulsory delisting; accompanied by annexures and an appendix of rescinded and consolidated circulars.

Capital issuance compliance framework consolidates circulars, harmonises disclosures, ASBA/UPI and timelines for public offerings and listing.
The Master Circular consolidates SEBI circulars under the ICDR Regulations, prescribes a chapter wise compliance framework for public and rights issues, standardises disclosures (including abridged prospectus formats and QR code linkage), codifies ASBA and UPI application and processing rules with SCSB/Sponsor Bank obligations and compensation measures for application failures, mandates Issue Summary Document filing and stock exchange utilities for dissemination, and reduces and sequences timelines for allotment, unblocking and listing.

Reclassification of FPI investment: custodians must report intent, freeze purchases, and permit transfer only after required RBI reporting is complete.
Procedure requires an FPI (with its investor group) reaching ten percent or more of a company's fully diluted paid-up equity to follow FEMA rules to reclassify as FDI; upon notice the custodian must report to the Board and freeze purchase transactions until reclassification completes, and custodians shall transfer securities from FPI demat accounts to FDI demat accounts only after RBI-prescribed reporting for reclassification is complete.

Mutual fund disclosures now require separate expense and yield reporting for direct and regular plans and a coloured risk-o-meter.
Mutual funds shall separately disclose total recurring expenses, half-year returns and compounded annualised yields for direct and regular plans, with AMFI to finalise the half-yearly statement format. A prescribed six-level Risk-o-meter with specified colour hex codes must be used in all digital and polychrome printed materials. Any change in a scheme's or benchmark's risk-o-meter must be notified to unitholders via Notice cum Addendum and e-mail/SMS showing both existing and revised risk-o-meters. These measures take effect December 05, 2024.

Exposure limit for overseas funds: Indian mutual funds must ensure underlying funds keep home market exposure below prescribed limit, with observance protocols.
Indian mutual fund schemes may invest in overseas mutual funds/unit trusts provided the underlying overseas MF/UTs do not have more than 25% exposure to Indian securities at the time of investment. Such overseas funds must be pooled blind vehicles with pari passu and pro rata investor rights, managed by an independent investment manager, disclose portfolios at least quarterly, and must not have advisory agreements with Indian mutual funds. If exposure breaches the limit post investment, a six month observance period applies followed by a six month liquidation period if rebalancing does not occur; non compliance attracts specified restrictions on the asset management company.

Periodic reporting obligations for research analysts and proxy advisers require standardized half yearly submissions to designated supervisory bodies.
The circular prescribes standardized half yearly reporting obligations for research analysts and proxy advisers: RAs must submit reports in the Annexure I format to the recognised RAASB and PAs must submit reports in the Annexure II format to SEBI within thirty days of the reporting period end. Annexures require detailed entity, governance, personnel, certification, bank, client and fee data, complaint and inspection records, advertising and activity metrics. RAASB is directed to operationalise receipt, publication and related rule amendments; the circular is immediately applicable under SEBI's regulatory powers.

Client level segregation: non individual advisers may obtain an annual auditor certificate; periodic reports due promptly after reporting period.
Non individual investment advisers may obtain an annual auditor certificate confirming compliance with client level segregation and must retain it as part of the compliance audit; periodic half yearly reports must be submitted to the administrative body within 30 days from the end of the reporting period, with immediate effect and administrative implementation mandated.

Advertisement code: research reports become advertisements when they promote a research analyst's products or services.
Research reports and recommendations are not advertisements by default, but a research report shall be construed as an advertisement if it contains content that expressly or impliedly promotes products or services offered by the Research Analyst. The advertisement code applies to printed materials, any literature used in publications or displays, electronic and wireless communications including social media and messaging platforms, and audio visual forms; a research report is an advertisement irrespective of its mode of dissemination when it promotes the RA's offerings.

Prohibition on associating with unregistered advisers: regulated entities must terminate associations absent Board permission.
Regulated persons and their agents must not directly or indirectly associate with any person who provides advice or recommendations related to securities or who makes claims of returns or performance in respect of securities unless such person is registered with or permitted by the Board. Associations through a specified digital platform are exempt only where the platform has Board-satisfactory preventive and curative mechanisms. Investor education providers are excluded if they do not engage in the prohibited activities. Regulated entities are advised to terminate existing contracts with such persons within three months.

Inclusion of mutual fund units in insider trading rules mandates disclosure and reporting of holdings and transactions by designated persons.
Mutual fund units are brought within the SEBI (Prohibition of Insider Trading) Regulations, 2015, requiring AMCs, trustees and their immediate relatives who are Designated Persons to disclose aggregate holdings quarterly (submitted in the format at Annexure A) and to report transactions in their own funds that exceed SEBI's prescribed value threshold per PAN across schemes in a calendar quarter to the AMC Compliance Officer and stock exchanges using the formats in Annexures B and C; the amendments take effect from November 1, 2024.

NRI/OCI/RI participation flexibility permits IFSC-based FPIs majority ownership subject to single-investor cap and regulatory compliance.
SEBI permits IFSC based FPIs to have aggregate participation by NRIs/OCIs/RIs above a majority threshold while maintaining that any single NRI/OCI/RI contribution stays below a specified cap, conditioned on compliance with the SEBI FPI Regulations and the Master Circular; this is implemented by adding an option in Section B-II of the Annexure to the CAF and by requiring submission of a prescribed declaration and constituent schedules (including PAN or alternative documents and look through details) as set out in Annexure 1.

Use of linked trading demat bank accounts permitted for public issue applications, allowing online bid cum application submission.
SEBI clarifies that investors may continue to submit the bid-cum application form online using 3-in-1 type accounts (linked online trading, demat and bank accounts) for public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities and securitised debt instruments, in addition to the modes specified in the Master Circular and notwithstanding the earlier SEBI circular dated September 24, 2024.

Liquidity Window facility via issuer put options enhances secondary market liquidity by enabling periodic investor redemptions.
Issuers may optionally offer a Liquidity Window allowing investors to exercise put options for early redemption on pre specified dates or intervals after one year from issuance; the facility requires board approval and oversight, must be nondiscriminatory, be made available to demat holding eligible investors (all or retail only), and have a disclosed aggregate limit and possible per window sub limits with proportionate acceptance when limits are exceeded. Operational, valuation, settlement, reporting and disclosure procedures are prescribed, and issuers may resell or extinguish purchased securities within specified timelines.

Position limits revised and monitoring tied to prior-day open interest; passive breaches exempt from penalties and forced unwind.
Aggregate Trading Member position limits for index futures and index options are raised to a higher fixed threshold or market-share percentage and remain applicable separately by contract type. Market open interest for monitoring will be measured using the prior trading day's closing open interest; passive breaches arising solely from a decline in market open interest will not be penalised or require unwinding. Exchanges and clearing corporations must amend their bye-laws, implement the changes, and notify participants.

Regulatory corrigendum: MIIs must follow master circular references and face accountability for technical glitches, with submission opportunity.
Corrigendum aligns the SEBI circular on payment of Financial Disincentives by MIIs for Technical Glitches with specified provisions of the Master Circular for Commodity Derivatives Segment, mapping particular paragraphs to para 16.8, para 16.8.1 and Clauses 3-8 of Annexure ZF. It inserts provisions requiring SEBI to afford MIIs an opportunity to submit facts on identified technical glitches and obliges MIIs to carry out internal examinations to determine individual accountability and record outcomes in performance appraisals, while preserving SEBI's right to initiate enforcement action.

Monitoring shareholding of MIIs enforces shareholding limits, fit-and-proper criteria and triggers freezes on excess holdings.
MIIs must disclose category-wise shareholding publicly, appoint a Designated Depository (DD) to monitor paid-up equity and breaches on an End of Day basis, and inform exchanges of threshold breaches. The DD will generate daily aggregate reports, alert on caution and breach levels, coordinate with other depositories, and on breaches apply ISIN-level freezes, disable e-voting for excess holdings, and freeze corporate benefits directing them to investor protection or settlement guarantee funds; listed excess holdings are divested via a special trading window, unlisted divestment follows regulator directions.

Direct payout of securities: settlement pay-out timing revised so securities are credited to clients on the same settlement day.
Clearing Corporations must credit securities directly to clients' demat accounts in the equity cash segment (including netted cash and F&O physical settlement), and the timing for securities pay-out on the settlement day is revised so securities are credited on the same settlement day instead of the following working day, with corresponding amendments required to the activity schedule and market participants' rules.

Payout to client demat accounts deadline extended to allow orderly implementation; exchanges and depositories must update systems and bylaws.
Mandate to effect pay-out of securities directly to the client's demat account is deferred to allow orderly implementation after delayed operational guidelines from Clearing Corporations; Exchanges, Clearing Corporations and Depositories must notify members, implement systems and procedures, and amend bye laws, rules and regulations to ensure compliance under SEBI and Depositories Act powers.

Specific due diligence by AIFs required to prevent regulatory circumvention, triggering compliance, reporting and investor exclusion measures.
SEBI prescribes specific due diligence by AIFs, their managers and Key Management Personnel to prevent circumvention of QIB/QB benefits, RBI prudential norms on stressed assets, and NDI Rules on border-country investments. Triggers include schemes where same group investors contribute fifty percent or more of corpus (for QIB/QB and border-country scrutiny) and specified twenty five percent/control-based tests for RBI regulated investors; due diligence must follow implementation standards formulated by the Standard Setting Forum for AIFs. Non compliant proposed or existing investments must either exclude relevant investors or be withheld, and must be reported to custodians who compile and furnish information to SEBI.

Social Enterprises on Social Stock Exchange: SEBI extends deadlines for annual disclosures and impact reports to January 31, 2025.
SEBI partially modified its May 27, 2024 circular to extend the outer timelines under the LODR Regulations for Social Enterprises' annual disclosures and annual impact report for 2023-24, setting the revised deadline for both submissions at January 31, 2025.