Default email dispatch for consolidated account statements makes electronic delivery primary while preserving opt in physical option.
The circular mandates email as the default mode of dispatch for Consolidated Account Statements and DP holding statements, using registered email addresses held by Depositories and AMCs/MF-RTAs, while preserving investor choice to opt for physical delivery. It prescribes monthly email CAS when transactions occur, half yearly email CAS where there are no transactions, and annual or half yearly email holding statements for various account activity scenarios. Depositories must amend rules, implement system changes, notify investors quarterly by SMS of the email used, publish the circular and report implementation status; DPs must furnish electronic statements under digital signature or provide physical statements if unable.

Basic Services Demat Account eligibility and mandatory conversion rules to promote financial inclusion and simplified charges.
The circular requires eligible individuals who have or propose only one demat account as sole or first holder and only one BSDA across depositories, with holdings within the prescribed threshold, to be offered BSDA. DPs must open BSDA for such eligible BOs and periodically reassess and convert existing eligible accounts into BSDA unless BOs give authenticated consent for a regular account. A simplified annual maintenance charge regime applies based on holdings, DPs must determine holdings value by specified market/pricing methods, and BSDA receives free electronic statements with limited fees for physical statements.

Mutual fund regulation updated: consolidated master circular sets filing, product, risk, ESG and ETF operational rules industry-wide.
The Master Circular consolidates mutual fund circulars up to March 31, 2024, superseding prior Master Circulars and rescinding specified earlier circulars while preserving prior actions; prescribes unified filing formats, timelines and disclosure requirements for SID/KIM/SAI, scheme categorisation and standardised characteristics for equity, debt, hybrid and other schemes, product-specific norms (Gold/Silver ETFs, FoFs, ESG schemes), a mandatory Risk Management Framework, stress testing and in-house credit assessment, rules for segregated portfolios on credit events, liquidity prudential norms, cyber resilience obligations, and ETF/index fund operational, tracking and market-making standards.

Aggregate contribution by NRIs, OCIs and resident Indians in IFSC based FPIs allowed subject to declaration, documentation and structural safeguards.
SEBI permits IFSC based FPIs regulated by IFSCA to accept aggregate contributions by NRIs, OCIs and RI individuals of fifty per cent or more subject to conditions: a registration declaration to the DDP, submission of PAN or prescribed declarations and identity documents for individual constituents (with look through disclosure for non individuals controlled or significantly owned by such individuals), classification of changes as Type II material changes, and an exemption pathway for IFSC funds meeting pooling, pari passu/pro rata, diversification and investor mix requirements with remedial cure periods for breaches.

Statutory committee composition rules for market infrastructure institutions strengthened to require public interest directors majority and PID-led chairs.
Revised governance requires MIIs to maintain specified statutory committees (MC, NRC, SCOT, ROC, RMC, IC) with Chairs as Public Interest Directors (PIDs), PIDs at least equalling other members in number (SCOT excluding IEPs), and voting validated only when PIDs who vote are not fewer than other members voting. Core TORs are non delegable; MC may delegate certain operational tasks to Internal Committees under defined SOPs while retaining accountability. Committees must adopt SOPs, manage sector specific oversight (technology, risk, surveillance, member admission, regulatory enforcement, investments), and ensure independent IEPs and required PID availability.

Electronic Gold Receipts as securities: creation, trading and conversion governed under a SEBI master framework ensuring vault, depository and risk controls.
SEBI's Master Circular establishes EGRs as tradable securities with a three tranche lifecycle: creation by registered Vault Managers upon deposit of qualifying gold and recording in a common depository interface; continuous trading on stock exchange segments with clearing by Clearing Corporations; and conversion/extinguishment permitting withdrawal of physical gold subject to verification, reconciliation, and assayer procedures. Vault Managers and Depositories must meet specified vault, security, insurance, reconciliation, disclosure and grievance redressal obligations, while a comprehensive margins and settlement framework governs risk management and T+1 rolling settlement.

System audit requirement for Professional Clearing Members mandates annual IT audits and timely submission of audit reports.
The circular mandates annual System Audits for Professional Clearing Members (PCMs) under the prescribed System Audit Framework and TOR, requires maintenance of a register of SEBI/CC technology circulars, and submission of audit reports- including management and Governing Board comments and exceptional non compliance formats-to Clearing Corporations within defined timelines. Auditor selection norms, independence requirements, CERT In empanelment, audit scope covering IT infrastructure, governance, security and BCP/DR, reporting formats with root cause and corrective-action timelines, and provisions for follow on audits/ATR verification are prescribed.

Special call auction with no price bands enables price discovery for eligible listed investment and holding companies.
SEBI introduces a special call auction with no price bands for ICs and IHCs whose scrips trade infrequently and whose six month VWAP is below 50% of per share book value based on listed investments. Eligibility requires uniform industry classification, at least one year listed without suspension, and at least 50% of assets invested in scrips of listed companies. Exchanges must give 14 day notice, disclose key price and book value information, coordinate sessions across exchanges, require at least five PAN based unique buyers and sellers for successful price discovery, and provide adequate risk management and surveillance.

Call auction duration changes require random closure and enhanced surveillance to curb pre-open session manipulation.
The pre-open call auction is prescribed as a one-hour session with segregated windows for order entry, matching and a buffer, and a system-driven random closure during the final part of order entry. Stock exchanges must implement enhanced surveillance with alerts based on specified cancellation and modification parameters, report alerts to the regulator by EOD, seek client explanations, and display cancelled order counts and quantities in real time. Risk management and margining requirements vary by issue size and scrip type, and exchanges must adopt systems and rule changes before the ninety-day applicability date.

Core SGF contributions: participants must provide risk based pro rata funding; LPCC replenishment and default waterfall govern recovery.
Participants who directly join LPCC must make risk based, pro rata contributions to the Core SGF equivalent to the MRC deficit after Issuer and Clearing Member contributions; LPCC may collect these upfront or staggered and must top up any shortfall until Participant contributions are received. Contributors must replenish Core SGF to MRC immediately after use, limited to one replenishment per 30 calendar day period from the date of default notice. The default waterfall prescribes an ordered loss absorption sequence culminating in capped additional contributions by non defaulting members/participants and, if necessary, pro rata haircuts to payouts, with conditions on resignation, caps, and regulatory approvals for haircut use and post haircut exits.

Employee bid cut-off rule revised: bids placed on T+1 must use the T-day cut-off, allotment based on T-day price.
Employees participating in exchange-based OFS shall place bids on T+1 day at the cut-off price of T day, and the allotment price will be based on the T-day cut-off price, subject to any discount. All other provisions of the prior OFS framework remain unchanged. Market Infrastructure Institutions must update systems, amend bye-laws where necessary, notify market participants, and implement the change within the prescribed implementation period.

Choice of nomination rules eased for existing investors as account freezing and payment restrictions are removed.
Non-submission of choice of nomination by existing demat account holders and mutual fund unitholders shall not lead to freezing of accounts or folios. Physical security holders may still receive corporate payments and access grievance or service requests even without nomination. New investors must continue to furnish choice of nomination, while intermediaries must encourage compliance through regular communications and login pop-ups, and only three fields are mandatory for updating nomination details.

Portfolio Managers must follow consolidated SEBI rules on registration, client funds segregation, related party limits, disclosures and reporting.
Master Circular consolidates SEBI guidance for Portfolio Managers, updating and superseding prior master circulars while preserving past actions. It prescribes online registration (Form A), Compliance Officer designation, net worth and certification norms, segregation of client funds, direct onboarding and distributor supervision, written policies for order placement and allocation, cyber security requirements for larger PMs, investment permissions including derivatives and co investment, prudential limits and client consent for related party investments, credit rating constraints, uniform disclosure and benchmarking of Investment Approaches, mandatory monthly/quarterly/offsite reporting to SEBI and clients, audited firm level performance reporting, fee and exit load rules, and grievance redressal obligations.

KYC uploading requirement: KRAs must validate and upload client KYC to the central registry and integrate systems promptly.
Registered intermediaries must continue to upload, download and modify client KYC information on KRA systems with proper authentication. KRAs shall verify and validate KYC data received from intermediaries and upload verified records to the Central KYC Records Registry within seven days of receipt or within any timeline notified under AML rules, integrate their systems with the central registry and commence uploading from the specified start date; existing KYC records of legal entities and individuals must be uploaded within six months from that start point.

Anti money laundering obligations require securities intermediaries to implement CDD, reporting, sanctions screening and risk based controls.
Registered securities intermediaries and stock exchanges must implement written AML/CFT procedures under the PMLA and SEBI Master Circular, encompassing client acceptance policies, client identification and beneficial ownership verification, ongoing CDD with enhanced measures for high risk clients, risk based monitoring and documented risk assessments. They must preserve transaction and identification records to enable audit trails, promptly report suspicious and reportable cash transactions to FIU IND in prescribed formats, maintain sanctions/designated lists and freeze or suspend transactions as required, and appoint designated compliance officers (Principal Officer and Designated Director) with independent audit and training arrangements.

Financial disincentives for surveillance lapses to penalize MIIs for non implementation of surveillance decisions and reporting failures.
The framework defines Surveillance Related Lapses as non implementation, partial or delayed implementation of surveillance meeting decisions or SEBI communications, failures in performing agreed surveillance activities, and inadequate or non reporting of surveillance activity. It prescribes monetary disincentives on a sliding scale tied to the MII's annual revenue band and number of SRL instances, requires pre imposition opportunity to submit, mandates payment to the Investor Protection and Education Fund within a specified timeframe, and requires public disclosure of imposed disincentives, while excluding matters of market wide impact or minor procedural lapses.

Direct payout of securities now mandatory to credit client demat accounts with auto-pledge for margin-funded stocks, enhancing client protection.
SEBI mandates direct payout of securities by Clearing Corporations to respective clients' demat accounts; funded stocks under margin trading must be held only by pledge in a separate demat account tagged 'Client Securities under Margin Funding Account' and, upon transfer to client accounts, followed by an auto-pledge without specific client instruction. CCs must identify unpaid and funded securities; unpaid securities follow Master Circular processes. Internal shortages from inter se netting are to be resolved through CC-specified auctions with no additional broker charges to clients. Custodian-arranged clients are excluded.

Post-registration securities disposal: new framework permits sale windows with a financial disincentive and escrow sale mechanism and reporting obligations.
SEBI amends FPI and Custodian Master Circulars to allow FPIs who lapse or fail to re activate registration defined disposal windows: 180 days post lapse (no disincentive), an additional 180 days subject to a 5% financial disincentive on sale proceeds remitted to the IPEF, subject to KYC/AML/CFT compliance. Unsold securities after the combined 360 days are deemed written off, losing beneficial interest; custodians must transfer written off securities to escrow accounts operated by exchange empanelled brokers for sale, with net proceeds transferred to the IPEF and prescribed reporting by custodians and exchanges.

Material change disclosures for FPIs now require expedited notice for critical events and mandatory DDP re-assessment.
Revised disclosure regime requires FPIs to notify material changes to DDPs/SEBI under two categories: Type I critical events affecting registration, eligibility or exemptions-examples include change of jurisdiction, ownership/control, cessation after corporate transactions, legal-form restructuring, and regulatory-status change-subject to expedited reporting and documentation; all other material changes are Type II with a longer notification and documentation window. DDPs must reassess eligibility, require fresh registration for specified Type I events, and inform SEBI of delayed intimation with reasons.

Prior approval for change in control required for bankers to an issue; SEBI mandates online applications, disclosures and reporting obligations.
SEBI consolidates guidance for Bankers to an Issue, centralising registration and filings on the SEBI Intermediary Portal, requiring online applications for registration, surrender and prior approval for change in control with prescribed disclosures and fit and proper compliance. BTIs must designate non person e mail IDs for investor and regulatory communication, submit half yearly activity and compliance reports in prescribed formats, maintain specified records, enforce outsourcing principles while remaining liable for third party performance, and comply with PAN identification, AML/CFT, FATCA/CRS reporting and a CERT In SaaS data localisation advisory.