Unsecured subordinated debt permitted with investor consent, subject to enhanced disclosure and escrow-backed security procedures.
Offer documents must identify assets subject to security and state charge ranking, disclose risks of second or subordinated charges, specify the required security/asset cover and its valuation basis and periodicity, obtain and submit relevant consents to the debenture trustee before opening the issue, and place issue proceeds in escrow until security documents are executed. The guidelines also permit issuance of unsecured/subordinated debt not constituting public deposits, provided subscription is limited to Qualified Institutional Buyers or investors who have given positive consent.

Debenture trustee regulations amended and take effect upon official publication, notifying registered debenture trustees to acknowledge receipt.
SEBI issued the Securities and Exchange Board of India (Debenture Trustees) (Second Amendment) Regulations, 2000, exercising powers under the SEBI Act to amend the regulation of debenture trustees; the amendment came into force from its publication in the Official Gazette and was communicated to all registered debenture trustees by circular with a copy of the Gazette enclosed.

Incremental Carry Forward Margin revised for excessive carry forward positions under Modified Carry Forward System, higher slab rates apply.
Incremental Carry Forward Margin (ICFM) is levied in addition to carry forward margin when carry forward positions exceed specified thresholds; ICFM is charged at the higher of two rate schedules-one by Net Outstanding Market Position bands and one by Carry Forward Net Position percentage bands-so that progressively higher rates apply with larger absolute or percentage positions, and other provisions of the original circular remain unchanged.

Incremental ALBM Margin: higher additional margins apply when ALBM positions breach thresholds; other exchanges must mirror the levy.
The corrigendum prescribes an Incremental ALBM Margin: when an exchange's ALBM position in a scrip exceeds specified market-position or deferred-net-position parameters, an additional margin must be levied in addition to the ALBM margin, charged at the higher of the two rates set by reference to net outstanding market position bands and deferred net position percentages. Positions of pure securities borrowers are excluded where collateral is held with the clearing house. An incremental margin imposed by one exchange will be followed by other exchanges with ALBM or MCFS from the next settlement.

Compulsory dematerialised trading postponed for non connected issuers; failure to connect moves shares to trade for trade settlement.
Issuers designated for compulsory dematerialised trading that did not sign agreements or establish connectivity with both depositories received a one month extension to complete such arrangements; failure to do so by the extended effective date will result in their shares being traded only on the exchanges' trade for trade settlement window. Certain scrips listed in annexures A and B have their compulsory dematerialisation implementation postponed to the next scheduled effective date, and three named banks are excluded from the compulsory list.

Applicability amendment: SEBI circular provisions now apply from August seventh to draft offer document filings.
The circular amends applicability of SMDRP/POLICY/CIR-35/2000 so its provisions shall apply to issues with draft offer documents filed with SEBI on or after August 07, 2000, replacing the earlier applicability date of June 15, 2000; it is addressed to the presidents and senior officers of all stock exchanges as an administrative notice.

Account verification requirement: Depository participants must authenticate identity and address before opening beneficiary accounts, or face regulatory action.
Depository participants must authenticate applicants' identity and photograph by an existing account holder, the applicant's bank, or by verification against originals of a passport, voter identity card, driving licence, or PAN card with photograph, and must obtain verified proof of address with originals certified by an authorised official; participants must verify existing accounts, report failures to produce originals, and may face account freezing or suspension of registration for non-compliance.

Listing procedure: exchanges must grant in principle and final approvals to expedite commencement of trading per revised timelines.
Issuers must file draft offer documents with SEBI and simultaneously with all proposed listing exchanges. Exchanges must accept or decline in principle approval within fifteen days, and the lead manager must furnish all such approvals to SEBI; without approvals from all exchanges the issue cannot proceed. In principle approvals must be disclosed in the offer document. After finalising the basis of allotment, despatch of certificates/refunds/demat credit and submission of allotment and listing documents must be completed within two working days, the regional exchange must give final approval within three working days, other exchanges shall grant automatic approval thereafter, and the lead manager must ensure listing and commencement of trading at all exchanges within seven working days.

Investor Protection Fund interest permitted for investor education, awareness and research by stock exchanges to enhance market safety.
Stock exchanges are authorized to utilize interest income earned on the Investor Protection Fund for investor education, awareness and research. The Fund, intended to compensate investors for broker defaults, has seen corpus growth and reduced disbursements due to improved risk management, and the circular permits using only the Fund's interest income to finance programs that promote investor knowledge and support market-related research.

Monthly cumulative reporting requirement mandates mutual funds to submit revised MCR format monthly to regulator.
Mandates mutual funds to submit a Monthly Cumulative Report (MCR) in a prescribed format by scheme type, reporting number of schemes, funds mobilised, repurchases/redemptions, net inflow/outflow and cumulative net assets on a financial year cumulative basis. Requires electronic submission (fax/e mail) by the monthly cutoff with hard copies by hand/courier, and directs other statistical reports to be submitted only electronically.

Margining requirements: separate mark-to-market and gross client-level margins to strengthen collateralisation and position disclosure.
SEBI requires separate collection of mark-to-market margins distinct from daily/exposure margins and will separately address netting of MTM results. Exchanges must adopt gross margining by mandating client codes at broker level within a short prescribed timeframe. Non institutional clients must maintain a minimum margin deposit in approved collateral, excluding actual deliveries/payments from net positions. Exchanges must disclose daily net open positions in principal scrips and implement these measures promptly.

Incremental carry forward margin under MCFS: exchanges must apply higher slab-based margins and align implementation.
The circular requires levy of an Incremental Carry Forward Margin on scrip-wise carry forward positions when market-wide outstanding or carry-forward-as-a-percentage thresholds are exceeded, applying the higher of two slab-based rates (absolute outstanding and percentage of paid-up shares). Exchanges with ALBM or MCFS must mirror imposition across other such exchanges from the next settlement. It further directs that Mark to Market Margin be collected separately and that carry forward margins be paid fully in cash, fixed deposits or government securities or their combination.

Position limits and margining in automated lending and borrowing mechanism define risk controls and collateral requirements.
The circular permits an Automated Lending and Borrowing Mechanism (ALBM) to facilitate securities lending, borrowing and settlement netting. Exchanges may implement ALBM only after SEBI approval of scrip eligibility, selection processes and disclosure rules, and only if they demonstrate adequate margin-computation software, governance and clearing intermediation. Risk controls include aggregate and per-scrip position limits for netted trade positions, special rules for pure securities borrowers, rules on short-sale charge release, gross-basis margining with minimum margin floors and tiered incremental margins, and specified collateral forms for margin collection.

Investment decision recordkeeping required: mutual funds must document due diligence and trustees must report compliance to regulator.
SEBI requires AMCs to maintain documentary support for each investment decision demonstrating exercise of due diligence, including detailed research reports for initial investments and recorded reasons for subsequent trades; boards must verify due diligence, with heightened scrutiny for unlisted/private placements, unrated debt, NPAs and associate transactions, and trustees must review and report compliance to SEBI, using auditors where appropriate.

Material misstatement standard replaces prior review wording; stock exchanges must amend Clause 41 and confirm compliance.
The circular revises the concluding sentence of the review report under Clause 41 to replace the word "misstatement" with material misstatement, while maintaining that the unaudited financial results must disclose information required by Clause 41 and the manner of disclosure; stock exchanges are directed to amend Clause 41 accordingly and confirm compliance.

Compulsory dematerialisation required for Sibar Software Services shares, making all trading and settlement in demat form.
NSDL has confirmed that SIBAR SOFTWARE SERVICES is available for dematerialisation; therefore trading and settlement in that scrip must be compulsorily effected in dematerialised form for all investors from the previously announced implementation date, superseding the earlier postponement for that scrip.

Modified Carry Forward System: increases broker carry forward limits, adds extra margin for excess positions, removes maximum holding period.
The circular revises the Modified Carry Forward System, raising the overall broker carry forward limit and imposing an additional 5% margin on incremental positions above the earlier cap; the margin applicable up to the earlier cap remains unchanged. It prescribes a per scrip, per broker position limit to curb concentration and removes the prior 90 day maximum tenure for carry forward transactions, while other existing conditions remain in force.

Compulsory dematerialised trading postponed for selected scrips while depository agreements and connectivity are pending.
SEBI required compulsory trading and settlement in dematerialised form for a list of securities effective July 24, 2000, but postponed the effective date for 39 scrips because they had not completed required depository agreements or established connectivity; a revised date will be announced after compliance is achieved.

Interim financial disclosure: half year results must be board approved, limited reviewed and filed with exchanges within two months.
Companies must prepare half yearly results (first two quarters) in the prescribed proforma, obtain Board approval, and subject them to a Limited Review by auditors (or a Chartered Accountant for PSUs). The Limited Review report, in prescribed wording, must be filed with stock exchanges within two months of the half year. If the sum of the first and second quarterly unaudited results for any proforma item differs by 20% or more from the reviewed half year results, a board approved explanatory statement must accompany the Review Report. The proforma's capital disclosure is amended to require Paid Up Equity Share Capital with face value indicated.

Volatility margin rules revised with higher thresholds and new slabs; price bands relaxed and margin withdrawal for delivery trades.
SEBI adjusted equity market risk controls: compulsory rolling settlement scrips are exempted from additional volatility margin and receive relaxed price-band treatment per prior procedure effective early July; account period settlement retains volatility margins under a raised threshold with a simplified slabbed margin schedule effective post-June 30, 2000; price-band relaxations apply to 200 identified scrips effective early July. The earlier 5% additional margin on scrip-wise net sale positions is withdrawn. Exchanges may permit delivery-marked trades to substitute bank guarantees for cash margin, with exchanges to determine implementation modalities.