Portfolio managers must upload revised monthly portfolio reports with client, asset and complaints data by the 5th of each following month.
Portfolio managers must upload the revised standardized monthly report on portfolio management activity by the 5th of the following month, using the prescribed format that covers discretionary, non-discretionary and advisory services with client and asset breakdowns, monthly quantitative indicators (gross sales, gross purchases, portfolio turnover, weighted average performance, assets managed for specified funds) and a separate monthly complaints schedule tracking opening, received, resolved and closing complaints by client category.

Dividend recovery in securities lending requires borrowers to reimburse dividends, and exchanges must update rules and report compliance.
The SLB framework is amended to require the dividend amount on book closure/record date to be calculated and recovered from the borrower and passed to the lender. Exchanges must amend bye laws and rules, notify member brokers and clearing members, disseminate the change on their websites, and report implementation status in the Monthly Development Report; other prior SLB and short selling provisions remain applicable.

Portfolio managers must use the high water mark for performance fees, disclose all charges on AUM, and cap client liability.
Performance fees must be computed using the high water mark principle and charged only on increases above the previously achieved high water mark (charge frequency not less than quarterly); this rule applies to discretionary and non-discretionary services but not advisory services. All fees and charges are to be levied on actual assets under management, client liability for discretionary mandates is capped at the client's investment, and client agreements must include a separate Annexure with a Rs. 10 lakh one-year illustrative disclosure (gain/loss/no change) in at least 11-point font, with signatures required from clients.

FII compliance mandate: noncompliant foreign investors barred from taking fresh cash or derivatives positions while permitted to unwind.
SEBI requires registered Foreign Institutional Investors to submit specified declarations and undertakings by the mandated deadline; non compliant entities are prohibited from taking fresh positions in cash and derivatives while permitted to retain or unwind existing positions, and SEBI will publish the list of non compliant entities on its website, with custodians and stock exchanges instructed to notify their clients and members.

Equilibrium price not discovered: market orders matched at previous day's close and unmatched orders shifted to normal market.
Where an equilibrium price is not discovered in the pre-open call auction: if only market orders exist, match market orders at the previous day's close price and shift any unmatched market orders to the normal market order book at that price following time priority, with that price as the opening price; if no market orders are available to be matched, shift unmatched market orders (at the previous day's close price) and limit orders to the normal market order book following price-time priority.

Depository connectivity enables shift from trade-for-trade to rolling settlement subject to dematerialisation certification and no other grounds.
Stock exchanges may shift securities from Trade for Trade Settlement to Rolling Settlement for companies with connectivity to both depositories if at least fifty percent of non-promoter holdings are dematerialised and a certificate from the Registrar and Transfer Agent (or a practicing company secretary/chartered accountant where no separate RTA exists) is submitted; shifts must not proceed where other grounds for continuation of TFTS exist, and exchanges must report such actions in their development reports.

Reconciliation of Share Capital Audit replaces Secretarial Audit, requiring periodic auditor certification and exchange submission.
Terminology 'Secretarial Audit' is substituted with 'Reconciliation of Share Capital Audit' for the purpose of reconciling share capital held in depositories and physical form with issued/listed capital; the audit must be performed periodically by a qualified chartered accountant or a practicing company secretary and submitted to stock exchanges. Stock exchanges and depositories must amend their bye laws/rules, notify issuers, registrars and share transfer agents, and publish the change on their websites.

Dematerialised public shareholding threshold determines trading eligibility; non compliant scrips moved to Trade for Trade and disclosure enforced.
Trading in the normal segment is conditional on a company having achieved at least fifty percent non promoter holding in dematerialised form; failure to meet this requirement based on the latest quarterly shareholding pattern will result in migration of the scrip to the Trade-for-Trade segment. Specified corporate events and certain listing circumstances will also require initial trading in the Trade-for-Trade segment with applicable price band provisions, and exchanges must ensure required disclosures are publicly disseminated prior to trading.

Arbitration fees framework revised for stock exchange disputes, including exemptions, refunds and allocation to investor protection.
Parties must deposit an exchange-prescribed amount on filing arbitration references under a tiered fee schedule based on the higher of claim/counter-claim and whether filed within or after a six-month period; clients filing small claims within six months are exempt. On award, deposits are refunded to the successful party; for claims within six months the unsuccessful party's deposit is appropriated as fees, while for late claims one-third of the unsuccessful party's deposit is appropriated as fees and two-thirds credited to the Investor Protection Fund. The six-month period is computed from quarter end with specified exclusions.

Power of Attorney restrictions limit brokers' authority to settlement-related transfers and prohibit off market movements, while remaining revocable by clients.
SEBI clarifies that a client's Power of Attorney to a stock broker or broker-cum-depository participant is optional and must not be a precondition for services. Permitted PoA powers are limited to transfers from the client's beneficial owner account to meet margin, delivery or settlement obligations arising from trades through the same broker, and to apply for or redeem investment products on client instruction with an audit trail. PoAs must list related-party bank and demat accounts, be revocable at any time without affecting prior settlement obligations, and must not enable off-market transfers between non-related parties.

Call auction pre-open session: unmatched market orders matched at last traded price or shifted to normal market accordingly.
Where an equilibrium price is not discovered in the pre-open call auction, if only market orders exist they shall be matched at the last traded price and unmatched orders moved to the normal market order book at that price following price time priority, with the last traded price as the opening price. If no market orders exist, all unmatched orders shall be shifted to the normal market order book following price time priority, and the price of the first trade in the normal market shall be the opening price.

Smart Order Routing permitted with neutrality, audit, disclosure and operational safeguards for brokers and exchanges.
Permits Smart Order Routing subject to conditions: brokers must apply to exchanges, obtain third party system audits, maintain logs and audit trails, enter specific client agreements describing features and opt out instructions, validate risk parameters, ensure neutral routing and best execution, and provide alternate trading modes on failure. Exchanges must decide applications within thirty days, publish approved auditors, assign unique identifiers, maintain Smart Order Routing data, implement surveillance and grievance mechanisms, synchronise clocks with an atomic clock, time stamp market data feeds within three months if required, and ensure broker routing servers are located in India.

Securities trading using wireless technology authorised with mandatory security, authentication, disclosure, audit and server-localisation requirements.
SEBI permits SEBI-registered brokers offering Internet-based trading to provide securities trading using wireless technology, subject to all Internet trading requirements and specified safeguards: secure access and encryption per DOT policy, user identification and authentication, unique client IDs, fallback communication for network failures, broker-client risk disclosures and concurrence, order confirmations and trade history, prohibition on storing session login details on devices, industry-standard network security and audit trails, broker servers located in India, periodic systems audits, investor education, and reporting of implementation to SEBI.

Derivative exposure limits set for mutual funds, ban on writing options, and uniform disclosure format mandated.
SEBI prescribes prudential limits on mutual fund derivative activity by capping cumulative gross exposure of a scheme through equity, debt and derivatives at the scheme's net assets, prohibiting writing of options and instruments with embedded written options, and limiting exposure from option premiums. Hedging positions may be excluded from limits only when they demonstrably reduce loss on an existing securities position, use the same underlying, and do not exceed the existing position; excess hedging is counted as exposure. Interest rate swaps for hedging and a standardized exposure computation and disclosure regime are mandated.

Transferability of mutual fund units affirmed; AMCs must addend demat holdings as freely transferable, ELSS lock in unchanged.
Asset management companies must issue an addendum by October 1, 2010 clarifying that mutual fund units held in demat form are freely transferable from the addendum's effective date, while transfers of units of equity linked savings schemes remain subject to existing lock in restrictions.

Investor documentation access: AMCs must maintain complete investor records to enable direct investor transactions and prompt service.
AMCs and mutual funds must maintain all investor-related documents (account opening forms, PAN, KYC, PoA if applicable, specimen signatures) with AMCs/RTAs; new folios may be opened only after these documents are available. Existing folios must be updated by November 15, 2010, and trustees must submit independent auditor certification of completion by November 22, 2010.

Arbitration mechanism in stock exchanges: mandatory panels, timelines, fee rules, appellate process and award implementation.
Exchanges must provide an arbitration mechanism for client member disputes under the Arbitration and Conciliation Act, maintain a panel of arbitrators selected on transparent criteria with required declarations, education and performance appraisal, and enforce a code of conduct. Procedural rules include limitation under the Limitation Act, sole arbitrator for claims up to Rs.25 lakh, three arbitrators above that, 30 day appointment timelines, awards within four months (with limited extensions), appellate arbitration timelines, prescribed deposits and fee scales with limited exemptions, venue requirements for national and other exchanges, escrow and payment procedures for awards favoring clients, and mandatory recordkeeping and public disclosure.

Debt allocation to foreign investors via bidding and FCFS processes with caps, utilisation windows, and non utilisation charge.
Allocation of unutilised Government and Corporate debt investment limits to FIIs will occur via a bidding process with per-entity ceilings, minimum bid size and tick, and a short utilisation window; remaining limits will be allocated on a first-come-first-served basis subject to a per-entity ceiling, a dedicated request email with a specified opening time, a limited utilisation period, and a non-utilisation charge tied to the average successful bid premium from the bidding stage.

Fund of funds expense structure must follow prescribed alternatives, with SID disclosure and unitholder exit option.
Fund of funds mutual fund schemes must adopt one of the prescribed total expense structures and AMCs must disclose the chosen structure in the scheme information document; existing fund of funds schemes must obtain trustees' approval to adopt a prescribed expense structure and must give unitholders an exit option when changing the total expense structure.

Dematerialisation threshold required before shifting securities from Trade for Trade to rolling settlement.
Companies with connectivity to both NSDL and CDSL may be shifted from Trade for Trade Settlement to normal Rolling Settlement only if at least 50% of shares other than promoter holdings are dematerialised, evidenced by a certificate from the Registrar and Transfer Agent or, if no separate RTA exists, from a practicing Company Secretary or Chartered Accountant, and provided there are no other grounds for continuation of TFTS. Stock exchanges must report actions taken in their Monthly/Quarterly Development Reports.