Flexi Cap Fund category introduced with equity investment floor, benchmark and naming requirements, and conversion conditions.
Introduction of the Flexi Cap Fund category requires a minimum investment in equity and equity related instruments of 65% of total assets; it is an open ended dynamic equity scheme investing across large cap, mid cap and small cap stocks. AMCs must adopt a suitable benchmark; scheme names must match the category for uniformity; existing schemes may be converted to this category subject to compliance with requirements for change in fundamental attributes under the mutual fund regulations. The category is effective from the date of the circular under SEBI's regulatory powers.

Overseas investment limits for mutual funds increased, with per fund and industry caps and monthly reporting required.
Mutual Funds may invest up to US$600 million per fund in overseas securities within a US$7 billion industry cap, and up to US$200 million per fund in overseas ETFs within a US$1 billion industry cap. US$50 million is reserved per Mutual Fund within the US$7 billion industry cap. NFOs must disclose intended overseas investment amounts in scheme documents, valid for six months from NFO closure, after which unutilised amounts revert to the industry pool. Ongoing schemes have a monthly headroom equal to 20% of the average AUM in overseas securities/ETFs for the preceding three calendar months. Monthly utilisation reporting is required within ten days of month end.

Rights issue by unlisted InvITs: framework for offering units to existing unitholders with prescribed approvals, disclosures and allotment rules.
Rights issue by unlisted InvITs permits offering units to existing unitholders only after investment manager board approval, issuance of the same class of units, and absence of disqualifying sponsor/trustee/manager conditions. The investment manager must determine and disclose the issue price before the record date, file and distribute a letter of offer with specified Schedule III disclosures, credit rights entitlements in demat accounts with renunciation rights, allot units in dematerialized form under prescribed priority and minimum allotment rules, and file an allotment report with the Board post-issue.

SaaS-based GRC solutions risk cross-border exposure; keep critical financial data within India and report compliance accordingly.
Advisory warns that SaaS use for GRC can move critical risk and compliance data beyond India's jurisdictions and advises keeping such data within India, using layered defence and continuous monitoring under direct control and supervision, and reporting compliance via half-yearly filings to exchanges/depositories and direct undertakings to the regulator; the advisory is effective immediately.

Creation of Security: trustees must verify and certify security creation and due diligence before listing of debt securities.
Issuers must provide detailed documents and consents at the time of entering into the debenture trustee agreement, including title deeds, registration evidence, consents/NOCs from existing charge holders, guarantee documentation and depository pledging undertakings. Debenture trustees shall independently perform due diligence-verifying registrations, conditional consents, guarantor financials, and commissioning valuation, title and ROC searches-and issue prescribed due diligence certificates at draft filing and prior to listing. Charges must be created, debenture trust deeds executed, and charges registered with relevant registries within the stipulated period; listing is conditional on receipt of the trustee's listing-stage due diligence certificate.

Schemes of Arrangement compliance: stock exchanges must verify filings and issue no-objection before SEBI referral and listing.
Stock exchanges must verify compliance with securities laws before referring draft schemes to the Board. Listed entities must furnish an Audit Committee report addressing rationale, need, synergies, shareholder impact and cost-benefit analysis; a Committee of Independent Directors' report confirming no detriment to shareholders; and a valuation by a Registered Valuer. Exchanges must issue a consolidated No-Objection letter before the Board provides comments, and transferee entities must complete simultaneous listing and prescribed disclosures, including restated audited financials, shareholding patterns, risk factors and litigations, prior to commencement of trading.

Investor grievance redressal clarified: SEBI mandates use of 'promoter(s)' in SCORES complaint procedures for uniform application.
SEBI directs that references to "promoter and promoter group" and "promoter/promoter group" in specified paragraphs and an annexure point of the investor grievance redressal circular on SCORES complaint handling and SOP for non-redressal by listed companies be read as "promoter(s)"; this textual substitution standardises which persons are covered and applies to listed companies, recognized exchanges, depositories and investor associations under SEBI's regulatory mandate.

Recovery Expense Fund requirement enables debenture trustees to access funds for enforcement after issuer default.
Creation of a Recovery Expense Fund is required from issuers listing debt securities; contributions may be cash, cash equivalents or bank guarantees, held and invested by the designated stock exchange with income credited to the REF. On default, the Debenture Trustee or Lead Debenture Trustee obtains holder consent for enforcement, notifies the designated exchange, and the exchange releases REF funds promptly. Trustees must account for expenses paid from the REF. Remaining balances are refundable to the issuer on repayment or call/put exercise upon trustees issuing a No Objection Certificate confirming no other defaults.

Investment Committee approvals: AIF registrations with resident external members proceed; cases with non resident members await regulatory clarification.
SEBI amended the AIF Regulations to permit a Manager to constitute an Investment Committee to approve investment decisions, and has sought clarification from the Government and the central bank on whether FEMA (Non debt Instruments) Rules apply when such committees include external members who are not resident Indian citizens. Pending that clarification, SEBI will process AIF registration and scheme launch applications where external members are resident Indian citizens, while applications proposing non resident external members will be held until clarification.

Utilization of regulatory fee forgone funds permitted for farmer support, including reimbursements and options incentives.
SEBI permits stock exchanges to use the fund created from regulatory fee forgone to reimburse mandi tax and warehouse handling (assaying, cleaning, drying, sorting, storage, transportation) for goods deposited in Clearing Corporation accredited warehouses with exchange specific eNWRs, reimburse Clearing Corporation fees on Farmers/FPOs, and incentivise option premium for Farmers/FPOs. Exchanges must revise and publish action plans, disclose corpus and monthly utilisation on their websites, include details in the Monthly Development Report, amend bye laws, notify brokers, and report implementation to SEBI. The circular is effective immediately under SEBI Act powers.

Investor consent for debt restructuring: trustees must obtain specified consents before enforcing security or entering inter creditor agreements.
Prescribes Debenture Trustee(s)' obligations on default of listed debt securities: treat default at the ISIN level; send investor notice promptly with proof, including options for negative consent on enforcement and positive consent for signing an ICA; allow 15 days for consent and convene a meeting within 30 days unless default is cured; act according to majority decisions at the ISIN level; form a representative committee if needed; and sign ICA only if the resolution plan complies with applicable laws and contains exit and protection clauses, with prescribed timelines for finalisation.

Inter-scheme transfers restricted: allowed only for specified liquidity or rebalancing needs with strict compliance and documentation.
Guidelines limit Inter Scheme Transfers (ISTs) to narrow circumstances: for close ended schemes only within three business days post NFO; for open ended schemes to meet liquidity after exhausting cash, optional market borrowing, and market sales, or to rebalance duration/issuer/sector/group and cure regulatory breaches. ISTs must not involve securities with adverse media or internal credit alerts in the prior four months. Trustees and senior investment and compliance officers must ensure compliance, maintain prescribed templates and evidence, and address credit risk scheme misuse via incentive adjustment mechanisms; downgrades within four months require trustee justification from the buying fund manager.

Virtual meetings for InvITs and REITs extended through year-end; extraordinary unitholder meetings may be held via VC/OAVM.
The facility to conduct extraordinary unitholder meetings of InvITs and REITs through video conferencing or other audio visual means (VC/OAVM) is extended until December 31, 2020, provided entities comply with the procedure prescribed in Annexure I of the June 22, 2020 circular. The extension responds to pandemic related representations and is issued under the regulator's statutory powers and the relevant InvIT and REIT regulatory provisions.

Issuance of AT1 instruments: mandatory electronic issuance, QIB only participation and enhanced disclosures to address investor risk.
Perpetual non cumulative preference shares and innovative/perpetual debt instruments, treated as Additional Tier 1 (AT1) instruments, are non equity regulatory capital instruments with issuer discretion to write down principal or interest, skip payments or recall early. SEBI mandates issuance via the Electronic Book Provider platform, restricts primary participation to Qualified Institutional Buyers, prescribes minimum allotment and trading lot thresholds, and requires enhanced disclosures including trustee consents, detailed instrument terms and a Point of Non Viability clause enabling regulatory write down.

Mutual fund product labeling requires a six level Risk o meter, monthly disclosure and unitholder notification for changes.
The circular mandates depiction of a Risk-o-meter with six risk bands for mutual fund schemes, requires initial assignment at launch, monthly portfolio level evaluation and disclosure within ten days of month end, and scheme level annual reporting of risk and change frequency. Annexure A prescribes a numeric scoring methodology-credit, duration and liquidity metrics for debt; market capitalisation, volatility and impact cost for equity; specified rules for derivatives, REITs/InvITs, gold, foreign securities and fund-of-fund holdings-aggregated by AUM and mapped by thresholds to the six Risk-o-meter levels. Changes must be notified to unitholders and are not treated as fundamental attribute changes.

Dividend option disclosure: clarify that dividends may include return of capital from the equalization reserve, with segregation in statements.
Mutual fund dividend options must be renamed and disclosed to clarify that amounts paid under the dividend option can be distributed out of investors' capital (Equalization Reserve), representing realized gains in the sale price; AMCs must state this in offer documents and ensure consolidated account statements segregate income distribution (NAV appreciation) from capital distribution when distributable surplus is paid.

Listing timeline standardization for privately placed securities mandates prompt listing and penal consequences for delay.
Issuers must follow standardized timelines-closure at T, receipt of funds by T+2 trading day, and allotment with listing application by T+4 trading day-and depositories shall activate ISINs for privately placed debt securities only after stock exchange listing approval; new re issuances should be credited to a temporary frozen ISIN and moved to the existing ISIN upon listing approval.

Monitoring of foreign holdings in depository receipts ensures regulated issuance and daily headroom reporting by depositories.
Framework requires a listed company to appoint one Indian depository as the Designated Depository to compute, consolidate and disseminate ISIN-wise DR information. Domestic Custodians must provide initial and ongoing DR details, maintain underlying permissible securities in a prescribed demat sub type, and report approvals and utilisation for re issuance. Designated and Feed Depositories shall exchange daily investor wise holdings, consolidate outstanding permissible securities, calculate conversion headroom (original DRs less outstanding securities and unutilised re issuance approvals) and publish headroom on their websites.

Undertaking cum Indemnity bond deadline extended; exchanges may modify bond and must notify members accordingly.
Extension of the deadline for Trading Members and Clearing Members to submit the Undertaking cum Indemnity bond for all bank accounts by one month, with Stock Exchanges and Clearing Corporations required to obtain bank account lists, permit modification of the draft undertaking as needed, and notify and publish the revised requirements; issued under SEBI's regulatory authority to protect investor interests and regulate markets.

Relaxation in timelines extended for regulated market intermediaries, easing compliance deadlines for call recordings, KYC uploads, and cyber audits.
SEBI extended relaxation of timelines for specified compliance obligations of trading members, clearing members and related entities, covering maintenance of client order call recordings, upload of client KYC application forms and documents to the KRA system, and completion of the Cyber Security & Cyber Resilience Audit; Stock Exchanges and Clearing Corporations must notify members and publish the extensions, with other prior conditions remaining applicable.