Governance reforms for market infrastructure institutions strengthen director accountability, reporting, whistleblower and risk frameworks.
SEBI requires MIIs to strengthen governance through mandatory bi annual PID meetings reporting to SEBI and the governing board, standardized quarterly Compliance Officer reports and half yearly Chief Risk Officer reports in prescribed formats, website disclosure of board agendas and minutes on regulatory and risk matters, SOPs for disciplinary action against KMPs including malus clawback provisions, tightened whistleblower resolution and reporting timelines, RegTech/SupTech adoption for member supervision, vendor appointment and monitoring policies, director training and a streamlined two stage director appointment process, and specified independent reporting interactions for CO, CRiO, CTO and CISO; the measures are to be implemented by the effective date with necessary bylaw amendments.

Security deposit requirement removed; exchanges must adopt SOP for previously deposited funds and notify listed issuers.
Requirement to deposit a 1% security deposit of issue size with the designated stock exchange under the ICDR Regulations has been dispensed with and the Master Circular on issuance of No Objection Certificate for that deposit is withdrawn with immediate effect. Stock exchanges must jointly frame an SOP for release of security deposits deposited before the amendment, notify listed companies, publish the change on their websites, and amend bye laws, rules and regulations as necessary to implement the circular.

Default treatment clarified: CRAs must verify funds, reasons and escrow payments before downgrading after payment failures.
Where non-payment of principal and/or interest arises from circumstances beyond the issuer's control (such as incorrect/dormant investor account details or account freezes), a CRA must confirm availability of adequate funds with the issuer and verify proof of payment failure, the specified reasons for failure, and that required amounts were paid into a separate escrow account on the due date; the CRA must, on the same day as its rating press release, furnish specified payment and failure details to Stock Exchanges, Depositories and the Debenture Trustee for dissemination.

InvITs: Exemption for employee benefit trust units, standard quarterly reporting, and aligned distribution timelines with unclaimed funds process.
Units allotted to an employee benefit trust for a unit based employee benefit scheme are exempt from the lock in and preferential allotment restrictions in Chapter 7, per new paragraph 7.6.4 and a proviso to 7.7.1; BIA will specify the standardized quarterly report and compliance certificate formats for Investment Managers and trustees; distributions timelines are aligned with Regulation 18(6)(c), and unclaimed distributions must be transferred to an Escrow 'Unpaid Distribution Account' within seven working days of expiry of the distribution timeline.

Relaxation for employee benefit trust units exempts lock in and allotment restrictions, with reporting and unclaimed distribution rules aligned.
Units allotted to an employee benefit trust for a unit based employee benefit scheme are exempted from the preferential issue lock in and allotment restrictions if compliant with Chapter IVA of the REIT Regulations. Indian REITs Association, with the regulator, shall specify a uniform format for quarterly reports and compliance certificates that managers must submit to trustees. Where distributions made within prescribed timelines remain unpaid or unclaimed, the manager must transfer such amounts to an Unpaid Distribution Account within seven working days of expiry of the distribution timeline.

Simplified FPI registration: abridged CAF option with auto-population of data and applicant consent to reused details.
SEBI permits eligible FPI applicants to use an abridged Common Application Form where only fields unique to the applicant are filled while other fields are auto-populated or disabled from the depositories' CAF module, subject to explicit applicant consent and confirmation of unchanged details; DDPs must update and maintain complete CAF records and pilot custodians with the Standards Setting Forum will specify implementation standards and auto-populatable fields.

Trading supported by blocked amount via UPI block or three in one accounts expands client choice and fund protection.
SEBI requires Qualified Stock Brokers to offer clients either trading in the cash segment supported by blocked amounts via the UPI block mechanism or a three in one trading account integrating trading, demat and bank accounts with fund and security blocking at order placement and post market upstreaming of pay ins to the Clearing Corporation; clients may continue pre funding or choose either facility and Stock Exchanges and Clearing Corporations must amend bye laws and notify participants. Effective February 01, 2025.

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.