Margining requirements for FPIs impose upfront margin for certain entities and maintain tailored position limits and allocation controls.
Differentiated risk-management for FPIs requires rolling margining for Categories I-III in the cash market, with corporate, individual and family office FPIs subject to upfront margins aligned with non institutional trades; existing position limits apply to Category I and II FPIs while Category III FPIs follow client-equivalent limits. Trade allocation must be pre disclosed through brokers to exchanges and limited to related FPIs; custodians/DDPs must provide FPI identification and categorisation to exchanges. Exchanges and clearing corporations may set additional transition requirements, amend rules, notify participants, update systems, and report implementation to the regulator.

Segregation of activities: DDPs must maintain separate DDP functions, robust infrastructure and submit detailed periodic compliance reports.
The circular requires DDPs under the Foreign Portfolio Investor regime to segregate DDP functions from other businesses, maintain dedicated staff reporting to the chief compliance officer, and provide necessary infrastructure, manuals and monitoring mechanisms. DDPs must submit monthly reports in prescribed detailed formats on applications (fresh registration, continuance, conversion, miscellaneous) and an annual expert audit report on internal controls within three months of the next year, together with quarterly Action Taken Reports addressing audit findings.

Liquidity enhancement schemes: regulated design, disclosure, incentive limits and integrity safeguards to govern market makers' participation.
Revised framework permits stock exchanges to introduce liquidity enhancement schemes in equity cash and derivatives segments subject to board approval, objectivity, transparency, non discrimination and law compliance. Schemes require quarterly board monitoring, semi annual effectiveness reviews, monthly dissemination of outcomes, and fifteen days' prior disclosure of changes. Exchanges must set eligibility benchmarks, limit scheme duration per security, publish eligible lists, and comply with quantitative ceilings on incentives and share based rewards while maintaining systems to detect collusion, prevent self matched incentives, and mandate conflict disclosure by liquidity providers.

Corporate governance reforms: mandatory e-voting and strengthened board, audit and disclosure obligations for listed companies.
Issuers must provide an e-voting facility for all shareholder resolutions and reference the e-voting platform link in notices; Clause 49 mandates principle-based corporate governance reforms including shareholder rights and disclosures, board composition and independent director criteria, standing committees (Audit, Nomination and Remuneration, Risk Management), mandatory Audit Committee review and powers, formal policies and approvals for related party transactions with material ones subject to shareholder special resolution, CEO/CFO certification of financial statements and internal controls, quarterly compliance reporting to exchanges, and auditor or company secretary certification of governance compliance.

Dematerialisation compliance enables shift from trade-for-trade to rolling settlement when depository connectivity and other conditions met.
Stock exchanges may shift securities from TFTS to normal Rolling Settlement where companies have dual depository connectivity and meet two conditions: at least 50% of other than promoter holdings are dematerialized certified by the Registrar and Transfer Agent (or, if no separate RTA exists, by a practicing Company Secretary or Chartered Accountant), and there are no other grounds for continuation of TFTS; exchanges must report actions in Monthly/Quarterly Development Reports.

Margin restoration for USD INR contracts restored to prior rates; exchanges must amend rules and implement by mid April.
The circular restores initial and extreme loss margins for USD INR currency derivatives to their pre July 08, 2013 rates, effective April 15, 2014. Stock exchanges and recognized clearing corporations must amend byelaws, implement systems for the restored margins, notify trading/clearing members, and disseminate the change on their websites under SEBI's statutory regulatory powers to protect investors and promote orderly markets.

Demat account rules: SEBI's master circular consolidates KYC, DIS, BSDA, transmission and depository governance requirements.
Consolidates SEBI circulars up to March 31, 2014 governing depositories, DPs and BO accounts: prescribes KYC (PAN as primary identifier with specified PoI/PoA and exemptions), mandatory Rights and Obligations document, BSDA eligibility and charge limits, DIS standardization/monitoring/scanning and investor safeguards, timelines and simplified documentation for transmission and dematerialisation, DP inspection and risk based categorisation, IT governance and BCP requirements, disclosure and grievance procedures, and adoption/assessment against CPSS IOSCO PFMIs.

Government debt investment restriction requires foreign investors to hold only dated securities with minimum one-year residual maturity.
Foreign Institutional Investors and Qualified Foreign Investors may invest only in dated government securities with a residual maturity of one year or above; existing Treasury Bill holdings may run off on maturity or sale and no further purchases of T Bills are permitted. The total government debt allocation remains capped and is redistributed toward longer maturities, with specified institutional categories retaining dedicated access.

Monthly Average Asset under Management redefinition requires mutual funds to report Monthly AAUM in prescribed disclosure formats.
Directs that the term Asset under Management (AUM) in the March 24, 2014 circular be read as Monthly Average Asset under Management (Monthly AAUM), and requires that data in Annexures A1 and A2 be reported using Monthly AAUM in place of AUM, altering the basis for mutual fund disclosure reporting.

Commencement of Foreign Portfolio Investor regime delayed; SEBI allows continued acceptance of FII registration and fee applications until commencement.
The Foreign Portfolio Investor (FPI) regime will commence and SEBI will continue to accept complete applications for FII and sub-account registration, fee acknowledgments, and miscellaneous requests until the transition to Designated Depository Participants (DDPs), after which DDPs will accept all such applications; Qualified Depository Participants deemed as DDPs may continue opening QFI accounts during the transition.

Auditors' Certificate requirement: standardised certification of accounting treatment compliance mandated for scheme filings under the listing agreement.
A mandatory standard format is prescribed for the Auditors' Certificate under Clause 24(i) of the Equity Listing Agreement to confirm that the accounting treatment in draft schemes of amalgamation, merger or reconstruction complies with applicable Accounting Standards and other generally accepted accounting principles, with any departures or regulator-prescribed treatments identified; the certificate must be furnished with draft/final schemes filed with stock exchanges from the circular date and auditors' examination is to follow professional guidance.

Mutual funds must publish detailed monthly AUM breakdowns, strengthen voting disclosures, and boost regional investor education.
The circular requires Mutual Funds to disclose detailed monthly AUM metrics (scheme-category, T-15/B-15 contributions, sponsor/other contributions, investor-type, distributor-source and state/UT-wise) in prescribed spreadsheet formats to AMFI for consolidated publication; mandates AMCs to record and publish specific rationale for each voting decision, provide quarterly and annual voting disclosures with auditor certification and trustee/board review confirmations; requires regional-language investor education and expanded distribution via PSU banks and online channels; and excludes specified high-quality instruments and short-term bank deposits from debt scheme sector exposure calculations.

OTC trades in corporate bonds must be reported on stock-exchange trade platforms within 15 minutes, effective April 1, 2014.
All OTC secondary market trades in corporate bonds must be reported on a trade reporting platform of any one stock exchange debt segment (NSE, BSE or MCX-SX) within 15 minutes of the trade; stock exchanges must implement systems, amend bye-laws, notify member brokers, and permit clearing and settlement through designated clearing corporations, effective April 1, 2014.

Anti-money laundering obligations: intermediaries must bolster risk assessment, CDD reliance rules, record retention and designate a compliance director.
Registered intermediaries must conduct documented risk assessments considering client profiles, geographies, transaction types and applicable sanctions lists; may rely on regulated third parties for client due diligence subject to PML Rules and SEBI guidance while retaining ultimate responsibility; maintain and preserve transaction, identity, account and FIU IND reporting records for the prescribed post business relationship period; designate and notify a Designated Director in addition to a Principal Officer; and ensure updated AML/CFT policies, internal audits and reporting to regulators.

Shifting from Trade-for-Trade to Rolling Settlement requires dematerialisation threshold, certification, and exchange reporting obligations to regulator
Companies with connectivity to both depositories may be shifted from Trade-for-Trade Settlement to Normal Rolling Settlement only if at least 50% of other-than-promoter holdings are in dematerialised form, evidenced by a certificate from the Registrar and Transfer Agent or, if no RTA exists, from a practicing Company Secretary or Chartered Accountant, and provided no other grounds for continuation of TFTS exist; stock exchanges must report actions taken in their Monthly/Quarterly Development Report.

FII/QFI commercial paper investment cap reduced; new sub limit within unchanged corporate debt ceiling applies immediately.
The circular reduces the FII/QFI sub limit for investment in Commercial Papers, restricting eligible foreign investors to the newly prescribed cap while maintaining the overall Corporate Debt ceiling and separately preserving an allocation for credit enhanced bonds; the amendment is effective immediately and requires custodians to inform their clients.

Dematerialisation requirement for settlement: exchanges may shift securities to normal rolling settlement upon certified dematerialisation and no continuing TFTS grounds.
Companies that have established connectivity with both depositories may be shifted from Trade for Trade Settlement to normal Rolling Settlement provided a required proportion of non promoter holdings are in dematerialised form certified by the Registrar and Transfer Agent or, if no separate RTA exists, by a practicing Company Secretary or Chartered Accountant, and provided there are no other grounds for continuation of TFTS; stock exchanges must report the action to the regulator in their development reports.

Software escrow safeguards urged to ensure seamless broker transition and contractual protections against vendor service failures.
Stock brokers should adopt safeguards against software vendor failure by exploring a software escrow arrangement, reducing reliance on a single vendor, and including contract terms that grant access to design and development specifications if the vendor fails to provide services, require broker training and expertise development, impose penalty clauses for trading disruptions or software glitches, and obligate vendor cooperation in audits including forensic audits. Stock exchanges must implement systems to effect these measures, amend bye laws and notify and disseminate the requirements to brokers.

Software testing requirements: expedited approval for limited changes while preserving risk-management integrity and preventing unauthorized modifications.
Stock exchanges may permit expedited approval for bug fixes, exchange-driven broker software changes, and vendor software already tested in mock environments; schedule mock testing, system-auditor certification and approval to facilitate transitions; waive mock testing and audits for changes limited to look-and-feel that do not affect risk-management or connectivity; require brokers to restore systems to production state after testing and implement controls to prevent unauthorized changes; and amend rules and notify members to implement these measures.

Risk based inspection framework for depository participants mandates adaptive sampling and combined qualitative quantitative scoring to prioritize inspections.
Depositories must adopt a risk based inspection framework covering specified operational and compliance areas, use an Adaptive Sample Size methodology with base samples and risk based multipliers, and compute a Total DP Risk Score by summing normalized quantitative and qualitative area scores. DPs are categorized by percentile into risk bands that determine inspection frequency and sample sizes; joint inspections and off site inspection tools are required, and depositories must amend rules, communicate requirements, and share risk ratings for common DPs.