Block mechanism mandatory for Early Pay-In transactions, requiring depositories and exchanges to implement systems and notify members.
The circular mandates the block mechanism as compulsory for all Early Pay-In transactions effective November 14, 2022, requiring Depositories, Clearing Corporations and Stock Exchanges to put in place systems to ensure compliance and to notify members, amend bye-laws, and report implementation status to SEBI.

Overseas investment eligibility for AIFs/VCFs: new jurisdictional, due diligence and reporting requirements govern permissible investments.
AIFs/VCFs must apply for allocation of an overseas investment limit using the prescribed format and submit trustee/manager undertakings; investments are permitted only in overseas investees incorporated in jurisdictions whose securities regulator is an IOSCO MMoU signatory or has a bilateral MoU, and are prohibited in jurisdictions identified by FATF for strategic AML/CFT deficiencies; transfers may be made only to entities eligible under FEMA/RBI rules, liquidation proceeds are available for reinvestment across funds, and specified reporting of investments and divestments to the regulator is mandatory within prescribed timelines.

Trading window closure: PAN-based freeze restricts designated persons from trading during closed periods around financial results.
SEBI requires depositories and exchanges to implement a system restricting trading by Designated Persons via PAN freeze at security level around financial-result disclosures for companies in benchmark indices. Listed companies must confirm ISIN, DPs' PANs and closure start/end dates at least two trading days prior (T-2); the Designated Depository will relay details to exchanges and other depositories by T-1 and daily during closure. Demat accounts are identified by PAN; on-market, off-market and pledge transactions will be restricted from commencement (T day), with additions, deletions or exemptions effected within two trading days and freezes processed post market hours.

Security creation and due diligence: debenture trustees must issue NOC after prescribed due diligence before charge registration.
Debenture trustees and issuers must amend the debenture trust deed before due diligence; the DT shall perform initial due diligence per prescribed formats and issue a no-objection certificate (NOC) permitting security creation. The issuer must create the security, execute the charge in favour of the DT and register the charge with applicable registries within thirty days; thereafter the issuer and DT shall execute a supplemental debenture trust deed and submit the NOC, executed deed, DT undertaking of creation and registration, and other required documents to depositories and stock exchanges for ISIN reassignment.

Nomination for mutual fund unit holders: timeline extended, with physical signatures and online validation rules for nomination forms.
Extends the timeline for mutual fund investors to submit nomination details or a declaration opting out of nomination. Investors subscribing to mutual fund units on or after October 1, 2022 may choose either the nomination form or the opt-out declaration, in physical or online form. Physical forms require wet signatures of all unit holder(s), while online forms may be validated through e-Sign or two-factor authentication using an OTP sent to the registered email or phone number.

Automated account deactivation for inadequate KYC triggers freeze on trading and demat accounts until KYC and acknowledgement are furnished.
Where all designated MIIs fail to effect physical delivery of a SEBI SCN/order and obtain a signed acknowledgement at KYC-linked addresses, MIIs shall, after prior email/SMS notice and within a specified operational window from the last unsuccessful delivery report, freeze debit and credit of all trading and demat accounts of the entity identified by PAN. Pending pay-in/pay-out and open positions may be settled. If any MII effects service and obtains acknowledgement, accounts remain active but KYC records across accounts must be updated and confirmed to the KRA. Reactivation requires proof of address, the signed acknowledgement, KYC update by the registered intermediary, and MII confirmation, with mandated short timelines for inter-party communication.

Continuous disclosure obligations consolidated into a Master Circular prescribing formats, timelines and enforcement for listed debt issuers.
Master Circular consolidates SEBI continuous disclosure obligations for issuers of listed Non Convertible Securities, Securitized Debt Instruments and Commercial Paper, prescribing standardised formats and timelines for financial results, limited review/audit reports, statements on utilisation and deviations of issue proceeds, default disclosures, securitization pool/tranche/loan level reports, rating review submissions, corporate governance and related party transaction reporting, scheme of arrangement pre filing and post sanction requirements, and a uniform enforcement and fine structure, effective from August 1, 2022.

Listing obligations for non-convertible securities updated: consolidated disclosure formats, filing procedures, schemes and defaults reporting.
SEBI consolidates and updates operational listing obligations for issuers of listed Non convertible Securities, Securitised Debt Instruments and Commercial Paper by prescribing standardised chapter wise formats, filing timelines and procedural processes for financial results, audit reports, utilization of issue proceeds, securitisation pool/tranche/loan level disclosures, default reporting, rating reviews, schemes of arrangement involving listed debt, related party transaction disclosure and corporate governance compliance, and establishes enforcement steps and fines with coordinated stock exchange and SEBI oversight.

Direct investor transactions in ETFs deferred; applicability of threshold requirement postponed to address implementation challenges.
Applicability of the provision restricting direct transactions with AMCs for units of exchange traded funds to investors above a specified threshold is deferred; stakeholder feedback on implementation challenges prompted postponement of the threshold-based direct-transaction requirement, with other aspects of the earlier circular continuing to operate under SEBI's regulatory powers.

KYC Aadhaar validation to commence, requiring existing Aadhaar-based records to be validated within the prescribed timeline.
Validation of KYC records that used Aadhaar as an Officially Valid Document shall commence from November 01, 2022, and existing clients with Aadhaar-based KYC must be validated within 180 days from that date. The circular implements amendments to the SEBI KYC Registration Agency Regulations and directs KRAs and intermediaries to validate both new and existing KYC records pursuant to SEBI's regulatory powers under the SEBI Act and the KYC Regulations.

Running account settlement of client funds required on designated monthly or quarterly first Fridays, with exchanges enforcing compliance.
Settlement of clients' running accounts is limited to funds and must be carried out by trading members on a uniform schedule: quarterly settlements for clients with the default mandate on the first Friday of each quarter (or the preceding trading day if that Friday is a holiday), and monthly settlements on the first Friday of every month (or the preceding trading day if that Friday is a holiday). Exchanges must notify members, amend rules, monitor timely settlement, ensure excess funds are not retained, require TM reporting, and report implementation status to the regulator.

e-KYC Aadhaar Authentication: entities authorised as sub-KUA must register with KUA and UIDAI to perform KYC.
Entities notified for sub-KUA status may perform Aadhaar-based e-KYC Aadhaar Authentication for securities market KYC only after entering into the UIDAI-prescribed agreement with an authorised KUA and registering with UIDAI as sub-KUAs. KUAs must facilitate onboarding, and sub-KUAs must follow the prescribed e-KYC processes and any further UIDAI directions.

GST on SEBI fees now applies to regulatory charges, requiring stakeholders to treat fees as taxable supplies and comply accordingly.
Fees and other charges payable to the Securities and Exchange Board are subject to Goods and Services Tax following withdrawal of SEBI's exemption by the GST Council and Notification No.4/2022; this applies to Market Infrastructure Institutions, intermediaries, listed and prospective issuers, effective July 18, 2022, requiring stakeholders to treat SEBI fees as taxable supplies and comply with GST collection and payment obligations.

Cybersecurity reporting for QRTAs now requires six-hour incident notifications and quarterly reports to SEBI via the dedicated email.
SEBI requires QRTAs to report all cyber-attacks, threats, incidents and breaches to SEBI within six hours of detection and to the national computer emergency response authority; systems designated as protected must also notify the critical infrastructure protection centre. Quarterly reports detailing incidents and mitigation measures must be submitted within 15 days after each quarter via the dedicated e-mail, using the existing reporting format, and QRTAs must implement systems to ensure immediate compliance.

KYC Registration Agencies must report cyber incidents within six hours and provide quarterly incident reports for regulatory oversight.
KRAs must report all cyber-attacks, threats, incidents and breaches within six hours of detection and notify the national computer emergency response body; systems designated as protected must also notify the national critical information infrastructure authority. KRAs must submit quarterly reports on incidents, vulnerabilities and mitigation measures within 15 days of quarter-end using the prescribed format and dedicated e-mail, and put in place systems to implement these requirements immediately.

Investor Grievance Redressal: exchanges must deploy online complaint systems and continue hybrid grievance and arbitration processes.
SEBI directs Recognized Stock Exchanges, Commodity Derivatives Exchanges and Depositories to implement a 24x7 web-based investor complaints redressal system interoperable with SCORES within six months, featuring online lodging, unique registration and tracking, online movement to concerned entities, Action Taken Reports, audit trails, centralised storage and MIS, access for trading members and DPs, investor status visibility and online clarifications. SEBI mandates continuation of a hybrid mode for GRC, arbitration and appellate arbitration, and replaces clause 1.J.(iii) of its 2017 circular to exempt clients with claims up to a specified monetary threshold from arbitration fees.

Cyber incident reporting requirement mandates rapid notification to regulators and CERT In and quarterly disclosures to aid market resilience.
Modification requires Stock Brokers and Depository Participants to report all cyber attacks, threats, incidents and breaches to Stock Exchanges/Depositories and SEBI within 6 hours of detection or notice, and to the national computer emergency response authority and, where systems are designated protected, to the national critical infrastructure protection centre; quarterly reports on incidents and mitigations must be submitted to Stock Exchanges/Depositories within 15 days of quarter end and shared with SEBI via a dedicated e mail.

Demat Debit and Pledge Instruction extension delays implementation; exchanges must notify members and update websites under regulatory powers.
SEBI extends the implementation timeline for the Demat Debit and Pledge Instruction (DDPI) regime for transfers of securities for deliveries/settlement obligations and pledging/re pledging, postponing the prior commencement date to allow depositories additional time to complete system changes. Stock Exchanges and Depositories must notify members/participants and publish the extension on their websites; the directive is issued under SEBI's statutory powers to protect investors and regulate the securities markets.

Disclosure of public shareholding requires named large shareholders and concert parties; revised shareholding and foreign ownership formats mandated.
Amendments require listed entities to name shareholders holding significant public stakes and disclose persons acting in concert where available; revised formats for public and non promoter non public shareholding disclosures (Table III and Table IV) are prescribed, and a new Table VI format captures foreign ownership limits. Stock exchanges and depositories must implement systems, notify listed entities and disseminate the formats; changes take effect from the quarter ending September 30, 2022.

Derivative contract adjustment threshold revised; adjustments now triggered only for sufficiently material dividend declarations.
Adjustment in single stock futures and options will be carried out only where dividend declarations meet or exceed a specified market value threshold; earlier circulars are modified to that extent while other provisions remain applicable. Exchanges and clearing corporations must implement systems, amend rules and bye laws as needed, disseminate the circular to members and confirm implementation to the regulator; the revision applies to announcements on or after the circular's effective date.