Alternative Investment Funds master circular consolidates regulatory rules on PPMs, leverage limits, overseas investment and reporting.
Master Circular consolidates operative AIF circulars into a single framework, rescinds listed circulars with savings, mandates online filings and PPM templates with merchant-banker due diligence, prescribes investor eligibility and accreditation, sets Category III leverage and liquidity norms with breach and reporting procedures, governs overseas investment allocation and reporting, details CDS and RFQ trading conditions, and consolidates governance, disclosure, reporting, benchmarking, investor charter and change-of-sponsor/manager approval and fee requirements.

Corporate debt backstop fund requires mutual fund debt schemes and AMCs to contribute and enables purchases during market dislocation.
Creation of CDMDF as a close-ended backstop facility to purchase listed investment-grade corporate debt (including money market instruments) with residual maturity up to five years from specified debt-oriented mutual fund schemes during SEBI-declared market dislocation. Specified schemes must invest a fixed fraction of their AUM in CDMDF units with incremental top-ups as AUM grows; AMCs make a one-time contribution tied to their schemes' AUM. Sellers receive predominantly cash and a portion in units that bear first-loss risk. Contributions are locked-in, access is proportional to holdings, and CDMDF investments are excluded from certain risk and maturity calculations.

Corporate Debt Market Development Fund to buy investment-grade corporate debt as a backstop to support market liquidity during stress.
The circular creates the Corporate Debt Market Development Fund (CDMDF) as an AIF backstop facility to purchase investment-grade corporate debt during market stress, subject to the GSCD. CDMDF must hold specified low-risk instruments in normal times, follow a fair-pricing valuation framework for purchases, observe a defined fee schedule, publish NAVs by prescribed times, and implement operational arrangements for RFQ trading and settlement. A three-tier loss-waterfall allocates initial losses to A3 units, then A1/A2, with residual protection via Government Guarantee; A1/A2 NAVs are protected at opening NAV during dislocation and A3 bears excess losses until parity is restored.

Legal Entity Identifier requirement for non individual FPIs now mandatory; accounts blocked for purchase privileges on non compliance.
Mandates submission and maintenance of the Legal Entity Identifier (LEI) for all non individual FPIs as a condition for registration, renewal and purchase activity. Depositories must modify the Common Application Form and DDPs will collect LEI details; new registrations require LEI receipt. Existing FPIs must provide LEIs within 180 days or face account blocking for purchases. FPIs must keep LEIs active; expired or lapsed LEIs will result in blocking until renewal.

Standing arrangements requirement: trustees must confirm arrangements in half yearly reports for special purpose audits and legal advice, effective immediately.
Trustees must maintain standing arrangements with independent firms for special purpose audits and legal advice, and must confirm continuous compliance with this requirement in the Half Yearly Trustee Reports, which are amended to include a specific entry for this confirmation and an additional item for other trustee matters; the requirement is effective immediately.

ESG investing rules: Mutual funds must adopt defined strategies and enhanced disclosures to curb greenwashing and improve transparency.
Introduction of a separate regulatory sub-category for ESG schemes requires Mutual Funds to offer multiple equity thematic schemes distinguished by defined ESG strategies, with a minimum 80% AUM allocation to equity instruments aligned to the chosen strategy; from October 1, 2024 at least 65% of AUM must be in companies reporting comprehensive BRSR with assurance on BRSR Core, subject to a transitional compliance window and prohibitions on fresh investments without assurance during that period.

Trading window PAN freeze for designated persons extended to all listed companies in phased implementation to restrict trading.
SEBI extends a phased framework requiring freezing of PAN at the ISIN level to restrict trading by Designated Persons during trading window closures under Clause 4 of Schedule B read with Regulation 9 of the PIT Regulations. Listed companies must confirm DP details and closure dates via a Designated Depository portal at least two trading days before commencement; the DD shall relay information to stock exchanges and other depositories by T 1 day and update daily. Depositories will restrict off-market transactions and pledges, and stock exchanges will block on-market trading for the closure period, with additions, updates and exemptions processed within two trading days.

Material event disclosure requires prompt stock exchange reporting with prescribed content, timelines, and materiality guidance.
The circular prescribes enhanced disclosure obligations for listed entities under Regulations 30 and 30A by specifying required content for Part A events, precise timelines for initial and follow up disclosures (including prompt post board meeting reporting), criteria and computation guidance for materiality under regulation 30(4), and rules on when an event is deemed to have occurred, while requiring listed entities to update exchanges as material particulars evolve.

ESG rating regulation: unified registration, disclosure and governance rules mandate transparency, auditability and conflict mitigation for providers.
SEBI establishes a unified regulatory framework for ESG Rating Providers requiring SEBI registration via the Intermediary Portal, prior approval for change in control with specified disclosures and timelines, procedures for transfer or surrender of registration ensuring orderly migration of client assignments, mandatory offering and disclosure of specified ESG products on a 0-100 scale, prohibition of hybrid business models, detailed governance and conflict of interest safeguards, yearly independent internal audits with prescribed scope and reporting, and extensive periodic and continuous public disclosures including transition rate studies and methodology transparency.

ESG disclosures via BRSR Core require phased assurance and mandated value chain reporting with specified KPIs and disclosure rules.
Introduction of a framework mandating standardized ESG reporting and assurance through the BRSR Core, a focused subset of the Business Responsibility and Sustainability Report comprised of key performance indicators across nine ESG attributes. The Core prescribes KPIs and a base methodology for reporting and reasonable assurance, requires phased applicability to top listed entities by market capitalization, and mandates disclosures for the value chain covering partners comprising seventy five percent of purchases or sales by value, with scope and assumptions disclosed.

SEBI master circular consolidates LODR compliance for listed entities, standardising disclosures, formats, and enforcement procedures.
SEBI issued a Master Circular consolidating compliance requirements under the LODR Regulations into a chapter wise framework, rescinding prior circulars with savings, and prescribing standardised formats, timelines and procedures for listing, periodic and event based disclosures, financial reporting, related party transactions, secretarial and sustainability reporting, e voting, MPS methods, auditor resignation protocols and enforcement including fines, freezing of promoter holdings, 'Z' category trading, suspension and delisting SOPs; recognised Stock Exchanges and Depositories must implement monitoring and systems.

Sponsor eligibility expanded for mutual funds; new rules for capital deployment, PE sponsors, and self-sponsorship.
The circular revises sponsor regulation by requiring AMCs to deploy the minimum net worth in liquid, unencumbered instruments; permitting acquisition funding by borrowings only where sponsors have other encumberable assets and requiring incremental capitalization to be funded from acquirer net worth; restricting pooled vehicle sponsors to private equity funds subject to experience, track record and safeguards including prohibition of specified off-market transactions and lock-in of initial shareholding; and establishing conditions, reporting, trustee composition and timelines for voluntary sponsor disassociation and for an AMC to qualify as a self-sponsored AMC, with provisions for re-association and unitholder exit without exit load.

Trustees' core responsibilities clarified to ensure independent oversight of AMC fees, conflicts, systems and prevention of misconduct.
Trustees must exercise independent due diligence on core responsibilities including fairness of AMC fees, scheme performance review, systems to prevent mis selling and valuation issues, prevention of undue influence by sponsors/associates, avoidance of unfair advantage to group entities, management of conflicts between AMC stakeholders and unitholders, and controls against misconduct and market abuse; Trustees must obtain system based exception reports and automated alerts from AMCs, independently evaluate compliance, and review remediation for incomplete or outdated KYC attributes.

Real Estate Investment Trusts: SEBI consolidates REIT circulars into master circular mandating compliance, filings, disclosures.
Master Circular consolidates SEBI circulars for Real Estate Investment Trusts into a single instrument effective from issuance, superseding listed circulars while preserving prior actions and pending applications by deeming them to have been done under corresponding provisions. It mandates online filings via SEBI's intermediary portal, requires periodic and continuous reports and disclosures (including detailed public-issue, financial disclosure, audit and NDCF frameworks), prescribes governance, issuance and listing procedures, and sets out transitional, compliance and reporting obligations for REITs, intermediaries and stock exchanges.

Master Circular consolidates SEBI guidance for Infrastructure Investment Trusts, mandating online filings and consolidated compliance obligations.
Master Circular consolidates SEBI circulars for InvITs up to July 6, 2023, takes immediate effect, supersedes listed circulars while preserving prior actions and pending applications, requires mandatory use of SEBI's online filing portal, and imposes consolidated compliance, reporting and disclosure obligations covering public offers, preferential and rights issues, financial and audit standards, continuous disclosures including NDCF statements, debt issuance rules, encumbrance and exit mechanisms, governance and specified reporting formats; issued under SEBI Act and InvIT Regulations and published on SEBI's website.

Institutional placement pricing now based on two-week average closing prices, with limited discount subject to unitholder approval.
The circular requires institutional placement pricing to be at least the average of the weekly high and low of closing prices of the same class of units during the two weeks preceding the relevant date, allows a limited discount subject to unitholder approval through the prescribed resolution, and defines the relevant date as the date of the board meeting when the board decides to open the issue; the amendment is effective immediately under the regulator's statutory and REIT regulatory powers.

Institutional placement pricing set at recent average closing prices, allowing a limited discount with unitholder approval.
Institutional placement price shall be the average of the weekly high and low of the closing prices of the same class of units on the stock exchange during the two weeks preceding the relevant date; the InvIT may offer a limited discount on that price subject to unitholder approval. "Relevant date" for institutional placement is the date of the meeting when the manager's board decides to open the issue.

Nominee director appointment: issuers must designate a non executive or independent director as trustee nominee when nomination events occur.
SEBI mandates that issuers unable to amend their principal charter to appoint trustee-nominated directors must give an undertaking to debenture trustees that, if events under Regulation 15(1)(e) arise, a non-executive or independent director or member of the governing body will be designated as the nominee director in consultation with the debenture trustee(s). Debenture trustees must ensure and monitor compliance; the circular is effective immediately and will be incorporated into relevant operational circulars.

Credit rating agency regulation: comprehensive operational, disclosure and governance requirements to standardize ratings and ensure transparency.
The Master Circular consolidates procedural and operational requirements for CRAs including online registration, prior approval for change in control, transfer and surrender mechanics, and obligations during suspension or cancellation. It standardizes rating scales (including an EL scale), mandates detailed operations manuals, rating criteria, committee governance, and recordkeeping. Surveillance obligations include monthly No Default Statements and event based reviews; standardized press releases must disclose analytical approach, liquidity and rating sensitivities. Enhanced transparency requires PD benchmarks, periodic default and transition disclosures, machine readable reporting, half yearly internal audits with specified scope, and rules on conflict management, outsourcing and firewalls.

Upstreaming of clients' funds - late receipts frozen until next upstreaming window; FDRs limited and pre-terminable.
Clients' funds must be upstreamed to Clearing Corporations in cash, by lien on pre-terminable FDRs of tenor not exceeding one year and one day, or by pledge of mutual fund overnight scheme units. Late receipt of client funds is permitted provided those funds are frozen against debit until the next day's upstreaming window and exchanges ensure such balances remain minimal and legitimate. Existing longer-tenor FDRs created before the prior circular may be grandfathered until maturity, with renewals required to meet the revised FDR conditions.