Transfer and dematerialization of re-lodged physical shares: endorsed certificates retained and demat request required within specified validity period.
Upon processing a re-lodged transfer, the RTA retains the endorsed physical certificates and issues a Letter of Confirmation to the transferee with endorsement, folio, certificate and distinctive numbers. The transferee must present that Letter to a Depository Participant and submit a Dematerialization Request Form so the DP can process demat credit on the basis of the Letter. If the transferee does not submit a demat request within the letter's validity, the shares will be credited to the company's Suspense Escrow Demat Account. RTAs must notify depositories of any lock-in for processing as lock-in demat.

Compliance timeline extensions for regulated intermediaries permit delayed submission of audits and KYC uploads amid pandemic disruptions.
SEBI extended compliance timelines due to COVID 19: trading and clearing members received extensions to submit half year Internal Audit, System Audit and half year net worth certificates for the period ended September 30, 2020 (with deadlines in late December 2020 and specified items to January 31, 2021). Depository Participants received extensions for half year Internal Audit reports and annual systems audit to December 31, 2020; uploading client KYC to KRA had an exclusion period through December 31, 2020 plus a 15 day backlog clearance window.

Simulated test environment optionalizes mandatory mock trading sessions; exchanges must provide access and monthly reporting.
Mandatory mock trading sessions become optional if a Recognised Stock Exchange provides a simulated test environment available to all members, for at least two hours after market hours on at least two trading days weekly, with data from at least one trading day in all segments not older than one month. Members with approved algorithms must participate at least one trading day monthly and such participation shall be audited and reported in the System Auditor's report; exchanges must provide daily logs to members and a summary to the regulator in the monthly development report.

Unified Payments Interface (UPI) adoption enables app/web public issue applications with mandate-based fund blocking and electronic reconciliation.
Permits application to public issues of debt, preference and securitised instruments via stock-exchange app/web interfaces and intermediaries with blocking of application funds through the Unified Payments Interface (UPI). Stock exchanges and depositories must validate PAN and demat details in near real time and transmit bid and UPI ID data to a designated Sponsor Bank, which initiates a one-time mandate for investor authorization. Upon mandate acceptance banks block funds and communicate status to Sponsor Bank, stock exchange and registrar; registrar reconciles block confirmations, prepares basis of allotment, and triggers debit/collect and unblocking actions for final settlement and allotment.

Preferential issue ineligibility clarified: parties transferring units within six months, including sponsors, are barred from allotment.
Preferential issue of units by a listed InvIT shall not be made to any person who sold or transferred units of the issuer during the six months preceding the relevant date; if any person belonging to a sponsor sold or transferred units in that period, the sponsor is ineligible for allotment on a preferential basis.

Continuous disclosure compliance: exchanges to impose uniform fines and enforcement measures for listed debt securities, preference shares and commercial papers.
SEBI mandates a uniform enforcement framework requiring recognized stock exchanges to monitor continuous disclosure compliance by issuers of listed Non-Convertible Debt Securities, NCRPS and Commercial Papers, levy specified fines for enumerated disclosure failures, coordinate actions across exchanges for multi-listed entities, credit fines to the Investor Protection Fund, and impose restrictions (including prohibition on issuance and further listing) until compliance and payment of fines, with publication of actions and allowance for deviations only with written reasons.

Debenture trustees must monitor security created, submit asset cover certificates and publish timely disclosure of defaults and compliance.
Debenture trustees must independently and periodically assess issuer compliance with issue covenants, with focused monitoring of the security created and asset charges. Trustees shall embed monitoring terms in trust deeds, obtain issuer documents, and submit prescribed reports (quarterly Asset Cover Certificates, guarantor net worth, valuations) to exchanges within specified timelines; amend existing trust deeds within 120 days; follow prescribed breach response procedures; furnish revised half yearly reports to the regulator; and publish defined disclosures on trustee websites within stated timelines.

Outsourcing obligations and liability: LPCCs may outsource core IT to clearing corporations but remain primarily liable for failures and continuity.
LPCCs may outsource core IT and operational activities to existing Clearing Corporations under comprehensive agreements that ensure redundancy, set selection criteria, define fees, and require service providers to meet regulatory and cybersecurity standards; the LPCC remains primarily responsible for risk management, clearing and settlement, dispute liability, business continuity, disaster recovery and must preserve regulator access while embedding indemnity and financial disincentives to prevent market disruption.

Investor grievance redressal mechanism enforces timelines, IGRC conciliation, and arbitration as escalation for unresolved complaints.
Investor grievance redressal mechanism requires Stock Exchanges to resolve investor complaints within prescribed timelines, seek additional information within seven working days, and record reasons for any delay. Service-related complaints are handled by the Exchange with escalation to the Investor Grievance Redressal Committee (IGRC) where complainants remain dissatisfied. IGRC has a 15-working-day conciliation period, extendable to an overall 30-working-day period if additional information is sought, must not dismiss complaints for lack of information or complexity, and may recommend admissible claim values which Exchanges must block from member deposits.

Liquidity requirement for open ended debt schemes imposes minimum liquid asset holdings and mandatory stress testing.
SEBI requires most open ended debt schemes to hold at least ten percent of net assets in liquid assets (cash, government securities, T bills, repo on government securities), excludes these holdings from scheme characteristic calculations, and mandates AMCs to restore such exposure before further investments if breached; additionally, all open ended debt schemes except overnight schemes must conduct stress testing under AMC stipulated guidelines, with a committee to review norms and methodology.

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.