Financial disincentives enforce MIIs and senior executives to promptly rectify technical glitches, with payments directed to investor protection funds.
SEBI mandates an SOP defining Technical Glitch as malfunction in MII hardware, software or services causing stoppage or variance in operations, requiring prompt reporting to SEBI, a preliminary report within 24 hours and a comprehensive Root Cause Analysis with corrective actions within 21 days. SEBI's Technical Advisory Committee may review RCAs and require further action. Failure to submit adequate RCA or to remediate within TAC/SEBI timelines triggers graduated Financial Disincentives, including per-day penalties, slab-wise payments, and percentage-based penalties on MIIs and on the MD and CTO, payable to investor protection or settlement guarantee funds.

Master Circular for commodity derivatives consolidates SEBI guidance on trading, risk, product design and participant obligations.
SEBI's Master Circular consolidates all CDMRD circulars issued up to April 30, 2021, updates terminology to treat commodity segments as belonging to recognized stock exchanges, and clarifies that original circulars prevail over the Master Circular; it supersedes the July 10, 2020 Master Circular and centralises operative rules on trading, disclosures, client identification, product eligibility, DPL and position limits, risk management, warehousing, participant eligibility and special funds for farmers/FPOs.

Regulatory timeline extensions for market intermediaries allow delayed compliance for call recordings, KYC uploads and client statements.
Extension of compliance timelines for Trading Members, Clearing Members, KYC Registration Agencies and related intermediaries covering maintenance of client call recordings; client funding reporting; operation from alternate trading locations; uploading KYC forms and supporting documents on KRA systems with an extended window and backlog clearance period; and delayed issuance of physical Annual Global Statements upon client request. Stock Exchanges, Clearing Corporations and Depositories must notify members and publish the extensions, which are issued under statutory powers to protect investors and regulate the securities market.

Cross margin benefit between commodity index futures and constituent futures reduces initial margin for eligible offsetting positions.
Cross margin benefit between commodity index futures and constituent futures permits reduction in initial margin for eligible offsetting positions while Extreme Loss Margin and Mark to Market margins continue to apply. The benefit must be computed at the client level in real time and passed to the client. Eligibility is limited to contracts in the same or nearest expiry month among the first three expiries and the benefit must be withdrawn by tender period start or expiry. Clearing Corporations may introduce cross margin after six months of back testing proving post benefit initial margin covers MTM on at least 99% of days, and must have default and liability allocation arrangements.

Liquidity risk management framework for open ended debt schemes mandates AMFI-prescribed norms and clarifies regulatory asset bases.
AMFI must prescribe a liquidity risk management framework for open ended debt schemes (excluding specified gilt and overnight funds) to govern holding of liquid assets and stress testing, to be adopted by all AMCs. SEBI clarifies that for regulatory calculations other than asset allocation limits the base is 100% of Net Assets, whereas for certain asset allocation limits the base is Net Assets excluding the minimum stipulated liquid assets, with an illustrative example provided.

Alignment of interest for key employees: implementation deadline extended to accommodate stakeholder feedback and protect unitholder interests.
Alignment of interest of Key Employees of Asset Management Companies with unitholders: SEBI's directive prescribing measures to align AMC key employee incentives with unitholders remains in force, but the implementation date has been postponed following stakeholder feedback to permit additional time for operationalisation. The circular is issued under Section 11(1) of the SEBI Act and Regulation 77 of the SEBI (Mutual Funds) Regulations to protect investor interests and regulate the securities market.

Investing in other AIFs: AIFs may hold units of other funds and direct securities subject to disclosure and investor consent.
AIFs may invest simultaneously in units of other AIFs and directly in investee securities within Regulation 15 limits; such investments need PPM disclosure and at least two thirds unit holder consent. PPMs must state allocation to other AIFs, fees attributable to those investments, compliance processes, and related party AIF investment details. Category III AIFs investing in other AIFs face a leverage cap calculated after excluding the value of such investments. The Fourth Schedule Code of Conduct applies to key management personnel, who must be named in the PPM and whose changes must be notified. A waiver format for Investment Committee compliance is prescribed, and consent is not required for changes in ex officio external investment committee members.

Investment Adviser administration and supervision: mandatory IAASB membership and prescribed reporting and fee compliance required.
SEBI has designated an Investment Adviser Administration and Supervisory Body (IAASB) to administer and supervise registered Investment Advisers, assigning it duties including on-site and off-site supervision, grievance redressal, administrative actions, monitoring and submission of periodical reports, and database maintenance; the IAASB board must be chaired by a Public Interest Director and include investor representation, while SEBI retains concurrent supervision and will inspect the IAASB. Registered Investment Advisers must join the IAASB and follow IAASB-prescribed membership, fee payment and reporting procedures to keep their registrations in force.

Interest Rate Swap hedging permitted with notional limited to assets hedged; single counterparty limits apply, except for CCP cleared trades.
Mutual funds may enter into plain vanilla Interest Rate Swaps (IRS) for hedging, with swap notional not to exceed the value of the assets being hedged. For OTC IRS, counterparties must be regulated market makers and exposure to a single counterparty is subject to a single-counterparty exposure cap. If IRS are transacted via an electronic trading platform where a clearing corporation acts as central counterparty guaranteeing settlement, the single-counterparty cap does not apply.

Running account settlement mandates periodic actual payment, permits limited retention after margin pledge adjustment, and requires client notification.
TMs must periodically effect actual settlement of clients' running account funds, considering end-of-day obligations across exchanges; where clients have outstanding positions, TMs may retain pay-in obligations for T and T 1 and a capped multiple of end-of-day margin liability after first adjusting collateral accepted as margin pledge (with haircuts). Excess client-identifiable collateral need not be unpledged. Settlement requires actual payment to the client's bank account; journal entries do not substitute for settlement. Exchanges must monitor compliance via online systems and reporting.

System driven disclosures under Regulation 7(2) extended to listed debt securities of equity listed companies, to be published on exchanges.
The circular extends the System Driven Disclosures mechanism under Regulation 7(2) of the PIT Regulations to include listed debt securities of equity listed companies, applying the same implementation procedure as for equity and equity derivatives. Depositories and stock exchanges must arrange for dissemination of these disclosures on exchange websites and exchanges must notify listed companies; implementation is to be coordinated by depositories and exchanges and published in the integrated disclosure displays.

Relaxation of minimum vesting period: options and SAR vest immediately on employee death to legal heirs or nominees.
The circular provides that the one year minimum vesting period under the SEBI (Share Based Employee Benefit) Regulations shall not apply in case of an employee's death and that all options, SAR or other benefits granted to the employee shall vest in the legal heir or nominee on the date of death; this relaxation applies to employees who died on or after April 1, 2020 and is issued under Section 11(1) of the SEBI Act.

Regulatory sandbox enables controlled live testing of fintech solutions with investor protections and reporting obligations.
The framework allows SEBI registered entities to test innovative securities market solutions in a two stage sandbox under SEBI approved user caps and informed consent. Applicants must show genuine need for live testing and for any regulatory relaxations, demonstrate testing readiness, user benefits and risk mitigants, and obtain a limited certificate of registration. SEBI may grant exemptions case by case while retaining core investor protections (KYC/AML). Applicants must submit project plans, monthly and final reports, maintain records, provide grievance redressal and indemnity cover, and comply with exit, withdrawal and revocation procedures.

Potential Risk Class matrix for debt schemes sets maximum interest rate and credit risk caps for scheme classification.
Introduction of a Potential Risk Class (PRC) matrix requiring all debt mutual fund schemes to be mapped to one of nine cells defined by maximum interest rate risk (scheme-level Weighted Average Macaulay Duration: Class I MD 1 year; Class II MD 3 years; Class III any MD) and maximum credit risk (scheme-level weighted average Credit Risk Value: Class A CRV 12; Class B CRV 10; Class C CRV

Centralized database for corporate bonds requires issuers, depositories and exchanges to submit and verify standardized bond data daily.
SEBI mandates a jointly maintained Centralized Database of corporate bonds in demat form, assigning Depositories the duties to create, host, synchronise, retain historical data, ensure data integrity and provide secure access; requiring Issuers to submit prescribed ISIN-time and periodic/event-based fields; obliging Stock Exchanges to update and verify data daily; and directing Credit Rating Agencies and Debenture Trustees to verify and correct rating and default information within timelines specified in Annex III. The circular applies to debt securities issued on or after August 1, 2021.

Overseas investment limits for mutual funds increased, with ETF sub-limits and scheme limits converted to reporting soft limits.
The circular raises per-fund and ETF-specific overseas investment ceilings while preserving industry-wide caps; specified scheme-level limits in NFO and ongoing scheme documents become soft limits for reporting. All other prior conditions continue to apply, the changes are effective immediately, and monthly reporting in the prescribed format remains required under the regulator's powers to protect investors and regulate the market.

UPI-based ASBA processing updated: adjusted timelines and operational duties to streamline mandate blocking, unblocking, and CUG reporting.
SEBI adjusts implementation timelines for UPI-enabled ASBA processing: SCSBs must continue SMS alerts with full application/allotment details deferred for later issues; Sponsor Banks must implement an automated CUG web portal after testing, with interim email reporting and immediate notification of technical issues; the circular prescribes refined sequencing and cut-offs for registrars, Sponsor Banks and SCSBs to ensure timely unblocking of UPI mandates around allotment, and requires inclusion of the circular's contents in offer documents filed thereafter.

Off-market transfer of securities permitted for FPI relocation to IFSC subject to DDP approval and tax and FEMA compliance.
A one-time off-market transfer is authorised for an FPI or its wholly owned special purpose vehicle to relocate holdings to a resultant fund, subject to DDP approval after appropriate due diligence. A relocation request is deemed an application for surrender of FPI registration, and the transfer is permitted without prejudice to tax laws and FEMA. DDPs and custodians must notify clients; the circular modifies an earlier SEBI instruction accordingly.

Risk-o-meter disclosures and portfolio details implementation deferred; requirement applies only to investor subscribed schemes.
Only for schemes subscribed by an investor, mutual funds must disclose the risk-o-meter with the benchmark and performance comparison, and provide portfolio details. The circular defers the implementation date of these disclosure obligations following industry representation, and issues the extension under the regulator's statutory powers to facilitate investor protection and orderly compliance.

Regulatory filing extension for AIFs and VCFs permits delayed submissions to address pandemic-related compliance disruptions.
SEBI permitted Alternative Investment Funds and Venture Capital Funds to submit regulatory filings for periods ending March through July 2021 on or before September 30, 2021, pursuant to SEBI Act authority, with the Circular taking immediate effect to address pandemic-related compliance disruptions.