Specialized Investment Funds regulatory framework introduces eligibility routes, investment and derivative limits, disclosure, listing and risk banding requirements.
The circular prescribes a regulatory framework for Specialized Investment Funds (SIF), detailing eligibility routes for registered mutual funds/AMCs, mandatory brand differentiation, permitted equity, debt and hybrid investment strategies with specified redemption frequencies, a minimum investment threshold per investor with monitoring and breach treatment, issuer and sector limits for debt, quantified limits and computation rules for derivative exposure including portfolio offsetting and an overall gross exposure cap, mandatory listing for close ended and interval strategies, benchmarking principles, comprehensive disclosure requirements and a five level Risk Band with monthly evaluation and public disclosure.

Deployment timelines for NFO funds: AMCs must deploy collected monies within prescribed period or face flow and fee restrictions.
AMCs must declare and adhere to achievable timelines for deployment of NFO proceeds per scheme asset allocation, deploy funds within the prescribed period from allotment, and, if unable to do so, place written reasons and mitigation efforts before the Investment Committee which may grant a single extension after examining root causes. Trustees shall monitor deployment; non-compliance leads to prohibition on fresh inflows into the scheme until deployment aligns with the SID, mandatory investor communication offering exit without exit load, and reporting of deviations. Distributor commission on switches into NFOs from schemes of the same AMC is to be limited to the lower commission of the two schemes, with further guidelines to follow.

Opening demat account for Association of Persons permitted for specified securities subject to conditions and member liability.
SEBI permits an Association of Persons (AoP) to open a Demat account in its own name for holding units of mutual funds, corporate bonds and Government Securities only, subject to the AoP ensuring compliance with statutes governing its constitution, providing PAN details of the AoP and its Principal Officer, confirming no use for equity shares, and acknowledging that the Principal Officer is the legal representative and members are jointly and severally liable.

Regulation 30 disclosure obligations: industry standards require listed entities to follow standardised material-event disclosure and exchanges to ensure compliance.
Industry standards for Regulation 30 have been formulated by an Industry Standards Forum in consultation with SEBI and will be published by the associations and stock exchanges. Listed entities must follow these standards to ensure compliance with Regulation 30, and stock exchanges are to notify and ensure adherence. The circular is issued under SEBI's statutory powers and is available on the regulator's website.

Investor protection: updated stock broker charter mandates public complaint disclosures and access to ODR and SCORES.
SEBI issues an updated Investor Charter for stock brokers requiring brokers to publish and provide the charter to clients, disclose monthly complaints data on their websites in the Annexure B format, comply with specified service timelines and broker obligations (including trade execution, contract notes, margin and settlement procedures), and implement a layered grievance redressal framework using SCORES and the ODR/SMARTODR platform; the circular rescinds the prior charter and is effective immediately.

Investor Education and Awareness requirement ensures AMCs allocate funds for education and financial inclusion under expense limits.
AMCs must annually set aside at least 2 basis points on daily net assets within the maximum permissible Total Expense Ratio for Investor Education and Awareness, and initiatives under that heading include financial inclusion initiatives as may be approved by the regulator.

Disclosure of Most Important Terms requires research analysts to obtain client consent, follow fee limits, payment rules, and grievance steps.
SEBI mandates standardized Most Important Terms and Conditions (MITC) for Research Analysts to be incorporated into research-service terms and disclosed to clients with consent; RAs cannot trade on clients' behalf; fees for individual and HUF clients are subject to a regulatory maximum, advance fees are time-limited with proportionate refunds on early termination, cash payments are prohibited, and RAs must disclose conflicts, refrain from offering assured returns, never seek client login credentials or OTPs, and follow a specified grievance redressal process.

Most Important Terms and Conditions require IAs to disclose fees, consent for trades, ban guaranteed returns, and manage conflicts.
SEBI requires Investment Advisers to include standardized Most Important Terms and Conditions (MITC) in advisory agreements, prohibiting acceptance of client funds or securities, banning assured/guaranteed return schemes, and prohibiting execution of trades without explicit client consent. The MITC set fee and payment rules including prescribed maximums for eligible clients, limited advance fees with pro rata refunds and capped breakage fee, non-cash payment modes, mandatory risk profiling and suitability analysis, conflict-of-interest management favouring non-commission plans, specified grievance redressal steps, and disclosure when services fall outside SEBI's regulatory purview.

Consolidated Account Statement timelines revised: new monthly and half yearly data submission and dispatch schedules for AMCs and depositories.
AMCs and MF RTAs must provide common PAN data to depositories within five days from month end; depositories shall consolidate and dispatch monthly CAS electronically within twelve days and physically within fifteen days from month end. For half yearly CAS, data must be provided by the eighth day of April and October, with electronic dispatch by the eighteenth and physical dispatch by the twenty first of those months. Monthly email CAS is required where investor accounts have transactions; otherwise half yearly email CAS with holdings applies, with a physical option available.

Related party transaction disclosure standards require specified minimum information be provided to audit committees and shareholders for approval.
Listed entities must provide the information specified in the Industry Standards on "Minimum information to be provided for review of the audit committee and shareholders for approval of a related party transaction" when submitting RPT proposals to the audit committee and when including explanatory information in shareholder notices, pursuant to modifications to Section III B of the Master Circular read with Regulation 23(2), (3) and (4) of the LODR Regulations; stock exchanges and industry associations will publish and promote the standards and ensure compliance.

Dematerialisation requirement: AIF investments must be held in dematerialised form with phased compliance and specified exceptions.
AIFs must hold investments in dematerialised form for any acquisition on or after July 1, 2025; pre-July 1, 2025 investments are exempt unless the investee is legally mandated to dematerialise or the AIF (alone or with other mandated SEBI-registered entities) exercises control over the investee, in which case such investments must be dematerialised by October 31, 2025. Schemes ending on or before October 31, 2025 or in extended tenure as of February 14, 2025 are exempt. Trustees/sponsors must ensure the manager's Compliance Test Report records compliance. The circular is immediately effective.

Inactive folio tracing platform enables investors to locate and claim dormant mutual fund holdings and update KYC.
Creates MITRA, a searchable industry-level platform to help investors trace inactive mutual fund folios-defined as folios with unit balance and no investor-initiated transactions in the last ten years-hosted jointly by the two Qualified RTAs as agents of AMCs; QRTAs are jointly and severally responsible for cybersecurity, system audits and BCP/DR compliance, must operationalise the platform within fifteen working days with a two-month beta, and AMCs' Unit Holder Protection Committees must review inactive folios to reduce unclaimed amounts.

NDS-OM access via Separate Business Unit: SEBI-registered brokers must segregate SBU operations and net worth.
SEBI-registered stock brokers may transact on NDS-OM through a Separate Business Unit (SBU) that is exclusively engaged in NDS-OM activities, maintained at arms-length from the broker's securities market business, with separate accounts and segregated net worth; the broker's net worth for compliance shall exclude the SBU. The SBU's trading activities are subject to the other regulatory authority's framework for policy, eligibility, risk management, inspection and enforcement, and exchange grievance redressal mechanisms and the Investor Protection Fund (including SCORES) will not be available to SBU investors.

Safer participation of retail investors in algorithmic trading through broker led API controls, empanelment, surveillance, and algo categorisation.
The framework requires brokers to act as principals for API-based algo trading, tag API orders with exchange identifiers, empanel and due diligence algo providers, restrict API access through client specific keys and static whitelisted IPs, adopt OAuth and two factor authentication, handle investor grievances, and ensure disclosure of fees and conflict free arrangements. Exchanges must supervise algos with SOPs, surveillance, kill switch capability, empanelment criteria, confidentiality safeguards, data flow rules, and specified turnaround times. Algos are categorized into white box and black box, with black box providers required to register as research analysts and maintain detailed research reports.

Technology-based monitoring of system audits requires exchanges to implement secure audit portals and empanel independent system auditors.
Exchanges must develop web portals to manage the system audit lifecycle of stock brokers, ensure secure auditor access via OTP, capture auditor geo-location to confirm physical visits, and enable online submission of standardised audit reports and Action Taken Reports. Exchanges shall empanel auditors under prescribed eligibility criteria emphasising individual qualifications, ensure auditor independence with appointment limits and potential cooling-off periods, and enforce de-empanelment for repeated deficiencies. The portal is to be ready within six months and the framework applies from the audit period FY 2025-26.

Performance evaluation of statutory committees of MIIs requires external triennial reviews and annual internal evaluations.
External evaluation of Statutory Committees of MIIs must be performed by an Independent External Agency appointed with SEBI's prior no-objection, selected for domain expertise and absence of conflict of interest, on a triennial basis (first review for FY 2024 25). Minimum external assessment criteria and weightages are Roles, Responsibilities and Duties (40%), Effectiveness of Meetings (30%), and Governance Aspects (30%); a standardized rating framework with sample quantitative and qualitative KPIs will be used. MIIs must also perform annual internal evaluations and submit reports to their Governing Board within three months of each financial year-end.

Prohibition on association: intermediaries and agents must avoid links with unregistered advisers or unauthorized performance promoters.
Persons regulated by the Board, MIIs and their agents must not directly or indirectly associate with any person who provides unregistered advice or recommendation on securities or who makes unauthorized claims about returns or performance; association includes transactions of money, client referrals, IT interactions, sharing client information, or similar linkages. Regulated entities are responsible, to the extent of their association, to ensure associated persons and agents do not engage in these prohibited activities and must take appropriate action if services are misused. Investor education is excluded only if it contains no advice or implied performance claims.

Technical glitch reporting requirement centralized via iSPOT portal, mandating MIIs to submit preliminary and RCA reports online.
SEBI requires Market Infrastructure Institutions to submit the preliminary and RCA report of technical glitches via the web based portal iSPOT, integrated with the SEBI Intermediary portal and accessible with existing SI credentials. The circular amends relevant Master Circular clauses to mandate iSPOT use, takes effect February 3, 2025, and directs MIIs to update systems and bye laws to ensure timely submission and centralized recordkeeping for monitoring and compliance.

Due diligence certificate requirement: debenture trustees must submit prescribed certificates at draft filing and at listing application.
SEBI requires Debenture Trustees to provide prescribed due diligence certificates for unsecured debt securities at two stages: at draft offer document/placement memorandum filing (Annex A) confirming disclosures, covenants and undertaking to execute the debenture trust deed before listing application; and at listing application filing (Annex B) confirming execution of the debenture trust deed as per the offer document/placement memorandum and that the issuer's disclosures and ongoing obligations to security holders are true, fair and adequate.

Information Ratio disclosure required for equity mutual funds to report risk adjusted performance and provide standardized explanations.
Mutual funds must disclose the Information Ratio (IR) as a measure of Risk Adjusted Return for equity oriented schemes on AMC websites daily, with AMFI providing comparable, downloadable, machine readable aggregation. IR is defined as (Portfolio Rate of Returns less Benchmark Rate of Returns) divided by the standard deviation of excess return, using the scheme's Tier 1 benchmark and daily arithmetic returns and volatility. AMCs and AMFI must provide standardized explanatory hyperlinks and investor education materials, with disclosures implemented via a prescribed spreadsheet template.