Rejection of draft offer documents: framework notified, requiring merchant bankers to exercise due care before filing.
SEBI has notified a framework permitting rejection of draft offer documents filed with the Board and published the General Order on its website; registered merchant bankers are advised to take note and exercise due care before filing draft offer documents, the circular being issued under SEBI's statutory powers and available on the SEBI website.

Electronic IPO application mechanism via broker network expands submission channels and sets broker, bank and registrar responsibilities.
SEBI introduced an electronic application mechanism using the nationwide broker network to accept ASBA and non ASBA public issue applications at designated broker centres. Brokers must acknowledge and upload bids to the Stock Exchange platform, handle payments or forward ASBA schedules, and bear liability for failures. Collecting banks/SCSBs and their controlling branches consolidate schedules and issue final certificates to registrars, who reconcile with exchange and depository data, calculate broker commissions disclosed in the offer document, and follow standard allotment, refund and listing procedures; stock exchanges must publish broker centre details and enforce compliance.

VaR margin methodology for index ETFs expanded, with cross margining allowed between ETFs and constituent instruments to improve margin efficiency.
The circular requires a VaR-based margin for broad-based index ETFs computed as the higher of a prescribed floor or a volatility multiple, excludes sectoral ETFs from this treatment, and extends cross-margining to allow offsets between ETFs and constituent stocks, ETFs and constituent stock futures, and ETFs and index futures to the extent they offset each other; cross-margining benefits will be withdrawn if ETF creation/redemption is suspended. Stock exchanges must implement systems, amend bylaws, notify members and publish the changes.

ASBA branch expansion: SCSBs must designate branches as ASBA-enabled and submit prescribed status reports to widen investor access.
The circular mandates expansion of the Application Supported by Blocked Amount (ASBA) facility by requiring Self Certified Syndicate Banks to designate branches for ASBA in a phased manner and to submit prescribed status reports within fifteen days of each phase deadline, consolidating prior reforms to broaden investor access and streamline application processing.

Grievance redressal mechanism required on delivery instruction forms, with complaints to be filed via the designated regulatory portal.
The circular mandates printing a revised grievance redressal mechanism on the inside back cover of the Delivery Instruction Form Book; requires depositories to amend applicable bye laws, rules and regulations and to notify and disseminate the requirement to their Depository Participants; lists categories of entities and complaint types covered; and directs investors to file complaints via the designated online regulatory complaint portal or by sending complaints to the Office of Investor Assistance and Education or the regional offices using the provided contact details.

Investor complaint processing in SCORES required; KRAs must submit electronic ATRs and resolve complaints within one month.
Processing of investor complaints against KYC Registration Agencies must be carried out through the centralized SEBI web based system SCORES; KRAs must upload Action Taker Reports and supporting documents electronically and physical ATRs will not be accepted. KRAs must redress grievances and submit ATRs within one month, inform investors and SEBI of actions taken, and are liable to penal action for noncompliance.

Mutual fund expense framework expanded to permit additional TER for geographically diversified inflows, with clawback and disclosure obligations.
SEBI prescribes measures to increase mutual fund penetration, permitting an additional Total Expense Ratio up to thirty basis points for schemes meeting specified new inflow thresholds from beyond top fifteen cities (with a pro rata formula and one year clawback for early redemptions); clarifies service tax allocation between schemes and fees; mandates single plan launches with a separate lower expense direct plan; allows a new simplified distributor cadre and unique identity numbers; requires monthly portfolio and half yearly financial disclosures; sets a 30% sector exposure cap for debt schemes; and requires investor education funding and distributor level disclosures.

Blocked funds requirement for ASBA applications: banks must block amounts only from funded deposit accounts, ensuring demarcated funds.
ASBA filings must be backed by clear demarcated funds in funded deposit accounts; banks must not block amounts by creating liens on credit limits or overdraft facilities. SCSBs must block application amounts only against funded deposit accounts and ensure cleared funds are available. Banks making ASBA applications on their own account must maintain a separate account in their own name with a registered SCSB used solely for public-issue applications, with demarcated funds available. The circular is effective immediately and issued under statutory securities powers.

Freeze on additional-issue securities until final listing approval, and exchanges must synchronize and notify depositories.
SEBI requires that ISINs for additional issues of listed securities be frozen until final listing/trading permission is granted; depositories must implement a freeze mechanism and stock exchanges must notify depositories of final approvals and synchronize effective listing/trading dates for multi-exchange listings.

KYC requirements for foreign investors clarified-custodian PoAs and risk based due diligence govern documentation and verification obligations.
Know Your Client requirements for foreign investors are clarified to permit acceptance of a Power of Attorney in favour of a Global or SEBI registered Local Custodian to sign and complete KYC, subject to custodial undertakings to produce beneficial ownership and identity information on request. Intermediaries must apply a risk based due diligence approach under the AML framework, perform in person verification for individual clients (including QFIs), verify custodian SEBI registration against originals or SEBI records, and may accept properly attested copies when originals are not produced.

Dematerialisation requirement for shifting securities from trade-for-trade to rolling settlement; exchanges must obtain certificates and report actions.
Companies with connectivity to both depositories may move from Trade for Trade Settlement to Rolling Settlement only if at least 50% of non-promoter holdings under clause 35 are dematerialized, supported by a certificate from the RTA or, if no RTA exists, from a practising company secretary or chartered accountant; exchanges must also satisfy there are no other grounds for continuing TFTS and must report actions in their Monthly/Quarterly Development Reports.

Minimum public shareholding: allow rights or bonus issues to public shareholders when promoters forgo entitlements to boost public float.
Permits listed entities to meet minimum public shareholding by issuing rights or bonus shares to public shareholders with promoters/promoter groups forgoing their entitlement, allows SEBI to approve other methods on a case-by-case basis, and requires amendments to Clause 40A of the Equity Listing Agreement with stock exchanges mandated to incorporate and enforce these conditions.

Two-way fungibility of IDRs permitted, allowing capped annual partial redemption converting IDRs into underlying equity shares.
SEBI permits two-way fungibility of IDRs with underlying equity shares to boost foreign participation, allowing conversion/redemption and reconversion subject to preservation of domestic liquidity. Conversion in a financial year is limited to 25% of originally issued IDRs, and detailed amendments to the legal framework will be issued separately; effectiveness and rescission of the prior circular hinge on those subsequent instructions. The circular is issued under Section 11 read with Section 11A of the SEBI Act, 1992.

Basic Services Demat Account expands low cost demat access with eligibility limits and capped maintenance charges for retail individuals.
SEBI introduces the Basic Services Demat Account (BSDA) for eligible individuals who are sole or first holders of a single demat account, permitting only one BSDA per individual and limiting value of securities in the account. DPs shall offer BSDA to new eligible applicants and allow conversion of existing eligible accounts at the next billing cycle. AMC structure is on slabs: no AMC upto Rs.50,000 and AMC not exceeding Rs.100 for holdings from Rs.50,001 to Rs.200,000; holdings valuation based on daily closing price/NAV/last traded price or face value for unlisted securities. DPs must reassess eligibility each billing cycle and apply regular charges if limits are breached.

Surrender of sub-broker registration requires public notice, client communication, and website disclosure to protect investors.
Surrender of sub-broker registration requires the affiliating stock broker to advertise in a local widely circulated newspaper informing investors not to deal with the sub-broker, and the affiliating broker and/or exchange must publish details or new AP status on their websites. If the sub-broker transitions to an Authorized Person with the same broker and exchange, the newspaper advertisement is not required but the affiliating broker must submit an undertaking to the exchange confirming individual client communication about the surrender and AP approval.

Filing jurisdiction updated: Eastern regional office now covers additional territories, altering where offer documents must be filed.
The circular revises filing jurisdiction under the ICDR Regulations by adding Andaman & Nicobar Islands and Sikkim to the Eastern Region and designating the SEBI Eastern Regional Office, Kolkata, as the office for filing draft offer documents and offer documents for issuers in that region. The amendment applies to drafts filed with SEBI on or after August 27, 2012 and is issued under the powers of Section 11 read with Section 11A of the SEBI Act, 1992.

Investor grievance redressal requires listed companies to register on SCORES and resolve complaints within prescribed timelines.
Listed companies must obtain SCORES authentication and, on receipt of a complaint through SCORES, take appropriate steps within seven days and resolve the complaint within thirty days while keeping the complainant informed; stock exchanges must notify and disseminate the circular and non compliance may attract regulatory enforcement.

Aadhaar as Proof of Address expands KYC document acceptance and mandates intermediaries update address verification procedures.
Aadhaar Letter issued by the Unique Identification Authority of India shall be admissible as Proof of Address in addition to its recognition as Proof of Identity for KYC compliance by SEBI-registered intermediaries and market participants; the circular further makes limited clerical corrections to effective dates in prior KYC circulars and is issued under SEBI's regulatory powers to protect investors and regulate the securities market.

Business Responsibility Reporting mandated for top listed companies; BR Reports must be included in annual reports and follow NVG framework.
SEBI requires listed entities to include Business Responsibility Reports in their Annual Reports pursuant to an amendment to the Listing Agreement. The mandated BR Report follows a prescribed framework based on the National Voluntary Guidelines, covering company and financial details, governance for BR, principle wise policies and performance disclosures across ethics, product responsibility, employee welfare, stakeholder engagement, human rights, environment, advocacy, inclusive growth and consumer issues. Applicability targets the top listed entities as identified by exchanges, with voluntary provisions and mapping permitted for existing international sustainability reports.

Audit qualification monitoring requires prescribed covering forms and a regulator-led review process with possible restatement directions.
Listed companies must file Form A (unqualified/matter of emphasis) or Form B (qualified/subject to/except for) signed by CEO/MD, CFO, Auditor and Audit Committee Chair, drawing attention to notes, management responses and board/audit committee comments; stock exchanges shall preliminarily scrutinise Form B for materiality (impact on profit and loss, financial position and corporate governance), consult another exchange for criteria and coordination, and refer cases needing further examination to SEBI for review under the Qualified Audit Review Committee and possible further referral to ICAI-FRRB, with potential directions to restate accounts.