Hedging with derivatives: mutual funds must ensure hedge effectiveness and size while respecting exposure limits.
Mutual funds may use derivatives for hedging and portfolio rebalancing only if hedges are effective and sized to avoid over hedging or naked exposures; options are assessed by notional and worst case exposures (not just delta); combined cash and derivative positions must remain within maximum permissible holding limits; long index positions cannot create impermissible leverage; funds must show worst case short exposure is covered by existing positions and worst case long exposure plus existing holdings is within permissible limits.

Dematerialisation compliance required: registrars must reconcile holdings with depositories and ensure timely processing and explanations for delays.
Registrars and share transfer agents must keep full records and controls over dematerialisation and rematerialisation, permit dematerialisation only after in principle exchange approval and depository admission, prevent duplicate dematerialisation, reconcile daily holdings across NSDL, CDSL and physical form to match admitted, issued and listed capital, and process dematerialisation requests within the prescribed timeframe, providing reasons for delays; failure to comply will attract action under applicable rules and regulations.

Secretarial audit required for issuer companies to reconcile capital holdings and report discrepancies to regulators.
Issuer companies must conduct a secretarial audit by a qualified Chartered Accountant or Company Secretary to reconcile holdings across NSDL, CDSL and physical form with issued/paid-up and listed capital, confirm Register of Members is updated, report dematerialisation requests pending beyond 21 days with reasons, and certify changes in share capital and listing approvals. The audit report must be submitted quarterly to stock exchanges, placed before the Board, and any discrepancies notified to SEBI and both depositories; non-compliance may invite action under the Depositories Act, 1996.

Centralised share registry management required to ensure coordinated physical and electronic records and protect investors from reconciliation delays.
All share registry functions must be consolidated so physical and electronic records are maintained at a single point, either in house or by a SEBI registered R & T Agent, to prevent delays in dematerialisation and reconciliation failures and to improve coordination and investor protection.

Electronic filing requirement mandates specified listed companies to upload prescribed disclosures to EDIFAR, centralizing online corporate reporting.
SEBI requires additional listed companies, chosen by market capitalization and turnover, to upload prescribed statements and documents to the EDIFAR portal pursuant to earlier EDIFAR instructions, with electronic filing effective from the quarter ending December 2002; stock exchanges must inform and advise the named companies about the online filing process.

FII registration fee reduction simplifies documentation and strengthens registration by requiring custodian and home regulator declarations.
Amendment revises FII registration and renewal by lowering the registration fee and simplifying required documentation: certified copy of governing clauses or agreement authorising investments; audited financial statements and annual report for at least twelve months; a declaration of registration or regulation by the applicant's home regulatory authority with registration particulars; and a declaration of a custodian agreement with a domestic custodian including its particulars.

Adjustment in derivative contracts: exchanges must preserve participant position value through uniform, principles-based corporate action adjustments.
Exchanges may determine adjustments to stock option and single stock futures contracts at the time of corporate actions so that the value of market participants' positions on cum and ex-dates remains the same as far as possible; adjustments must follow international best practices, align with prior SEBI guidance, account for investor interest, and be uniform across all exchanges.

Separation of cash and derivative segments mandates separate governance and funds; CEO mandate withdrawn and inspection norms revised.
Requires separation of cash and derivative segments via distinct legal frameworks, membership, guarantee funds and governing councils while permitting shared operational resources; withdraws the mandatory appointment of a separate derivative-segment CEO with Executive Director/Managing Director assuming those duties; replaces 100% annual member inspections with a risk- and activity-based inspection policy that targets top members, samples remaining members, avoids prolonged non inspection of active participants, and must be submitted to the regulator for approval.

Eligibility criteria for underlying stocks require liquidity based quarter sigma sizing and monthly rolling recalculation for derivatives listing.
Stock options and single stock futures eligibility requires selection from top stocks by average daily market capitalisation and traded value and a minimum median quarter-sigma order size computed from four daily order book snapshots over the prior six months using the daily closing volatility estimate; exchanges must use a common methodology, publish details, recalculate monthly on a rolling basis, and may suspend issuance or force closure of derivative contracts if eligibility is not met, subject to consultation and uniform application across exchanges.

Underwriter registration: submit Form A with required additional information complete and promptly to avoid processing delays.
SEBI requires applicants for registration or renewal as Underwriters to submit Form A together with the complete set of supplementary data specified in the 'Additional Information' on the SEBI website, supported by relevant documents; incomplete submissions may delay processing and applicants must provide all required material with the initial application.

Submission of Form A and complete additional information required for merchant banker registration to prevent processing delays.
Registration or renewal as a Merchant Banker requires submission of Form A together with the detailed 'Additional Information' and relevant supporting documents as specified on the regulator's website; applications must be full and complete to avoid processing delays and the requirement is effective immediately.

Direct upload requirement: custodians must electronically submit FII trade and investment reports daily, discontinuing physical submissions.
Custodians must directly upload daily equity and debt FII trade and investment reports from their offices by the prescribed daily cutoff, discontinuing submission of floppies and hard-copy daily reports. Monthly Portfolio Reports, amendment/cancellation reports, and Hand Delivery Trades reports are discontinued; custodians must reconcile client holdings monthly. Other items already uploaded require no separate submission. If uploading fails, FIIs must submit the data by both soft and hard copy before the scheduled time.

Registration of intermediaries with AMFI required, with certification, conduct rules, empanelment controls and compliance reporting.
Registration of intermediaries with AMFI is mandated subject to passing a certification examination and adherence to prescribed guidelines and code of conduct; mutual funds must empanel intermediaries, follow regulator and AMFI parameters for commission payments, monitor compliance across business, and report compliance in board meetings and periodic filings. An exemption allows senior citizens with prior distribution experience to be registered and exempted from the examination subject to training and submission of a fund-endorsed certificate. The code of conduct forbids commission sharing with investors and inducements, with limited transitional honouring of prior incentives.

Registrar registration requirements: applicants must submit complete Form A with prescribed proformas and information to avoid delays.
Applicants for registration and renewal as Registrar to an Issue and/or Share Transfer Agent must submit Form A together with the detailed prescribed proformas and Additional Information Sheet for registration, and the Information Sheet for renewal for renewals, all as available on the regulator's website. Submitted information must be full and complete, failing which processing may be delayed; the streamlined procedure takes effect immediately.

Reconciliation procedure for government securities mandates monthly balance reconciliation and periodic compliance reporting by mutual funds.
Monthly reconciliation of Government Securities in SGL/CSGL accounts requires Public Debt Offices to issue monthly balance statements to mutual funds, which must reconcile those balances with their transaction records; the reconciliation must form part of internal audit with auditors reporting continuously to Audit Committees and Boards, mutual funds must submit quarterly compliance certificates to the monetary authority and report compliance in AMC quarterly and Trustees' half yearly reports.

Normal rolling settlement: specified scrips with depository connectivity moved from trade-for-trade to rolling settlement on scheduled dates.
Movements of specified listed scrips from the trade-for-trade settlement window into the normal rolling settlement trading segment are directed based on establishment of connectivity with both depositories. Eighty-three companies that established depository connectivity on or before July 31, 2002 are authorized to trade in the normal rolling settlement mode with immediate effect, while additional groups meeting connectivity cutoffs as of August 31, September 30 and October 31, 2002 are scheduled to migrate to normal rolling settlement on designated future effective dates.

Foreign investment limit in mutual fund schemes capped with expense aggregation rules and mandatory board reporting.
SEBI permits mutual funds to invest up to ten percent of a scheme's net assets as at the specified valuation date in foreign securities, subject to minimum and maximum per-fund investment quanta and necessary approvals; previously approved funds may seek enhancements and others must apply to SEBI. Investments in overseas mutual funds are exempt from the Seventh Schedule unit-investment and fee prohibition, provided the combined foreign and domestic management fees and recurring expenses do not exceed the prescribed overall expense limits, with pro rata application where only part of assets are invested, and with required board reporting and annual report disclosure.

Mandatory admission of debt instruments on both depositories required, ensuring dual depository registration for all issuances effective immediately.
Debt instruments issued by companies must be admitted on both recognized depositories rather than on a single depository; issuers and custodial participants are required to arrange dual admission to standardise dematerialisation, custody and settlement across market infrastructure participants as decided following the Working Group on Dematerialisation.

Time-bound arbitration limits adjournments and extensions, requiring awards within a capped maximum period after reference.
Adjournments are permitted only in exceptional cases for bonafide reasons recorded in writing. The arbitral tribunal shall normally make the award within three months from the date of entering upon the reference; the Managing Director or relevant authority may grant up to three extensions on application, but notwithstanding such extensions the award must be passed within six months from the date of entering the reference. The tribunal is deemed to have entered upon the reference on the date of its first hearing. Exchanges should incorporate these clauses into their arbitration bye-laws.

Account closure charges removed for beneficial owner accounts, while transaction charges remain payable under depository rules.
No account closure fees shall be levied on the termination of beneficial owner accounts with depositories and custodians, while ordinary transaction charges remain collectible; depositories, stock exchanges and custodians must implement this instruction prospectively as specified by the regulator and adjust account-management practices accordingly.