VaR margin upfront collection required; adjust against collateral and release on pay-in, exchanges must amend rules.
SEBI requires VaR based margin to be collected upfront at the time of trade, to be collected or adjusted against additional capital or collateral in the prescribed form, and permits release of that margin along with the pay-in. Stock exchanges must implement the change after necessary software modifications, amend bye-laws and rules, notify members and publish the provisions, and report implementation status to SEBI as directed.

Privately placed corporate debt rules permit listing and trading in standard market lots subject to prescribed disclosures.
Clarifies that SEBI's requirements govern listing and trading of privately placed debt securities issued on or after the circular date and existing issues subject to a transition deadline, excluding instruments with maturity under 365 days. Issuers must make prescribed initial and continuing disclosures, may host disclosures on exchange websites for standard denominations, and may file umbrella offer documents. Intermediary engagement is discretionary but accountable; no SEBI vetting or mandatory deposit applies. Securities must be dematerialised, carry a SEBI-registered credit rating, and may trade in a separate anonymous order-driven segment in the standard marketable lot.

Dematerialisation reporting requirement relaxed; depositories must amend rules, notify participants and report implementation status to regulator.
Depository Participants are relieved of the obligation to furnish weekly information to SEBI on processing of dematerialisation applications because the depositories hold the requisite data; depositories must amend bye-laws, notify DPs, publish the change on their websites and report implementation status to SEBI.

Two-way fungibility of ADRs/GDRs: custodians must file revised monthly reports to regulators by the prescribed deadline.
Custodians must use the amended monthly report format for two-way fungibility of ADRs/GDRs, reflecting revisions to columns 10 and 12, and submit transactions up to the last Friday of the month in both hard and electronic form to SEBI/RBI by the 10th of the following month; the revision is effective from the December 2003 report and the annexed schedule specifies required disclosure fields including sectoral cap status, issuance and redemption progressives, shares deposited for fungibility, outstanding ADR/GDRs, gross value of deposited shares, and unsold conversion shares.

FII Half Yearly Reporting required: FIIs must submit equity and debt reconciliation files via custodians in prescribed format.
SEBI mandates FIIs, via custodians, to submit separate half yearly reports for equity and debt in a prescribed soft copy pipe delimited format capturing ISIN, opening and closing quantities and values, purchases and sales, and closing market value. All fields are mandatory with fixed field widths and MMYYYY period coding; custodians must verify accuracy before electronic submission to SEBI and address operational queries to the designated contact.

Notice period reduction for book-closure/record dates: dematerialised scrips now subject to shorter notice than physical scrips.
SEBI has directed stock exchanges to reduce the advance notice for fixing the book-closure/record date, cutting the previous 30-day intimation requirement for dematerialised securities and 42-day requirement for physical securities to shorter calendar notice periods (reduced to 15 days for demat scrips and 21 days for physical scrips in the first phase), with immediate implementation, requisite listing agreement and bye-law amendments, dissemination to members, and publication for investor access under SEBI's powers under Section 11(1) read with Section 10 of the SCRA.

Reporting obligation for offshore derivative instruments may allow quarterly nil reports after undertaking; transactions still require fortnightly reporting.
FIIs without outstanding offshore derivative instruments may replace fortnightly 'Nil' reports with a quarterly 'Nil' report if they submit an undertaking to revert to fortnightly reporting upon issuance. Quarterly 'Nil' reports, containing the undertaking, must be filed within three working days after each quarter; FIIs with outstanding instruments or any issuance/renewal/cancellation/redemption must continue fortnightly reporting. Reports must follow the prescribed format and be emailed to the designated address. The instruction is issued under Regulation 20A and is effective immediately.

Proprietary trading disclosure required: brokers must inform clients of proprietary trading status upfront and before any change.
Brokers must disclose whether they undertake proprietary trading as well as client based business: inform existing clients within one month, provide upfront disclosure to new clients in the Know Your Client agreement, and notify clients before commencing proprietary trading if begun later. Stock exchanges must amend bye laws, notify members, publish the requirement, and report implementation to the regulator.

Portfolio management: require benchmark performance disclosure, board oversight, internal audit, and half yearly compliance reporting.
Portfolio managers must include benchmark index performance in client periodical reports under Regulation 21, selecting indices that match client objectives and recording any later changes. Boards must review portfolio performance against benchmarks and take corrective action. Boards must also receive quarterly compliance reports, monitor due diligence and investor grievance redressal, and place SEBI deficiency or warning letters before the Board. An internal audit by a practicing CA or CS must assess internal procedures and be submitted to the Board. Managers must exercise due diligence and submit half-yearly compliance reports to SEBI within thirty days for prescribed reporting dates.

Mutual fund short-term deposit investments must be reported to trustees with reasons and comparative interest-rate justification.
Mutual funds may invest pending scheme funds in short-term deposits of scheduled commercial banks, but such placements must be reported to trustees with stated reasons, including a comparison of interest rates offered by other scheduled commercial banks; AMCs must record these reasons in the manner prescribed by the earlier circular, as required under the mutual fund regulatory framework.

FII and NRI position limits modified for exchange-traded derivatives, with exchange monitoring, client coding, and disclosure obligations.
Revised FII position limits and defined NRI position limits apply to exchange-traded single-stock and index derivative contracts. FIIs face percentage-based or fixed-cap limits tied to market-wide position limits; index FII limits remain unchanged. NRIs trade subject to client-level limits and disclosure for concerted index holdings. NRI single-stock derivative exposure is limited by the higher of a percentage of free-float market capitalisation or a percentage of open interest, measured across all derivative contracts on the underlying at an exchange. Exchanges must monitor positions, assign unique client codes for NRIs, and enforce disclosure and monitoring procedures.

Disclosure of Shareholding Changes: Exchanges must ensure listed companies report shareholding pattern changes and enforce compliance.
Listed companies must report changes in shareholding and sales by concerned persons under the listing agreement and the insider trading and takeovers regulations. Stock exchanges are required to notify issuers of these obligations, implement systems to monitor compliance, take appropriate action for non compliance, and report the status of implementation to the regulator in the Monthly Development Report.

Model bye laws compliance obliges exchanges to amend bylaws and report implementation to regulator, enhancing investor protection.
Model Bye laws require stock exchanges to amend any inconsistent bye laws and immediately implement relevant rules and regulations. Exchanges must notify member brokers and clearing members, publish the provisions for investor access, and report implementation status in the monthly development report. Upon completion, exchanges must submit a declaration confirming adoption or incorporation of the Model Bye laws. The circular invokes statutory powers to protect investor interests and to regulate and develop the securities market.

Broker fee payment obligation extended; non compliant brokers must pay full fees and interest by the revised deadline or face enforcement.
Brokers in the cash segment who did not avail the 50% facility by March 31, 2003, and whose fee collection has not been stayed by any court, must pay the entire fees and interest due through the relevant financial year by December 31, 2003; failure to comply will result in enforcement action under the SEBI Act and the SEBI (Stock Brokers and Sub brokers) Regulations read with the SEBI enquiry and penalty procedure regulations.

Prior approval for new trading segments required, with exchanges to provide parameters and rationale and notify members.
Exchanges are required to seek prior approval for any new trading segment, submitting the segment's parameters and rationale; they must amend bye-laws and rules forthwith, notify member brokers and clearing members and publish the requirement on their websites, and report implementation in the Monthly Development Report.

Risk Disclosure Document mandate ensures clients receive and sign standardized risk disclosures before trading, creating broker obligations.
A mandatory model Risk Disclosure Document is prescribed for stock exchanges to adopt and require members to disclose to constituents and obtain signed acknowledgement. The RDD enumerates market risks-higher volatility, lower liquidity, wider spreads, order execution limitations, news and rumours impact, and system/network risks-and prescribes constituent obligations including KYC, broker client agreement, contract notes, settlement timelines, trade verification and grievance procedures, with claims against defaulters subject to the Investors' Protection Fund scheme.

Secondary market transparency for privately placed corporate debt: exchange trading limited to qualified institutional and high net worth investors.
Listed companies issuing debt on private placement must provide initial and continuing disclosures under Schedule II, SEBI disclosure guidelines and the listing agreement (with web-only disclosure permitted for securities in a standard denomination); obtain an investment grade rating from a SEBI-registered agency; appoint a SEBI-registered debenture trustee; issue and trade securities in demat form; sign a separate listing agreement; and ensure all non-spot trades occur on exchange platforms with trading restricted to qualified institutional investors and high networth individuals. Intermediaries associating with such issuances are accountable and must furnish periodic reports to SEBI.

In principle approval for listing: issuers must obtain it from nationwide trading exchanges before issuing further shares or securities.
A listed company must obtain in-principle approval from exchanges with nationwide trading terminals before issuing further shares or securities; if not listed on any such exchange, it must obtain in-principle approval from all exchanges where it is listed. Stock exchanges are required to amend listing agreements, notify stakeholders, publish the change for investors and report implementation to the regulator.

Offshore derivative instrument reporting: registered FIIs must email prescribed reports and custodians must confirm compliance promptly.
Registered Foreign Institutional Investors issuing Offshore Derivative Instruments must submit periodic reports by email to the designated address only, using a subject line that identifies FII name, registration number and reporting period. FIIs not issuing ODIs must file a Nil-Report by declaration without Annexure B. Custodians must inform FII clients of these obligations and provide compliance confirmation by the stated deadline; prior contact addresses are superseded and the circular is available on the regulator's website.

Prohibition on cash payments: broker client settlements must use account payee cheques or electronic transfers and demat beneficiary delivery.
Brokers and sub brokers must not accept or give cash for client obligations or margins; payments shall be by account payee crossed cheques, demand drafts, direct credit/EFT or other RBI permitted modes, with cash accepted only exceptionally within income tax limits. Securities delivery must be in demat mode directly to or from clients' beneficiary accounts except where delivery to a recognised entity is authorised under an approved exchange or SEBI scheme. Exchanges must amend bye laws, notify members and report implementation.