Debenture trustee eligibility and duties clarified; stricter conflict-of-interest and compliance obligations imposed by regulatory update
Regulations amend the framework for debenture trustees: updating definitions to align with the Companies Act, narrowing eligibility to scheduled commercial banks, public financial institutions, insurance companies and specified body corporates; expanding conflict-of-interest prohibitions on appointment; and imposing detailed duties to ensure consistency of prospectuses and trust deeds, monitoring and reporting of defaults, appointment of nominee directors on specified defaults, verification and enforcement of security creation, enhanced certification and reporting for receivables-backed issues, five-year recordkeeping, Compliance Officer certification, and strengthened liability and enforcement mechanisms.

Increment timing on promotion: pre max promotions follow prior increment date; post max promotions get next increment one year after promotion.
Regulation 25A prescribes that if an employee is promoted before reaching the maximum of the pre promotional incremental scale, the next increment in the higher grade falls on the pre promotional increment date; if promotion occurs after reaching that maximum, the next increment is one year from promotion, except where a post scale benefit is due within one year of promotion, in which case the increment in the promotional grade is the date of accrual of that benefit.

International Securities Identification Number requirement imposed for privately placed debt securities, mandating compliance as specified by the board.
Regulation 20A is amended to require that consolidation and re-issuance of debt securities be undertaken "in the manner as may be specified by the Board from time to time," and clause (a) is substituted to require that the articles of association of the issuer contain no provision, express or implied, contrary to such consolidation and re-issuance. A new Regulation 20B mandates that issuers of debt securities on a private placement basis comply with conditions relating to the issue of the International Securities Identification Number as specified by the Board.

Recognition under securities regulation: clearing corporation authorised for a one year term subject to SEBI compliance requirements.
Recognition is granted to NSE IFSC Clearing Corporation Limited under Regulation 4 authorising it as a recognised clearing corporation for one year from 29 May 2017 to 28 May 2018, pursuant to powers under the Securities Contracts (Regulation) Act; the recognition is conditional on compliance with conditions specified by SEBI and any additional conditions SEBI may prescribe.

SEBI amends capital-raising rules to require quarterly monitoring reports and public disclosure of issue proceeds utilisation.
The amendments add systemically important non-banking financial companies (NBFCs with net worth over five hundred crore) to defined terms, revise regulation 16 to exclude offer-for-sale from issue-size calculations and lower the numeric threshold, require quarterly monitoring agency reports in the Schedule IX format until 95% of proceeds (excluding offer-for-sale and general corporate purposes) are utilised, mandate board and management comments, and require public dissemination of monitoring reports within forty five days; Schedule IX is substituted with a detailed standardized monitoring-report format.

Regulation amendment: omission of a specific stock brokers provision alters registration framework upon official Gazette publication.
The Securities and Exchange Board of India issues an amendment to the Stock Brokers and Sub Brokers Regulations, 1992 by omitting regulation 18C; the amendment takes effect on the date of its publication in the Official Gazette, thereby altering the regulatory text governing stock brokers and sub brokers without specifying transitional measures.

Offshore derivative instruments restriction: ODIs prohibited from being issued or transferred to resident or beneficially linked Indian persons.
Amendment adds clause (c) to regulation 22(1) of the FPIs Regulations, providing that offshore derivative instruments shall not be issued to or transferred to persons who are resident Indians or non-resident Indians, nor to entities beneficially owned by resident Indians or non-resident Indians, creating a categorical prohibition on ODIs reaching persons or entities with beneficial ownership links to Indian residents.

Option in securities inclusion broadens permitted exchange activities, subject to prior Board approval and aligned regulatory language.
The regulations amend operative provisions to include option in securities - subject to prior Board approval - by deleting the limiting word 'only' in selling or dealing clauses, substituting the scope description to read 'commodity derivatives and option in securities with the prior approval of the Board', and inserting corresponding language in regulation 44D to harmonise permissions for dealing activities.

Recruitment composition revised to add contract recruits and external experts in selection panels.
Amendments add "/Contract Recruits" to the schedule heading, redefine recruitment modes as promotion, deputation and contract, prescribe that most posts be filled from internal candidates with remaining posts by deputation/contract and allow filling from other categories if unavailable, and modify selection body composition to include two external experts to be nominated by the Chairman; the regulations commence on publication in the Official Gazette.

Prohibition on employee participation in Board-conducted auctions bars direct or indirect involvement in recovery-sale auctions.
A new Regulation 71A prohibits any employee of the Board from participating, directly or indirectly, in auctions conducted by the Board for sale of movable or immovable property in pursuance of recovery proceedings under the relevant securities and depositories enactments; the amendment is inserted into the Employees' Service Regulations, 2001 and takes effect on publication in the Official Gazette.

Special Judge appointment under securities law designates a court to exercise enforcement powers under specified market statutes.
The Central Government, under powers in the Securities and Exchange Board of India Act, the Securities Contract (Regulation) Act and the Depositories Act, appoints the named presiding judge of a specified civil and sessions court as the Special Judge to serve as the designated court and Special Court for exercising jurisdiction and enforcement functions under those statutes, following recommendation by the High Court Chief Justice.

Electronic payment requirement mandates NEFT/RTGS/IMPS or specified modes for regulatory fees and filings, effective retrospectively.
The amendment standardizes fee payment modes across multiple securities regulations by inserting a requirement that fees and specified remittances be made by direct credit to the Board's bank account through NEFT/RTGS/IMPS or any other RBI allowed mode, with demand drafts retained as an alternative where provided; it also revises certain fee tables, inserts a new schedule for draft scheme of arrangement fees, and provides retrospective commencement with savings for prior actions.

Appointment of Whole Time Member establishes statutory tenure and prescribed remuneration under the regulator's service rules.
The Central Government appoints Smt. Madhabi Puri Buch as a Whole Time Member of the securities regulator under section 4 of the Act read with the relevant Rules, for an initial period of three years from assumption of charge or until further orders, with pay as admissible to an Additional Secretary to the Government of India or a consolidated monthly salary as notified.

Admission of institutional members required by stock exchanges when recommended by regulator, including banks and specified institutions.
Where the Securities and Exchange Board of India makes a recommendation, the governing body of a stock exchange shall admit as member specified corporations, bodies corporate, companies and institutions, including development finance institutions, registered insurance companies, Unit Trust of India, specified banks and their subsidiaries, export-import and development banks, pension and provident arrangements, standalone primary dealers authorised by the Reserve Bank, and Category I and II foreign portfolio investors, provided such foreign portfolio investors engage only in proprietary trades in classes of securities specifically permitted by SEBI.

Electronic payment mandate for SEBI fees introduced, requiring NEFT/RTGS/IMPS and revising fee schedules and caps.
The regulations require payment of SEBI fees by direct credit to the Board's bank account through NEFT/RTGS/IMPS or any other RBI allowed mode across numerous SEBI rules, update multiple fee schedules (including stock broker turnover based fees, a revised buy back fee table, and a new fee for draft schemes of arrangement calculated as a percentage of paid up capital subject to a cap), and make minor textual edits such as replacing "Bombay" with "Mumbai"; the amendments take effect on publication, with one sub clause effective from April 1.

Settlement timing and interest: late filings and delayed payments attract additional fees and simple interest under amended SEBI settlement rules.
Amendments condition late application consideration on a condonation request and additional processing fee, levy simple interest at six per cent per annum for filings after prescribed periods or for remittances made after thirty days up to ninety days, require settlement and condonation fees and legal costs to be credited to the SEBI General Fund, introduce a Settlement Notice with a fifteen day opportunity to apply, refine IA calculation including joint and several liability in specified cases and a fifteen per cent increase for multiple proceedings, and update stage based PCF multipliers.

Foreign Portfolio Investors investment scope expanded to include unlisted debt securities and securitised debt instruments.
Amendments expand Foreign Portfolio Investors' permissible investments to include unlisted non-convertible debentures/bonds subject to corporate affairs guidelines, and securitised debt instruments, including SPV-issued certificates for asset securitisation and certificates listed under the securitised-debt listing framework; related numbering adjustments are made and the changes take effect on Gazette publication.

Appointment of SEBI Chairman: Ajay Tyagi named to serve an initial term upon assumption, subject to further government orders.
The Central Government notifies the appointment of Shri Ajay Tyagi, IAS, as Chairman of Securities and Exchange Board of India by formal notification dated 17 February 2017, effective from the date he assumes charge; the appointment carries an initial fixed term of three years measured from assumption of charge and is subject to earlier governmental orders, made in compliance with the statutory terms and conditions of service for the office.

Municipal debt eligibility: requires surplus income or board-specified criteria, no recent defaults, positive net worth for corporate entities.
Regulation 4 is amended: (c) municipalities must have surplus income in any of the immediately preceding three financial years or meet other Board-specified financial criteria, and corporate municipal entities must not have had negative net worth in those years; (d) municipalities must not have defaulted on repayment of debt securities or bank/financial institution loans during the preceding year. If the issuer is a corporate municipal entity, the municipality being financed must comply with clauses (b) and (d).

Regulatory amendment to depositories regulations alters Regulation 7 wording: replaces punctuation after 'share capital' and omits proviso.
Amendment substitutes a semicolon for the colon following the words "share capital" in sub regulation (eb) of Regulation 7 and omits the proviso to that sub regulation, with the amendment to come into force on publication in the Official Gazette.