Regulatory amendment to stock exchange regulations substitutes punctuation and removes a proviso, altering regulation 18 wording.
SEBI's Second Amendment Regulations, 2017 revise the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 by substituting a full stop for a colon after the words "share capital" in sub regulation (4) of regulation 18 and by omitting the proviso to that sub regulation; the amendment takes effect on publication in the Official Gazette and is made under powers conferred by the Securities Contracts (Regulation) Act, 1956 and the SEBI Act, 1992.

Mutual fund investments in REITs and InvITs limited by asset and issuer concentration under new regulations.
Amendment adds definitions for InvIT and REIT, renumbers a clause, and inserts a Seventh Schedule provision allowing mutual funds to invest in REIT and InvIT units subject to fund-level issuer concentration limits and scheme-level NAV exposure limits, with an exception for index funds and sector- or industry-specific schemes focused on REITs and InvITs.

Liability for contravention enables stock exchanges to impose fines, suspend trading and freeze promoter holdings under issue and disclosure rules.
New regulations add express enforcement powers allowing recognised stock exchanges, in accordance with Board circulars or guidelines, to impose fines, suspend trading, freeze promoter or promoter group holdings in coordination with depositories, and take other specified actions for contraventions by listed entities or other persons; revocation of suspension or freezing follows Board guidance; failure to pay fines permits exchanges to initiate further lawful action after written notice.

Listing obligations: draft schemes merging a wholly owned subsidiary into its holding company exempt but must be filed for disclosure.
The amendment excludes from the relevant listing regulation draft schemes solely providing for the merger of a wholly owned subsidiary with its holding company, while requiring that such draft schemes be filed with the stock exchanges for disclosure purposes; the amendment takes effect on publication in the Official Gazette.

Foreign participation in stock exchanges permitted for specified overseas entities, subject to a capped minority equity stake and conditions.
Regulation 17 is amended to permit specified foreign persons - a foreign stock exchange, foreign depository, foreign banking company, foreign insurance company and foreign commodity derivatives exchange - to acquire or hold, directly or indirectly, individually or jointly, up to fifteen per cent. of the paid up equity share capital of a recognised stock exchange; the proviso clarifies these persons are those recognised or incorporated outside India and the amendment takes effect on publication in the Official Gazette.

FPI transaction scope expanded to include corporate bond trading and electronic book platform transactions through primary and secondary markets.
The amendment revises eligible instruments to the specific term Shares and clarifies that trading in India occurs through primary and secondary markets; it adds permitted transactions for Category I and Category II FPIs to include corporate bonds as specified by the Board and transactions on the electronic book provider platform of recognized stock exchanges, with consequent renumbering of subclauses.

Recognition under securities regulation granted to a clearing corporation, subject to regulatory compliance conditions and time limited authorization.
Recognition is granted to India International Clearing Corporation (IFSC) Ltd to operate as a clearing corporation under the securities regulatory framework for a one year term, pursuant to statutory powers, and is expressly conditional on compliance with conditions that the regulatory authority may specify or impose from time to time.

Recognition under Section 4 granted to India International Exchange with one-year validity, subject to SEBI compliance conditions.
Grant of recognition under Section 4 of the Securities Contracts (Regulation) Act, 1956 to India International Exchange (IFSC) Limited for the period commencing 29 December 2016 and ending 28 December 2017, subject to compliance with conditions specified by the securities regulator and any further conditions that may be prescribed or imposed.

Angel fund investment rules expanded to allow foreign investments subject to central bank and securities regulator conditions.
Amendments recalibrate Alternative Investment Funds rules: increase the investor threshold to two hundred; modify Regulation 19F by deleting restrictive wording in sub-regulation (1), aligning startup age requirement with central startup criteria, reducing numerical limits and shortening a required period from three years to one year; and add a provision permitting angel funds to invest in securities of companies incorporated outside India subject to conditions or guidelines issued by the central bank and the Board.

Restrictions on insider compensation arrangements: approval and shareholder ratification required for agreements affecting dealings in listed securities.
Prohibits employees, key managerial personnel, directors or promoters from entering into compensation or profit sharing agreements with shareholders or third parties in connection with dealings in the listed entity's securities without prior board approval and approval of public shareholders by ordinary resolution; requires disclosure to stock exchanges of agreements entered during the preceding three years; requires subsisting agreements to be placed before the board and, if board approved, before public shareholders by ordinary resolution with interested persons abstaining from voting; defines "interested person" as a voting rights holder directly or indirectly interested in such agreements.