Amendments in the Securities Law during the calendar year 2023
1. Extension of timeline for entering the details of the existing outstanding non-convertible securities in the Security and Covenant Monitoring system hosted by Depositories
On January 05, 2023, SEBI vide Circular No. SEBI/HO/DDHS/RACPOD1/CIR/P/2023/003, extended the timeline till January 31, 2023, for entering the details of existing outstanding non-convertible securities in the security and covenant monitoring system hosted by depositories.
Earlier, this was to be done by October 31, 2022. This is the second time SEBI has extended the deadline to comply with the rules. Earlier, the deadline was September 2022, which was extended to October 2022.
The link for the aforesaid Circular is as below:
2. Monitoring and periodical reporting of compliance with the requirements pertaining to the Security and Covenant Monitoring System hosted by Depositories
On January 05, 2023, SEBI vide Circular No. SEBI/HO/DDHS/RACPOD1/CIR/P/2023/002 intimated the Depositories to ensure periodic monitoring regarding compliance with the requirements relating to the Security and Covenant Monitoring and to bring to the notice of SEBI any instances of non-compliance every quarter, not later than 1 month from the end of the quarter in the format as specified in the Circular. This Circular came into force from April 01, 2023.
The link for the aforesaid Circular is as below:
3. SEBI extends relaxation on dispatching hard copies of financial statements
On January 05, 2023, SEBI vide Circular No. SEBI/HO/CFD/PoD-2/P/CIR/2023/4 extended the relaxation to listed companies from dispatching physical copies of financial statements till September 30, 2023. The earlier extension was till December 31, 2022.
This extension came after similar relaxations were provided by the Ministry of Corporate Affairs to companies dispatching physical copies of financial statements, including board’s report, auditor’s report, or other documents to shareholders through a circular dated December 28, 2022.
However, listed entities were required to send hard copies of annual reports to those shareholders who requested the same. Also, companies were required to disclose the weblink to the annual report to enable the shareholders to have access to the full annual report.
The link for the aforesaid Circular is as below:
4. Operational Circular for Credit Rating Agencies
On January 06, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-RACPoD2/P/CIR/2023/6 issued an Operational Circular for Credit Rating Agencies which is a compilation of all the existing circulars (covering operational & procedural aspects) issued by SEBI till December 31, 2022, with consequent changes. This Circular came into force from February 01, 2023.
The link for the aforesaid Circular is as below:
5. Management and Advisory services by AMCs to Foreign Portfolio Investors
On January 06, 2023, SEBI vide Circular No. SEBI/HO/IMD/IMD-PoD1/P/CIR/2023/5 permitted Asset Management Companies (AMCs) to provide management and advisory services to all Foreign Portfolio Investors (FPIs) operating from International Financial Services Centres (IFSCs).
This is subject to certain conditions, including that such FPIs will be allowed to invest in mutual fund schemes other than the schemes in the category of “thematic”. For investment in equity and equity derivative securities listed on recognized stock exchanges in India, the FPIs will not be allowed to take contra-position for 6 months from the date of purchase or sale of such securities.
Earlier in December 2019, SEBI allowed AMCs to provide management and advisory services to appropriately regulated FPIs that include pension funds, insurance companies, and banks.
The link for the aforesaid Circular is as below:
6. Comprehensive Framework on Offer for Sale (OFS) of Shares through Stock Exchange Mechanism
On January 10, 2023, SEBI vide Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 issued a comprehensive framework on the Offer for Sale of Shares through the Stock Exchange Mechanism which modifies the earlier set of guidelines originally introduced on 18 July 2012.
The Circular has been issued pursuant to representations made to SEBI by various stakeholders and recommendations of a working group of stock exchanges constituted by SEBI. This Circular came into effect from February 09, 2023.
The link for the aforesaid Circular is as below:
7. Facility for conducting meetings of Unit-Holders of Real Estate Investment Trustees (REITs) and Infrastructure Investment Trusts (InVITs) through Video Conferencing (VC) or Other Audio-Visual Means (OAVM)
On January 12, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS_Div2/P/CIR/2023/13 and SEBI/HO/DDHS/DDHS_Div2/P/CIR/2023/14 for REITs and InVITs respectively, allowed REITs and InVITs to conduct the meetings of unit-holders through VC/OAVM to enable maximum participation of the unit-holders in the decision-making process, irrespective of their geographical location.
Annual meetings of all unit holders of REITs and InVITs are required to be conducted at least once a year within 120 days from the end of the financial year and the time between two meetings must not exceed 15 months.
In conducting these meetings, the Managers are required to fulfill certain requirements as detailed in the Circulars.
Additionally, the Managers are also required to undertake the following reporting and monitory measures:
- The Investment Manager of the InvIT/ Manager of the REIT is required to disclose to the Stock Exchange and Trustee that the meeting of unit holders will be conducted through VC/OAVM.
- The trustee of the InvIT/ Manager of the REIT shall attend meetings of unit holders and monitor the meetings conducted through VC/OAVM.
The link for the aforesaid Circular for REIT is as below:
The link for the aforesaid Circular for InVIT is as below:
8. SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2023
On January 17, 2023, SEBI vide Notification No. SEBI/LAD-NRO/GN/2023/117 introduced the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2023. The following amendments have been made:
- Now High-Value Debt Listed Entity are Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs) are not required to comply with Regulations 15 to 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 i.e. Corporate Governance related regulations. (Effective from April 01, 2023)
- REITs and InVITs are required to follow the governance norms as would be specified under the SEBI (Infrastructure Investment Trusts) Regulations, 2014, and SEBI (Real Estate Investment Trust) Regulations, 2014, respectively. (Effective from April 01, 2023)
- The definition of ‘Senior Management’ under regulation 16 (definitions) has been amended to include functional heads. The revised definition is as follows: ‘“Senior management” shall mean the officers and personnel of the listed entity who are members of its core management team, excluding the Board of Directors, and shall also comprise all the members of the management at one level below the CEO or MD or WTD or Manager (including CEO and Manager, in case they are not part of the Board of Directors) and shall specifically include the functional heads, by whatever name called and the CS and CFO.” (Effective from January 17, 2023)
- In case of the appointment of a person of the Board of Directors, SEBI has clarified that shareholder approval (at the next general meeting or within 3 months from the date of appointment, whichever is earlier) is applicable in the case of both appointment and re-appointment. Previously, the regulation did not include ‘reappointment’. (Effective from January 17, 2023)
- Additionally, a new proviso has been inserted whereby incase of a public sector company, the approval of the shareholders for the appointment or re-appointment of a director or manager can be taken at the next general meeting. (Effective from January 17, 2023)
- The details of material subsidiaries of the listed entity, including the date and place of incorporation and the name and date of appointment of the statutory auditors of such subsidiaries, are now required to be additionally reported in the Annual Report. (Applicable for annual reports for 2022–23 and onwards)
The link for the aforesaid Notification is as below:
9. Amendment to Circular dated July 31, 2023, on Online Resolution of Disputes in the Indian Securities Market
On January 17, 2023, SEBI vide Notification No. SEBI/LAD-NRO/GN/2023/118 introduced the SEBI (Settlement Proceeding) (Amendment) Regulations, 2023. The following amendments have been made:
Now, the Whole Time Member, Adjudicating Officer, or the Competent Officer of SEBI before whom the proceedings are pending, shall dispose of the respective proceedings, by an appropriate order, based on the approved settlement terms. Earlier only Adjudication Officer was given authority.
The link for the aforesaid Notification is as below:
10. SEBI launches information database on municipal bonds
On January 22, 2023, SEBI vide Press Release No. 01/2023 launched an information database including a repository of information pertaining to municipal bonds on its website to assist municipal debt issuers and other stakeholders in the municipal debt market.
The information database will also be accessible by using a QR Code. Users will gain access to a wide range of information in the form of statistics and regulations, circulars, guidance notes, and FAQs issued by SEBI concerning municipal debt securities.
The repository also contains various checklists for pre-listing requirements and sample letters and certificates from various intermediaries to be obtained by an issuer who plans to tap the municipal bond market; templates for agreements between various stakeholders and an indicative due diligence questionnaire for merchant bankers are also included.
The link for the aforesaid Press Release is as below:
11. SEBI changes the framework to enable verification of upfront collection of margins from clients in the derivatives segment
On February 01, 2023, SEBI vide Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2023/16 amended the framework pertaining to the collection of End of Day (EOD) margin requirements from clients in derivatives segments.
In a circular, SEBI has said that EOD margin collection requirements from clients, in derivatives segments, including commodity derivatives, would also be calculated based on the fixed Beginning of Day (BOD) margin parameters of the client. SEBI further clarified that the change is only for the purpose of verification of upfront collection of margins from clients. The margin parameters applicable for the collection of margin obligation by Clearing Corporations would continue to be updated on an intra-day and EOD basis, as per the extant provisions.
The link for the aforesaid Circular is as below:
12. Transaction in corporate bonds via Request For Quote (RFQ) platform by Alternative Investment Funds (AIF)
On February 01, 2023, SEBI vide Circular No. SEBI/HO/AFD/PoD/P/CIR/2023/17 clarified on transaction made by AIFs in corporate bonds through the RFQ platform.
All transactions in corporate bonds, wherein AIF is on both sides of the trade would be executed through the RFQ platform in ‘one-to-one’ mode. However, any transaction entered by an AIF in corporate bonds in ‘one-to-many’ mode which gets executed with another AIF, would be counted in ‘one-to-many’ mode and not in ‘one-to-one’ mode. This would come into force from April 1, 2023.
The link for the aforesaid Circular is as below:
13. Operational Circular for Credit Rating Agencies
On February 03, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-RACPoD2/P/CIR/2023/19 issued a revised Operational Circular for Credit Rating Agencies amending the earlier Operational Circular issued on January 06, 2023. The link for the aforesaid Circular is as below:
14. Manner of achieving Minimum Public Shareholding
SEBI vide Circular No. SEBI/HO/CFD/CMD/CIR/P/43/2018 dated February 22, 2018 on the captioned subject, had permitted different methods that may be used by the listed entities to achieve compliance with the Minimum Public Shareholding (MPS) requirement mandated under Rule 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 read with Regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
To facilitate listed entities achieve MPS compliance, SEBI on February 03, 2023, vide Circular No. SEBI/HO/CFD/PoD2/P/CIR/2023/18 reviewed and rationalized the existing methods and introduced 2 additional methods. Accordingly, a listed entity shall adopt any of the methods mentioned in the Circular to achieve compliance with the MPS requirements.
The Stock Exchange(s) shall monitor the methods adopted by listed entities to increase their public holding and comply with MPS requirements in terms of this circular. Non-compliance, if any, observed by the Stock Exchange(s) with respect to the method(s) and/or conditions prescribed herein, shall be reported to SEBI every quarter.
The link for the aforesaid Circular is as below:
15. Do’s & Don’ts relating to green debt securities to avoid occurrences of greenwashing
On February 03, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-RACPoD1/P/CIR/2023/20 prescribed Do’s and Don’ts relating to green debt securities (debt securities issued to raise funds which are utilized specifically for renewable energy, clean transportation, sustainable water management, climate change adaptation, energy efficiency, sustainable waste management, sustainable waste management, and biodiversity conservation projects) to avoid occurrences of greenwashing.
Greenwashing is making false, misleading, unsubstantiated, or otherwise incomplete claims about the sustainability of a product, service, or business operations.
The issuer of green debt securities shall ensure the following:
- constantly monitor their green operations to ensure that they result in the reduction of adverse environmental impact and contribute towards a sustainable economy.
- not permitted to utilize funds raised through green bonds for purposes that would not fall under the definition of green debt securities. In the event of any utilization that is not permitted, issuers should disclose the same to the investors and, if required by the majority of investors, undertake early redemption of such debt securities.
- prohibited using misleading labels, hiding trade-offs or cherry-pick data from research, making untrue claims, and giving false impression of certification by a third-party entity. Further, issuers must maintain the highest standard associated with the issue of green debt security while adhering to the rating assigned to it.
- quantify the negative externalities associated with the utilisation of the funds raised through green debt security and must not make untrue claims giving false impression of certification by a third-party entity.
The link for the aforesaid Circular is as below:
16. Review of Chapter IX – Green Debt Securities of the Operational Circular for issue and listing of Non- Convertible Securities (NCS), Securitised Debt Instruments (SDI), Security Receipts (SR), Municipal Debt Securities and Commercial Paper (CP) dated August 10, 2021 (hereinafter referred to as the ‘NCS Operational Circular’), as amended from time to time
Due to increasing interest in sustainable finance in India as well as around the globe, and to align the extant framework for green debt securities with the updated Green Bond Principles (GBP) recognized by IOSCO, SEBI on February 06, 2023, vide Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/023 replaced Chapter IX of the NCS Operational Circular to include the following:
- Initial disclosure requirements for issue and listing of green debt securities
- Continuous disclosure requirements for listed green debt securities
- An issuer to appoint a third-party reviewer/ certifier for a green debt security
- Responsibilities of the issuer
The provisions of this circular shall come into force for all issues of green debt securities launched on or after April 01, 2023.
The link for the aforesaid Circular is as below:
17. Clarification in respect of the compliance by the first-time issuers of debt securities under SEBI (Issue and Listing of Non- Non-Convertible Securities) Regulations, 2021 with Regulation 23(6) (NCS Regulations)
Regulation 23(6) read along with Regulation 2(1)(r) of NCS Regulations requires the Articles of Association (AoA) of an issuer i.e. a company to include provisions relating to the requirement for the Board of Directors, to appoint such person nominated by the debenture trustee in terms of Regulation 15(1)(e) of the SEBI (Debenture Trustees) Regulations, 1993. The regulation also provides a time up to September 30, 2023, for existing debt-listed issuers to amend their AoA.
However, on representations received from first-time issuers of debt securities, SEBI on February 09, 2023, vide Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/028 advised the stock exchanges to take an undertaking from such first-time issuers that they will ensure that their AoA is amended within 6 months from the date of the listing of the debt securities. This undertaking is to be obtained at the time of granting the in-principle approval. The issuer shall, within such time, comply and report compliance to Stock Exchanges, which shall periodically monitor/remind such issuers to do the needful.
The link for the aforesaid Circular is as below:
18. SEBI introduces issue summary document for filing IPO papers in XBRL format
On February 15, 2023, SEBI vide Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2023/29 introduced the issue summary document for filing IPO papers and for further issues of securities in XBRL format, a move that will help provide data to stakeholders in a structured manner.
This is part of the capital markets regulator’s effort to make available relevant information at the stock exchanges and depositories in a structured manner. The rollout of the Issue Summary Document (ISD) will be done in a phased manner starting March 01, 2023.
SEBI has decided to introduce the ISD in XBRL format for Initial Public Offer (IPO); Further Public Offer; Further Issues- Preferential Issue, Qualified Institutions Placement (QIP), Rights Issue, Issue of American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs); Buy-Back of Equity Shares, Open Offer under SEBI (SAST) Regulations; Voluntary Delisting of equity shares were exit opportunity is required.
The link for the aforesaid Circular is as below:
19.Master Circular for SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
On February 16, 2023, SEBI vide Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2023/31 issued a Master Circular on Takeover Regulations, to enable the stakeholders to have access to the provisions of the applicable circulars in one place.
With the issuance of this Master Circular, the directions/instructions contained in the circulars listed out in Annexure-V to this Master Circular, to the extent they relate to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”), shall stand rescinded.
The link for the aforesaid Circular is as below:
20. Master Circular for Foreign Venture Capital Investors (FVCI)
On March 03, 2023, SEBI vide Circular No. SEBI/HO/AFD/PoD/P/CIR/2023/34, issued a Master Circular to enable the stakeholders to have access to all the applicable circulars/directions for Foreign Venture Capital Investors (FVCI) in one place.
The Master Circular prescribes the following provisions:
- Requirement of firm commitment for registration as FVCI
- Quarterly Reporting by FVCIs
- Online filing Systems for FCVIs
All the existing FVCIs registered on SEBI were advised to activate their online accounts, using an activation e-mail sent by SEBI.
The link for the aforesaid Master Circular is as follows:
21. Framework for Adoption of Cloud Services by SEBI Regulated Entities (REs)
On March 06, 2023, SEBI vide Circular No. SEBI/HO/ITD/ITD_VAPT/P/CIR/ 2023/033 issued Framework for Adoption of Cloud Services by SEBI Regulated Entities (REs).
This framework came into force immediately for all new or proposed cloud onboarding assignments/projects of the REs. Cloud computing has 4 types of deployment models viz public cloud, community cloud, private cloud, and hybrid cloud.
The Framework specifies the key risks and mandatory control measures that REs need to put in place before adopting cloud computing. This framework applies to REs which include Stock Exchanges, Clearing Corporations, Depositories, Stock Brokers through exchanges, Depository Participants, Asset Management Companies/ Mutual Funds, Qualified Registrars to an Issue and Share Transfer Agents, KYC Registration Agencies. This framework serves as general guidelines to set the standards for REs to comply with while adopting cloud services.
The link for the aforesaid Circular is as follows:
22. Linking of PAN with Aadhaar
On March 08, 2023, SEBI vide Press Release No. 05/2023 asked investors to link their Aadhaar and PAN before March 31, 2023.
The Income Tax Act, 1961 also mandated the linking of PAN with Aadhaar within a prescribed period, failing which the PAN shall become inoperative.
The Central Board of Direct Tax (CDBT) had also issued a circular stating that if a person fails to link his PAN with Aadhaar before March 31, 2023, he will be liable to all the consequences under Income tax, 1961 for not furnishing, intimating, and quoting the PAN.
All the SEBI Market Infrastructure Institutions (MIIs) are required to ensure valid KYC requirements for all participants. If an investor fails to comply with the said CDBT Circular there could be restrictions on securities and other transactions until the Pan and Aadhaar are linked.
A New Press Release has been issued by CDBT on March 28, 2023, through which the date for linking PAN and Aadhaar has been extended to June 30, 2023.
The link for the aforesaid Press Release is as follows:
23. Operational Guidance on Amendment to SEBI (Buyback of Securities) Regulations, 2018
On March 08, 2023, SEBI vide Circular No. SEBI/HO/CFD/PoD-2/P/CIR/2023/35 provided operational guidance on SEBI (Buyback of Securities) (Amendment) Regulation, 2023 (“the Buy Back Regulations”) issued on February 07, 2023, which came into force on March 08, 2023.
The restrictions on buyback through the Stock Exchange Route
Reg 16(vi) of the Buy Back Regulations places restrictions on the placement of bids, price, and volume for buy-back through stock exchanges which shall be specified by the Board. The circular specifies the following restrictions for the same:
the company shall not buy back more than 25% of the average daily trading volume (in terms of value) of its shares or other specified securities in the 10 trading days preceding the day in which such purchases are made.
the company shall not place bids in the pre-open market, first and last 30 minutes of the regular trading session
the company’s purchase order price should be within the range of ±1%from the last traded price.
Margin Requirement for deposits in Escrow Account
Reg 9 (ix) (c) and Reg 20 (ii) of the Buy Back Regulations prescribe that the escrow account shall consist of cash and/or other than cash. The Merchant Banker shall ensure an adequate amount is available in the escrow account till completion of all formalities of buy-back.
The link for the aforesaid Circular is as follows:
24. Amendment in SEBI (Foreign Portfolio Investors) Regulation, 2019
On March 14, 2023, SEBI issued a Notification No. SEBI/LAD-NRO/GN/2023/128 to amend the SEBI (Foreign Portfolio Investors) Regulation, 2019. The amendment contains minor changes in the Regulation which are highlighted in Italics and are as follows:
An application for the grant of the certificate as a foreign portfolio investor shall be made to a designated depository participant in the form and manner specified by the Government or the Board from time to time and shall be supported by the fee specified in Part A of the Second Schedule and any documents in the manner specified by the Board from time to time.
All the intimations required under Regulation 22 – General Obligations and Responsibilities of Foreign Portfolio Investors and Regulation 31 – Obligations and responsibilities of designated depository participants shall be made “as soon as possible but not later than seven (7) working days” which were earlier required to be made “forthwith”.
It shall be the responsibility of the Foreign Portfolio Investor to ensure that accurate details regarding its investor group are maintained with its designated depository participant at all times as per Regulation 22 (1)(l).
The link for the aforesaid Notification is as follows:
25. Common and simplified norms for processing investor service requests by RTAs and for furnishing PAN, KYC details, and Nomination
On March 16, 2023, SEBI vide Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 issued common and simplified norms for processing investor service requests by RTAs and for furnishing PAN, KYC details, and Nomination. SEBI issued this simplified norm after receiving representations from investors regarding difficulties faced by them with certain procedural aspects of provisions and varied interpretations with regard to the documentation required for processing investor service requests. This circular came into force from April 01, 2023.
The link for the aforesaid Circular is as follows:
26. Master Circular for Portfolio Managers
On March 20, 2023 SEBI vide Circular No. SEBI/HO/IMD/IMD-POD-1/P/CIR/2023/38 issued Master Circular”) to enable the stakeholders to have access to all the applicable Circulars issued till November 30, 2022 related to Portfolio Managers in one place. The Master Circular came into force on March 20, 2023. However, provisions relating to written-down policies by Portfolio Managers and Fair and equitable treatment of all clients came into force with effect from April 01, 2023. Provisions relating to the submission of data relating to all clients within 10 days from the end of the quarter and submission of data relating to all clients for the period from April 01, 2020, to September 30, 2023, came into force with effect from the quarter ending September 30, 2023.
The link for the aforesaid Master Circular is as follows:
27. E-wallet investments in Mutual Funds
Earlier, On May 08, 2017, SEBI vide circular No. SEBI/HO/IMD/DF2/CIR/P/2017/39 permitted the use of e-wallet for investment in Mutual Funds within the umbrella limit of INR 50,000 by an investor through both e-wallet and/or cash, per Mutual Fund per financial year.
In relation to this, on March 23, 2023, SEBI vide Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2023/40 stated that all e-wallets should be fully compliant with KYC norms as prescribed by the Reserve Bank of India, and all other provisions shall remain the same. The said Circular came into effect from May 01, 2023.
The link for the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/mar-2023/e-wallet-investments-in-mutual-funds_69254.html
28. Master Circular on Surveillance of Securities Market
On March 23, 2023, SEBI vide Circular SEBI/HO/ISD/ISD-PoD-2/P/CIR/2023/039 issued a Master Circular to ensure the availability of consolidated information contained in all the circulars about surveillance of the securities market at one place. SEBI has been issuing various circulars from time to time about effective surveillance of the securities market. Further, a Master Circular in the form of a compilation of all the relevant circulars was issued on this subject on September 13, 2022. The Master Circular came into force from March 23, 2023.
The link for the aforesaid Circular is as follows:
29. Streamlining the onboarding process of FPIs
SEBI (Foreign Portfolio Investors) Regulations, 2019 (‘FPI Regulations’) provides that an application shall be made to a Designated Depository Participant (’DDP’) for the grant of a certificate by a Foreign Portfolio Investor (‘FPI’) in the form and manner specified by the Government/ SEBI from time to time.
On December 19, 2022, SEBI vide Circular No. SEBI/HO/AFD-2/CIR/P/2022/175 issued a Master Circular providing inter alia, guidance for processing of FPI applications by FPIs, KYC requirements for FPIs, investment conditions/restrictions on FPIs registered under FPI Regulations, etc.
On March 27, 2023, to ease the onboarding process of FPIs and reduce the time taken for granting registration and opening of demat, trading, and bank accounts of FPIs, SEBI vide Circular No. SEBI/HO/AFD/P/CIR/2023/043 modified the above-mentioned Master Circular, to provide the following:
Grant of FPI registration based on scanned copies of application forms and supporting documents
Use of Digital Signatures by FPIs
Certification of copies of original documents by authorized bank officials using the SWIFT mechanism
Verification of PAN through the CAF module available on the websites of the Depositories
Submission of unique investor group ID by FPI applicants in lieu of complete details of group constituents
The link for the aforesaid Circular is as follows:
30. Extension of timelines of Nomination for Eligible Trading and Demat Accounts of existing holders
On March 27, 2023, SEBI vide Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/42 extended the timeline specified for nominating/opting out of a nomination for investors opening new trading and/or demat accounts on or after October 01, 2021, and for all existing eligible trading and demat account holders. If they fail to comply with prescribed timelines their trading accounts shall be frozen for trading and the demat account shall be frozen for debits.
On July 23, 2021, SEBI vide Circular No. SEBI/HO/MIRSD/RTAMB/CIR/P/2021/601 directed to furnish nomination or declaration for opting out of nomination latest by March 31, 2022. On receiving representations from various Stakeholders SEBI extended the timeline till March 31, 2023. After receiving representation from the stakeholders and assessment of the trading and demat accounts of investors, SEBI provided the relief till September 30, 2023.
The Stockbrokers and Depository Participants shall encourage their clients to update ‘choice of nomination’ by sending emails and SMS on a fortnightly basis to all such trading and demat account holders who are not in compliance with the nomination requirement. They shall also guide investors to comply with nomination requirements. They shall also monitor the efforts made by trading members and depository participants to update the ‘choice of nomination’ by their clients and submit a report every month within 7 days from the end of the month.
The link for the aforesaid Circular is as follows:
31. Extension on timelines for Nomination of Mutual Fund Unit Holders
On March 28, 2023, SEBI vide Circular No. SEBI/HO/IMD/IMD-IPOD1/P/CIR/2023/47 extended the timeline for nominating/ opting out of nomination for all the existing individual unit holders holding mutual fund units either solely or jointly till September 30, 2023, failing which the folios will be frozen for debits.
SEBI had prescribed the requirement for nomination/opting out of nomination for all the existing individual unit holders holding mutual fund units either solely or jointly, by March 31, 2023. After receiving representation from the market participants, SEBI provided relief till September 30, 2023. The AMC and RTAs shall be aware of the investors and encourage them by sending emails and SMS on a fortnightly basis to all such unit holders who are not in compliance with the nomination requirement.
The link for the aforesaid Circular is as follows:
32. SEBI Board Meeting dated March 29, 2023
Decisions taken in the SEBI Board Meeting are as follows:
Introduction of a Balanced Framework for Environmental, Social and Governance Disclosures, Ratings and Investing
Establishment of a regulatory framework for ESG Rating Providers (ERPs) in the Securities Market by introducing a new chapter in the SEBI (Credit Rating Agencies) Regulations, 1999
Introduction of an ASBA-like facility for trading in the Secondary Market
Upstreaming of clients’ funds by Stock Brokers (SBs)/Clearing Members (CMs) to Clearing Corporations (CCs) to mitigate credit risk on intermediaries
Amendments to Stock Brokers Regulations to institute a formal mechanism for prevention and detection of fraud or market abuse by stock brokers
Introduction of Regulatory Framework for Index Providers to foster transparency and accountability in governance and administration of financial benchmarks in the securities market.
Introduction of Framework for “Corporate Debt Market Development Fund”
Clarity on the roles and responsibilities of Trustees and Boards of Asset Management Companies of Mutual Funds with a focus on Unitholder protection
Review of Regulatory Framework for Sponsors of Mutual Funds to give greater flexibility to the industry
Amendments to SEBI (LODR) Regulations to facilitate more comprehensive and timely disclosure
Amendments to SEBI (ICDR) Regulations, 2018 to increase transparency and streamline certain issue processes
Introduction of the concept of General Information Document (GID) and Key Information Document (KID) for issuance of Bonds/ Commercial Paper and streamlining of disclosures
Extension of the “Comply or Explain” period for Large Corporates (LCs) to meet their financing needs from the debt market through the issuance of debt securities to the extent of 25% of their incremental borrowings in an FY
Extension of the ‘Comply or Explain’ period for the High-Value Debt Listed Entities (HVDLEs) in respect of corporate governance norms and simplification of disclosure requirements pertaining to the payment of interest/ coupon and redemption amount
Amendment to Alternative Investment Funds (AIFs) Regulations to prescribe provisions for valuation of investments, dematerialization of units, certification requirement for key employees of Investment Manager, transactions with associates, and the option to sell unliquidated investments to a new scheme of AIFs
Strengthening the Investor Grievance Redressal Mechanism in the Securities Market through amendments to Regulations to operationalize the Online Dispute Resolution (ODR) Mechanism for investors across registered intermediaries / regulated entities
The link for the aforesaid Press Release is as follows:
https://www.sebi.gov.in/media/press-releases/mar-2023/sebi-board-meeting_69552.html
33. Operational Circular for Debenture Trustees
On March 31, 2023, SEBI vide Circular No. SEBI/HO/DDHS/P/CIR/2023/50 issued an Operational Circular for Debenture Trustees. Debenture Trustees are regulated under the provisions of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 (‘DT Regulations’). The framework for Debenture Trustees has been laid down in the DT Regulations and procedural/ disclosure requirements and obligations have been specified by SEBI through circulars. SEBI has issued a single operational circular that consolidates all applicable circulars to remove inconsistencies and repetitions through consequent changes. The list of circulars superseded by this operational circular is also mentioned in the Circular. The provisions in this circular shall come into effect from April 01, 2023. Debenture Trustees must comply with the conditions of this circular and have the necessary systems and infrastructure in place, and the Board of Directors is responsible for ensuring compliance.
The link for the aforesaid Operational Circular is as follows:
34. Extension of compliance period –Fundraising by Large Corporates through issuance of debt securities to the extent of 25% of their incremental borrowings in a financial year
On March 31, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/049 provided an extension of the compliance period for Fundraising by large corporates through the issuance of debt securities to the extent of 25% of their incremental borrowings in an FY which was required as per NCS Operational Circular dated August 10, 2021. The said issuance of debt securities has been extended to a contiguous block of three years from FY 2021-22 (currently it is a contiguous block of two years from FY 2021-22).
The link for the aforesaid Circular is as follows:
35. FAQs on SEBI (Prohibition of Insider Trading) Regulations, 2015
On March 31, 2023, SEBI issued revised FAQs on SEBI (Prohibition of Insider Trading) Regulations, 2015 rescinding the earlier FAQs.
The link for the aforesaid FAQs is as follows:
36. Guidelines with respect to excusing or excluding an investor from an investment of AIF
On April 10, 2023, SEBI vide Circular No. SEBI/HO/AFD-1/PoD/P/CIR/2023/053, issued Guidelines with respect to excusing/excluding an investor from an investment of AIF. This circular came into force with immediate effect. It was observed that the information disclosed in the Private Placement Memorandum (PPM) was inconsistent and there was a lack of adequate disclosure with respect to certain industry practices. Therefore, the Alternative Investment Policy Advisory Committee (“AIPAC”) recommended excusing or excluding an investor from an investment in the AIF under the term ‘Excuse and Exclusion’.
The link for the aforesaid Circular is as follows:
37. Direct plan for schemes of Alternative Investment Funds (AIFs) and trail model for distribution commission in AIFs
On April 10, 2023, SEBI vide Circular No. SEBI/HO/AFD/PoD/CIR/2023/054, issued a Direct Plan for schemes of Alternative Investment Funds (AIFs) and a trail model for distribution commission in AIFs to provide flexibility to investors for investing in AIFs, bring transparency in expenses, and curb mis-selling. This circular to be complied with by investors on-boarded in AIFs/schemes of AIFs from May 01, 2023 onwards.
SEBI had earlier vide Circular No SEBI/HO/AFD/DF6/CIR/P/2020/24 dated February 05, 2020, introduced a template for a Private Placement Memorandum (PPM) for AIF to ascertain the minimum level of information disclosed to the investors. The PPM template provides for disclosure of the Direct Plan and constituents of fees that may be charged by AIF/ scheme of AIF.
The link for the aforesaid Circular is as follows:
38. New Logo of SEBI was unveiled on the occasion of SEBI Foundation Day
On April 12, 2023, SEBI vide Press Release No. 8/2023 unveiled the New Logo of SEBI on the occasion of SEBI 35th Foundation Day.
In its journey of the past 35 years, SEBI has grown and evolved into an institution that facilitates the growth of the markets and the Indian economy. The new logo seeks to reflect the unique combination of rich traditions of SEBI and new data and technology-based approach to all three areas of its mandate in the securities market -Development and Regulation of the Securities Market and Investor Protection.
New image
The link for the aforesaid Press Release is as follows:
39. Introduction of Legal Entity Identifier (LEI) for listed non-convertible securities, securitized debt instruments, and security receipts
On May 03, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2023/64 directed the issuers having outstanding listed non-convertible securities as of August 31, 2023, to report and/or obtain LEI code (a unique 20-character to identify legally distinct entities that engage in financial transactions) in the Centralized Database of corporate bonds, on or before September 01, 2023. Similarly, Issuers having outstanding listed securitized debt instruments and security receipts as of August 31, 2023, shall report and/or obtain the LEI code to the Depository(ies), on or before September 01, 2023.
LEI helps in creating a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. Currently, the non-individual borrowers having aggregate exposure of above Rs. 25 crores, to obtain LEI code as per RBI directions.
The issuer that is proposing to issue and list non-convertible securities or securitized debt instruments and security receipts on or after September 01, 2023, shall report their LEI code in the Centralized Database of Corporate Bonds and Depositories respectively at the time of allotment of the ISIN.
The link for the aforesaid Circular is as follows:
40. Additional requirements for the issuers of transition bonds
On May 04, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2023/66 prescribed additional requirements for the issuer of the Transition Bond to ensure transparency and assist the investor in making informed decisions. The additional requirement of disclosure in offer documents, centralized database, Stock exchange, and the annual report is to avoid misallocation of funds. The transition bonds as per the SEBI (Issue and Listing of Non-Convertible Securities), comprise “funds raised for transitioning to a more sustainable form of operations, in line with India’s Intended Nationally Determined Contributions.
Additional requirements for the Issuer for issuance and listing of transition bonds are as follows:
- to differentiate the transition bonds from other categories of green debt security, by denoting ‘GB-T’ in the offer documents on the cover page and in the type of instrument field in the term sheet.
- to disclose the denotation GB-T in the Centralized Database for corporate bonds/ debentures by filling in the denotation Type of Instrument- Others in the Centralized Database.
- to disclose during the year the revised transition plan along with an explanation for any such revision to the already disclosed plan; if applicable.
- to disclose in the Annual Report the transition plan along with a brief on the progress of the implementation of the transition plan.
The link for the aforesaid Circular is as follows:
41. Investment in units of Mutual Funds in the name of the minor through the guardian
On May 12, 2023, SEBI vide Circular No. SEBI/HO/IMD/POD-II/CIR/P/2023/0069 partially modified SEBI Circular no. SEBI/HO/IMD/DF3/CIR/P/2019/166 dated December 24, 2019, which prescribed the mode of payment for investment by the minor through a guardian and the uniform process to be followed across Asset Management Companies (AMCs) in respect of investments made in the name of a minor through a guardian.
Under the partial modification, payment for investment by any mode is to be accepted from the bank account of the minor, parent, or legal guardian of the minor, or a joint account of the minor with the parent or legal guardian. For existing folios, the AMCs insist upon a Change of Pay-out Bank mandate before redemption is processed. All proceeds of redemption are to be credited only to the verified bank account of the minor, held with the parent/ legal guardian after completing all KYC formalities. Irrespective of the source of subscription payment, all redemption proceeds shall be credited only to the verified bank account of the minor, i.e. the account the minor may hold with the parent/ legal guardian after completing all KYC formalities.
The link for the aforesaid Circular is as follows:
42. Master Circular for Registrar to an Issue and Share Transfer Agents (RTAs)
On May 17, 2023 SEBI vide Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2023/70 issued a Master Circular for the Registrar to Issue and Share Transfer Agents to enable the users to have access to all the applicable Circulars issued to date in one place.
The link for the aforesaid Master Circular is as follows:
43. Master Circular for Stock Brokers
On May 17, 2023 SEBI vide Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/71 issued a Master Circular for Stock Brokers to enable the users to have access to all the applicable Circulars issued to date related to Stock Brokers in one place.
The link for the aforesaid Master Circular is as follows:
44. Master Circular for Mutual Funds
On May 19, 2023 SEBI vide Master Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/74 issued a Master Circular for Mutual Funds to enable the stakeholders to have access to all the applicable regulatory provisions issued till March 31, 2023, related to Mutual Funds in one place. All the regulatory provisions of the Master Circular were applicable with immediate effect except the reporting of offsite inspection data to SEBI which was applicable from July 01, 2023.
The link for the aforesaid Master Circular is as follows:
https://www.sebi.gov.in/legal/master-circulars/may-2023/master-circular-for-mutual-funds_71438.html
45. Dematerialisation of securities of Hold Cos and SPVs held by Real Estate Investment Trusts (REITs)
On May 22, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/75 and SEBI/HO/DDHS-PoD-2/P/CIR/2023/76 directed REITs and InVITs respectively to hold the securities of Hold Cos and SPVs in dematerialized form only and the Manager of the REIT/ InVIT to ensure the same. This will promote the dematerialization of securities, encourage ease of doing business, and improve transparency in the dealings of securities of SPVs/ Hold Cos. The Managers of the REITs/ InVITs were directed to dematerialize the existing securities in the physical form of Hold Cos and SPVs of the REITs on or before June 30, 2023.
The link for the aforesaid Circular for REIT is as follows:
The link for the aforesaid Circular for InVIT is as follows:
46. Model Tripartite Agreement between the Issuer Company, Existing Share Transfer Agent, and New Share Transfer Agent
On May 25, 2023, SEBI vide Circular SEBI/HO/MIRSD/MISRD-PoD-1/P/CIR/2023/79 provided a draft of the Model Tripartite Agreement to be executed between the Issuer Company, Existing Share Transfer Agent, and New Share Transfer Agent. This Tripartite Agreement was prepared in consultation with the Registrar Association of India (RAIN) and some issuer companies. The draft Model Tripartite Agreement forms part of the Circular as Annexure A.
The link for the aforesaid Circular is as follows:
47. Comprehensive guidelines for Investor Protection Fund and Investor Services Fund at Stock exchange and Depositories
On May 30, 2023, SEBI vide Circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/81 prescribed a comprehensive guideline for Investor Protection Fund (“IPF”) and Investor Services Fund (“ISF”) at Stock exchange and Depositories by modifying certain provision of existing guidelines. The provisions of these guidelines were applicable from June 29, 2023.
The link for the aforesaid Circular is as follows:
48. Master Circular for all Recognised Stock Exchange and Clearing Corporations having Electronic Gold Receipt Segment, All Depositories, and all Registered Vault Managers
On June 01, 2023, SEBI vide Circular SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/82 issued a Master Circular enabling the users to have access to all the applicable Circulars issued to date for all Recognised Stock Exchange and Clearing Corporations having Electronic Gold Receipt (EGR) Segment, All Depositories, and all Registered Vault Managers till March 31, 2023 in one place. Instruments used for trading in gold exchange are referred to as EGR.
The link for the aforesaid Master Circular is as follows:
49. Online Processing of investor service requests and complaints by RTA (Registrar to an Issue & Share Transfer Agent)
On June 08, 2023, SEBI vide Circular SEBI/HO/MIRSD-PoD-1/P/CIR/2023/72 proposed the digitization of investor service requests and complaints by RTAs in two phases. Digitization will help in maintaining a database and online tracking of service requests and complaints. Hence, under Digitization the physical securities holder can avail various services in online mode.
The link for the aforesaid Circular is as follows:
50. Master Circular for Investment Advisors
On June 15, 2023, SEBI vide Circular SEBI/HO/MIRSD-PoD-2/P/CIR/2023/89 issued a Master Circular enabling the investment advisors registered with SEBI to have access to all the applicable circulars to Investment Advisors in one place.
The link for the aforesaid Master Circular is as follows:
51. SEBI (Alternative Investments Funds) 2nd Amendment Regulations, 2023
On June 15, 2023, SEBI amended the SEBI (AIF) Regulations, 2012 vide Gazette Notification SEBI/LAD-NRO/GN/2023/132, by prescribing new regulations and amending existing regulations.
A new definition of Corporate Debt Market Development Fund, liquidation period Liquidation scheme has been introduced.
Introduction of a new category of AIF Fund named Specified Alternative Investment Fund along with Category I, II, & III AIFs and added in Schedule Form A.
Revision of qualification of Key Investment Team of Manager of AIFs.
Issuance of units of AIFs in dematerialized form as per timeline specified by SEBI through Circular dated June 15, 2023.
AIFs or the scheme of the AIFs shall be wound up as per Regulation 29 of AIF Regulation if the consent of unit holders to extend tenure or upon expiry of the extended tenure is not received.
Approval of 75% of a specified list of unitholders in terms of the value of the unit holder required for buying or selling.
Introduction of a new Chapter on the Corporate Debt Market Development Fund.
Appointment of Compliance Officer.
Valuation of Investments by Independent Valuer.
Winding up of the AIF scheme.
Introduction of a new Regulation 29A – Liquidation scheme.
The link for the aforesaid Notification is as follows:
52. Adherence to Regulation 51A of SEBI (Issue and Listing of Non- Non-Convertible Securities) Regulations, 2021 by Online Bond Platform (OBP)
On June 16, 2023, SEBI vide Circular SEBI/HO/DDHS/POD1/P/CIR/2023/092 prescribed various provisions relating to the Online Bond Platform (OBP). Vide these circulars, Online bond platform providers are restricted from offering products other than listed debt securities on their platforms. SEBI has also allowed OBP providers to offer securities such as Government Securities, Treasury Bills, Listed Sovereign Gold Bonds, Listed Municipal Debt Securities, and Listed Securitized Debt Instruments on their platform. An entity acting as an OBP Provider should cease to offer on its platform or any other platform website, products or services not permitted under the rules.
The holding company, subsidiary, or associate of an OBP Provider is to not utilize the name, brand name, or any name resembling that of the OBP provider for offering products and services that are not regulated by a financial sector regulator viz. SEBI, RBI, IRDAI, or PFRDA.
A holding company, subsidiary, or associate, undertaking any activity or offering products/ securities or services that are not regulated by a financial sector regulator viz. SEBI, RBI, IRDAI, or PFRDA shall neither have access to or receive information about the user of the OBP nor cross-sell products/ securities or services to a user of the OBP.
This Circular aligns the investor grievance redress mechanism for OBP with the Master Circular for Stock Brokers.
The link for the aforesaid Circular is as follows:
53. Master Circular on Scheme of Arrangement by Listed Entities
On June 20, 2023, SEBI vide Circular No. SEBI/HO/CFD/POD-2/P/CIR/2023/93 issued a Master Circular order to enable the users to have access to all the applicable circulars at one place relating to the Scheme of Arrangements by Listed Entities.
The provisions of this Circular do not apply to schemes that solely provide for the merger of a wholly owned subsidiary of its division with the parent company. However, such draft schemes shall be filed with the Stock Exchanges for disclosure and the Stock Exchanges shall disseminate the scheme documents on their website.
The Circular also clarifies that the ‘relevant date’ for computing pricing shall be the date of the Board Meeting in which the scheme is approved.
The link for the aforesaid Master Circular is as follows:
54. Master Circular on Issue of Capital and Disclosure Requirement
On June 21, 2023, SEBI vide Circular No. SEBI/HO/CFD/PoD-2/P/CIR/2023/00094 issued a Master Circular to enable the stakeholders to have access to all the applicable circulars with respect to the Issue of Capital and Disclosure Requirements in one place.
The link for the aforesaid Master Circular is as follows:
55. Issuance of units of Alternative Investment Funds (“AIFs”) in dematerialized form
On June 21, 2023, SEBI vide Circular SEBI/HO/AFD/PoD1/CIR/2023/96 directed AIF to dematerialize their units within the following timelines:
Particulars | Schemes of AIFs with corpus ≥ Rs 500 Crore | Schemes of AIFs with corpus < Rs 500 Crore |
Dematerialization of all the units issued | Latest by October 31, 2023 | Latest by April 30, 2024 |
Issuance of units only in dematerialized form | November 01, 2024 onwards | May 01, 2024 onwards |
This circular was issued in pursuance of the 2nd Amendment dated June 15, 2023, to SEBI (AIFs) Regulations, 2012. Schemes of AIFs that are ending on or before April 30, 2023, are not required to dematerialize their units.
The manager of AIF shall submit a report on compliance with the provisions of the circular on www.siportal.sebi.gov.in in the specified format. The trustee/sponsor of AIF shall ensure that the ‘Compliance Test Report’ prepared by the manager in terms of SEBI Circular CIR/IMD/DF/14/2014 dated June 19, 2014, includes compliance with the provisions of this circular.
The link for the aforesaid Circular is as follows:
56. Modalities for launching Liquidation Scheme and for distributing the investments of Alternative Investment Funds (AIFs) in-specie
On June 21, 2023, SEBI vide Circular SEBI/HO/AFD/PoD1/CIR/2023/098 issued a procedure for launching the Liquidation Scheme and distribution of the investments of AIF in-specie.
The link for the aforesaid Circular is as follows:
57. Standardised approach to valuation of investment portfolio of Alternative Investment Funds
On June 21, 2023, SEBI vide Circular SEBI/HO/AFD/PoD/CIR/2023/97 issued a standardized approach with respect to the valuation of the investment portfolio of AIFs.
Valuation
The securities whose valuation norms have already been prescribed under SEBI (Mutual Funds) Regulations, 1996 shall be valued as per the norms prescribed therein. Valuation of securities that are not covered under SEBI (Mutual Funds) Regulations, 1996 shall be carried out as per valuation guidelines endorsed by any AIF Industry Association. It shall be the responsibility of the Manager to ensure that the investment of schemes is valued in the manner prescribed by SEBI.
Deviation in Valuation
In case of a deviation in valuation at each asset level of more than 20% between two consecutive valuations or a deviation of more than 33% in a financial year, the manager shall inform the investors along with detailed reasons.
Criteria of Independent Valuer
The Independent valuer shall possess the following criteria:
- They shall not be associate of the manager or sponsor or trustee of the AIF.
- They shall have at least 3 years of experience in the valuation of unlisted securities.
- They shall be Registered Valuers registered with IBBI, ICAI, ICSI, CMA, or CFA Institute
- Or
They are holding or subsidiary company of a Credit Rating Agency registered with SEBI
Or
Any other criteria as specified by SEBI.
Reporting
The manager of the fund shall ensure that a specific timeframe for providing audited accounts is included as one of the terms in the subscription agreement with the investee company. AIFs shall report valuation based on audited data of investee companies to performance benchmarking agencies within 6 months. The manager shall report only after the audit of the books of accounts of the fund in accordance with the AIF Regulations.
The link for the aforesaid Circular is as follows:
58. Format for Annual Secretarial Compliance Report for InvITs and REITs
On June 26, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/102 AND SEBI/HO/DDHS-PoD-2/P/CIR/2023/103 issued Format for Annual Secretarial Compliance Report as required under Regulation 26J of SEBI (Infrastructure Investment Trusts) Regulations,2014 and Regulation 26D of SEBI (Real Estate Investment Trusts) Regulations, 2014 respectively.
This circular shall come into force with effect from the financial year 2023-24 onwards.
The Annual Secretarial Compliance Report shall be issued by the Practising Company Secretary (PCS). The investment manager of the InvIT or the manager of REIT as the case may be, on an annual basis, appoint a PCS to examine the compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder, consequent to which, the PCS shall submit a report to the investment manager of the InvIT or the manager of REIT as the case may be.
The Investment Manager? The manager shall provide all necessary information to PCS. The investment manager of the InvIT or the Manager of the REIT shall submit the Annual Secretarial Compliance Report in the format as specified in this Circular to the stock exchanges within 60 days from the end of each financial year. The Annual Secretarial Compliance Report shall also be part of the Annual Report of the InvIT/ REIT.
The link for the aforesaid Circular for InVIT is as follows:
The link for the aforesaid Circular for REIT is as follows:
59. Format of Compliance Report on Governance for REITs and InVITs
On June 26, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/101 and Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/100 for REITs and InVITs respectively issued Format for Compliance Report on Governance prescribed under Regulation 26E of (Real Estate Investment Trusts) Regulations, 2014for REITs and Regulation 26K of (Infrastructure Investment Trusts) Regulations, 2014 for InVITs.
This circular shall come into force with effect from the financial year 2023-24 onwards. Accordingly, the first report shall be made for the quarter that ended June 2023.
The Manager of REIT or Investment Manager of InVIT shall submit a quarterly Compliance Report signed by the Compliance Officer or CEO of the Manager of REIT or the Investment Manager of InVIT to the stock exchanges within 21 days from the end on the quarter. Accordingly, the formats of the Compliance Report on Governance shall be as per the following Annexures to the above-mentioned Circular:
- Annexure I – To be submitted within 21 days from the end of each quarter.
- Annexure II – To be submitted within 21 days from the end of the financial year.
- Annexure III – To be submitted within 3 months from the end of the financial year on an annual basis
The link for the aforesaid Circular for REIT is as follows:
The link for the aforesaid Circular for InVIT is as follows:
60. Disclosure of Information on Issuers Not Cooperating (INC) with Credit Rating Agencies (CRAs)
On June 27, 2023, SEBI vide Circular SEBI/HO/DDHS/DDHS-POD2/P/CIR/2023/105 prescribed a format for the CRAs to disclose the INC issuers. To boost transparency, SEBI asked CRAs to disclose lists of issuers who are non-cooperative with them. This comes after SEBI observed that the number of issuers that are non-cooperative with CRAs has increased, with a vast majority of INC issuers being unlisted and small entities. The list would be disclosed in a prescribed format and the disclosure would be updated daily. The circular came into effect from July 15, 2023. Every CRA is required to carry out periodic reviews of all published ratings during the lifetime of the securities unless the rating is withdrawn.
The link for the aforesaid Circular is as follows:
61. Manner of achieving minimum public unitholding – REITs and InVITs
On June 27, 2023, vide Circular SEBI/HO/DDHS/PoD2/P/CIR/2023/106 notified methods to unitholders of REITs and InvITs to achieve compliance with the 25% minimum public holding requirement. Any listed REIT or InvIT is mandated to achieve minimum public holding of at least 25% within 3 years from the date of listing of the units.
SEBI prescribed the following methods, if any, applicable for adoption by the Investment Manager of InVIT or REIT as the case may be:
- Issuance of units to the public through offer document;
- Offer for sale of units held by Sponsor(s)/Manager/and their associates/related parties and Sponsor Group to public through offer document;
- Offer for sale of units held by Sponsor(s)/Manager/and their associates/related parties and Sponsor Group through the Stock Exchange mechanism i.e., the secondary market;
- Rights issue to public unitholders;
- Bonus Issue to public unitholders;
- Allotment of units under Institutional placement;
- Sale of units held by Sponsor(s)/Manager/and their associates/related parties and Sponsor Group in the open market;
- Transfer of units held by Sponsor(s)/Manager/and their associates/related parties and Sponsor Group to an Exchange Traded Fund (ETF) managed by a SEBI-registered mutual fund, subject to a maximum of 5% of the paid-up unit capital of the REIT;
- Any other method as may be approved by the Board on a case-to-case basis.
The link for the aforesaid Circular for REIT is as follows:
The link for the aforesaid Circular for InVIT is as follows:
62. SEBI Board Meeting dated June 28, 2023
Decisions taken in the SEBI Board Meeting are as follows:
- The proposal for reducing the period for listing of shares in a public Issue from the existing 6 days to 3 days, from the date of issue closure (T Day). The revised timeline of T+3 days shall be made applicable in two phases i.e. voluntary for all public issues opening on or after September 01, 2023, and mandatory on or after December 01, 2023.
- The amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requiring listed entities having outstanding listed NCDs (as on December 31, 2023) to list their subsequent issuances of NCDs at the stock exchange(s). This new requirement which will come into effect from January 01, 2024, is aimed at facilitating transparency in price discovery of non-convertible debt securities; better disclosures to investors and the market, and avoiding ISIN-level confusion and possible mis-selling of unlisted bonds.
- The proposal to additionally facilitate participation by entities desiring direct participation (not through a clearing member) in repo transactions in corporate bonds of the Limited Purpose Clearing Corporation (LPCC)
- The sponsor of InvIT/ REIT is required to hold a certain minimum unitholding on a reducing scale for the entire life of the InvIT/REIT. The mandatory minimum unitholding shall be locked in and be unencumbered.
- The proposal for the introduction of a Self-Sponsored Investment Manager/Manager i.e. an Investment Manager/ Manager who also takes on the responsibilities of the Sponsor of InvIT/REIT.
- The amendments to the SEBI (Infrastructure Investment Trusts) Regulations, 2014, and SEBI (Real Estate Investment Trusts) Regulations, 2014 to provide nomination rights to unitholders holding 10% or more of the total outstanding units of the InvIT/REIT, either individually or collectively, on the board of directors of the Investment Manager/Manager. This ensures pro-rata rights to all unitholders.
- The amendment to SEBI (Foreign Portfolio Investors) Regulations, 2019, inter-alia covering to mandate enhanced disclosures from certain classes of foreign portfolio investors (FPIs), including furnishing granular level details about ownership and economic interests. The new norms will be applicable for FPIs that concentrate holdings in a single corporate group.
- Strengthening of investor grievance handling mechanism through SCORES and linking the new platform with the Online Dispute Resolution Mechanism.
- The SEBI Annual Report: 2022-23. In compliance with Section 18(2) of the SEBI Act, 1992, the Annual Report would be submitted to the Central Government.
The link for the aforesaid Press release is as follows:
https://www.sebi.gov.in/media/press-releases/jun-2023/sebi-board-meeting_73278.html
63. Master Circular for Credit Rating Agencies
On July 03, 2023, SEBI vide Circular SEBI/HO/DDHS/DDHS-POD2/P/CIR/2023/111 issued a Master Circular with respect to Credit Rating Agencies to enable the users to have access to all the applicable Circulars issued to date with respect to Credit Rating Agencies in one place. This Master Circular covers all the Circulars issued relating to Credit Rating Agencies till July 03, 2023.
The link for the aforesaid Master Circular is as follows:
64. SEBI (Issue and Listing of Non- Convertible Securities) 2nd Amendment Regulation
On July 03, 2023, SEBI vide Notification SEBI/LAD-NRO/GN/2023/135 amended the SEBI (Issue and Listing of Non- Convertible Securities) Regulations, 2021.
The Amendment briefly specifies the following:
- New Definition of Key Managerial Personnel and Senior Management is inserted, definition of Placement Memorandum is substituted and definition of Shelf Placement Memorandum and Tranche Placement Memorandum is omitted.
- The issuer making private placement of debt securities and non-convertible redeemable preference shares and seeking listing thereof on a recognized stock exchange shall make disclosures in the placement memorandum as per Schedule I (earlier Schedule II)of the regulation. The issuer shall ensure that the audited financial statements in the placement memorandum (earlier Tranche Placement memorandum was also included) shall not be older than 6 months from the date of filing the placement memorandum or the issue opening date, as applicable
- Regulation 47 relating to the filing of Shelf Placement Memorandum is Omitted
- The issuer issuing perpetual debt instruments, perpetual non-cumulative preference shares, and instruments shall make disclosures as per Schedule I (earlier Schedule II)of the regulation.
- New Chapter VA & VB introduced on Issuance and listing of Non-Convertible Securities issued on a Private Placement Basis and requirements for Large Corporates respectively
A new concept of filing a General Information Document (GID) and Key Information Document (KID) for issuance of Non-Convertible Securities on a private placement basis with Stock Exchanges is introduced. The GID shall have a validity of 1 year from the date of opening of the first offer. The issuer shall file GID and KID on a “comply or explain basis” until March 31, 2024, and thereafter on a mandatory basis.
- SEBI has prescribed a common Disclosure requirement under Schedule I for public issues and private placement of NCS. Hence, Schedule II has been omitted.
The link for the aforesaid Notification is as follows:
65. Appointment of Director nominated by the Debenture Trustee on boards of issuers
On July 04, 2023, SEBI vide Circular SEBI/HO/DDHS/POD1/P/CIR/2023/112 issued a clarification with respect to the appointment of Nominee Directors on the board of entity governed under SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
An entity registered under the Companies Act, 2013 has to ensure that a person nominated by the debenture trustee is appointed as a director. While this obligation exists for issuers that are companies under the Companies Act, of 2013, there is no similar obligation for issuers that are not companies.
Citing issues raised by the debenture trustees and the role of a nominee director, SEBI said that issuers coming under certain categories can submit an undertaking to the debenture trustees instead of nominating a director.
The link for the aforesaid Circular is as follows:
66. Amendments to guidelines for the preferential issue and institutional placement of units by a listed REIT or InVIT:
On July 05, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/114 and SEBI/HO/DDHS-PoD-2/P/CIR/2023/113 amended the guidelines issued by SEBI through Circular dated November 27, 2019, with respect to the preferential issue and institutional placement of units by a listed REITand InVIT respectively.
After receiving feedback from stakeholders, SEBI modified the Pricing method for preferential issues and institutional placement of units by listed REITs and InVITs. This Circular shall be applicable with effect from July 05, 2023.
Accordingly, institutional placement should be made at a price not lower than the average of the weekly high and low closing prices of units of the same class quoted on the stock exchange during the 2 weeks preceding the relevant date. However, the REIT/ InVIT may offer a discount of up to 5% on the calculated price, subject to approval from unitholders through a resolution.
The relevant date shall be the date of the meeting in which the board of directors of the manager decides to open the issue.
The link for the aforesaid Circular for REIT is as follows:
The link for the aforesaid Circular for InVIT is as follows:
67. Master Circular for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs)
On July 06, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/115 and SEBI/HO/DDHS-PoD-2/P/CIR/2023/116 issued Master Circular on Infrastructure Investment Trusts (InvITs) and Master Circular on Real Estate Investment Trusts (REITs) respectively to enable the stakeholders to have access to all the applicable circulars at one place, the provisions of the circulars issued till July 06, 2023.
The link for the aforesaid Master Circular for InVITs is as follows:
The link for the aforesaid Master Circular for REIT is as follows:
68. Master Circular for Debenture Trustee
On July 06, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD1/P/CIR/2023/109 issued a Master Circular for Debenture Trustees to enable the Debenture Trustees and other market stakeholders to have access to all the applicable Circulars relating to procedural/ disclosure requirements and obligations specified by SEBI issued till date in one place.
The link for the aforesaid Master Circular is as follows:
69. Role & Responsibilities of Trustees and Board of Directors of Asset Management Company (AMC) of Mutual Funds
On July 07, 2023, SEBI vide Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/117 specified the core responsibilities of the Trustees of Mutual Funds. The roles and responsibilities of the Trustees and Board of Directors are based on the recommendation of the Working Group and Mutual Fund Advisory Committee. This circular shall come into force with effect from January 01, 2024.
The Circular briefly specifies the following:
- Core responsibilities of the Trustees
- Third Party Assurances
- Constitution of Unit Holder Protection Committee
- Appointment of Chairperson of the Trustee Company
- Meetings between the Trustee Company and the AMC
The link for the aforesaid Circular is as follows:
70. Regulatory Framework for Sponsors of a Mutual Fund
On July 07, 2023, SEBI vide Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/118 issued a regulatory framework for sponsors of Mutual Funds to facilitate the fresh flow of capital into the industry, fostering innovation, encouraging competition, providing ease of consolidation and easing exit for existing sponsors. To enhance the penetration of the Mutual Fund industry, and to facilitate new types of players to act as sponsors of Mutual Funds, an alternative set of eligibility criteria is introduced vide this Circular.
The requirement of minimum net worth in liquid assets will be applicable from January 01, 2024, and other provisions of the Circular became effective from August 01, 2023.
The link for the aforesaid Circular is as follows:
71. Master Circular for Issue and listing of Non-Convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities, and Commercial Paper
On July 07, 2023, SEBI vide Circular SEBI/HO/DDHS/PoD1/P/CIR/2023/119 issued a Master Circular covering various Circulars issued by SEBI relating to the issue and listing of Non-Convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper. This Master Circular is issued for effective regulation of the corporate bond market and to enable the issuers and other market stakeholders to get access to all the applicable circulars in one place.
The link for the aforesaid Master Circular is as follows:
72. Master Circular for Compliance with provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [LODR Regulations] by listed entities
On July 11, 2023, SEBI vide Circular SEBI/HO/CFD/PoD2/CIR/P/2023/120 issued a Master Circular providing a chapter-wise framework for compliance with various obligations under the LODR Regulations. SEBI had notified the LODR Regulations which came into effect on December 1, 2015, replacing the erstwhile listing agreement regime. SEBI from time to time issued various circulars pertaining to the compliance requirements specified in the LODR Regulations. This Master Circular has been prepared to enable the users to have access to the provisions of the applicable circulars, issued till June 30, 2023, in one place.
The link for the aforesaid Master Circular is as follows:
73. Business Responsibility and Sustainability Report (BRSR) Core – Framework for assurance and ESG disclosures for value chain
On July 12, 2023, SEBI vide Circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 introduced a regulatory framework for listed entities on ESG disclosures for the value chain and assurance, as per the BRSR code. The BRSR Core is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs)/metrics under 9 ESG attributes. The BRSR Core specifies the data and approach for reporting and assurance only as a base methodology.
Top 1000 listed entities (by market capitalization) shall make disclosures as per the updated BRSR format, as part of their Annual Reports from the FY 2023 – 2024.
The Listed entities shall mandatorily undertake reasonable assurance of the BRSR Core as per the following timelines:
Financial Year | Applicability of BRSR Core to top listed entities (market capitalization) |
2023-24 | Top 150 listed Entities |
2024-25 | Top 250 listed Entities |
2025-26 | Top 500 listed Entities |
2026-27 | Top 1000 listed Entities |
The link for the aforesaid Circular is as follows:
74. Master Circular for ESG Rating Providers (“ERPs”)
ERPs are regulated under the SEBI (Credit Rating Agencies) Regulations, 1999 (“CRA Regulations”). The CRA provides the broad framework for the ERPs viz. guidelines for registration, general obligations, manner of inspection, and code of conduct applicable to ERPs.
While the CRA provides the broad framework, SEBI vide Circular No. SEBI/HO/DDHS/POD2/P/CIR/ 2023/ 121 dated July 12, 2023 (“the Master Circular”) has specified the procedural/disclosure requirements and obligations, to enable the industry and other users to have access to all the applicable directions to ERPs at one place.
All ERPs shall have the necessary systems and infrastructure in place for the implementation of this circular. The Board of Directors of the ERP shall be responsible for ensuring compliance with these provisions of the Master Circular. Monitoring of the provisions of the Master Circular shall be done in terms of the yearly internal audit for ERPs, mandated under Regulation 28S of the CRA Regulations and the Master Circular.
The link for the aforesaid Master Circular is as follows:
75. Disclosure of material events/information by listed entities under Regulations 30 and 30A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”)
SEBI vide Circular No. CIR/CFD/CMD/4/2015 dated September 9, 2015, specified the details that need to be provided while disclosing events given in Part A of Schedule III of SEBI LODR and guidance on when an event/information can be said to have occurred. On July 11, 2023, SEBI vide Circular SEBI/HO/CFD/PoD2/CIR/P/2023/120 issued a Master Circular providing a chapter-wise framework for compliance with various obligations under the LODR Regulations. The aforesaid circular dated September 09, 2015, has been made part of Section V-A of Chapter V of the said Master Circular.
To bring more transparency and to ensure timely disclosure of material events/information by listed entities, the proposal to amend LODR Regulations was deliberated by the Primary Market Advisory Committee (PMAC) of SEBI and subsequently placed for public consultation for comment. Based on the above, under approval by SEBI, amendments to the SEBI LODR were notified vide SEBI LODR Second Amendment Regulations, 2023 dated June 14, 2023.
Regulation 30 was amended and a new Regulation 30A was inserted vide the aforementioned amendment regulations.
Accordingly, SEBI vide Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023 (“the Circular”) provided for disclosure requirements under Regulations 30 and 30A as follows:
- ANNEXURE Ispecifies the details that need to be provided while disclosing events given in Part A of Schedule III (Annexure 18 to the above-mentioned Master Circular);
- ANNEXURE IIspecifies the timeline for disclosing events given in Part A of Schedule III;
- ANNEXURE IIIguides when an event/information can be said to have occurred (Annexure 19 to the Master Circular);
- ANNEXURE IVguides the criteria for the determination of the materiality of events/information.
The link for the aforesaid Circular is as follows:
76. Trading Window closure period under Clause 4 of Schedule B read with Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Extending framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level to all listed companies in a phased manner
On July 19, 2023, SEBI vide Circular No. SEBI/HO/ISD/ISD-PoD-2/P/CIR/2023/124 extended the framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at the security level to all listed companies in a phased manner.
To ensure the smooth implementation of the framework, a glide path has been prescribed by SEBI. It is provided that for the top 1,000 companies in terms of BSE Market Capitalization as of June 30, 2023 (excluding companies part of benchmark indices), the PAN freeze start date is October 1, 2023. For the next 1,000 companies in terms of BSE Market Capitalization as of June 30, 2023, and remaining companies listed on BSE, NSE & MSEI, the PAN freeze start date is January 1, 2024, and April 1, 2024, simultaneously. Further, it is prescribed that for the companies getting listed on Stock Exchanges post issuance of this circular, the PAN freeze begins from the 1st day of the 2nd quarter from the quarter in which the company gets listed. The procedure for implementation of the system is enclosed in Annexure- A to this circular and the flowchart for the same is enclosed in Annexure- B to this circular.
The link for the aforesaid Circular is as follows:
77. New category of Mutual Fund schemes for Environmental, Social, and Governance (“ESG”) Investing and related disclosures by Mutual Funds
On July 20, 2023, SEBI vide Circular SEBI/HO/IMD/IMD-I –PoD1/P/CIR/2023/125 introduced a new category of Mutual Fund Scheme for Environmental, Social, and Governance (“ESG”) Investing and related disclosures by Mutual Funds. SEBI initially permitted Mutual Funds to launch only one scheme with ESG investing under the thematic category for Equity schemes. After receiving recommendations and representation, SEBI has now allowed Mutual Funds to launch multiple ESG schemes with different strategies by Mutual Funds.
The link for the aforesaid Circular is as follows:
78. Resources for Trustees of Mutual Funds
On July 26, 2023, SEBI vide Circular SEBI/HO/IMD/IMD-I –PoD1/P/CIR/2023/126 modified the format of the Half Yearly Trustee Report.
SEBI vide Master Circular on Mutual Funds No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/74 dated May 19, 2023, prescribed that the Trustees of a Mutual Fund shall have standing arrangements with independent firms for special purpose audit and/or to seek legal advice in case of any requirement as identified and whenever considered necessary. Since the aforesaid standing arrangement with independent firms has to be available continuously, a confirmation to this effect shall be provided by Trustees in the Half Yearly Trustee Reports submitted to SEBI.
The link for the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/jul-2023/resources-for-trustees-of-mutual-funds_74381.html
79. Framework for Corporate Debt Market Development Fund (CDMDF)
Chapter III-C has been inserted vide amendments to SEBI (Alternative Investment Funds) Regulations, 2012 vide Gazette notification no. SEBI/LADNRO/GN/2023/132 dated June 15, 2023, to facilitate the constitution of an Alternative Investment Fund namely, Corporate Debt Market Development Fund (CDMDF), to act as a Backstop Facility for the purchase of investment grade corporate debt securities, to instill confidence amongst the participants in the Corporate Debt Market during times of stress and to generally enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress. CDMDF shall comply with the Guarantee Scheme for Corporate Debt (GSCD) as notified by the Ministry of Finance vide notification no. G.S.R. 559(E) dated July 26, 2023, which includes the Framework for Corporate Debt Market Development Fund. The fund shall deal only in Low-duration Government Securities, Treasury bills, Tri-party Repo on G-sec, and guaranteed corporate bond repo with maturity not exceeding 7 days. Corporate debt securities to be bought by CDMDF during market dislocation include listed money market instruments.
The link for the aforesaid Circular is as follows:
80. Mandating Legal Entity Identifier (LEI) for all non – individual Foreign Portfolio Investors (FPIs)
On July 27, 2023, SEBI vide Circular SEBI/ HO/ AFD/ AFD– PoD–2/ CIR/ P/ 2023/ 0127 mandated Legal Entity Identifier (LEI) for all non-individual Foreign Portfolio Investors (FPIs).
The Legal Entity Identifier (LEI) code is a unique global 20-character code to identify legally distinct entities that engage in financial transactions. LEI is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management in the Global Financial Crisis. RBI directions, inter alia, mandate non-individual borrowers having aggregate exposure of above Rs. 25 crores, to obtain LEI code.
All existing FPIs (including those applying for renewal) that have not already provided their LEIs to their DDPs shall do so within 180 days from the date of issuance of this circular, failing which their account shall be blocked for further purchases until LEI is provided to their DDPs.
All fresh registration, after issuance of this circular, shall be carried out upon receipt of the FPIs’ respective LEI details.
FPIs are required to ensure that their LEI is active at all times. Accounts of FPIs whose LEI code has expired/lapsed shall be blocked for further purchases in the securities market till the time the LEI code is renewed by such FPIs.
The link for the aforesaid Circular is as follows:
81. Master Circular for Alternative Investment Funds (AIFs)
To ensure an effective regulatory framework for AIFs, SEBI has been issuing various circulars from time to time. For ease of reference, SEBI vide Circular SEBI/HO/AFD/PoD1/P/CIR/2023/130 dated July 31, 2023, issued a Master Circular for AIFs. The provisions of the various circulars issued by SEBI up to March 31, 2023, which are operational as on date, have been incorporated in the Master Circular excluding the circulars providing temporary relaxations with regard to certain compliance requirements. Further, any other directions or guidance issued by SEBI, as specifically applicable to AIFs, shall continue to remain in force in addition to the provisions of the Master Circular or any other law for the time being in force.
The link for the aforesaid Circular is as follows:
82. Online Resolution of Disputes in the Indian Securities Market
On July 31, 2023, SEBI vide Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/131 announced the establishment of a common Online Dispute Resolution Portal (“ODR Portal”) which harnesses online conciliation and online arbitration for resolution of disputes arising in the Indian Securities Market.
Disputes between Investors/Clients and listed companies or any of the specified intermediaries / regulated entities in the securities market arising out of the latter’s activities in the securities market will be resolved in accordance with this circular and by harnessing online conciliation and/or online arbitration as specified in this circular. It is provided that an investor/client shall first take up his/her/their grievance with the Market Participant by complaining directly to the concerned Market Participant. If the grievance is not redressed satisfactorily, the investor/client may, by the SCORES guidelines, escalate the same through the SCORES Portal by the process laid out therein. After exhausting all available options for resolution of the grievance, if the investor/client is still not satisfied with the outcome, he/she/they can initiate dispute resolution through the ODR Portal. The provisions of this Circular will be implemented in phases.
The link for the aforesaid Circular is as follows:
83. Master Circular for Commodity Derivatives Segment
On August 04, 2023, SEBI vide Circular SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/136 issued a Master Circular with respect to the Commodity Derivatives Segment. This master circular consolidates all circulars issued by SEBI till March 31, 2023, in one place to ensure the availability of comprehensive information pertaining to the Commodity Derivatives Segment.
The link for the aforesaid Master Circular is as follows:
84. Offer for Sale framework for the sale of units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
On August 03, 2023, SEBI vide Circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/134 amended the comprehensive framework on Offer for Sale (OFS) of shares including units of REITs and InvITs through stock exchange mechanism.
SEBI modified the aforesaid framework and prescribed that OFS for the sale of units of REITs and InvITs by sponsor(s) or sponsor group entities, and other unit holders are permitted only in units of listed REITs and listed InvITs. However, in the case of OFS for listed InvITs, the trading lot shall be the same as the trading lot prescribed for such InvITs in the secondary market in terms of SEBI (Infrastructure Investment Trusts) Regulations, 2014.
The link of the aforesaid Circular is as follows:
85. Amendment on guidelines for Online Resolution of Disputes
On August 05, 2023, SEBI vide Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/135 amended the guidelines relating to Online Resolution of Disputes in the Indian market issued by it on July 31, 2023. This Circular became effective on August 05, 2023.
SEBI provided clarity on the framework concerning the online resolution of disputes in the Indian securities market. SEBI stated that an investor will have to first take up his/her grievance with the market participant by complaining directly with the concerned market participant. If the grievance is not redressed satisfactorily, the investor can escalate the same through the regulator’s SCORES portal. After exhausting these options for resolution of the grievance, if the investor is still not satisfied with the outcome, he/she can initiate dispute resolution through the Online Dispute Resolution (ODR) portal. The ODR institution that receives the complaint’s reference will appoint a sole independent and neutral conciliator from its panel of conciliators. Such a conciliator will have relevant qualifications as well as expertise and should not be linked to any disputing party.
The link for the aforesaid Circular is as follows:
86. Amendment in validity period granted to AIF/CIF for overseas investment
On August 04, 2023, SEBI vide Circular SEBI/HO/AFD/PoD/CIR/P/2023/137 reduced the validity period of approval to Alternative Investment Funds (AIFs) and Venture Capital Funds (VCFs) for overseas investment.
Based on the recommendation of the Alternative Investments Policy Advisory Committee, SEBI has reduced the validity period of approval given to AIFs and VCFs for making overseas investments to 4 months (earlier 6 months). If these funds fail to make investments within the revised time limit, then SEBI can allocate their unutilized limits to other applicant AIFs and VCs. The time limit has been reduced with an intent to utilize the allocated funds efficiently and, if unutilized, the same is again available to the AIF industry in a shorter period.
The link for the aforesaid Circular is as follows:
87. Transactions in Corporate Bonds through Request for Quote (RFQ) platform by FPIs
On August 07, 2023, SEBI vide Circular SEBI/HO/AFD/AFD-POD-2/P/CIR/2023/138 issued a clarification with respect to transactions in Corporate Bonds through Request for Quote (RFQ) platform by FPIs. To increase liquidity on the RFQ platform vis-à-vis trading in Corporate Bonds by FPIs., it is decided that FPIs shall undertake at least 10% of their total secondary market trades in Corporate Bonds by value by placing/seeking quotes on the RFQ platform of stock exchanges, every quarter.
The link for the aforesaid Circular is as follows:
88. Reduction of timeline for listing of shares in Public Issue from existing T+6 days to T+3 days
On August 09, 2023, SEBI vide a circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 reduced the timeline for listing of shares in Public Issue from existing T+6 days to T+3 days. SEBI decided to reduce the time taken for listing of specified securities after the closure of public issue to 3 working days (T+3 days) as against the present requirement of 6 working days (T+6 days). ‘T’ stands for issue closing date. Accordingly, the revised timelines for listing specified securities and various activities involved in the public issue process. Further, the T+3 timeline for listing shall be appropriately disclosed in the Offer Documents of public issues.
The provisions of this circular shall be applicable voluntarily for public issues opening on or
after September 1, 2023, and mandatory for public issues opening on or after December 1, 2023.
The link of the aforesaid Circular is as follows:
89. Timeline for the Exit Option Window Period for Change in Control of Asset Management Companies (AMCs)
On August 11, 2023, SEBI vide circular SEBI/HO/IMD/IMD-PoD-2/P/CIR/2023/142 reviewed the timeline for the exit option window period for change in control of Asset Management Companies (AMCs).
As per extant guidelines when the control of an AMC changes hands, it is considered a change in fundamental attributes of the scheme. In line with the regulations, the investors in the mutual fund schemes are given an intimation. They are also given an exit load-free window of 30 days if they do not agree with the change and are keen to redeem their investments. SEBI has reduced the exit window period to not less than 15 calendar days on prevailing Net Asset Value without any exit load, in case of a change in the control of AMC. However, in case of a change in control resulting in consolidation or merger of schemes, the unitholders are given the option to exit on the prevailing Net Asset Value (NAV) without any exit load within a period not less than 30 calendar days from the date of the communication.
The link of aforesaid Consultation Paper is as follows:
90. Mandating additional disclosures by Foreign Portfolio Investors (FPIs) that fulfill certain objective criteria
On August 24, 2023, SEBI vide circular SEBI/HO/AFD/AFD–PoD–2/CIR/P/2023/148 mandated additional disclosures to be made by FPIs.
The link of the aforesaid Circular is as follows:
91. SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2023
On August 23, 2023, SEBI vide Notification EBI/LAD-NRO/GN/2023/149 amended the existing SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by inserting a new Chapter VIA providing the framework for voluntary delisting of nonconvertible debt securities or non-convertible redeemable preference shares and obligations of the listed entity on such delisting. The said Circular shall come into force on the date of their publication in the Official Gazette.
The provisions of this Chapter VIA shall apply to the voluntary delisting of all listed nonconvertible debt securities or non-convertible redeemable preference shares from all or any of the stock exchanges where such non-convertible debt securities or nonconvertible redeemable preference shares are listed except a few mentioned in the notification.
The link of aforesaid Consultation Paper is as follows:
92. Modification in Cyber Security and Cyber Resilience framework of Stock Exchanges, Clearing Corporations and Depositories
On August 24, 2023, SEBI vide Circular SEBI/HO/MRD/TPD/P/CIR/2023/147 modified the Cyber Security and Cyber Resilience Framework of Stock Exchanges, Clearing Corporations and Depositories.
Market Infrastructure Institutions (“MIIs”) are required to communicate the status of the implementation of the provisions of this circular to SEBI within 30 days of this Circular. Earlier on July 06, 2015, SEBI had issued guidelines for the Cyber Security and Cyber Resilience Framework of Stock Exchanges, Clearing Corporations and Depositories and further amended it on May 20, 2022. In continuation of this, SEBI has further modified certain guidelines in this Circular.
The MIIs are mandated to conduct comprehensive Cyber Audit at least 2 times in an FY along with the Cyber Audit Reports. Now, MIIs are directed to submit a declaration from the MD/CEO certifying that:
- Comprehensive measures and processes including suitable incentive/disincentive structures, have been put in place for identification/detection and closure of vulnerabilities in the organization’s IT systems.
- Adequate resources have been hired for staffing their Security Operations Centre (SOC).
- There is compliance by the MII with all SEBI circulars and advisories related to cyber security.
The link for the aforesaid Circular is as follows:
93. Guidelines for MIIs regarding Cyber security and Cyber resilience
On August 29, 2023, SEBI vide Circular SEBI/HO/MRD/TPD/P/CIR/2023/146 issued guidelines for strengthening the existing cyber security and cyber resilience framework of MIIs. These guidelines should be read in conjunction with the applicable SEBI circulars and subsequent updates issued by SEBI from time to time and are placed in Annexure-A to this circular. The compliance of the guidelines shall be provided by the MIIs along with their cybersecurity audit report. The compliance shall be submitted as per the existing reporting mechanism.
The link for the aforesaid Circular is as follows:
94. New format of Abridged Prospectus for public issues of Non-Convertible Debt Securities and/or Non-convertible Redeemable Preference Shares
On September 04, 2023, SEBI vide Circular SEBI/HO/DDHS/PoD1/CIR/P/2023/150, revised the format for disclosures in the abridged prospectus for public issues of non-convertible debt securities and/or non-convertible redeemable preference Shares.
To further simplify, provide greater clarity and consistency in the disclosures across various documents, and to provide additional but critical information in the abridged Prospectus, the format for disclosures in the abridged Prospectus has been revised for public issues of Non-Convertible Debt Securities and/or Non-convertible Redeemable Preference Shares and is placed at Annex-I of this Circular. Further, instructions to investors for completing the application form are specified in Annex II.
For public issues that open on or after October 1, 2023, the format of an Abridged Prospectus shall be as per Annex-I of this Circular instead of Part B of Schedule I of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 Regulations. Further, it is prescribed that the issuer/ Merchant Bankers shall insert a Quick Response (QR) code on the last on the last page of the Abridged Prospectus. The scan of such a QR code on the Abridged prospectus would lead to the Prospectus.
The link for the aforesaid Circular is as follows:
95. Change in Mode of Payment w.r.t. SEBI Investor Protection and Education Fund Bank A/c
On September 04, 2023, SEBI vide Circular SEBI/HO/GSD/TAD/P/CIR/2023/149, amended the mode of payment concerning SEBI Investor Protection and Education Fund Bank Account (SEBI IPEF). SEBI had earlier prescribed that the amounts shall be credited to SEBI IPEF through online mode or a demand draft drawn in favor of SEBI IPEF. Vide this circular, SEBI has modified the mode of payment. Henceforth, remittances to the SEBI IPEF shall be made only through the link specified at the SEBI website (www.sebi.gov.in) under the head “Click here to pay SEBI IPEF”. The link enables the remitter to make payment in any of the following manner: –
- Net banking
- NEFT/RTGS
- Debit Cards
- UPI
While making the remittances online, through the above link, remitters shall furnish the requisite information like the name of the payer, PAN, mobile number, email ID, the purpose for which payment is made, the amount to be paid, etc.
The link of the aforesaid Circular is as follows:
96. Mechanism for Sharing of Information by Credit Rating Agencies (CRAs) to Debenture Trustees (DTs)
On September 04, 2023, SEBI vide Circular SEBI/HO/DDHS/DDHS-POD2/P/CIR/2023/151, issued a mechanism for sharing information by Credit Rating Agencies (CRAs) to Debenture Trustees (DTs). CRAs shall report on their compliance with this circular to SEBI within one quarter from the date of applicability of this circular.
SEBI (Credit Rating Agencies) Regulations, 1999 (“CRA Regulations”) and circulars issued thereunder require the sharing of certain information from CRAs to Debenture Trustees (DTs). Due to the large quantum of information submitted daily by CRAs to DTs, as well as the short timelines mandated for disclosure of this information by DTs, the data shared by CRAs must be structured and submitted in a specified format for easier accessibility and analysis of the submitted data. Accordingly, an Excel template is placed as an Annexure to this Circular. CRAs shall use the same template for their daily submissions of rating revisions to DTs.
The link of the aforesaid Circular is as follows:
97. Clarification regarding investment of Mutual Fund schemes in units of Corporate Debt Market Development Fund
On September 06, 2023, SEBI vide Circular SEBI/HO/IMD/PoD2/P/CIR/2023/152, issued a clarification concerning the investment of Mutual Fund schemes in units of Corporate Debt Market Development Fund (CDMDF). The Association of Mutual Funds in India (AMFI) requested that for the calculation of asset allocation limits, the base should be considered as a net asset excluding investment in units of CDMDF. SEBI therefore clarified that for the calculation of asset allocation limits of mutual fund schemes in terms of the Master Circular for Mutual Funds dated May 19, 2023, investment in units of CDMDF shall be excluded from the base of net assets.
The link of the aforesaid Circular is as follows:
98. Board nomination rights to unitholders of Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs)
On September 11, 2023, SEBI vide Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/153 and Circular SEBI/HO/DDHS-PoD-2/P/CIR/2023/154 for InVITs and REITs respectively, issued a framework for Eligible Unitholder(s) of InvITs and REITs to exercise board nomination rights.
The eligibility of the unitholders will be decided based on the unitholding pattern as on September 30, 2023. In two circulars issued on September 11, 2023, the SEBI detailed the framework and asked the investment managers to inform the unitholders about the same within 10 days from September 30, 2023, and to request unitholders to send in their nominations if they wish to exercise this right. The eligibility of the nominee director will be confirmed by the investment manager, based on the evaluation done by the Nomination and Remuneration Committee and/or the Board of Directors of
the investment manager in line with the policy formulated for this and within 10 days of receipt of notice from eligible unitholders.
The link of the aforesaid Circular for InVIT is as follows:
The link of the aforesaid Circular for REIT is as follows:
99. Regulatory Reporting by Alternative Investment Funds (AIFs)
On September 11, 2023, SEBI vide Circular SEBI/HO/AFD/SEC-1/P/CIR/2023/0155 revised reporting format by AIFs. SEBI revised the quarterly reporting format for AIFs in consultation with industry associations. The goal is to establish uniform compliance standards, simplify compliance reporting, and support regulatory and developmental objectives.
AIFs will be required to submit quarterly reports online through the SEBI Intermediary Portal (SI Portal) within 15 calendar days from the end of each quarter as per the revised format. The reporting format will be periodically reviewed by the association or an AIF Standard Setting Forum in consultation with SEBI. Any revisions to the format will be published on association websites at least 1 month before the end of the quarter.
The link of the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/sep-2023/regulatory-reporting-by-aifs_76908.html
100. SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2023 (SEBI (LODR) (Fourth Amendment) Regulations, 2023)
On September 19, 2023, SEBI vide Notification No. SEBI/LAD-NRO/GN/2023/151 notified the SEBI (LODR) (Fourth Amendment) Regulations, 2023 (“Amendment Regulations”), and amended the SEBI (LODR) Regulations, 2015 (“the Regulations”).
A new Regulation 62A is inserted which provides for the listing of subsequent issuances of non-convertible debt securities (NCDs) by listed entities whose NCDs are listed
No listed entity shall be required to list the following securities:
- Bonds issued under section 54EC of the Income Tax Act, 1961;
- NCDs issued under an agreement entered into between the listed entity of such securities and multilateral institutions;
- NCDs issued under an order of any court or Tribunal or regulatory requirement as stipulated by a financial sector regulator namely, the Board, Reserve Bank of India, Insurance Regulatory and Development Authority of India, or the Pension Fund and Regulatory Development Authority.
The link of the aforesaid Circular is as follows:
101. Redressal of investor grievances through the SEBI Complaint Redressal (SCORES) Platform and linking it to the Online Dispute Resolution platform
On September 20, 2023, SEBI Vide Circular SEBI/HO/OIAE/IGRD/CIR/P/2023/156, issued a Revised Framework for handling and monitoring complaints received through the SCORES platform.
The Revised Framework requires the entities who receive complaints from investors on SCORES, to resolve the complaint and submit an Action Taken Report (ATR) on SCORES within 21 calendar days of receipt of such complaint. The Complaint shall also be simultaneously forwarded to the concerned Designated Bodies who are responsible for ensuring of submission of ATR by the entities. The Revised Framework for handling and monitoring the complaints received through the SCORES platform is specified in the Annexure of this circular. A List of Designated Bodies has been specified in this circular.
The link of the aforesaid Circular is as follows:
102. SEBI Board Meeting dated September 21, 2023
The following decisions were taken in the said Board Meeting:
Flexibility in the framework for Large Corporates (LCs) for meeting incremental financing needs through the issuance of debt securities
Streamlining the Framework for credit of unclaimed amounts of investors in listed entities other than companies, REITS, and InvITs to the Investor Protection and Education Fund (IPEF) and process of refund from the IPEF
SEBI extends timeline for compliance with enhanced qualification and experience requirements for Investment Advisers
The link to the Press above Release is as follows:
103. Extension of timelines (i) for nomination in eligible demat accounts and (ii) for submission of PAN, Nomination, and KYC details by physical security holders; and voluntary nomination for trading accounts
On September 26, 2023, SEBI vide Circular SEBI/HO/MIRSD/POD-1/P/CIR/2023/158 extended the timeline for the nomination of eligible demat accounts, submission of details by physical security holders and voluntary nomination for trading accounts.
For trading and demat accounts
SEBI, vide Circular SEBI/HO/MIRSD/RTAMB/CIR/P/2021/601 dated July 23, 2021, stated that trading accounts and demat accounts which do not have ‘choice of nomination’ shall be frozen by September 30, 2023. Based on the representations received from various other stakeholders, the following has been decided:
Submission of ‘choice of nomination’ for trading accounts has been made voluntary as a step towards ease of doing business;
With respect to demat accounts, it has been decided to extend the last date for submission of ‘choice of nomination’ to December 31, 2023.
For physical security holders
With respect to physical securities, SEBI, vide circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 dated March 16, 2023, stated that the folios of physical security holders shall be frozen if PAN, Nomination, Contact details, Bank A/c details, and Specimen signature are not submitted by the holders by September 30, 2023.
Based on the representations received from investors, the Registrars Association of India, and various other stakeholders, it has been decided to extend the last date for submission of PAN, Nomination, Contact details, Bank A/c details, and Specimen signature for their corresponding folio numbers to December 31, 2023.
The link of the aforesaid Circular is as follows:
104. Master Circular for Merchant Bankers Registered with SEBI
On September 26, 2023, SEBI vide Circular SEBI/HO/MIRSD/POD-1/P/CIR/2023/158 issued a Master Circular for Merchant Bankers registered with SEBI. To enable the stakeholders to have access to all circulars with respect to Merchant Bankers in one place, a Master Circular has been prepared by SEBI. With the issuance of this Master Circular, all directions/instructions contained in the circulars listed in the Appendix to this Master Circular shall stand rescinded to the extent they relate to the Merchant Bankers.
The link of the aforesaid Circular is as follows:
105. Nomination for Mutual Fund Unit Holders – Extension of timelines
Earlier SEBI vide its circular dated June 15, 2022, read with circulars dated July 29, 2022, and March 28, 2023, had prescribed the requirement for nomination/ opting out of nomination for all the existing individual unit holder(s) holding mutual fund units either solely or jointly, by September 30, 2023, failing which the folios shall be frozen for debits. However, basis the representations received from the market participants, SEBI on September 27, 2023, vide Circular SEBI/HO/IMD/IMD-I POD1/P/CIR/2023/160, extended the effective date of provision for freezing of folios from September 30, 2023 to January 01, 2024.
AMCs and RTAs shall encourage the unit holder(s) to fulfill the requirement for nomination/ opting out of nomination by sending a communication on a fortnightly basis by way of emails and SMS to all such unit holder(s) who are not in compliance with the requirement of nomination. The communication shall provide guidance by which the unit holder(s) can provide nomination or opt out of nomination.
The link of the aforesaid Circular is as follows:
106. Centralized mechanism for reporting the demise of an investor through KRAs
On October 03, 2023, SEBI vide Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163, introduced a centralized mechanism for reporting and verification in case of the demise of an investor and thereby smoothen the process of transmission in the securities market. This circular spells out the operational norms including the obligations of regulated entities, including registered intermediaries that have an interface with ‘investors’ / ‘account holders’ who are natural persons. Listed companies wanting to provide beneficial access to the centralized mechanism to their investors holding securities in physical form are eligible to establish connectivity with KYC Registration Agencies (KRAs) through their RTAs.
The link for the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/centralized-mechanism-for-reporting-the-demise-of-an-investor-through-kras_77534.html
107. Limited relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
On October 06, 2023, SEBI vide Circular SEBI/HO/DDHS/P/CIR/ 2023/0164 granted a limited relaxation on Regulation 58(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stating that the listed entity shall send a hard copy of the statement containing the salient features of all the documents, as specified in Section 136 of Companies Act, 2013 and rules made thereunder to those holders of non-convertible securities who have not so registered. SEBI has relaxed the requirements of regulation 58 (1)(b) of the SEBI Listing Regulations up to September 30, 2024.
The link for the aforesaid circular is as follows:
108. Master Circular for Depositories
On October 06, 2023, SEBI vide Circular SEBI/HO/MRD-Pod-2/P/CIR/2023/166 issued a Master Circular for Depositories. To enable the users to have access to all the applicable circulars/directions pertaining to depositories in one place, the Master Circular for Depositories has been prepared by SEBI. This Master Circular covers the relevant circulars/communications pertaining to depositories issued by SEBI up to August 31, 2023.
The link of the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/master-circulars/oct-2023/master-circular-for-depositories_77789.html
109. Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
On October 07, 2023, SEBI vide Circular SEBI/HO/CFD/CFD-PoD-2/P/CIR/2023/167, extended the relaxation on the applicability of regulation 36(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015 for Annual General Meetings (AGMs) and regulation 44(4) of the LODR Regulations for general meetings (in electronic mode) held till September 30, 2024. Earlier, the SEBI Master Circular dated July 11, 2023, on compliance with the provisions of the LODR Regulations, 2015 by listed entities inter-alia relaxed the applicability of regulations 36(1)(b) and 44(4) of the LODR Regulations till September 30, 2023 (section VI-J of the Master Circular).
The link for the aforesaid circular is as follows:
110. Extension in the timeline for compliance with qualification and experience requirements under Regulation 7(1) of SEBI (Investment Advisers) Regulations, 2013
On October 10, 2023, SEBI vide Circular SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/168 extended the timeline for compliance with qualification and experience requirements under Regulation 7(1) of SEBI (Investment Advisers) Regulations, 2013
Regulation 7 of SEBI (Investment Advisers) Regulations, 2013, as amended vide SEBI (Investment Advisers) (Amendment) Regulations, 2020, specifies the qualification and experience requirements for investment advisers and provides that an individual investment adviser or principal officer of a non-individual investment adviser registered under these regulations and persons associated with investment advice shall comply with the enhanced qualification and experience requirements within 3 years, i.e., by September 30, 2023. Accordingly, it is now specified that the timeline to comply with the enhanced qualification and experience requirements under regulation 7(1) is extended to September 30, 2025.
The link of the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/extension-in-timeline-for-compliance-with-qualification-and-experience-requirements-under-regulation-7-1-of-sebi-investment-advisers-regulations-2013_77901.html
111. Master Circular on Know Your Client (KYC) norms for the securities market
On October 12, 2023, SEBI vide Circular SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 issued a Master Circular on Know Your Client (KYC) norms to be followed by intermediaries in the securities market to enable the users to have access to all the applicable circulars/directions at one place. This Master Circular is a compilation of the circulars/directions issued by SEBI up to September 30, 2023, on Know Your Client (KYC) norms for the securities market includes certain modifications to align such circulars/directions with the provisions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and the Securities and Exchange Board of India [KYC (Know Your Client) Registration Agency] Regulations, 2011.
The link of the aforesaid Circular is as follows:
112. Ease of doing business and development of corporate bond markets – revision in the framework for fundraising by issuance of debt securities by large corporates (LCs)
On October 19, 2023, SEBI vide circular SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 revised framework for fundraising by the issuance of debt securities by large corporates (LCs).
This framework is applicable with effect from April 01, 2024, for LCs following April – March as their financial year. This framework is applicable with effect from January 01, 2024, for LCs which follow January – December as their financial year. The framework shall be applicable for all listed entities (except for Scheduled Commercial Banks)
LCs are required to comply with the following provisions:
- LCs are obligated to raise at least 25% of their “qualified borrowings” by issuing debt securities in the following financial years.
- From FY 2025, LCs must fulfill the mandatory qualified borrowing rule continuously for three years, starting from March 31 (FY “T-1”) for April-March financial years, and December 31 (FY “T-1”) for January-December financial years.
- Incentives and disincentives are applied based on an LC’s borrowing performance
- If an LC surpasses the 25% borrowing condition over the three-year block, it qualifies for benefits including lower annual listing fees and reduced contribution to the Core Settlement Guarantee Fund (SGF) of Limited Purpose Clearing Corporations (LPCC).
- If an LC fails to meet the 25% borrowing requirement, it faces a disincentive in the form of an additional contribution to the core SGF.
- Stock Exchanges will play a crucial role in identifying LCs and calculating incentives or disincentives. They will notify LCs and facilitate the implementation of these provisions. LPCC will need to make necessary changes and ensure LCs comply with the requirements related to contribution to the core SGF.
- LCs that were identified based on previous criteria and meet the new criteria have the flexibility to comply with the 25% borrowing requirement over three years, starting from FY 2022.
The link for the aforesaid circular is as follows: –
113. Guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR) of Qualified RTAs (QRTAs)
SEBI in consultation with its Technical Advisory Committee (TAC), on October 20, 2023, vide Circular No. SEBI/HO/IMD/IMD-TPD-1/P/CIR/2023/173 issued new guidelines for strengthening overall resiliency, the procedures at / governance of QRTAs for handling disruption, augmentation of systems and practices to achieve better Recovery Time Objective (“RTO”) and Recovery Point Objective (“RPO”), and to improve overall preparedness by conducting periodic announced / unannounced drills.
The link of the aforesaid Circular is as follows:
114. Revision in the manner of achieving minimum public unitholding requirement – Infrastructure Investment Trusts (InvITs)
On October 31, 2023, SEBI vide Circular No. SEBI/HO/DDHS-PoD-2/P/CIR/2023/174 provided an additional method (given below) to achieve minimum public unitholding requirements by privately placed InvITs.
S. No. | Method | Specific Conditions, if any, applicable |
10. | Issuance of units through preferential allotment | Only units issued to the public shall be considered for compliance with the minimum unitholding requirement |
The link of the aforesaid Circular is as follows:
115. Informal Guidance with respect to the disclosure of material events/ information
Query 1: With reference to Point No. 8 of Para B of Part A of Schedule III of the LODR Regulations, whether details of arbitral proceedings of pending arbitration matters or arbitral awards can be disclosed to SEBI as it may contravene Section 42A of Arbitration and Conciliation Act, 1996?
Response: The disclosure of the details of arbitral proceedings or arbitral awards can be made to the extent it is legally permissible under the Arbitration and Conciliation Act, 1996 which would inter-alia include disclosure of the fact of initiation of arbitration proceedings, amount of claim involved in such proceedings, fact of passing of arbitral award and its effect on the listed entity, fact of termination of the arbitration proceedings, court orders about the arbitration proceedings etc.
Query 2: With reference to the above provision, in the SEBI Circular, what does ‘cumulative basis’ mean. Whether it includes:
In case there are multiple litigations/ cases with the same party, whether the claims by/ against the said party in all such multiple litigations/ cases to be taken together for arriving at the cumulative figure (deciding materiality)?
In any single litigation/ case, whether claim by the listed entity and a counter-claim against the listed entity need to be added together, to arrive at the cumulative figure (deciding materiality)?
Response: It is clarified that the cumulative figure is to be arrived at by taking together the claims by/ against a party in all ongoing litigations or disputes with the same party. However, the claim by the listed entity and a counter-claim against the listed entity in any single litigation/ case may not be added together or set off to arrive at the aforesaid cumulative figure.
The link for the aforesaid Informal Guidance is as follows:
https://www.sebi.gov.in/sebi_data/commondocs/oct-2023/Gail_India_Ltd_CFD_AL_p.pdf
116. Simplification and streamlining of Offer Documents of Mutual Fund Schemes
SEBI in consultation with the Association of Mutual Funds in India (“AMFI”), to enhance the ease of preparation of the Scheme Information Document by mutual funds and increase its readability for investors, undertook an exercise to revamp the format of the SID. Accordingly, on November 01, 2023, SEBI vide Circular No. SEBI/HO/IMD/IMD-RAC-2/P/CIR/2023/000175 (“the Circular”) based on the suggestions of AMFI and the recommendations of the Mutual Fund Advisory Committee, simplified and rationalized the format of SID. The revised format, detailed in Annexure A of this Circular, aims to streamline the dissemination of relevant information to investors and facilitate periodic updates by mutual funds.
Applicability:
The revised format for SID, Key Information Memorandum (“KIM”), and Statement of Additional Information (“SAI”) shall be adopted as follows:
- Updated format for SID/KIM/SAI to be implemented w.e.f. April 01, 2024.
- Draft SIDs to be filed with SEBI on or before March 31, 2024, or SIDs already filed with SEBI (final observations yet to be issued) or SIDs for which the final observations have already been received from SEBI (if launched on or before March 31, 2024), can use the old format of SID, provided that the SIDs are updated as per the timeline mentioned at (c) below.
- For Existing SIDs – by April 30, 2024, with data as of March 31, 2024.
The link for the Circular mentioned above is as follows:
117. Procedural framework for dealing with unclaimed amounts lying with entities having listed non-convertible securities and manner of claiming such amounts by investors
In view to standardize the process to be followed by a listed entity for the transfer of amount to Escrow Account and by the investors for making claims thereof, to define the manner of handling the unclaimed amounts lying in the Escrow Accounts of the listed entities which are not companies, transfer of such amounts to the IPEF and claim thereof by the investors, SEBI on November 08, 2023, vide Circular No. SEBI/HO/DDHS/DDHS-RAC-1/P/CIR/2023/176 (“the Circular”) introduced the following frameworks as Annexures A & B to the circular as below:
- Annex-A – Framework for transfer of unclaimed amounts by the listed entities to Escrow Accounts and claim thereof by investors;
- Annex-B – Framework for transfer of unclaimed amounts from the Escrow Account of the listed entity (which are not companies) to IPEF and claim thereof by the investors.
The Circular further mandates the following:
- Listed entities having unclaimed amounts in the Escrow Account for less than 7 years, as on February 29, 2024, shall start computing interest, as per provisions of Annex – A, from March 1, 2024.
- Listed entities (which are not companies) and have unclaimed amounts in the Escrow Account for more than 7 years, as on February 29, 2024, shall transfer the unclaimed amounts of the investors to IPEF, in compliance with the provisions of Annex – B, on or before March 31, 2024.
The link for the Circular mentioned above is as follows:
118. Procedural framework for dealing with unclaimed amounts lying with Real Estate Investment Trusts (REIT) and manner of claiming such amounts by unitholders
On November 08, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-RAC-1/P/CIR/2023/177 (“the Circular”), provided a framework defining the procedure to be followed by a REIT for transfer of unclaimed amounts, initially to an Escrow Account and subsequently, to the IPEF and claim thereof by a unitholder, as Annexure – A to the Circular. Further, the Circular mandates that REITs having unclaimed amounts for less than 7 years, as on February 29, 2024, start computing interest, as per provisions of Part I of Annexure – A to the Circular, from March 1, 2024. For REITs holding unclaimed amounts for more than 7 years, as on February 29, 2024, shall transfer the unclaimed amounts of the unitholders to IPEF, in compliance with the provisions of Part II of Annexure – A to the Circular, on or before March 31, 2024. The provisions of the Circular shall come into effect from March 01, 2024.
The link for the Circular mentioned above is as follows:
119. Procedural framework for dealing with unclaimed amounts lying with Infrastructure Investment Trusts (InvITs) and manner of claiming such amounts by unitholders
On November 08, 2023, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-RAC-1/P/CIR/2023/178 (“the Circular”), has provided a framework defining the procedure to be followed by an InvIT for transfer of unclaimed amounts, initially to an Escrow Account and subsequently, to the IPEF and claim thereof by a unitholder, as Annexure – A to the Circular. Further, the Circular mandates that InvITs having unclaimed amounts for less than 7 years, as on February 29, 2024, start computing interest, as per provisions of Part I of Annexure – A to the Circular, from March 1, 2024. For InvITs which shall be holding unclaimed amounts for more than 7 years, as on February 29, 2024, shall transfer the unclaimed amounts of the unitholders to IPEF, in compliance with the provisions of Part II of Annexure – A to the Circular, on or before March 31, 2024. The provisions of the Circular shall come into effect from March 01, 2024
The link for the Circular mentioned above is as follows:
120. Simplified norms for processing investor service requests by RTAs and norms for furnishing PAN, KYC details, and Nomination
SEBI, vide circular no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 dated March 16, 2023 (now rescinded due to issuance of Master Circular for Registrars to an Issue and Share Transfer Agents dated May 17, 2023) simplified norms for processing investor’s service request by RTAs and for furnishing PAN, KYC details and Nomination. Based on representations received from the Registrars’ Association of India, feedback from investors, and to mitigate unintended challenges on account of freezing of folios and referring frozen folios to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and Prevention of Money Laundering Act, 2002, it has been decided to do away with the above provisions.
Accordingly, on November 17, 2023, vide Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2023/181 (“the Circular”) Para 9 of Section V of the Master Circular for Registrars to an Issue and Share Transfer Agents dated May 17, 2023, has been amended as follows:
- Reference to the term ‘freezing/ frozen’ has been deleted;
- Referral of folios by the RTA/listed company to the administering authority under the Benami Transactions (Prohibitions) Act, 1988, and Prevention of Money Laundering Act, 2002, has been done away with.
Para 19 of Section V of the Master Circular inter-alia, provides for the freezing of folios without PAN, KYC details, and Nomination and referral of frozen folios to the administering authority under the Benami Transactions (Prohibitions) Act, 1988, and/or Prevention of Money Laundering Act, 2002, if they continue to remain frozen as on December 31, 2025.
The link for the Circular mentioned above is as follows:
121. SEBI Board Meeting dated November 25, 2023
Following decisions were taken by the Board:
- Flexibility in the framework for the Social Stock Exchange (SSE) to provide impetus to fundraising by Not-for-Profit Organizations (NPOs) on the SSE.
- Introduction of Regulatory Framework for Index Providers to foster transparency and accountability in the governance and administration of financial benchmarks in the securities market.
- Facilitation of Small & Medium REITs (“SM REITs”) – Amendments to SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) for the creation of a new regulatory framework
- Amendment to SEBI (Alternative Investment Funds) Regulations, 2012, to facilitate ease of compliance and strengthen protection of interest of investors in Alternative Investment Funds
The link for the aforesaid Press Release is as follows:
122. Extension of timeline for implementation of provisions of circular SEBI/HO/OIAE/IGRD/CIR/P/2023/156 dated September 20, 2023, on Redressal of investor grievances through the SEBI Complaint Redressal (SCORES) Platform and linking it to Online Dispute Resolution platform
SEBI vide circular dated September 20, 2023 (“the Circular”), issued a Revised Framework for handling and monitoring complaints received through the SCORES platform. To strengthen the existing investor grievance handling mechanism through SCORES by making the entire redressal process of grievances in the securities market comprehensive by providing a solution that makes the process more efficient by reducing timelines and by introducing auto-routing and auto-escalation of complaints, SEBI notified the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023. The Revised Framework requires the entities who receive complaints from investors on SCORES, to resolve the complaint and submit an Action Taken Report (ATR) on SCORES within 21 calendar days of receipt of such complaint. The Complaint shall also be simultaneously forwarded to the concerned Designated Bodies who are responsible for ensuring of submission of ATR by the entities. The provisions of the Circular were required to come into force with effect from December 04, 2023. However, SEBI on December 01, 2023, vide Circular No. SEBI/HO/OIAE/IGRD/CIR/P/2023/183 has extended the effective date of the said provisions to April 01, 2024. However, the entities shall continue to submit the Action Taken Report (“ATR”) on SCORES within 21 calendar days from the date of receipt of the complaint.
The link of the aforesaid Circular is as follows:
123. Revised framework for computation of Net Distributable Cash Flow (NDCF) by Real Estate Investment Trusts (REITs)
To promote Ease of Doing Business, SEBI on December 06, 2023, vide Circular No. SEBI/HO/DDHS/DDHS-PoD/P/CIR/2023/185 (“the Circular”) has decided to standardize the framework for the calculation of available Net Distributable Cash Flows. Accordingly, the revised standardized framework for computation of NDCF by REITs and its Holdcos/SPVs shall be as per Annexure A to the Circular. The revised calculation framework shall supersede the calculation framework provided in Paragraph F of Chapter 3 of the Master Circular and shall be applicable from April 01, 2024.
The link of the aforesaid Circular is as follows:
124. Revised framework for computation of Net Distributable Cash Flow (NDCF) by Infrastructure Investment Trusts (InvITs)
To promote Ease of Doing Business, SEBI on December 06, 2023, vide Circular No. SEBI/HO/DDHS/DDHS-PoD/P/CIR/2023/184 (“the Circular”) has decided to standardize the framework for the calculation of available Net Distributable Cash Flows. Accordingly, the revised standardized framework for computation of NDCF by InvITs and its Holdcos/SPVs shall be as per Annexure A to the Circular. The revised calculation framework shall supersede the calculation framework provided in Paragraph F of Chapter 3 of the Master Circular and shall be applicable from April 01, 2024.
The link of the aforesaid Circular is as follows:
125. Credit of units of AIFs in dematerialised form
On December 11, 2023, SEBI vide Circular No. SEBI/HO/AFD/PoD1/CIR/2023/186 specified the process to be followed for dematerialising/ crediting the units issued, in cases where investors are yet to provide demat account details to AIFs. AIFs to open an “Aggregate Escrow Demat Account” (AEDA) to credit AIF units in cases where investors onboarded either before November 01, 2023/May 01, 2024 have not provided demat details. This account shall be used for the sole purpose of holding demat units of AIFs on behalf of such investors. New units to be issued in demat form shall be allotted to such investors and credited to the AEDA. As and when such investors provide their demat account details to the AIF, their units held in AEDA shall be transferred to the respective investors’ demat accounts within 5 working days.
Accordingly, the following is clarified with respect to the issuance and credit of units of AIFs in demat form:
Details | Schemes with corpus ≥ INR 500 crore as on Oct 31, 2023 | Schemes with corpus < INR 500 crore as on Oct 31, 2023, and schemes launched after Oct 31, 2023, irrespective of corpus |
Investors who have provided their demat account details | Units issued after Oct 31, 2023, shall be in demat form and credited only to investors’ demat accounts. | Units issued after Apr 30, 2024, shall be in demat form and credited only to investors’ demat accounts. |
Investors who have not provided their demat account details | For investors on-boarded prior to Nov 01, 2023, units shall be credited in Aggregate Escrow Demat Account temporarily, till investors provide their demat account details. | For investors on-boarded prior to May 01, 2024, units shall be credited in Aggregate Escrow Demat Account temporarily, till investors provide their demat account details. |
Completion of credit of demat units to a) demat accounts of investors who have provided demat account details and
b) Aggregate Escrow Demat Account, for those who have not provided demat account details | Latest by Jan 31, 2024 | Latest by May 10, 2024 |
The link of the aforesaid Circular is as follows:
126. Upstreaming of clients’ funds by Stock Brokers (SBs)/Clearing Members (CMs) to Clearing Corporations (CCs)
To safeguard clients’ funds lying with Stock Brokers (SBs) / Clearing Members (CMs), SEBI vide circulars issued in June, specified the framework requiring SB/CMs to place clients’ funds with Clearing Corporations (CCs) also called upstreaming. On December 12, 2023, SEBI vide Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/187 (“the Circular”) revised the framework for upstreaming.
SBs/CMs to upstream all the clients’ clear credit balances to CCs on an end-of-day (EOD) basis. Such upstreaming of clients funds to be done only in the form of either cash, lien on Fixed Deposit Receipts (FDRs) created out of clients’ funds, or pledge of units of Mutual Fund Overnight Schemes (MFOS) created out of clients’ funds.
The link of the aforesaid Circular is as follows:
127. Simplification of requirements for grant of accreditation to investors
To provide flexibility and facilitate ease of accreditation of investors, SEBI on December 18, 2023, vide Circular No. SEBI/HO/AFD/PoD1/CIR/2023/ 189 (“the Circular”) simplified the requirements for the grant of accreditation to investors as under:
- Accreditation Agencies, which are also KYC Registration Agencies (KRAs), may access Know Your Customer (KYC) documents of applicants available with them in the capacity of KRA and may also access the same from the database of other KRAs, for accreditation;
- The Accreditation agencies shall grant accreditation solely based on the KYC and the financial information of the applicants;
- The accreditation certificate issued by accreditation agencies shall include the disclaimer stating the assessment of the applicant for accreditation is solely based on the applicant’s KYC and financial information and does not in any manner exempt market intermediaries and pooled investment vehicles from carrying out necessary due diligence of the accredited investors at the time of onboarding them as their clients.
Accordingly, Annexure A (‘Modalities of accreditation’) and Annexure B (‘List of documents to be submitted by the applicant for accreditation’) to SEBI Circular dated August 26, 2021, have been revised and are given in Annexure 1 and Annexure 2 of the Circular respectively.
The link of the aforesaid Circular is as follows:
128. Amendment to Circular dated July 31, 2023, on Online Resolution of Disputes in the Indian Securities Market
SEBI vide circular dated July 31, 2023, provided guidelines Online Dispute Resolution Portal (“ODR Portal”) which harnesses online conciliation and online arbitration for the resolution of disputes arising in the Indian Securities Market. Pursuant to feedback received for providing clarity on certain aspects, SEBI on December 20, 2023, vide Circular No. SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2023/191 (“the Circular”) amended the Circular dated July 31, 2023, which inter-alia provides for the following:
Methodology for initiating claims against the Government of India / President of India or a State Government / Governor of a State;
Within 10 days of an investor initiating online arbitration, the market participant is to deposit 100% of the admissible claim value with the relevant market infrastructure institution (MII) and pay the applicable fees for online arbitration.
If market participants choose online arbitration, they must inform the Online Dispute Resolution (ODR) institution within 10 days of concluding the conciliation process.
SEBI has also adjusted the fee slab for arbitration processes above Rs 50 lakh to ‘Above Rs 50 lakh-Rs 1 crore’ and an ad-valorem fee @ 1% of the claim value or Rs. 1,20,000/- whichever is more has been prescribed for claims of Rs. 1 crore and above.
The link for the aforesaid Circular is as follows: –
129. Amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015
On December 21, 2023, SEBI vide notifications No. SEBI/LAD-NRO/GN/2023/162 and No. SEBI/LAD-NRO/GN/2023/161 replaced the term ‘Social Audit’ with ‘Social Impact Assessment’ in the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 respectively. The requirement for audit of the annual impact report of a Social Enterprise registered on the Social Stock Exchange or which has raised funds through the Stock Exchange, is substituted with the assessment by a Social Impact Assessment Firm employing Social Impact Assessor.
The link for the aforesaid Notification for SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 is as follows: –
https://egazette.gov.in/(S(ct1khtvw510ld2ocy3dodnpo))/ViewPDF.aspx
The link for the aforesaid Notification for SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 is as follows: –
https://egazette.gov.in/(S(ct1khtvw510ld2ocy3dodnpo))/ViewPDF.aspx
130. Extension of timelines for providing ‘choice of nomination’ in eligible demat accounts and mutual fund folios
SEBI vide Master Circulars dated May 19, 2023 and October 06, 2023 for Mutual Funds and Depositories respectively, inter-alia prescribed that the Depository Participants, Asset Management Companies and Registrar & Transfer Agents are required to encourage the demat account holders/ mutual fund unit holders to fulfil the requirement for nomination/opting out of nomination by sending a communication on fortnightly basis by way of emails and SMS to all such demat account holders/ mutual fund unit holders who are not in compliance with the requirement of nomination. The communication shall provide guidance to provide nomination or opting out of nomination.
SEBI, on the basis representations received from the market participants, for ease of compliance and investor convenience, has on December 27, 2023 vide Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2023/19 decided to extend the last date for submission of ‘choice of nomination’ for demat accounts and mutual fund folios to June 30, 2024.
The link for the aforesaid Circular is as follows:
131. Framework on Social Stock Exchange (“SSE”)
SEBI vide its Circular dated September 19, 2022, notified the detailed framework on Social Stock Exchange. Further, SEBI pursuant to feedback received through public consultation approved and vide notification dated December 21, 2023, notified amendments to SEBI ICDR Regulations and SEBI LODR Regulations. SEBI on December 28, 2023, vide Circular SEBI/HO/CFD/PoD-1/P/CIR/2023/196 has approved modification/additions to the Circular dated September 19, 2022, which inter-alia provides for the following:
- Procedure for public issuance of Zero Coupon Zero Principal Instruments by a not-for-profit organization;
- Contents of the fund-raising document; and
- Other conditions relating to issuance of Zero Coupon Zero Principal Instruments.
The link for the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/dec-2023/framework-on-social-stock-exchange_80233.html
132. Master Circular for Online Resolution of Disputes in the Indian Securities Market
In furtherance of the interests of investors and pursuant to public consultations and consequent to notification of Alternative Dispute Resolution Amendment Regulations in 2023, SEBI on December 20, 2023, vide Circular No. SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2023/195 further updated the Master Circular on Online Resolution of Disputes in the Indian Securities Market. The Master Circular provides for streamlining the existing dispute resolution mechanism in the Indian securities market under the aegis of Stock Exchanges and Depositories (collectively referred to as Market Infrastructure Institutions (MIIs)).
The link for the aforesaid Circular is as follows: