Menu
Edit Content
Menu
Edit Content

Amendments in Securities Law

1. Consultation paper on review of SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008

Securitization in India is governed by SEBI through SEBI (Issue and Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008 (‘SDI Regulations’) and by RBI through Master Direction – RBI (Securitization of Standard Assets) Directions, 2021 – for standard assets; (‘RBI SSA Directions’) and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) – for stressed financial assets.

RBI issued revised directions in September 2021 on Securitization of Standard Assets. Further, a considerable amount of time has passed since the SDI regulations were formulated, and considering the availability of revised directions issued by RBI that can serve as a benchmark, SEBI saw it as an opportune time to refresh and restate the SDI regulations.

Accordingly, pursuant to the recommendations of the working group, review of RBI SSA Directions, meetings with various market participants, and internal deliberations to restate the SDI Regulations SEBI vide Consultation paper dated November 01, 2024, had invited public comments to be submitted latest by November 16, 2024, on the propositions for the aforementioned restatement. The said propositions is placed in Annexure A to the Consultation Paper.

The following are the major changes proposed:

  1. Form and nature of SDIs, ticket size, the meaning of debt, etc.
  2. structural elements of the securitization transaction
  3. Composition of Board of Trustees, Removal, Obligation, and Code of Conduct of Trustees
  4. Periodic Disclosure of Information on SDI
  5. Clarificatory changes

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-sebi-issue-and-listing-of-securitised-debt-instruments-and-security-receipts-regulations-2008_88172.html

2. Investments in Overseas Mutual Funds/ Unit Trusts by Indian Mutual Funds

SEBI vide Circular dated June 27, 2024 permitted mutual funds to invest in overseas securities which includes investment in overseas Mutual Funds/Unit Trusts. Accordingly, to bring transparency in the manner of investment, and to enable Mutual Funds to diversify their overseas investments, SEBI vide Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/149 dated November 04, 2024 has decided the following:

a. Investment by schemes:

Indian Mutual Fund schemes can invest in overseas MF/UTs with exposure to Indian securities below 25% of their net assets. If, after investment, the exposure exceeds 25%, a 6-month observance period allows for monitoring portfolio rebalancing. No new investments can be made during this time. Investments may resume if the exposure to Indian securities falls back below 25%. If the exposure remains above 25% after 6 months, the Indian MF scheme must liquidate its investments within the next 6 months, unless the exposure drops below 25%, in which case liquidation is not required.

If the Indian Mutual Fund/ Asset Management Company fails to rebalance the portfolio of the scheme as mentioned above, then after the 6-month liquidation period, the Indian Mutual Fund/ Asset Management Company shall:

  1. not be permitted to accept any fresh subscriptions in concerned Indian Mutual Fund scheme;
  2. not be permitted to launch any new scheme;
  3. not levy exit load, if any, on the investors exiting such scheme(s).

However, The Indian Mutual Fund scheme(s) shall be exempted from the requirement of a fundamental attribute change for any change in underlying overseas MF/UT, subject to the following:

  1. the underlying overseas MF/UT exceeds 25% exposure to Indian securities, and;
  2. Indian Mutual Fund scheme intends to invest in other overseas MF/UT with similar investment objectives, and;
  3. a notice cum addendum is issued to investors.

b. Indian Mutual Fund schemes investing in overseas MF/UTs must ensure the following:

  1. Pooling: All investor contributions are pooled into a single investment vehicle with no segregated portfolios or side-vehicles.
  2. Pari-passu and Pro-rata: All investors have equal rights to returns, proportional to their contributions, with no segregated portfolios.
  3. Independent Fund Manager: The overseas MF/UT is managed by an independent investment manager making autonomous decisions.
  4. Public Disclosure: Portfolios are disclosed publicly at least quarterly for transparency.
  5. No Advisory Agreement: No advisory agreements exist between Indian MFs and overseas MFs/UTs to avoid conflicts of interest.

The link for the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/investments-in-overseas-mutual-funds-unit-trusts-by-indian-mutual-funds_88198.html

3. Measures for Reforms to Debenture Trustees Regulations Including Ease of Doing Business

In the FY 2023-24 budget, the Hon’ble Finance Minister announced measures to simplify and reduce compliance costs in the financial sector. To align with this, SEBI formed Working Groups to review and ease compliance under various SEBI Regulations.

The Working Group on Debenture Trustee Regulations (‘DT regulations’) proposed measures to promote Ease of Doing Business (EoDB). SEBI, through a Press Release on October 4, 2023, invited public comments on these proposals by November 6, 2023.

The comments were forwarded to the Working Group for consideration in its final recommendations. Accordingly, public feedback was sought by SEBI vide a Consultation Paper dated November 04, 2024 which was to be submitted latest by November 18, 2024 on the EoDB proposals and the revamp of DT Regulations.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-measures-for-reforms-to-debenture-trustees-regulations-including-towards-ease-of-doing-business_88212.html 

4. Advisory on unauthorized virtual trading/gaming platforms

SEBI vide Press Release No. 27/2024 dated November 04, 2024, has cautioned the public against apps, web platforms, or services offering virtual trading, paper trading, or fantasy games based on stock price data.

Such apps, web platforms etc. violate the Securities Contracts (Regulation) Act, 1956, and SEBI Act, 1992. SEBI’s August 30, 2016 press release also warned against such unauthorized schemes. Investors can only trade through registered intermediaries. Engaging with unregistered platforms is at their own risk, and they will not have access to SEBI’s investor protection, grievance redressal mechanisms, or Exchange dispute resolution services.

The link to the aforesaid Press Release is as follows:
https://www.sebi.gov.in/media-and-notifications/press-releases/nov-2024/advisory-on-unauthorized-virtual-trading-gaming-platforms_88200.html 

5. Disclosure of expenses, half-yearly returns, yield, and risk-o-meter of schemes of Mutual Funds

To enhance transparency and ease of comprehension for investors, SEBI vide Circular No. SEBI/HO/IMD/PoD1/CIR/P/2024/150 dated November 05, 2024 has decided the following to standardize disclosures by Mutual Funds, as recommended by the Mutual Fund Advisory Committee.

This includes clearer disclosures regarding scheme expenses and associated risks, ensuring a more transparent and consistent approach across the industry.

a. Disclosure of expenses, half yearly returns and yield of a scheme:

Investments under direct plan of a mutual fund scheme, which was introduced vide circular dated September 13, 2012 and came into effect from January 01, 2013, are investments which are not routed through distributors of Mutual Funds. As no distribution expenses or commissions are charged under direct plan of a mutual fund scheme, the expense ratio of the direct plan is lower than that of the regular plan, resulting in different returns for the two plans.

Mutual funds will now disclose separate details for direct and regular plans, including total recurring expenses, returns for the half-year, and compounded annualized yields. These disclosures will follow the guidelines under SEBI’s (Mutual Funds) Regulations, 1996, ensuring clear differentiation between the two plans.

To standardize the above disclosures, AMFI, in consultation with SEBI, will review and finalize the format for the half-yearly financial statements of mutual fund schemes. For all other regulatory disclosures, where expenses, expense ratio, returns and/or yield of the schemes are required to be disclosed, separate disclosures shall be made for both regular and direct plans.

b. Colour Scheme for Risk-o-meter:

Clause 17.4 of the Master Circular dated June 27, 2024 for Mutual Funds provided for product labelling in Mutual Funds. Further, based on the recommendation of MFAC, it has been decided that in addition to the existing labels relating to levels of risk, the Risk-o-meter shall also be depicted using a colour scheme.

c. Disclosure of change in Risk-o-meter:

As per the above-mentioned Master Circular any change in the risk-o-meter shall be communicated to unitholders of that particular scheme by way of a Notice cum Addendum as well as an e-mail or SMS. Further, in order to standardise the format of disclosure and for ease of understanding of the change in level of risk for unitholders, the Mutual Funds shall disclose the existing risk-o-meter along with the revised risk-o-meter.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/disclosure-of-expenses-half-yearly-returns-yield-and-risk-o-meter-of-schemes-of-mutual-funds_88230.html 

6. Consultation Paper on Review of Regulatory Framework on Alignment of Interest of the Designated Employees of the Asset Management Company (AMC) with the Interest of the Unitholders

Mutual Funds are regulated through SEBI (Mutual Funds), Regulations, 1996 (“MF Regulations”) and circulars issued thereunder including Master Circular dated June 27, 2024.

Further SEBI inter-alia constituted a working group namely EODB Working Group to review the present framework under MF Regulations and recommend measures to promote the ease of doing business for Mutual Funds.

The EODB Working Group has provided its recommendation on alignment of interest of the Designated Employees of AMC with the interest of the unitholders (‘skin in the game’). The comments were to be provided by November 21, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-requirements-of-alignment-of-interest-of-the-designated-employees-of-the-amc-with-the-interest-of-the-unitholders_88268.html 

7. Proposed review of the definition of Unpublished Price Sensitive Information (UPSI) under SEBI (Prohibition of Insider Trading) Regulations, 2015 to bring regulatory clarity, certainty and uniformity of compliance in the ecosystem

According to a study conducted by SEBI on material events disclosed to the stock exchanges and events classified as Unpublished Price Sensitive Information (‘UPSI’) by listed entities, companies were seen to be categorizing only the items explicitly mentioned in Regulation 2(1)(n) of SEBI (Prohibition of Insider Trading) Regulations, 2015 (‘PIT Regulations’) as UPSI thus not complying with the law in spirit.

Thus, SEBI felt that there exists a need to review the definition of UPSI to bring about regulatory clarity, certainty, and uniformity in compliance for the listed companies.

Accordingly, SEBI vide Consultation Paper dated March 18, 2023 had sought public comments on the proposal to amend the definition of UPSI to include material events in accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’).

The following major issues were highlighted in the public feedback received for the above-mentioned Consultation Paper:

Sr. No.

Issue

Feedback Received

1

Material Information v/s ‘Price Sensitive Information’ and Materiality Threshold for UPSI

i. All events or information under Regulation 30 of LODR Regulations may not have an impact on the price of securities.

ii. Alternately, expand the list of events under the current definition of UPSI instead of including complete Regulation 30 of LODR Regulations.

 

2

Enforcing compliances under PIT Regulations

 

i. Compliance management will increase

ii. Potential perpetual closure of the trading window

3

Others

i. Amend UPSI definition post notification of LODR Amendments made to introduce quantitative threshold for determining ‘materiality’ of events / information, stricter timeline for disclosure of material events / information, market rumours to be verified and confirmed, denied or clarified, as the case may be, disclosure for certain types of agreements binding listed entities, etc.

 

This proposal seeks to bring greater clarity and uniformity of compliance in the ecosystem and to align the definition of UPSI in PIT Regulations with events from Para A and Para B of Part A of Schedule III as defined under Regulation 30 of SEBI LODR.

A working group (WG) was formed to review the definition of UPSI, aligning it with events listed in Para A and Para B of Schedule III of the SEBI LODR. The WG will make recommendations towards aligning the illustrative list of events in the definition of UPSI with events from Para A and Para B of Part A of Schedule III read with Regulation 30 of LODR. The WG considered public feedback on earlier consultation papers and aimed to ensure that its recommendations would not negatively impact the Ease of Doing Business or increase compliance burdens for listed entities.

The WG identified potential price-sensitive events and proposed their inclusion in the UPSI definition, with rationale and recommendations outlined in the Consultation Paper published by SEBI on November 09, 2024. The comments along with rationale were required to be given latest by November 30, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-proposed-review-of-the-definition-of-unpublished-price-sensitive-information-under-sebi-prohibition-of-insider-trading-regulations-2015-to-bring-regulatory-clarity-certainty-_88313.html 

8. Procedure for reclassification of FPI investment to FDI

SEBI vide Circular No. SEBI/HO/AFD/AFD-POD-3/P/CIR/2024/152 dated November 11, 2024 (‘the Circular’) has provided that in case a Foreign Portfolio Investor fails to divest its holdings, which is in excess of 10% of the total paid-up equity capital of a company on a fully diluted basis, within five (5) trading days, the entire investment in the company by such Foreign Portfolio Investor including its investor group shall be considered as investment under the Foreign Direct Investment (“FDI”), as per the procedure specified by the Board.

Further, vide the Circular, SEBI has modified the Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors and provided the following for reclassification of FPI investment to FDI:

  1. In case the investment made by a Foreign Portfolio Investor (along with its investor group) reaches 10% or more of the total paid-up equity capital of a company on a fully diluted basis and the FPI (along with its investor group) intends to reclassify its FPI holdings as Foreign Direct Investment (FDI), it shall follow extant FEMA Rules and circulars issued thereunder in this regard.
  2. Pursuant to receipt of such intent from the FPI, the respective Custodian shall report the same to SEBI and freeze purchase transactions by such FPI in equity instruments of such Indian company, till completion of the reclassification.
  3. On receipt of the request from the FPI for the transfer of the equity instruments of such Indian company from its FPI demat account to its demat account maintained for holding FDI investments, the Custodian shall process the requestif the reporting for reclassification, as prescribed by RBI, is complete in all respects.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-procedure-for-seeking-waiver-or-reduction-of-interest-in-respect-of-recovery-proceedings-initiated-for-failure-to-pay-penalty-_88322.html

9. Trading supported by Blocked Amounts in the Secondary Market

To enhance investor protection from the default of the Members [Trading Member (‘TM ‘)/ Clearing Member (‘CM’)], SEBI introduced a supplementary process in its Master Circular dated October 16, 2023, allowing trading in the secondary market based on blocked funds in investors’ bank accounts, rather than transferring them upfront to Trading Members (TMs). This facility, aimed at protecting investors’ cash collateral, and went live on January 1, 2024.

The UPI block mechanism for trading, introduced in the aforementioned Master Circular, was a non-mandatory facility for stock brokers. Given its benefits, SEBI conducted public consultations and discussions with market participants to encourage its widespread adoption.

Based on the aforesaid deliberations and considering the significant changes required to be made in the systems and processes of the Clearing Corporations, Stock Exchanges, Depositories, NPCI and the TMs, in the implementation of the facility of trading supported by blocked amount to trade in the secondary market, SEBI vide Circular No. SEBI/HO/MRD-PoD2/CIR/P/2024/153 dated November 11, 2024 has decided the following:

1. In addition to the current mode of trading, the Qualified Stock Brokers (QSBs) shall provide either the facility of trading supported by the blocked amount in the secondary market (cash segment) using the UPI block mechanism or the 3-in-1 Trading Account facility, to their clients.

2. The 3-in-1 trading account facility offered/ to be offered by the TMs shall, at least have the following features:

  1. Integration of the trading account with the demat and bank accounts of the client.
  2. Blocking of funds, to the extent of the obligation, in the bank account of the client on placement of buy orders. In case the buy orders are not executed the funds blocked are released.
  3. Blocking of securities in the demat account of the client on placement of sell orders. In case the sell orders are not executed, the block on the securities is removed.
  4. The pay-in (transfer of Funds/securities) blocked at the time of order placement, from the bank / demat account of the client is carried out post-market hours and is upstreamed to the Clearing Corporation. The client earns interest on the available funds till the pay-in.

3. Clients of the QSBs will have the option, to either continue with the existing facility of trading by transferring funds to TMs or opt for either of the facilities stated at Para 5.1 above, as provided by the QSBs.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/trading-supported-by-blocked-amount-in-secondary-market_88339.html 

10. Consultation paper on “Procedure for seeking waiver or reduction of interest in respect of recovery proceedings initiated for failure to pay penalty”

The SEBI Act, 1992, Securities Contracts (Regulation) Act, 1956, and the Depositories Act, 1996, incorporate certain provisions of the Income Tax Act, 1961, with necessary modifications during the exercise of powers for recovery of dues. Section 220(2) of the Income-tax Act, 1961 empowers the Recovery Officer of SEBI to recover the outstanding amount along with the applicable interest as specified therein. Section 220(2A) of the Income-tax Act, 1961 confers powers on the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to reduce or waive the amount of interest paid or payable.

In line with the above, SEBI has delegated the power to the following Competent Authority to waive or reduce the interest levied only in respect of recovery proceedings initiated for failure to pay the penalty:

  1. Panel of Executive Directors of SEBI, where the amount of interest sought to be waived or reduced is less than Rs. 2 crores;
  2. Panel of Whole-time Members, in other cases.

However, the waiver or reduction of interest shall not be applicable in the following cases and the same shall be returned forthwith:

  1. where interest for failure to remit fees to the Board is levied on the intermediaries in accordance with respective intermediary regulations;
  2. where the interest on the amount directed to be disgorged or refunded is levied in accordance with the orders passed under section 11, 11B, 11(4) of the SEBI Act, 1992.

With regard to the above SEBI vide Consultation Paper has proposed a procedure to be followed for making an application seeking waiver or reduction of interest. The procedure is proposed to be issued through a circular. The public comments on the said Consultation paper were to be given latest by December 02, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-procedure-for-seeking-waiver-or-reduction-of-interest-in-respect-of-recovery-proceedings-initiated-for-failure-to-pay-penalty-_88322.html 

11. Master Circular for compliance with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 by listed entities

SEBI issued a Master Circular on July 11, 2023, consolidating all relevant circulars on SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’) until June 30, 2023.

This was updated on November 11, 2024, through Master Circular No. SEBI/HO/CFD/PoD2/CIR/ P/0155 (‘Master Circular’), incorporating all circulars issued up to September 30, 2024, and superseding the July 2023 Master Circular.

The Master Circular inter-alia provides for a chapter-wise framework for compliance with various obligations under the SEBI LODR which are as follows:

  1. Chapter I – Uniform Listing Agreement;
  2. Chapter II – Periodic Disclosures (Non-Financial);
  3. Chapter III – Financial Disclosures;
  4. Chapter IV – Annual Disclosures;
  5. Chapter V – Event-Based Disclosures;
  6. Chapter VI – Other Obligations and Disclosure Requirements;
  7. Chapter VII – Penal Actions for Non-Compliance.

The link to the aforesaid Master Circular is as follows:
https://www.sebi.gov.in/legal/master-circulars/nov-2024/master-circular-for-compliance-with-the-provisions-of-the-securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-regulations-2015-by-listed-entities_88388.html 

12. Master Circular for Issue of Capital and Disclosure Requirements

SEBI issued a Master Circular on June 21, 2023, consolidating all relevant circulars on SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2015 (‘SEBI ICDR’) until June 21, 2023. This was updated on November 11, 2024, through Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 (‘Master Circular’), incorporating all circulars issued up to September 30, 2024, and superseding the June 2023 Master Circular.

The Master Circular inter-alia provides for a chapter-wise framework for compliance with various obligations under the SEBI ICDR which are as follows:

  1. Chapter 1 – Non-compliance with certain provision of SEBI ICDR;
  2. Chapter 2 – Streamlining the process of Rights Issue;
  3. Chapter 3 – Disclosures in offer document;
  4. Chapter 4 – Online Filing System, Guidelines for returning of draft offer document and resubmission and Audio-visual (AV) presentation of Disclosures;
  5. Chapter 5 – Compensation to Retail Individual Investors (RIIs) in an IPO;
  6. Chapter 6 – Guidelines on issuance of non-convertible debt instruments along with warrants (‘NCDs with Warrants’) in terms of Chapter VI – Qualified Institutions Placement of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018;
  7. Chapter 7 – Framework for the process of recognition of investors for the purpose of Innovators Growth Platform;
  8. Chapter 8 – Issue Summary Document (ISD) and dissemination of issue advertisements;
  9. Chapter 9 – Applications Supported by Blocked Amount (ASBA) Facility;
  10. Chapter 10 – Use of Unified Payment Interface (UPI) in Public Issue;
  11. Chapter 11 – Timeline for listing of shares in Public Issue.

The link to the aforesaid Master Circular is as follows:
https://www.sebi.gov.in/legal/master-circulars/nov-2024/master-circular-for-issue-of-capital-and-disclosure-requirements_88398.html

13. Simplified Registration for Foreign Portfolio Investors (FPIs)

SEBI’s Master Circular for Foreign Portfolio Investors (FPIs), Designated Depository Participants, and Eligible Foreign Investors related entities dated May 30, 2024 mandates every FPI applicant to submit a duly filled and signed Common Application Form (CAF) and ‘Annexure to CAF’ supported by required documents for registration. The market participants have represented that in case of certain categories of FPIs information regarding the Investment Manager (IM) and other relevant information is already captured in depositories’ CAF module. Further, there are certain fields that are exclusive to individual FPI applicants and hence not relevant for the applicants belonging to the aforesaid categories.

During SEBI’s course of industry consultation, there has been feedback that, in the above constructs, permitting the applicants to fill only those fields that are unique to them, helps save significant time and effort in terms of reviewing the application and signing a reduced number of pages.

Accordingly, to facilitate ease of onboarding for FPI applicants and reduce duplication of available information, based on deliberations held with market participants, SEBI vide Circular No. SEBI/HO/AFD/AFD-PoD-3/P/CIR/2024/156 dated November 12, 2024 (‘the Circular’) has decided the following:

  1. In case of onboarding applicants belonging to the categories mentioned at Para 2 of the Circular, they may be provided with an option to fill the entire CAF or fill an abridged version of CAF, i.e., a version of CAF where applicants fill only those fields that are unique to them.
  2. In case applicant opts for this abridged version of CAF, the remaining fields shall either be auto populated from the information available in the CAF module or shall be disabled, as applicable.
  3. While using the available information, an explicit consent to use the same and a confirmation that all the details other than those mentioned in the abridged version of CAF remain unchanged, shall be obtained from the applicant.
  4. Designated Depository Participants, upon receipt of information from the applicant, shall update the details in CAF against the application number of the applicant for future reference purposes. They shall also ensure that the CAF module hosted on the website of the Depository reflects complete information (information filled in by applicant and that auto-populated) and facilitates seamless fetching of the same.

The implementation standards, along with the fields that can be auto populated from the CAF module or be disabled, shall be formulated by the pilot Custodians and Designated Depository Participants Standards Setting Forum (CDSSF), in consultation with SEBI.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/simplified-registration-for-foreign-portfolio-investors-fpis-_88408.html 

14. Relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit-based employee benefits scheme, Alignment of timelines for making a distribution by REITs and Format of Quarterly Report and Compliance Certificate - Real Estate Investment Trusts (REITs)

A. Relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit based employee benefit scheme

SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) provides a framework for unit based employee benefit (“UBEB”) scheme, which inter-alia, provides that issuance of units to the employee benefit trust shall be based on the guidelines for preferential issue of units, including pricing guidelines as specified by SEBI.

The aforementioned guidelines for preferential issue and institutional placement of units by REITs are provided in the Master Circular for REITs dated May 15, 2024 (‘Master Circular’). These provisions contain lock-in and allotment-related restrictions. However, to promote ease of doing business and to facilitate the acquisition of units by the employee benefit trust and the subsequent transfer of units to the employees as per the terms of the UBEB scheme, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/158 dated November 13, 2024 (‘the Circular’) has relaxed the applicability of lock-in and allotment restrictions to units allotted to an employee benefit trust for the purpose of a UBEB.

B. Format of Quarterly Report and Compliance Certificate

The Circular provides that to ensure uniformity across the industry, Indian REITs Association (‘IRA’), in consultation with SEBI, shall specify the format of the quarterly report and compliance certificate required to be submitted by the Manager of the REIT to the Trustee under Regulation 10(18)(a) and Regulation 9(3) of the REIT Regulations respectively, and publish it on its website. Any future changes to this format shall be made by IRA in consultation with SEBI, prior to implementation.

C. Alignment of timelines for making distribution by REITs

The Circular has modified the provisions of the Master Circular related to dealing with unclaimed amounts lying with REITs, to align the timelines for making distributions with the REIT Regulations. The Master Circular now provides for the transfer of unclaimed amount lying with the REIT to be transferred to an Escrow Account opened by the Manager on behalf of the REIT in a scheduled bank within seven working days from the date of expiry of timelines for making distributions given in REIT Regulations.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/relaxation-from-certain-provisions-for-units-allotted-to-an-employee-benefit-trust-for-the-purpose-of-a-unit-based-employee-benefit-scheme-alignment-of-timelines-for-making-distribution-by-reits-and-_88471.html 

15. Relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit based employee benefit scheme, Alignment of timelines for making distribution by InvITs and Format of Quarterly Report and Compliance Certificate – Infrastructure Investment Trusts (InvITs)

A. Relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit based employee benefit scheme

SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”) provides a framework for unit based employee benefit (“UBEB”) scheme, which inter-alia, provides that issuance of units to the employee benefit trust shall be based on the guidelines for preferential issue of units, including pricing guidelines as specified by SEBI.

The aforementioned guidelines for preferential issue and institutional placement of units by InvITs are provided in the Master Circular for InvITs dated May 15, 2024 (‘Master Circular’). These provisions contain the lock-in and allotment related restrictions. However, to promote ease of doing business and to facilitate the acquisition of units by the employee benefit trust and the subsequent transfer of units to the employees as per the terms of the UBEB scheme, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/159 dated November 13, 2024 (‘the Circular’) has relaxed the applicability of lock-in and allotment restrictions to units allotted to an employee benefit trust for the purpose of a UBEB.

B. Format of Quarterly Report and Compliance Certificate

The Circular provides that to ensure uniformity across the industry, Bharat InvITs Association (‘BIA’), in consultation with SEBI, shall specify the format of quarterly report and compliance certificate required to be submitted by the Investment Manager of the InvIT to the Trustee under Regulation 10(18)(a) and Regulation 9(3) of the InvIT Regulations respectively, and publish it on its website. Any future changes to this format shall be made by BIA in consultation with SEBI, prior to implementation.

 C. Alignment of timelines for making distribution by InvITs

The Circular has modified the provisions of the Master Circular related to dealing with unclaimed amounts lying with InvITs, to align the timelines for making distributions with the InvIT Regulations. The Master Circular now provides for transfer of unclaimed amount lying with the InvIT to be transferred to an Escrow Account opened by the InvIT in a scheduled bank within seven working days from the date of expiry of timelines for making distributions given in InvIT Regulations.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/relaxation-from-certain-provisions-for-units-allotted-to-an-employee-benefit-trust-for-the-purpose-of-a-unit-based-employee-benefit-scheme-alignment-of-timelines-for-making-distribution-by-invits-and-_88472.html 

16. Consultation paper on review of regulatory framework for Angel Funds in AIF Regulations

Angel Funds, a type of Category I AIFs, provide capital to startups from angel investors, with growing interest reflected in an increase in registered Angel Funds and their investments. However, the current regulatory framework reveals operational gaps, concerns about investor risk appetite, and the need for revised prudential norms. In light of these issues and the recent abolition of Angel Tax, the question arises whether Angel Funds should continue to be regulated under the SEBI (AIF) Regulations, 2012.

In view of the above on November 13, 2024, SEBI published a Consultation Paper seeking public feedback on the need for regulating capital flow from angel investors through a structured framework. If regulation is deemed necessary, the Consultation Paper further seeks views on streamlining the framework for Angel Funds to:

  1. Rationalize fundraising processes
  2. Strengthen disclosure and governance
  3. Provide operational clarity and investment flexibility.

These proposals aim to target investors with appropriate risk appetite, improve investment evaluation, and enhance ease of doing business in the business space.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-regulatory-framework-for-angel-funds-in-aif-regulations_88449.html 

17. Consultation paper on Review of SEBI (Custodian) Regulations, 1996 and operational guidelines for Custodians

Custodians are crucial to SEBI’s investor protection mandate, in the context that they safekeep assets for SEBI-registered funds, including those managing retail investors’ funds. For Foreign Portfolio Investors (FPIs), Custodians also act as Designated Depository Participants (DDPs), facilitating registration and compliance with KYC and investment norms.

Custodians also ensure adherence to disclosure requirements and monitor status changes. Additionally, custodians have played a key role in enabling the T+1 settlement cycle in India and are facilitating the implementation of the optional T+0 cycle.

Given the time since Custodian Regulations were first introduced and the substantial growth in market size, regulatory scope, and technological advancements, SEBI has identified a need to review and update the Custodian Regulations.

Accordingly, SEBI constituted a Working Group (‘WG’) and on the recommendations of the WG SEBI has published a Consultation Paper on November 13, 2024 inviting public comments on the proposals of the WG which were to be submitted latest by November 28, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-sebi-custodian-regulations-1996_88439.html

18. Consultation paper on “Proposed amendments with respect to assigning responsibility for the use of artificial intelligence tools by Market Infrastructure Institutions, Registered Intermediaries and other persons regulated by SEBI”

“Artificial Intelligence” refers to programs in machines and computers that can learn, reason, and act like humans, reducing the need for human assistance. Given the growing use of AI and Machine Learning (ML) in investor-facing products, SEBI has specified requirements for reporting AI/ML applications and systems offered and used by market intermediaries in the securities market. This aims to track AI/ML adoption and ensure readiness for future challenges.

While encouraging market intermediaries to adopt AI/ML tools, SEBI emphasizes the importance of investor protection. SEBI has mandated reporting requirements for AI/ML usage but also seeks to assign responsibility to Market Infrastructure Institutions (MIIs), intermediaries, and regulated entities to ensure responsible deployment of AI/ML tools and safeguard investors’ interests.

SEBI has published a Consultation Paper dated November 13, 2024, recommending that all SEBI-regulated entities using AI tools in securities markets must comply with applicable laws and shall be solely responsible for the consequences, including ensuring the privacy, security, and integrity of investor and stakeholder data. They will also be accountable if the output from such tools is relied upon or acted upon.

In view of the foregoing SEBI has vide the said Consultation Paper has proposed amendments to Securities and Exchange Board of India (Intermediaries) Regulations, 2008, Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 and Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 for the usage of artificial intelligence tools and assigning responsibility for use of the same by SEBI regulated entities. The public comments on the proposed amendments were to be sent latest by November 28, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/proposed-amendments-with-respect-to-assigning-responsibility-for-the-use-of-artificial-intelligence-tools-by-market-infrastructure-institutions-registered-intermediaries-and-other-persons-regulated-b-_88470.html 

19. India International Trade Fair (IITF) 2024

SEBI vide its Press Release No. 28/2024 dated December 14, 2024 had informed that in association with NISM, BSE, NSE, MCX, NCDEX, CDSL, NSDL and AMFI had set up a pavilion ‘BHARAT KAA SHARE BAZAAR’ (7th Edition) in the 43rd India International Trade Fair (IITF), 2024 (14-27 November 2024), as part of its endeavour to spread investor awareness.

Through its presence at the Trade Fair, SEBI in association with MIIs, NISM and Industry association intends to spread investor awareness and education, and caution the public at large against dealing with unregistered entities/web applications/platforms/apps/unauthorised schemes. A variety of live events and activities like talk shows by market experts, skits and puppet shows were convened to convey these messages in an engaging manner.

The link to the aforesaid Press Release is as follows:
https://www.sebi.gov.in/media-and-notifications/press-releases/nov-2024/india-international-trade-fair-iitf-2024_88518.html 

20. SEBI study finds that 1 out of 4 times, listed companies paid royalty exceeding 20% of their net profits to Related Parties

SEBI vide Press Release No. 29/2024 dated November 14, 2024, published a study analysing the payments made by listed companies to their Related Parties (RPs). The study is based on annual, company level information, in respect of 233 listed companies across sectors in India.

Apart from disclosing the major findings of the said study viz. Royalty paid as a percentage of turnover and net profit, Royalty paid by profit-making and loss-making companies etc., the Press Release also subsumes the issues flagged by Proxy Advisory Firms on Royalty related matters. These issues are as follows:

a. Royalty payment below 5% of turnover does not require approval of a majority of the minority shareholders;

b. Royalty payments by companies have little correlation to their revenue or profits;

c. The performance of royalty-paying companies is not of a higher order compared to their peers, including those who are not paying royalty;

d. Companies, at times, seek approval for royalty payments in perpetuity, contrary to the principles of corporate governance;

e. Companies often make significant payments towards brand usage, despite these companies themselves spending considerably on advertisement, brand promotion, and creating/ adding value to the parent brand;

f. Cash outflows to RPs (other than royalty or brand payments), are usually termed as ‘Management fees’, ’Technology License fees’, etc. Such payments do not fall within the ambit of royalty from a regulatory perspective and the quantum of such payments can be uncomfortably large;

g. Poor disclosure levels continue to keep a veil on royalty and related payments. Listed companies do not provide adequate justification or rationale for royalty payments, and details of benefits derived in return for such royalty paid;

h. In case of MNCs, shareholders of the Indian subsidiary have little information on the rates of royalty being charged from fellow subsidiaries in other geographies; and

i. Independent fairness opinions by different agencies on royalty payments vary significantly in terms of valuation. This suggests a high degree of subjectivity surrounding the valuation, and the fairness of royalty rates arrived upon.

The link to the aforesaid Press Release is as follows:
https://www.sebi.gov.in/media-and-notifications/press-releases/nov-2024/sebi-study-finds-that-1-out-of-4-times-listed-companies-paid-royalty-exceeding-20-of-their-net-profits-to-related-parties_88520.html 

21. Amendment to Para 15 of Master Circular for Credit Rating Agencies (CRAs) dated May 16, 2024 (“Master Circular”)

As per the Master Circular the default for debentures/bonds is specified as “A delay of 1 day even of 1 rupee (of principal or interest) from the scheduled repayment date”. No exemption is provided from the aforementioned, except in case of rescheduling of the debt instrument by the lenders prior to the due date of payment.

In the wake of COVID-19 pandemic, with a view to providing some flexibility to CRAs in taking appropriate view in cases of defaults corrected by the rated entity within a relatively shorter span of time, the provision on post-default curing period was introduced vide SEBI Circular dated May 21, 2020, which is contained in Para 15 of the Master Circular. The provision provided for framing of a policy by CRAs in respect of upgrade of default rating to investment grade rating and such policies may include scenarios like technical defaults, change in management, acquisition by another firm, sizeable inflow of long-term funds or benefits arising out of a regulatory action, etc. which fundamentally alter the credit risk profile of the defaulting firm.

However, there may be scenarios of non-payment of debt (principal and/ or interest) arising due to reasons beyond the control of the issuer namely, failure to remit payment due to absence of correct information or due to incorrect or dormant investor account furnished by the investor(s) or due to notice/ instruction received from a government authority to freeze the account of investor(s). Accordingly, one of the recommendations of the Working Group of CRAs for Ease of Doing Business is to provide specific policy guidance on treatment of ‘technical defaults’ so that the policy is applied uniformly across CRAs. Thus, SEBI vide Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2024/160 dated November 18, 2024 (‘Circular’) has modified the Para 15 of the master Circular by deleting the words ‘technical defaults’.

As per the Circular in all the instances of technical defaults the CRA inter-alia other requirements shall furnish such details provided in the Circular to the Stock Exchanges, Depositories and Debenture Trustee on the same day as the dissemination of the rating Press Release on the CRA’s website.

The link to the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/nov-2024/amendment-to-para-15-of-master-circular-for-credit-rating-agencies-cras-dated-may-16-2024-master-circular-_88547.html

22. Consultation paper on Review of SME segment framework under SEBI (ICDR) Regulations, 2018, and applicability of corporate governance provisions under SEBI (LODR) Regulations, 2015 on SME companies to strengthen pre-listing and post-listing SME provisions

SME IPOs have surged, particularly since 2022-23, raising over Rs. 6000 crore in FY 2023-24, with Rs. 5700 crore raised through 159 IPOs by October 15, 2024.

Secondary fundraising by listed SMEs has also increased. However, concerns have arisen regarding promoter-driven companies, where limited external oversight and fraudulent activities like fund diversion and circular transactions inflate revenues. SEBI has issued orders against such entities.

To address these issues, stricter scrutiny of related party transactions (RPTs) is needed. SEBI is reviewing the SME IPO framework and corporate governance provisions to ensure only companies with a strong track record can raise funds and comply with post-listing requirements.

SEBI has consulted with NSE, BSE, and Merchant Bankers to strengthen both pre- and post-listing SME provisions. Based on their feedback and discussions with the SEBI Primary Market Advisory Committee (PMAC), SEBI published a Consultation Paper on November 19, 2024, proposing amendments to the SME provisions.

Comments on the paper were to be submitted by December 4, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-sme-segment-framework-under-sebi-icdr-regulations-2018-and-applicability-of-corporate-governance-provisions-under-sebi-lodr-regulations-2015-on-sme-companies-to-_88627.html 

23. Consultation paper on “Process for appointment of specific KMPs of an MII; and cooling-off period for KMPs and Directors of an MII joining a competing MII”

A. Process for appointment of KMPs of Verticals 1 and 2 of an MII, viz., Compliance Officer (CO), Chief Risk Officer (CRO), Chief Technology Officer (CTO), and Chief Information Security Officer (CISO) or by whatever designations referred.

Market Infrastructure Institutions (‘MIIs’) are key institutions providing capital market infrastructure for trading, clearing, settlement, and securities record-keeping. Empowered by law, they regulate their paying members, including listed corporates and trading members. MIIs are primarily required to focus on serving as crucial public utilities, acting as first-line regulators while also operating as efficient, competitive, and profit-driven entities.

The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 (‘SECC Regulations, 2018’), Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 (D&P Regulations, 2018), require MIIs to prioritize Critical Operations (Vertical 1) and Regulatory, Compliance, Risk Management, and Investor Grievances (Vertical 2) over Business Development (Vertical 3). To ensure this, MIIs must have a Governing Board with a majority of non-executive Public Interest Directors (PIDs), appointed by SEBI. SEBI also approves the MD’s appointment. MIIs are regulated by SEBI, and the appointment and removal of key management personnel (KMPs) in Verticals 1 and 2 are overseen by the MII’s NRC.

To ensure the primacy of public interest over commercial interests, MIIs need capable KMPs in Verticals 1 and 2, responsible for compliance, risk management, technology, and information security. These KMPs must operate independently of short-term commercial pressures to uphold the MII’s role as a public utility and regulator. It has been noted that in some large MIIs, there is a significant compensation gap between the MD and KMPs heading Verticals 1 and 2.

In view of the above to reinforce the important role of CO, CRiO, CTO and CISO (by whatever name called) in carrying out their obligations in the public interest, without being influenced by commercial considerations, SEBI vide Consultation Paper dated November 22, 2024, has proposed certain conditions and provided that the process for appointment, reappointment, and termination of service of such specific KMPs of Vertical 1 and 2 of an MII may be subject to such conditions.

B. Uniform regulatory treatment of minimum cooling-off period for KMPs and Directors of an MII before they join a competing MII

SECC Regulations, 2018 and D&P Regulations, 2018 do not prescribe any cooling-off period for MD and KMPs before they can join a competing MII. However, the SECC Regulations, 2018 provide for a cooling-off period for PIDs.

While regulations specify a minimum cooling-off period for PIDs to move to other MIIs, there is none mandated for the MD, other Directors, and other KMPs. This anomaly may need to be addressed.

In view of the above the Consultation Paper proposes that MII shall adopt and implement a policy approved by its governing board prescribing a minimum cooling-off period for KMPs (including the MD) and their Directors (including PIDs) before joining a competing MII. SEBI shall no longer prescribe a cooling-off period for PIDs of an MII joining another MII. The public comments on the above-mentioned proposals were to be submitted by December 12, 2024.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-sme-segment-framework-under-sebi-icdr-regulations-2018-and-applicability-of-corporate-governance-provisions-under-sebi-lodr-regulations-2015-on-sme-companies-to-_88627.html

24. Review of Ownership and Economic Structure of Clearing Corporations

The Clearing Corporations (CCs) act as central counterparties and as first line regulators, and the importance of them operating as independent, self-sufficient public utilities, able and willing to finance appropriate investments into technology, operations, human and regulatory resources, and maintain their Settlement Guarantee Fund (SGF) as appropriate, cannot be overstated.

Currently, the CCs are subsidiaries of their parent exchanges, with parent exchanges holding practically 100% of the shareholding in their respective CCs. The dominance of the parent exchange in the ownership structure, invariably exposes a CC to the expectations of shareholders of the parent exchange, with the financial statements of CCs being consolidated with the parent exchange.

To ensure that CCs discharge their vital function of risk management independently and in the best public interest, and to strengthen the systemic stability of the Market Infrastructure Institution (MII) ecosystem, SEBI vide Consultation Paper dated November 22, 2024 has sought public opinion on a proposal to, inter-alia, diversify the ownership in CCs operating in equity markets.

The link to the aforesaid Consultation Paper is as follows:
https://www.sebi.gov.in/reports-and-statistics/reports/nov-2024/consultation-paper-on-review-of-ownership-and-economic-structure-of-clearing-corporations_88710.html

25. Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024

SEBI vide Notification No. SEBI/LAD-NRO/GN/2024/209 dated November 18, 2024 has issued the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 and shall be effective from the said date.

The Fifth Amendment Regulation, 2024 inter-alia other changes introduces a new provision stating that investors in an Alternative Investment Fund (AIF) scheme will have pro-rata rights based on their commitment, including investments and distribution proceeds. Any rights prior to this amendment that are not pro-rata and not exempted by SEBI will be handled as per SEBIs instructions. Other investor rights in the scheme will be pari-passu. However, differential rights may be granted to select investors without impacting others, as specified by SEBI. This provision does not apply to Large Value Funds for Accredited Investors.

The link to the aforesaid Notification is as follows:
https://egazette.gov.in/(S(l0510khfs1zjbwq3q5pkdpl4))/ViewPDF.aspx

26. Securities and Exchange Board of India (Buy-Back of Securities) (Second Amendment) Regulations, 2024

SEBI vide Notification No. SEBI/LAD-NRO/GN/2024/210 dated November 20, 2024 has issued the Securities and Exchange Board of India (Buy-Back of Securities) (Second Amendment) Regulations, 2024 and shall be effective from the said date.

The Amendment Regulations inter-alia has made the following key changes:

  1. If any member of the promoter/promoter group declares its intention to not participate in the buyback, their shares shall not be considered for computing the entitlement ratio.

  2. The cover page of the Letter of Offer should explicitly cover the entitlement ratio for small and general shareholders and the web link to the website of the Registrar and Share Transfer Agent for shareholders to check.

  3. The buyback offer must open within 4 working days of the public announcement instead of the record date as required earlier.

  4. The company cannot issue shares or other securities till the date of expiry of the buy-back period except for discharging subsisting obligations through conversion of warrants, stock option schemes,  sweat equity, or conversion of preference shares or debentures into equity shares.

The link to the aforesaid Notification is as follows:
https://egazette.gov.in/(S(l0510khfs1zjbwq3q5pkdpl4))/ViewPDF.aspx

27. Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 2024

SEBI vide Notification No. SEBI/LAD-NRO/GN/2024/211 dated November 20, 2024, has issued the Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 2024 and shall be effective from the said date.

The Amendment Regulations inter-alia other changes have expanded the scope of activities provided by the banker to an issue by introducing new services, such as providing escrow facilities for issue management, buybacks, delisting, or open offers, and managing separate accounts for IPO or public offer proceeds. Further, the Amendment Regulations stipulate that the bankers now require to obtain a registration certificate from SEBI before acting as a banker to an issue.

The link to the aforesaid Notification is as follows:
https://egazette.gov.in/(S(l0510khfs1zjbwq3q5pkdpl4))/ViewPDF.aspx 

28. Securities and Exchange Board of India (Depositories and Participants) (Third Amendment) Regulations, 2024

SEBI vide Notification No. SEBI/LAD-NRO/GN/2024/213 dated November 28, 2024 has issued the Securities and Exchange Board of India Depositories and Participants) (Third Amendment) Regulations, 2024, and shall be effective from the said date.

The Amendment Regulations have introduced a new provision requiring every participant to provide an option to the beneficial owner to nominate, a person to whom the securities held by him shall vest in the event of his death and to nominate a person who shall be authorized to conduct transactions on behalf of the beneficial owner in the event of the incapacitation of the beneficial owner.

Further, where an account with a participant is held in the name of more than one person jointly, the joint beneficial owners may together nominate, a person upon whom the securities held by them shall vest, in the event of the death of all the joint beneficial owners.

The link to the aforesaid Notification is as follows:
https://egazette.gov.in/(S(l0510khfs1zjbwq3q5pkdpl4))/ViewPDF.aspx

29. Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 2024

SEBI vide Notification No. SEBI/LAD-NRO/GN/2024/214 dated November 29, 2024 has issued the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 2024 and shall be effective from the said date.

The Amendment Regulations inter-alia has made the following key changes:

  1. Any person making an application to SEBI for registration as a Merchant Banker shall have in its employment a minimum of two persons who are professionally qualified in finance or law or accountancy or business management from a Government instead of erstwhile requirement of a minimum of two persons who have the experience to conduct the business of merchant banker;
  2. Market making to be in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The link to the aforesaid Notification is as follows:
https://egazette.gov.in/(S(l0510khfs1zjbwq3q5pkdpl4))/ViewPDF.aspx

30. Standard Operating Process under SEBI (PIT) Regulations, 2015 for ensuring compliance with Structured Digital Database (“SDD”)

BSE vide Notice No. 20241113-13 and NSE vide Circular No. NSE/CML/2024/35 dated November 13, 2024 has extended the applicability of its Notice and Circular dated October 18, 2024 respectively to such unlisted company that is getting listed pursuant to any scheme as approved by NCLT.

Regulations 3(5) and 3(6) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulation, 2015 (‘PIT Regulations’) are applicable to such companies and they are required to submit an SDD Certificate at the time of filing of application with the Exchanges from PCS that the Company is compliant with Regulation 3(5) and 3(6) of PIT Regulations and any amendment thereof.

The link to the aforesaid Notice and Circular is as follows:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20241113-13 
https://nsearchives.nseindia.com/web/sites/default/files/inline- files/NSE_Circular_13112024.pdf

31. Introduction of the single filing system through API-based integration between Stock Exchanges

BSE vide Notice No. 20241114-66 and NSE vide Circular No. NSE/CML/2024/36 dated November 14, 2024 has informed that single filing system through API-based integration between Stock Exchanges notified by BSE and NSE vide Notice and Circular dated September 30, 2024 respectively is now available for filing of the following:

  1. Reconciliation of Share Capital Audit Report by Equity listed and Equity + Debt listed companies. However, the same is not available for Exclusively Debt listed companies and REITs and InvITs;
  2. Corporate Governance Report by Equity listed and Equity + Debt listed companies. Availability of filing of Corporate Governance Report by Exclusively Debt listed companies and REITs and InvITs through the API-based integration shall be communicated later.
  3. Investor Grievance Report by Equity listed, Equity + Debt listed and Exclusively Debt listed companies. Availability of filing of Investor Grievance Report by REITs and InvITs through the API-based integration shall be communicated later.

The link to the aforesaid Notice is as follows:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20241114-66
https://nsearchives.nseindia.com/web/sites/default/files/inline-files/NSE_Circular_14112024%201.pdf 

Related Newsletter


© AmitaDesai 2025

Scroll to Top