On Feb. 10, 2025, IND SEBI published gazetted Securities and Exchange Board of India (depositories and participants) (amendment) regs 2025, in force Apr. 1, 2025.
Amends Securities and Exchange Board of India (depositories and participants) regulations, 2018 with requirements on late fees and artificial intelligence usage.
Depositories must pay annual fees within 15 days from the beginning of each FY.
Required to submit chartered accountant certified computation statement with fee remittance details; interest of 15% per annum charged on unpaid, late, or short payments for each month of delay; new regs for use of AI and machine learning tools.
Establishes responsibilities for depositories, applies whether tools are internally developed or procured from third-party providers; depositories solely responsible for privacy, security, integrity of investor/stakeholder data held in fiduciary capacity.
In addition, outputs and results from AI tool usage, compliance with applicable laws.
Scope of AI tools includes applications, software programs, executable systems used for trading and settlement facilitation, internal operations, compliance requirements.
In addition to those used for products offered to public, used for business purposes.
Document dated Feb. 10, 2025, received from IND SEBI Feb. 11, summarized Feb. 14.
On May 10, IND SEBI revised depositories, participants regulations.
IND SEBI published the SEBI (Depositories and participants) (amendment) regulations, 2024, which amend the 2018 principal regulations on the same subject.
Follows IND SEBI Oct. 2023 proposed simplification of numerous regs, see #186918.
Document dated May 10, 2024, received from IND SEBI May 14, summarized May 16.
Amendments
Regulation 9 was amended in relation to payment of annual charges by depositories.
Depositories are required to pay percentage of annual custody charges they receive from issuers to SEBI; payment must be made within 15 days from end of each month.
Effectiveness
Amendments come into force on date of publication in official gazette, May 10, 2024.
Aug. 2024 Second Amendment
On Aug. 29, 2024, IND SEBI issued Securities and exchange board of India (depositories and participants) (second amendment) regs 2024, in force Aug. 29.
Amends Securities and exchange board of India (depositories and participants) regulations, 2018by inserting chapter VIIA on restriction in dealing with other entities.
Document dated Aug. 29, 2024, received from IND SEBI Aug. 30, summarized Sep. 3.
In Oct. 2024, IND SEBI proposed rules for specified digital platform, see #230769.
In Oct. 2024, IND SEBI clarified rules for association of persons, see #230773.
Dec. 2024 Third Amendment
On Dec. 4, 2024, IND SEBI published gazetted Securities and Exchange Board of India (depositories and participants) (third amendment) regulations, in force Dec. 4, 2024.
Amends Securities and Exchange Board of India (depositories and participants) regulations, 2018 by inserting reg 60A in chapter VII on nomination requirements.
Every participant must provide beneficial owners option to nominate person to receive their securities upon death; participants must allow beneficial owners to nominate person authorized to conduct transactions if the owner should become incapacitated.
For joint accounts, joint beneficial owners can nominate person to receive securities upon death of all joint owners; depositories and participants will not be made liable for actions taken based on the respective nominations made by the beneficial owners.
In Dec. 2024, IND SEBI proposed clarification re prohibited activities, see #236213.
Jan. 2025 Additional Amendment
On Feb. 10, 2025, IND SEBI published gazetted Securities and Exchange Board of India (depositories and participants) (amendment) regs 2025, in force Apr. 1, 2025.
Amends Securities and Exchange Board of India (depositories and participants) regulations, 2018 with requirements on late fees and artificial intelligence usage.
Depositories must pay annual fees within 15 days from the beginning of each FY.
Required to submit chartered accountant certified computation statement with fee remittance details; interest of 15% per annum charged on unpaid, late, or short payments for each month of delay; new regs for use of AI and machine learning tools.
Establishes responsibilities for depositories, applies whether tools are internally developed or procured from third-party providers; depositories solely responsible for privacy, security, integrity of investor/stakeholder data held in fiduciary capacity.
In addition, outputs and results from AI tool usage, compliance with applicable laws.
Scope of AI tools includes applications, software programs, executable systems used for trading and settlement facilitation, internal operations, compliance requirements.
In addition to those used for products offered to public, used for business purposes.
Document dated Feb. 10, 2025, received from IND SEBI Feb. 11, summarized Feb. 14.
Regulators
IND SEBI
Entity Types
Auditor; B/D; Depo; Fiduciary
Reference
OG CG-MH-E-10022025-260882, No. 91, 2/10/2025; OG CG-MH-E-02122024-259089, No. 959 12/4/2024; Reg F.No. SEBI/LAD-NRO/GN/2024/213, 11/28/2024; OG SEBI/LAD-NRO/GN/2024/200, OG SEBI/LAD-NRO/GN/2018/40, 8/29/2024; OG SEBI/LAD-NRO/GN/2024/173, 5/10/2024; Fintech
