SEBI has proposed amendments to the Securities and Exchange Board of India (Custodian) Regulations, 1996 to change the frequency of custodian fee payments from an annual to a monthly basis. Currently, custodians are required to pay an annual fee of ₹10 lakh or 0.0005% of Assets Under Custody (AUC), whichever is higher, within one month after the end of each financial year. During FY 2025-26, SEBI received approximately ₹175.80 crore as annual custodian fees. The proposal follows recommendations made by the Audit Committee of the Board to improve the periodicity of fee collection and was subsequently discussed with the Custodians and Designated Depository Participants Standards Setting Forum (CDSSF) and the FPI Advisory Committee (FAC), both of which supported the proposal. Under the revised framework, custodians would pay a monthly fee of ₹85,000 or 0.0000416% of AUC, whichever is higher, with the new system proposed to take effect from 1 October 2026.
Also Read SEBI Press Release No. 33/2026 Dated: 19/06/2026: SEBI Approves Major Regulatory Reforms to Simplify Securities Market Processes
Securities and Exchange Board of India
Dated: 19th June 2026
Proposal for revision of frequency for collecting Custodian fees
1. Objective
1.1. This Board Memorandum seeks approval of the Board for amending the Securities and Exchange Board of India (Custodian) Regulations, 1996 (hereinafter referred to as “Custodian Regulations”) to revise the periodicity of payment of annual fee by Custodian from existing annual basis to monthly basis.
2. Background
Regulation 9(d) read with Second Schedule to the Custodian Regulations requires Custodians to pay annual fee of Rs 10,00,000 or 0.0005 percent of the assets under custody (AUC) of the custodian, whichever is higher.
2.1. Such annual fee is payable with reference to each financial year, within one month of completion of the financial year.
2.2. The total annual fee for FY 2025-26 received in April 2026 is Rs 1,75,80,07,468.
3. Need for Review
3.1. The Audit Committee of the Board, in its meeting held on March 20, 2025 advised SEBI to collect the fees on a monthly/ quarterly basis from the intermediaries. Accordingly, the matter was examined and also discussed with Custodians and Designated Depository Participants Standards Setting Forum (CDSSF) and FPI Advisory Committee (FAC). After deliberations, CDSSF and FAC agreed with the proposals mentioned at para 4.
4. Proposal
4.1. It is proposed that the annual fee may be renamed as “Monthly fee” and required to be paid on a monthly basis. Accordingly, Custodian shall be required to pay Monthly fee of Rs. 85,000/- or 0.0000416% of the AUC of the custodian, whichever is higher.
4.2. For the purpose of ease of calculation of Monthly fee, it is proposed that the same may be made applicable with effect from October 01, 2026.
5. A comparison of the existing provisions with the proposed amendments to the Custodian Regulations is placed at Annexure A. The draft notification for the proposed amendment is placed at Annexure B.
6. Proposal to the Board
The Board is requested to consider and approve the proposals at Para 4 above with suitable amendments as considered appropriate and authorize the Chairman, to make consequential and incidental changes and take necessary steps to give effect to the decision of the Board.
Encls:
Annexure A –
Comparison of the existing provisions with the proposed amendments to Custodian Regulations (01 page)
Annexure B –
Draft notification for the proposed amendments to Custodian Regulations (01 page)
Annexure A
Amendment to SEBI (Custodian) Regulations, 1996 shall be notified after following the due process.
Annexure B
Amendment to SEBI (Custodian) Regulations, 1996 shall be notified after following the due process
