Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2025, set to take effect on April 1, 2025. Key changes include revised timelines for depositories to pay annual fees within 15 days from the start of the financial year and mandatory submission of fee remittance details certified by a chartered accountant. A new regulation imposes an interest penalty of 15% per annum on any unpaid, late, or short-paid fees by depositories. Additionally, SEBI has introduced regulations governing the use of artificial intelligence (AI) and machine learning (ML) tools by depositories. Depositories must ensure the security, privacy, and integrity of investor data and take full responsibility for AI-generated outputs. These rules apply to both internally developed and third-party AI tools used for trading, settlement, compliance, and other business functions.
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 6th February, 2025
SECURITIES AND EXCHANGE BOARD OF INDIA (DEPOSITORIES AND PARTICIPANTS) (AMENDMENT) REGULATIONS, 2025
F. No. SEBI/LAD-NRO/GN/2025/225.-—In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with section 25 of the Depositories Act, 1996 (22 of 1996), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 namely, —
1. These regulations may be called the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2025.
2. They shall come into force on the first day of April, 2025:
Provided that the amendment in regulation 3(IV) of these amendment regulations shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018, —
I) in regulation 8, after the words and symbol “under regulation 7, shall pay” and before the words “annual fee”, the words and symbols “, within fifteen days from the beginning of each financial year, the” shall be inserted.
II) in regulation 9, the existing regulation shall be renumbered as sub-regulation (1) thereof and after sub-regulation (1) so numbered, the following sub-regulation shall be inserted, namely, –
“(2) The details of remittance shall be forwarded along with the statement of computation of annual charges certified to be correct by a chartered accountant.”
III) after regulation 9, the following regulation shall be inserted, namely –
“Interest on non-payment, belated payment or short payment of annual fee and annual charge.
9A. Where due to the default of the depository, any fee which was liable to be paid to the Board under Regulation 8 and Regulation 9 remains unpaid or is paid belatedly or is short-paid by the depository, it shall, without prejudice to any other action that may be initiated under the Act, rules or regulations, pay an interest of fifteen per cent per annum on the amount remaining unpaid or belatedly paid or short-paid, for every month of delay or part thereof to the Board.”
IV) in Chapter VII, after the existing regulation 82A, the following new regulation shall be inserted, namely,–
“Responsibility for the use of artificial intelligence
82AA. A depository which uses artificial intelligence and machine learning tools and techniques, either designed by it or procured from third-party technology service providers, irrespective of the scale and scenario of adoption of such tools for conducting its business and servicing its clients or constituents, shall be solely responsible–
a) for the privacy, security and integrity of investors’ and stakeholders’ data including data maintained by it in a fiduciary capacity throughout the processes involved;
b) for the output arising from the usage of such tools and techniques it relies upon or deals with; and
c) for the compliance with applicable laws in force.
Explanation: For the purpose of this regulation, the expression “artificial intelligence and machine learning tools and techniques” may include any application or software program or executable system or a combination thereof, offered by the depository to investors/stakeholders or used internally by it to facilitate trading and settlement or to carry out its activities including for compliance requirements and the same are portrayed as part of the products offered to the public or under usage for compliance or management or other business purposes. ”
BABITHA RAYUDU, Executive Director
[ADVT.-III/4/Exty./948/2024-25]
Footnote:
1. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 were published in the Gazette of India on October 3, 2018 vide No. SEBI/LAD-NRO/GN/2018/40.
2. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 were subsequently amended on, –
a. 4th June, 2019 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/20.
b. 21st February, 2020 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/04.
c. 17th April, 2020, by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10.
d. 5th May, 2021, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations 2021, vide No. SEBI/LAD-NRO/GN/2021/23.
e. 3rd August, 2021, by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021, vide No. SEBI/LAD-NRO/GN/2021/30.
f. 13th August, 2021 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2021vide No. SEBI/LAD-NRO/GN/2021/43.
g. 26th October 2021 by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/53.
h. 23rd February 2022 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/74.
i. 2nd March 2023 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/125.
j. 22nd August, 2023 by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/147.
k. 10th May, 2024 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/173.
l. 26th August, 2024 by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/200.
m. 28th November, 2024 by the Securities and Exchange Board of India (Attestation of Documents) (Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/212.
n. 2nd December, 2024 by the Securities and Exchange Board of India (Depositories and Participants) (Third Amendment) Regulations, 2024 vide SEBI/LAD-NRO/GN/2024/213.
