Securities and Exchange Board of India (SEBI), through its circular dated May 16, 2025 (SEBI/HO/AFD/AFD-POD-3/P/CIR/2025/71), has extended the timeline for implementing certain provisions related to Offshore Derivative Instruments (ODIs) and Foreign Portfolio Investors (FPIs) with segregated portfolios. These provisions were originally outlined in paragraphs 2.2 to 2.7 of an earlier SEBI circular dated December 17, 2024. While most parts of the earlier circular were effective immediately, the specified paragraphs were scheduled to take effect five months after issuance, i.e., by May 17, 2025. However, based on representations from market stakeholders and to facilitate a smoother transition, SEBI has now extended this implementation deadline to November 17, 2025. All other provisions of the December 2024 circular remain in force without change. Depositories, designated depository participants, custodians, and stock exchanges are required to ensure readiness for compliance within the new timeline. The extension aims to allow regulated entities more time to adjust their systems and reporting structures. This circular is issued under relevant provisions of the SEBI Act, 1992, SEBI (FPI) Regulations, 2019, and the Prevention of Money-laundering Rules, 2005, to protect investor interests and maintain regulatory consistency in the securities market. The circular is available on the SEBI website for reference.
Securities and Exchange Board of India
Circular No. SEBI/HO/AFD/AFD-POD-3/P/CIR/2025/71 Dated: May 16, 2025
To,
1. Foreign Portfolio Investors (“FPIs”)
2. Designated Depository Participants (“DDPs”) and Custodians
3. The Depositories
4. The Stock Exchanges and Clearing Corporations
Dear Sir / Madam,
Subject: Extension of timeline for implementation of provisions of SEBI circular dated December 17, 2024 on Measures to address regulatory arbitrage with respect to Offshore Derivative Instruments (ODIs) and FPIs with segregated portfolios vis-à-vis FPIs
1. SEBI vide Circular No. SEBI/HO/AFD/AFD-POD-3/P/CIR/2024/176 dated December 17, 2024, inter alia, provided for additional disclosures to be made by ODI subscribers and FPIs with segregated portfolios. The provisions were contained in paragraphs 2.2 to 2.7 of the said circular.
2. Paragraphs 4 and 5 of the said circular, inter-alia, specifies the following:
“4. The provisions of this circular except Para 2.2 to 2.7 shall come into force with immediate effect. Para 2.2 to 2.7 shall come into effect after 5 months from the date of this Circular…… .
5. Depositories are advised to put in place appropriate systems, procedures and mechanisms to ensure compliance with the provisions of this Circular within 5 months from the date of this Circular.”
3. Based on representations received from market participants and in order to ensure smooth implementation of the said circular, it has been decided to extend the above timeline, prescribed under Paragraphs 4 and 5 of the said circular, to November 17, 2025.
4. All other provisions of SEBI circular dated December 17, 2024 shall remain unchanged.
5. This Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulations 21, 22(1), 22(6), 22(7) and 44 of SEBI (Foreign Portfolio Investors) Regulations, 2019, and Sub-rule 14 (i) of Rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.
6. This Circular is available at sebi.gov.in under the link “Legal —Circulars”. Yours faithfully,
Aparna Thyagarajan
Chief General Manager
Tel No.: 022 –26449024
E-mail: aparnat@sebi.gov.in
