Introduction: The Securities and Exchange Board of India (SEBI) has recently issued a circular, SEBI/HO/AFD/AFD-SEC-2/P/CIR/2024/8, dated January 25, 2024. The circular focuses on streamlining regulatory reporting by Designated Depository Participants (DDPs) and Custodians. The objective is to establish uniform compliance standards, enhance ease of reporting, and meet regulatory requirements.

Detailed Analysis:

1. Reporting Requirements and Periodicity: SEBI emphasizes the submission of specific reports on the SEBI Intermediary Portal (SI Portal) by DDPs and Custodians. These reports cover various aspects, including annual audit reports, system reviews, AI/ML reports, and more.

2. Formats and Disclosure: The reporting formats have been finalized in consultation with the pilot Custodians and the Designated Depository Participants Standard Setting Forum (CDSSF). CDSSF will share these formats with DDPs and Custodians, who are required to disclose them on their respective websites.

3. Timelines for Submission: The circular outlines the timelines for submitting reports, ranging from monthly to annual. Monthly and quarterly reports are to be uploaded within 15 calendar days from the end of each month and quarter, respectively. The circular modifies certain provisions mentioned in the earlier circulars.

4. Effective Date: The provisions of this circular will come into effect from the month ending February 2024 onwards. This ensures that DDPs and Custodians have adequate time to adapt to the new reporting requirements.

Conclusion: In conclusion, SEBI’s latest circular aims to enhance the efficiency and standardization of regulatory reporting by DDPs and Custodians. The specified reporting requirements, formats, and timelines provide a clear framework for compliance. DDPs and Custodians are encouraged to familiarize themselves with the circular and ensure timely adherence to the new reporting norms. This initiative by SEBI aligns with its commitment to protecting investor interests and fostering the development of a well-regulated securities market.

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Securities and Exchange Board of India

Circular No. SEBI/HO/AFD/ AFD-SEC-2/P/CIR/2024/8 Dated: January 25, 2024

To
All Designated Depository Participants (DDPs),
All Custodians

Sir/ Madam,

Sub: Streamlining of Regulatory Reporting by Designated Depository Participants (DDPs) and Custodians

1. SEBI has reviewed various reports submitted by DDPs and Custodians in order to have uniform compliance standards, for ease of compliance reporting and for regulatory purposes.

2. In terms of Regulation 31(4) of SEBI (Foreign Portfolio Investors) Regulations, 2019, and Regulation 20 of the SEBI (Custodian) Regulations, 1996 read with the provisions of Master Circular for Custodians dated April 27, 2023 (referred as Master Circular for Custodians) all DDPs and Custodians shall submit the reports specified by the Board from time to time.

3. Subsequent to the review, it has been decided that the following reports shall henceforth be submitted on the SEBI Intermediary Portal (SI Portal) by DDPs and Custodians:

Table 1: Reporting Requirements with Periodicity

S. No

Reporting Requirements Periodicity
I. Annual audit reports on internal controls of DDPs under Regulation 31(6) of SEBI (Foreign Portfolio Investors) Regulations, 2019 Annual
II. Annual review report of the systems, procedures & controls of the Custodian by an expert under Regulation 14 (2) of Custodian Regulations read with Clause 8 of Chapter IV of the Master Circular for Custodians.
III. Audited Annual report along with Net worth certificate under Clause 7 of Chapter IV of the Master Circular for Custodians
IV. AI / ML report under Clause 9 (v) of Chapter IV of the Master Circular for Custodians Half yearly
V. Custodian Quarterly report under Clause 6 of Chapter IV of the Master Circular for Custodians. Quarterly
VI. FPI General Information to assess the eligibility under Regulation 4 of FPI Regulations, 2019
VII. NRI/OCI/RI requirements under Clause 1(ii) of Part A of Master Circular for FPIs and DDPs dated December 19, 2022 Quarterly
VIII. FPIs non-compliant with Legal entity identifier requirements under circular dated July 27, 2023
IX. FPIs who have not submitted granular BO details under circular dated August 24, 2023
X. Details of FPIs granted exemption under circular dated August 24, 2023
XI. Change in material information where there is a delay of 6 months as provided under Clause 14(iii) of Part A of the Master Circular for FPIs and DDPs Monthly
XII. Report of short sales by FPIs under Clause 4 of Chapter IV of the Master Circular for Custodians.

4. The reporting formats which were finalised in consultation with the pilot Custodians and Designated Depository Participants Standard Setting Forum (CDSSF) shall be shared by CDSSF with all the DDPs and Custodians, who shall disclose the same on their websites.

5. Reporting by DDPs under Clause 14(iii) of Part A of Master Circular for FPIs and DDPs shall be on monthly basis on SI portal. However, the DDPs shall continue to submit delay in intimation of certain material changes (excluding change in Name, Change in Senior Managing Official and Change in Beneficial owner not leading to change in Investor Grouping), within 2 working days from the receipt of intimation by FPI by email to misc-fpi@sebi.gov.in.

Timelines for submission of reports

6. These reports shall be submitted by DDPs and Custodians on the SI portal on monthly, quarterly, half yearly and annual basis as specified. The monthly and quarterly reports shall be uploaded within 15 calendar days from the end of each month and quarter, respectively. The other reports shall be uploaded as per timelines specified in the Master Circular.

7. The mode and periodicity of the provisions of circulars as mentioned in para 2 stand modified to the extent specified herein.

8. The provisions of this Circular shall come into effect from month ending February – 2024 onwards.

9. This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.

10. This Circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework – Circulars” and “Info for Foreign Portfolio Investors”.

Yours faithfully,

Treasa Kuriala
Deputy General Manager
Tel no.: +91-22-26449228
treasak@sebi.gov.in

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