SEBI Updates
Service platform for investors to trace inactive and unclaimed Mutual Fund folios- MITRA (Mutual Fund Investment Tracing and Retrieval Assistant) Regulatory Updates
Sometimes, Mutual Fund investors lose track of their investments especially when held in physical form with minimal KYC details. Due to non-availability of KYC details these folios may not appear in the unitholder’s Consolidated Account Statement. To avoid fraudulent redemptions of such investments and to address similar concerns, the MITRA platform has been developed to provide investors with a searchable database of inactive and unclaimed Mutual Fund folios. Developed jointly by Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited, MITRA provides a searchable industry-wide database for investors to identify overlooked investments or claims. This platform encourages investors to update their Know Your Customer (KYC) details, reducing non-compliant folios and mitigating fraud risks.
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Industry Standards on “Minimum information to be provided for review of the audit committee and shareholders for approval of a related party transaction Regulatory Updates
SEBI issued a circular on February 14, 2025, establishing industry standards for the minimum information required when seeking approval for related party transactions (RPTs) from audit committees and shareholders. The Industry Standards Forum (“ISF”) comprising representatives from three industry associations, viz. ASSOCHAM, CII and FICCI, under the aegis of the Stock Exchanges, have formulated these industry standards, in consultation with SEBI, for minimum information to be provided for review of the audit committee and shareholders for approval of RPTs. Listed entities are mandated to adhere to these standards in compliance with SEBI’s Listing Obligations and Disclosure Requirements Regulations, 2015
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Investor Charter for Stock Brokers Regulatory Updates
SEBI has updated the Investor Charter for stock brokers to enhance financial consumer protection, financial literacy stock brokers are required to inform both existing and new clients about the Investor Charter by displaying it on their websites, placing it prominently in their offices, including it in the account opening kit, and sharing it through emails or letters. The updated Investor Charter is detailed in the circular. Further, in order to ensure transparency in the Investor Grievance Redressal Mechanism, all the stock brokers shall continue to disclose on their respective websites, the data on complaints received against them or against issues dealt by them and redressal thereof, latest by the 7th of succeeding month.
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Opening of Demat Account in the name of Association of Persons Regulatory Updates
SEBI has permitted Associations of Persons (AoPs) to open demat accounts in their own name, effective June 2, 2025. This enables AoPs to hold securities such as mutual fund units, corporate bonds, and government securities directly. However, the demat account cannot be used for subscribing/ holding equity shares. To open such accounts, AoPs must provide Permanent Account Numbers (PANs) for both the association and its Principal Officer (e.g., secretary or treasurer), who will act as the legal representative in case of disputes. All the members of the AoP shall be jointly and severally liable.
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Regulatory framework for Specialized Investment Funds (‘SIF’) Regulatory Updates
SEBI (Mutual Funds) Regulations, 1996 have been amended to introduce the broad regulatory framework for the new investment product –Specialized Investment Fund to bridge the gap between Mutual Funds (MFs) and Portfolio Management Services (PMS) in terms of portfolio flexibility, creating an opportunity for a new investment product. The regulatory framework for SIFs will be effective from April 1, 2025.
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Amendments and clarifications to Circular dated January 10, 2025 on Revise and Revamp Nomination Facilities in the Indian Securities Market
SEBI issued a circular on February 28, 2025, providing amendments and clarifications to its earlier circular dated January 10, 2025, revising the norms for nomination for demat accounts and mutual fund (MF) folios in the Indian securities market. Key clarifications include the transmission of assets for joint holdings upon the demise of one or more joint holders, allowing investors to opt out of the nomination process through online or physical modes, etc. All clarifications and amendments can be accessed through the below link. Regulatory Updates
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Industry Standards on Key Performance Indicators (“KPIs”) Disclosures in the draft Offer Document and the Offer Document
The Industry Standards Forum (ISF), comprising representatives from ASSOCHAM, CII, and FICCI, formulated industry standards, in consultation with SEBI for effective implementation of the requirement to disclose KPIs in the draft offer document and offer document as per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘ICDR Regulations’) effective from April 01, 2025. The Issuer Companies and Merchant Bankers should follow the industry standards to disclose Key Performance Indicators in the draft offer document and the offer document as per ICDR Regulations. Regulatory Updates
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MCA Updates
Extension for obtaining International Securities Identification Number (‘ISIN’) under Rule 9B of Companies (Prospectus and Allotment of Securities) Rules, 2014 Regulatory Updates
The Ministry of Corporate Affairs, through a notification dated February 12, 2025, has extended the deadline for facilitating the dematerialization of shares (i.e., obtaining the International Securities Identification Number) to June 30, 2025, from the earlier deadline of September 30, 2024. Companies that fall under this category may undertake issue and transfer of shares in physical mode until June 30, 2025. The amendment is made effect retrospectively without adversely affecting the interests of any person.
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RBI Updates
RBI Revises Access Criteria for NDS-OM Platform
The Reserve Bank of India (RBI) has updated the access criteria for the Negotiated Dealing System – Order Matching (NDS-OM) platform through the Master Direction – Reserve Bank of India (Access Criteria for NDS-OM) Directions, 2025, superseding the previous guidelines. The revised guidelines allow direct access to NDS-OM for eligible entities such as banks, primary dealers, NBFCs, mutual funds, and insurance companies. Entities not meeting the direct access criteria can access the platform indirectly through intermediaries with direct access. Additionally, SEBI-registered non-bank brokers are now permitted to facilitate retail investor trades. These revisions, effective from February 7, 2025, are aimed at enhancing market participation and efficiency. Regulatory Updates
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Change in Bank Rate
The Reserve Bank of India (RBI) has announced a reduction in the Bank Rate by 25 basis points, from 6.75% to 6.50%, effective immediately, as per the Monetary Policy Statement 2024-25. This revision also affects penal interest rates on shortfalls in reserve requirements, which have been reduced accordingly. Regulatory Updates
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RBI Adjusts Liquidity Adjustment Facility Rates
The Reserve Bank of India (RBI) has announced a 25-basis points reduction in the policy repo rate from 6.50% to 6.25%, effective immediately, as part of the Monetary Policy Statement dated February 07, 2025. Consequently, the Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates are also adjusted to 6.00% and 6.50%, respectively. All other terms and conditions of the Liquidity Adjustment Facility (LAF) scheme remain unchanged.
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Standing Liquidity Facility for Primary Dealers
In a recent update, the Reserve Bank of India (RBI) has reduced the policy repo rate by 25 basis points from 6.50% to 6.25%, effective immediately, as per the decision of the Monetary Policy Committee (MPC). Consequently, the Standing Liquidity Facility (SLF) for Primary Dealers (PDs) will now be provided at the revised rate of 6.25%. Regulatory Updates
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RBI Revises Risk Weights on Microfinance Loans
The Reserve Bank of India (RBI) has reviewed the risk weights on microfinance loans. Microfinance loans classified as retail claims will now attract a 100% risk weight, as opposed to the previous 75% for claims that meet certain criteria. Additionally, microfinance loans in the nature of consumer credit will be subject to a 100% risk weight, excluding those related to housing, education, vehicle loans, and loans secured by gold. These revisions are applicable immediately to both new and outstanding loans.
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RBI Revises Prudential Regulations for All India Financial Institutions
The Reserve Bank of India (RBI) has made amendments to the Reserve Bank of India (Prudential Regulations on Basel III Capital Framework, Exposure Norms, Significant Investments, Classification, Valuation and Operation of Investment Portfolio Norms and Resource Raising Norms for All India Financial Institutions) Directions, 2023. A key change is that investments by AIFIs in long-term bonds and debentures, with a minimum residual maturity of three years, issued by non-financial entities, will no longer be subject to the 25% ceiling under the Held to Maturity (HTM) category. These changes are set to take effect from April 1, 2025.
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RBI Amends Foreign Exchange Management Regulations Regulatory Updates
The Reserve Bank of India (RBI) has amended the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023. The amendment allows for payments from a resident in one member country of the Asian Clearing Union (ACU) to a resident in another ACU country through the ACU mechanism, excluding Nepal and Bhutan. This amendment comes into effect immediately upon publication.
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RBI Issues New Directions for Forward Contracts in Government Securities
The Reserve Bank of India (RBI) has issued the “Reserve Bank of India (Forward Contracts in Government Securities) Directions, 2025,” effective from May 2, 2025. These Directions shall apply to forward contracts in government securities undertaken in the Over-the-Counter (OTC) market in India. These directions apply to both resident and non-resident market participants eligible to invest in government securities under the Foreign Exchange Management (Debt Instruments) Regulations, 2019. The directions aim to enhance market liquidity and transparency in the trading of forward contracts on government securities in the Over-the-Counter (OTC) market. Regulatory Updates
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RBI Reviews and Rationalizes Prudential Norms for Urban Co-operative Banks (UCBs)
The Reserve Bank of India (RBI) has reviewed and revised the prudential norms for Urban Co-operative Banks (UCBs) to provide greater operational flexibility while maintaining regulatory oversight. Key changes include the revision of small value loans, now defined as loans up to ₹25 lakh or 0.4% of Tier 1 capital, whichever is higher, with a cap of ₹3 crore per borrower. The cap on exposure to housing, real estate, and commercial real estate loans has been updated, with housing loans for individuals capped based on UCB tier, ranging from ₹60 lakh to ₹3 crore. Additionally, the RBI has extended the glide path for provisioning on Security Receipts (SRs) to FY 2027-28. These changes are effective immediately from the date of notification i.e., February 24, 2025.
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Income Tax Updates
Key amendments to Direct taxes in Finance Bill, 2025
- No personal income-tax till 12 lakhs (12.75 lakhs in case of salaried employees) under the new income tax scheme
- TDS rates rationalised Regulatory Updates
- Proposed block assessment for transfer pricing
- Removing date restrictions on framing faceless schemes in certain cases
- Timeline for filing updated return extended from 24 months to 48 months
- Evergreening of carry forward of losses plugged in cases of amalgamation
- Crypto transaction reporting proposed
- Introduction of Section 44BBD – Presumptive Taxation for Non-Residents Providing Services/Technology to Electronics Manufacturing Facilities in India
- TCS on sale of goods is proposed to be omitted w.e.f April 1, 2025
Income-tax Bill, 2025 Introduced (13 February 2025)
- Replaces the Income Tax Act, 1961, effective April 1, 2026. Regulatory Updates
- Major Changes:
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- Terminology Update: “Tax year” replaces “Previous year”; “Assessment year” removed.
- Simplified Structure: 536 sections, 23 chapters, and 16 schedules; redundant provisions removed.
- Consolidation & Clarity: TDS rules grouped under Section 393, exempt incomes moved to schedules.
- Taxpayer Rights: Introduces a Taxpayer Charter outlining rights & obligations.
- No New Taxes Introduced.
Principal Purpose Test (PPT) in Tax Treaties
- PPT under MLI prevents treaty abuse if tax benefits were a primary transaction motive.
- Applicability:
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- Bilateral DTAA (e.g., India-Chile, India-Hong Kong) → Effective from treaty amendment date.
- MLI-based amendments: Effective from first day of the previous year post-MLI enforcement. Regulatory Updates
Due date for filing Form 56F (report required to be filed for claiming deduction under section 10AA of the Act) for AY 2024-25 extended
On consideration of difficulties reported by taxpayers and other stakeholders in filing of Form 56F within the specified timeline, the CBDT has extended the due date for filing the said report for AY 2024-25 to 31 March 2025.
CBDT amends Rule 114DA of Income-tax Rules, 1962 requiring non-residents having liaison office in India to file the specified form
Section 285 of the Act requires non-residents having a liaison office in India to file an annual statement for every financial year in Form 49C. Rule 114DA of the Income-tax Rules, 1962 has now been amended to provide that such form shall be filed within eight months from the end of such financial year. Regulatory Updates
CBDT amends Rules 12CA & 12CC of the Income-tax Rules, 1962 revising the timelines for furnishing statement of income by business trusts and securitisation trusts
CBDT, vide Notification No. 17/2025 dated Feb 24, 2025 revises the timelines for furnishing to PCIT the statement of income distributed by a business trust to its unit holder under Section 115UA(4) of the Act and statement of income paid or credited by a securitisation trust to its investor under Section 115TCA(4) of the Act to June 15 instead of November 15.
GST Updates
GST Rate & Procedural Changes (Effective 1 April 2025)
- Revised GST rates for used vehicles, fortified rice, and sponsorship services (now under forward charge).
- 0.1% compensation cess on merchant exporter supplies. Regulatory Updates
- Hotel accommodation rules updated (delinked from declared tariff).
- Temporary Identification Number (TIN) introduced for unregistered persons to make GST payments.
- GSTR-9C late fee waived for FY 2017-18 to 2022-23 (file by 31 March 2025).
CBIC Clarifications on GST Transactions
- GST Exemptions:
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- Penal charges by banks/NBFCs for transactions up to ₹2,000.
- NSDC-approved skilling services (exemption restored).
- Regularized GST on:
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- R&D services, electricity utility services, and property rentals under RCM.
- Past GST dues of Goethe Institute/Max Mueller Bhawan.
- Delhi Development Authority (DDA) is not a “local authority” under GST.
- Municipal Corporation Delhi facility management services remain taxable.
GST on Reinsurance (Regularization for 2017-2024)
- No GST on co-insurance premium & reinsurance commissions if the lead insurer has paid tax. Regulatory Updates
GST Arrest & Bail Guidelines Updated
- Grounds of arrest must be communicated in writing, separate from broader reasons. Regulatory Updates
