The Securities and Exchange Board of India (“SEBI”), in powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read Regulation 21, Regulation 22(1), Regulation 22(6), Regulation 22(7) and Regulation 44 of SEBI (Foreign Portfolio Investors) Regulations, 2019, and Rule 9(14)(i) of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, vide Circular No. SEBI/HO/AFD/AFD-POD-3/P/CIR/2025/71,[1] dated May 16, 2025 (“Circular”), extended the timeline for the implementation of certain provisions of its circular dated December 17, 2024, titled ‘Measures to address regulatory arbitrage with respect to Offshore Derivative Instruments (ODIs) and FPIs with segregated portfolios vis-à-vis FPIs’ (“Original Circular”).
As per the Original Circular, additional disclosure requirements were mandated for Offshore Derivative Instruments (ODI) subscribers and Foreign Portfolio Investors (FPIs) with segregated portfolios under paragraphs 2.2 to 2.7 of the Original Circular. While the rest of the provisions came into effect immediately, paragraphs 2.2 to 2.7 of the Original Circular were scheduled to come into force 5 (five) months from the date of the Original Circular, i.e., by May 17, 2025. Paragraph 5 of the Original Circular further directed depositories to establish systems and procedures for compliance within the same 5 (five) month period.
In response to representations received from market participants and with the objective of ensuring smooth implementation, SEBI has now decided to extend the implementation timeline for the provisions under paragraphs 2.2 to 2.7 of the Original Circular, as well as the related compliance requirements for depositories, to November 17, 2025. All other provisions of the Original Circular dated December 17, 2024, remain unchanged.
[1] https://www.sebi.gov.in/legal/circulars/may-2025/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-f-_93980.html