Master Circular for Custodians
Summary
This section establishes the Master Circular as a consolidated source for Custodian regulations effective April 27, 2023. It mandates online registration via the SEBI Intermediary Portal and requires compliance with uniform norms for clearing and settlement integration. Additionally, it outlines fee payment structures based on assets under custody and specifies vault safety standards aligned with RBI guidelines. Chapter IV mandates custodians to submit daily reports on FPI transactions via email and the SEBI portal by 3:00 p.m. Section A establishes general instructions for data accuracy, date formats, and the use of ISIN codes. Sections B and C provide detailed operational guidelines for reporting equity and debt transactions, including specific transaction codes for various corporate actions. This section mandates strict reporting methodologies for debt securities, including specific field requirements and handling of amendments or deletions. It outlines procedures for hybrid instruments, voluntary retention route investments, and trades executed on holidays. Additionally, it establishes periodic reporting obligations for custodians regarding assets under custody, debt holdings,
Text
The provisions of various circulars/directions to Custodians have been consolidated in this Master Circular to enable stakeholders to access applicable requirements at one place.
In addition to this Master Circular, custodians shall be required to independently comply with other requirements specified by SEBI for market intermediaries such as GST levy, data access terms, digital payments, grievance redressal, and outsourcing guidelines.
With respect to any other directions or guidance issued by SEBI, as specifically applicable to Custodians, the same shall continue to remain in force in addition to the provisions of this Master Circular or any other law for the time being in force.
This Master Circular shall come into force from the date of its issue. The circulars mentioned in Annexure A of the Master Circular shall stand rescinded with effect from the date of issuance of this Master Circular.
Notwithstanding such rescission, anything done or any action taken under the rescinded circulars prior to such rescission shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; pending applications shall be deemed made under these provisions; and previous operations, rights, liabilities, and penalties shall remain unaffected.
This Master 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 interests of investors in securities and to promote the development of, and to regulate the securities market.
All applicants desirous of seeking registration as a Custodian are now required to submit their applications online only, through SEBI Intermediary Portal at https://siportal.sebi.gov.in.
The Custodian seeking approval as Designated Depository Participant (DDP) in terms of Regulation 10 of Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 shall also apply through this portal.
Custodians must function as an integral part of the system and integrate with the system. Therefore, no custodians shall have such norms and practices as would result in their functioning in isolation of clearing and settlement systems.
Custodians must be a member of the clearing houses/ clearing corporations of the stock exchange(s) and participate in the clearing and settlement process through the clearing house/clearing corporation for all securities of their clients.
Custodians shall comply with the applicable rules of the exchanges where they have become members of the clearing house/clearing corporation.
Payment of annual fee by Custodians to SEBI shall be made in terms of Second Schedule of Custodian Regulations. The payment of annual fee shall be accompanied by a statement of assets under custody as per below format and shall be certified to be true and complete by the functional head of the custody services of the custodian.
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Source: SecMarx — Master Circular for Custodians. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.