Law Updates

Subject

Summary: The Ministry of Commerce and Industry has revised the notified boundary of the multi-product Special Economic Zone developed by Mangalore SEZ Limited near Mangalore in Karnataka. Through Notification S.O. 4512(E), the Central Government has added 27.0093 hectares to the SEZ and de-notified 1.1558 hectares from it. This Mangalore SEZ area revision changes the notified geographical boundary of the existing Special Economic Zone. After both adjustments, the notified area of Mangalore SEZ increases from 570.7080 hectares to 596.5615 hectares. The additional land falls in Permude and Bajpe villages, while the de-notified parcels are located in 62 Thokur village in Dakshin Kannada district. The notification is therefore relevant to businesses tracking the Mangalore SEZ land addition, Mangalore SEZ de-notification, and the current Mangalore SEZ total area. The Mangalore Special Economic Zone notification is primarily a geographical and administrative change to the SEZ boundary. The notification does not introduce a new registration procedure, compliance deadline, fee, testing requirement or penalty for SEZ units. Its practical importance lies in determining which identified land parcels form part of the notified SEZ after the revision. Mangalore SEZ Notification at a Glance Particular Verified details Issuing authority Ministry of Commerce and Industry, Department of Commerce, SEZ Division, Government of India Document type Gazette notification concerning addition and partial de-notification of SEZ land Notification number S.O. 4512(E) Gazette number 4332, Part II, Section 3, Sub-section (ii) File number F. No. F.2/120/2006-SEZ Notification date 12 June 2026 Date shown on the Gazette issue 14 August 2026 Electronic Gazette identifier CG-DL-E-17082026-275513 Effective date A separate commencement or effective date is not expressly specified Governing law Special Economic Zones Act, 2005 and Special Economic Zones Rules, 2006 SEZ developer M/s Mangalore SEZ Limited Type of SEZ Multi-product Special Economic Zone Location Baikampady, near Mangalore, Dakshin Kannada district, Karnataka Area before the 2026 revision 570.7080 hectares Area added 27.0093 hectares Area de-notified 1.1558 hectares Net increase 25.8535 hectares Revised total area 596.5615 hectares Compliance deadline Not expressly specified Nature of the measure Revision of the notified geographical area of an existing SEZ The notification is dated 12 June 2026, but the Gazette shows 14 August 2026. The online Gazette record and digital signature show 17 August 2026. So, these dates should be recorded separately. For businesses searching for the SEZ notification Karnataka authorities have issued in relation to Mangalore, S.O. 4512(E) is the relevant 2026 boundary revision notification. Regulatory Framework for the Boundary Revision The Mangalore SEZ notification has been issued under section 4(1) of the Special Economic Zones Act, 2005, read with rule 8 of the Special Economic Zones Rules, 2006. In this sense, the notification forms part of the regulatory framework under the Special Economic Zones Act 2005 notification mechanism for identifying and modifying notified SEZ areas. Section 3 of the SEZ Act provides the framework through which a person or government may propose the establishment of an SEZ. After the proposal and letter-of-approval process, section 4(1) allows the Central Government to notify a specifically identified area as an SEZ when the prescribed conditions are satisfied. The second proviso to section 4(1) is particularly relevant here. It permits the Central Government, after an SEZ has been notified, to notify additional land for inclusion in that SEZ when it considers the addition appropriate. Rule 8 deals with notification of the identified area after the required details have been submitted and the applicable conditions have been accepted. The present notification uses that framework to change the geographical composition of an existing SEZ. It does not establish a completely new SEZ. It adds specified parcels to the existing Mangalore SEZ and removes other specified parcels from its notified area. History of Area Changes in Mangalore SEZ The 2026 notification also records the earlier notifications through which the area of Mangalore SEZ changed over time. Stage Notification Date Area added (hectares) Area de-notified (hectares) Resulting total (hectares) 1 S.O. 1885(E) 6 November 2007 587.9210 -- 587.9210 2 S.O. 1477(E) 28 June 2011 55.7760 22.9570 620.7400 3 S.O. 1909(E) 18 August 2011 4.0460 -- 624.7860 4 S.O. 2298(E) 8 September 2014 35.0163 4.2980 655.5043 5 S.O. 3719(E) 13 November 2017 -- 4.8722 650.6321 6 S.O. 544(E) 9 February 2022 -- 79.9241 570.7080 7 S.O. 4512(E) 12 June 2026 27.0093 1.1558 596.5615 This history matters because the new total cannot be understood by looking only at the original 2007 notification. The notified boundary has expanded and contracted several times. For current land-status work, stakeholders should use the latest notification together with the earlier instruments and the relevant official maps or demarcation records. The history also explains why the Mangalore SEZ area after the 2026 notification is 596.5615 hectares rather than the original notified area. The latest notification must be read as the current boundary revision to the existing SEZ. What Has Changed under S.O. 4512(E)? The 2026 notification makes two connected changes: It adds 27.0093 hectares situated in Permude and Bajpe villages to the notified SEZ. It de-notifies 1.1558 hectares situated in 62 Thokur village from the SEZ. The combined effect is a net increase of 25.8535 hectares. Therefore, in response to how much land has been added to Mangalore SEZ, the notified addition is 27.0093 hectares. After accounting for the land removed from the notified area, the net increase is 25.8535 hectares. Change Area Location Practical meaning Additional land notified 27.0093 hectares Permude and Bajpe The listed survey parcels are added to the notified SEZ area Land de-notified 1.1558 hectares 62 Thokur The listed survey parcels are removed from the notified SEZ area Net boundary increase 25.8535 hectares Mangalore SEZ The overall notified area becomes larger Revised total 596.5615 hectares Multi-product Mangalore SEZ This is the resultant area stated in the notification The notification does not explain the intended use of each newly included parcel. It also does not state whether the added land will be classified as a processing area, trading or warehousing area, or a non-processing area. Those matters may depend on separate demarcation, approval, or authorised-operation records. Revised Mangalore SEZ Area Calculation The area calculation can be reconciled as follows: Calculation component Area in hectares Total notified area before the 2026 notification 570.7080 Add: newly notified land 27.0093 Subtotal 597.7173 Less: de-notified land 1.1558 Correct resultant area 596.5615 The arithmetic confirms the final area of 596.5615 hectares stated in the notification. However, the Gazette contains a numerical inconsistency in its final English calculation line. This is discussed separately under “Points Requiring Clarification.” Village-Wise Summary of the Boundary Change Village Nature of change Number of listed entries Total area in hectares Permude Land added to the SEZ 17 13.3965 Bajpe Land added to the SEZ 23 13.6128 Total addition   40 27.0093 62 Thokur Land de-notified from the SEZ 7 1.1558 The Permude and Bajpe totals have been calculated from the individual entries printed in the Gazette. Together, they reconcile exactly with the notified addition of 27.0093 hectares. The village-wise schedule is particularly relevant when reviewing the Permude and Bajpe SEZ land included through the 2026 boundary revision and the parcels affected by the 62 Thokur SEZ de-notification. Survey-Wise Land Added in Permude and Bajpe The notification provides a detailed survey-wise list of the land parcels added to the Mangalore SEZ. The following tables show the exact survey numbers and corresponding areas notified in Permude and Bajpe, making it easier for businesses and landholders to verify the affected parcels. Land added in Permude S. No. Survey number Area in hectares 1 42/1 Part 0.1710 2 44/1 Part 0.1530 3 44/2 Part 0.8140 4 45/1 1.0120 5 45/2 2.8770 6 46/3 Part 2.1735 7 46/4 0.5990 8 46/5 0.3400 9 46/6 0.1380 10 46/7 Part 0.9370 11 46/8 Part 0.1110 12 46/15 Part 0.0840 13 46/16 Part 0.0490 14 196/2 Part 0.3440 15 196/3 0.4370 16 199/1 2.8530 17 199/2 0.3040 Total - Permude 13.3965 Land added in Bajpe S. No. Survey number Area in hectares 1 69/1 0.8788 2 69/2A 0.6620 3 69/2B 0.2905 4 70/1 0.5500 5 70/2 0.1740 6 70/3 0.0850 7 70/3 0.0809 8 70/4 0.0648 9 70/5 0.4330 10 70/6 0.0607 11 70/7 0.0971 12 70/8A 0.3292 13 70/8B 0.0607 14 70/9 0.2384 15 70/11 0.5059 16 70/12 0.0648 17 153/1 2.9624 18 153/2 0.2023 19 159/1 1.2869 20 159/2 0.9834 21 159/3 0.1052 22 163/1 1.6510 23 163/2 1.8458 Total - Bajpe 13.6128 Survey number 70/3 appears twice in the Gazette with two different areas: 0.0850 hectare and 0.0809 hectare. Both rows have been retained exactly as separate notified entries. They should not be merged or treated as a single parcel without an official cadastral or survey-level verification. Businesses specifically asking which survey numbers were added to Mangalore SEZ should refer to the complete survey-wise schedule above rather than relying only on the village-wise total. Survey-Wise Land De-notified in 62 Thokur S. No. Survey number Area in hectares 1 59/13B 0.0605 2 59/14B 0.0964 3 59/15 0.0562 4 59/19B 0.1537 5 61/3A1B 0.2750 6 62/15 P 0.1174 7 63/13 P 0.3966 Total 1.1558 For the listed parcels, de-notification means that they are removed from the notified geographical area of the SEZ under this notification. The Gazette does not, by itself, explain the resulting land use, ownership position, compensation, local planning treatment, or other approvals applicable to those parcels after de-notification. Those issues require separate verification from the relevant land, planning, state, local, and SEZ records. Geographical Scope and Applicability The notification is narrow in scope. It applies to the specified survey parcels connected with the multi-product Mangalore SEZ near Baikampady in Dakshin Kannada district, Karnataka. It is directly relevant to: Mangalore SEZ Limited as the developer, existing, or proposed units whose sites, access, utilities, or projects may relate to the listed parcels, investors and infrastructure providers conducting due diligence within the SEZ, landowners, occupiers, and counterparties dealing with the identified survey numbers, surveyors, lawyers, consultants, lenders, and project teams reviewing land status, and the Development Commissioner and other authorities responsible for SEZ administration and demarcation. The notification does not state that every business operating in or around Mangalore must take a new compliance step. Relevance depends mainly on whether a business, project, agreement, approval, or land record is connected with the affected parcels or the revised SEZ boundary. What the Revision Means for Key Stakeholders The notification identifies the exact survey numbers and land areas added to the Mangalore SEZ across Permude and Bajpe villages. Mangalore SEZ Limited For the developer, the most immediate issue is consistency across official boundary records. The Gazette schedule, survey records, approved plans, infrastructure layouts, land documents, internal maps and stakeholder communications should all refer to the same revised area. The notification itself does not prescribe a new filing deadline. As a practical control, however, the developer should confirm whether any consequential update is required before the Board of Approval, Development Commissioner, Specified Officer, customs authorities, state authorities or other relevant bodies. Existing SEZ units The notification does not change an existing unit’s letter of approval, authorised operations, validity, performance requirements or regular SEZ compliance. Still, units should check whether their premises, utilities, access roads, leases, expansion plans, or common facilities are linked to any of the affected survey parcels. If a unit has no connection with the revised parcels, there may be little immediate impact on its operations. Proposed units and investors For proposed units and investors, the revised boundary should be checked before finalising a site or completing legal due diligence. Simply describing a property as being “near the SEZ” is not enough. The exact survey number and parcel should be checked against the latest notified schedule and available demarcation records. The notification only confirms which listed parcels have been added to or removed from the SEZ. It does not replace title checks, encumbrance searches, land-use checks, environmental due diligence, access reviews or other approvals needed for a project. Landowners, occupiers, and contracting parties Anyone dealing with the affected land should first verify the survey number and exact area. This is particularly important where the survey number has a “Part,” “A,” “B” or “P” reference or where the same survey number appears more than once. The Gazette does not settle questions about ownership, possession, compensation, contracts, or mutation. These matters should be checked against the relevant land and revenue records before entering into a transaction. Lenders and due-diligence teams Banks, investors, legal advisers, and transaction teams should include Notification S.O. 4512(E) in their land and project checks. If any security, valuation, lease, acquisition or project document relates to the affected land, its details should be compared with the revised SEZ boundary. This can help avoid discrepancies between the notified area and the information used in financing, valuation or transaction documents. Points Requiring Clarification in the Gazette The notification contains several drafting or presentation issues that deserve careful treatment. 1. Incorrect figure in the final English formula The English table states that the de-notified area totals 1.1558 hectares. The operative text also uses 1.1558 hectares. However, the final calculation line prints: 570.7080 + 27.0093 - 1.558 That printed expression does not produce 596.5615 hectares. If 1.558 hectares were deducted, the result would be 596.1593 hectares. The stated final total of 596.5615 hectares is obtained only by deducting 1.1558 hectares: 570.7080 + 27.0093 - 1.1558 = 596.5615 The de-notified parcels add up to 1.1558 hectares. So, the 1.558 figure in the final calculation appears to be a typo. Businesses should still use the figure as published in the Gazette and, if it affects a transaction, boundary check, or filing, confirm the correct figure with the concerned authority. 2. De-notification table uses the wrong column label The final column of the English “Table for De-notification Area” is labelled “Area to be notified (in Hectares).” Because the table concerns parcels being removed from the SEZ, the label appears inconsistent with the table’s subject and operative text. The individual figures and the total are still understandable in context, but the heading should be read cautiously and reproduced accurately when cited. 3. Survey number 70/3 appears twice The additional-area table lists Bajpe survey number 70/3 in two consecutive rows, with areas of 0.0850 hectare and 0.0809 hectare. The Gazette does not provide a subdivision, qualifier, or explanation distinguishing the two entries. The duplication may represent two separate portions, but that cannot be confirmed from the text alone. Parcel-level reliance should therefore be supported by an official survey schedule, map, or clarification. 4. Different issue, Gazette, and electronic-publication dates The notification is dated 12 June 2026. The Gazette issue is dated 14 August 2026, while the electronic identifier and digital-signature information point to 17 August 2026. No separate effective-date clause is printed. These dates should be recorded separately. If a legal or commercial question depends on the exact date from which the revised boundary must be treated as operative, specific advice or authority confirmation may be appropriate. What Affected Businesses Should Do Next The notification does not set any general compliance deadline. But if your business has any connection with the listed land, it is worth checking the details before making any changes to your plans or documents. Check the survey details: If your project, lease, property, access route or facility is on the affected land, compare the survey number and area with the details given in the notification. Update boundary records:  Ensure that internal maps, land schedules, due-diligence reports, presentations, and approval documents do not continue to show the earlier total of 570.7080 hectares as the current SEZ area. Keep the area figures clear: The listed de-notified parcels total 1.1558 hectares, even though the final calculation in the notification shows a different figure. Keep this discrepancy on record when reviewing the document. Do not merge duplicate entries automatically: keep both 70/3 rows separate until an official map or clarification identifies their precise parcel boundaries. Review connected approvals and contracts:  See if the boundary change has any effect on existing leases, land allotments, infrastructure or utility agreements, financing documents, or planned expansion. Check if any updates are needed:  If the affected land is relevant to the project, confirm with the Development Commissioner or SEZ authorities whether any maps, approvals, demarcation records, or other documents need to be changed. Separate requirements from precautions: These are practical steps for businesses to consider. The notification itself does not set out this checklist or mention any deadline for completing these actions. Benefits and Practical Challenges The revised boundary brings some practical opportunities for the SEZ, but businesses may also face challenges while updating land and project records. Potential benefits The net increase of 25.8535 hectares may support additional land availability, infrastructure planning, project development or future allocation within the SEZ. These are possible business implications, not outcomes guaranteed by the notification. The survey-wise schedule also creates a formal public record of the parcels included and removed. That can improve boundary clarity when it is read together with authoritative maps and land records. Practical challenges One of the main issues could be getting all records to show the same boundary. Some businesses may still have maps, or documents showing the earlier 570.7080-hectare area. The incorrect figure in the final calculation and the two 70/3 entries could also confuse when checking individual parcels. It is better not to rely only on the total area. The survey number, village, land area, maps and land records should all be checked against each other. How Corpseed Can Help SEZ boundary changes can affect land due diligence, project documentation, approvals, and stakeholder coordination even when the Gazette does not impose a direct filing deadline. Corpseed can assist businesses in understanding the notification and identifying the practical work required for their specific project. Relevant support may include: SEZ notification and applicability assessment, survey schedule and regulatory-document review, support in reconciling land details with project and approval records, assistance with SEZ-related applications and documentation where separately required, review of developer, unit, and authorised-operation documentation, regulatory gap assessment for proposed SEZ projects or expansions, coordination support for clarifications from relevant authorities, and ongoing SEZ compliance consultancy for developers and units. The appropriate scope depends on the business, parcel, approval status, and proposed activity. Corpseed does not treat the Gazette notification alone as a substitute for land-title, cadastral, environmental, tax, customs, or project-specific legal review. Businesses connected with the affected survey parcels can seek a document-specific assessment before changing plans, agreements, applications or investment decisions. Key Takeaways Notification S.O. 4512(E) revises the geographical boundary of the multi-product Mangalore SEZ. It adds land in Permude and Bajpe, removes specified land in 62 Thokur and increases the total notified area from 570.7080 hectares to 596.5615 hectares. The notified addition is 27.0093 hectares. The de-notified area is 1.1558 hectares. The net increase is 25.8535 hectares. The revised SEZ area is 596.5615 hectares. The notification creates no express compliance deadline for businesses. Parcel-level decisions should be based on exact survey details and official demarcation records. The final English formula contains an apparent typographical error, although the itemised figures and final total reconcile. Survey number 70/3 appears twice and should not be consolidated without official verification. The Mangalore SEZ area after the 2026 notification is therefore 596.5615 hectares. The Mangalore SEZ land addition covers identified parcels in Permude and Bajpe. The Mangalore SEZ de-notification covers seven identified parcels in 62 Thokur. Stakeholders requiring help with the revised boundary can consider professional SEZ compliance consultancy based on their specific land, project, and approval requirements.

Subject

Summary: The Government of the National Capital Territory of Delhi has enacted the Delhi Bed & Breakfast Establishments (Repeal) Bill, 2026. The Bill seeks to repeal the act that has regulated and registered Bed & Breakfast Establishments in Delhi since 2007, including the subsequent amendments made in 2010 and 2021. The Bill was introduced in the Delhi Legislative Assembly on August 7, 2026, by the Minister of Tourism. The declared objective of this Bill is to transition from the current statutory regime to a more adaptable, policy-based regime for bed-and-breakfast regulation and promotion. The key thing for the operators to note here is that the document provided above is that of a repealing Bill rather than one indicating commencement. The repealing is meant to take effect neither from the date of the Bill nor from the time it is published. Clause 1(2) provides that the proposed Act shall commence on the date appointed by the Government by means of notification in the Gazette. Before the commencement, businesses should not assume that the 2007 regime is no longer in place. Notification at a Glance Particular Verified details Introducing authority Government of the National Capital Territory of Delhi Department Tourism Legislature Legislative Assembly of the National Capital Territory of Delhi Document type Repeal Bill Legal status of attached source Bill as introduced; not a commencement notification Official title The Delhi Bed and Breakfast Establishments (Repeal) Bill, 2026 Date of introduction 7 August 2026 Gazette publication details Delhi Gazette, Extraordinary, Part IV, No. 229; published for general information Proposed short title after enactment Delhi Bed and Breakfast Establishments (Repeal) Act, 2026 Proposed commencement A date to be appointed later by Government notification in the Official Gazette Existing law covered National Capital Territory of Delhi (Incredible India) Bed and Breakfast Establishments (Registration and Regulation) Act, 2007 Amendments covered Amendment Acts of 2010 and 2021 Main stakeholders Existing B&B operators, certificate holders, new applicants, applicants with pending cases, guests, and the Tourism Department Core development Proposed replacement of the statutory framework with an executive policy framework Compliance deadline Not expressly specified in the source document Immediate transition statement Fresh registrations and processing of pending applications are stated to remain in abeyance during the transition Further action awaited Completion of the legislative process, approval and notification of the replacement policy, and a commencement notification These dates must be considered independently. While the Bill was presented on 7 August 2026, its intended date of operation would depend on the subsequent Gazette Notification. However, the publication of the Bill for general information does not, by itself, establish the date of the repeal. Legal Status of the Delhi B&B Repeal Bill, 2026 The attached Gazette is the text referred to as the Bill, which was presented in the Delhi Legislative Assembly on 7 August 2026. The Assembly’s official Bulletin can confirm this. The agenda of the legislative business that was conducted after this shows that the Bill was to be considered. However, these are just some of the details of the legislative process and do not constitute the enactment of the law. The importance of the above lies in the postponement of the Billis commencement. Clause 1(2) states that the proposed Act shall take effect only on the appointed date by the Government in a Gazette Notification. The Memorandum Regarding Delegated Legislation mentions that the above is planned to coincide with the notification of the new B&B policy framework. Therefore, the correct business position is: The proposal to repeal the 2007 framework is official and has entered the legislative process. The attached source should not be treated as proof that the repeal is already operational. Operators should verify the final legislative status and the separate commencement notification before changing their compliance position. Existing obligations should not be stopped merely because a repeal Bill has been published. The Delhi Legislative Assembly Gazette of 7 August 2026 announces the presentation of the Bill. The revised list of business for 11 August 2026 mentions the Bill in the schedule. Neither of these two documents should be mistaken for the notice of commencement that is needed under Clause 1(2). The Regulatory Framework This existing legislative framework emanates from the "National Capital Territory of Delhi (Incredible India) Bed and Breakfast Establishments (Registration and Regulation) Act, 2007," also known as the Delhi Act No. 11 of 2007. It was formulated to ensure the regulation and growth of qualifying B&Bs in Delhi. The 2007 Act formulated the statutory framework for registration, inspection, classification, and regulation. It dealt with issues such as the requirements for registering a residential establishment, the classification of establishments, the obligations of owners, the maintenance of guest lists, appeal mechanisms, redressal of grievances, inspections, and punishments. The Act also provided for special provisions relating to registered establishments, licenses, and residential establishments. The framework has been amended by the 2009 Amendment Act, contained in Delhi Act No. 03 of 2010, and the 2021 Amendment Act, Delhi Act No. 04 of 2021. The repeal bill is meant to repeal the Act and both amendments. The Bed and Breakfast Scheme website maintained by the Delhi Tourism Department is yet another reason why operators must be sure of the operative law before closing the framework down. Why the Repeal Was Proposed The Statement of Objects and Reasons explains the Government's stated basis for the proposal. According to the document, the tourism and hospitality sector has changed considerably since 2007. New forms of accommodation have emerged, and policy approaches to small and alternative accommodation have also developed. The Government considers the existing statutory model less suited to this changed environment. It proposes discontinuing that model and replacing it with a more flexible and facilitative policy framework. The stated intention is to regulate and promote B&B establishments through executive policy rather than continue with the present Act-based structure. The policy is described as more liberal and supportive. At the same time, the Bill's explanatory statement makes clear that operators will still need to comply with applicable laws concerning: Safety Public health Municipal governance Public order The proposal is therefore not a complete withdrawal of regulation. It is a proposed change in the form and source of B&B regulation. The current Act-based system would give way to a policy-based system, while other generally applicable laws would remain in force. Acts Proposed to Be Repealed Clause 2(1) identifies three enactments: Enactment Proposed treatment National Capital Territory of Delhi (Incredible India) Bed and Breakfast Establishments (Registration and Regulation) Act, 2007, Delhi Act No. 11 of 2007 Proposed to be repealed National Capital Territory of Delhi (Incredible India) Bed and Breakfast Establishments (Registration and Regulation) (Amendment) Act, 2009, published as Delhi Act 03 of 2010 Proposed to be repealed National Capital Territory of Delhi (Incredible India) Bed and Breakfast Establishments (Registration and Regulation) (Amendment) Act, 2021, Delhi Act 04 of 2021 Proposed to be repealed The proposal does not simply amend one registration rule. It removes the principal statute and its two amendment Acts. The replacement framework is expected to come through policy, but the final policy's operative details must be checked separately once approved and notified. What the Bill Proposes The Bill is short, but it would produce a major structural change. Its principal proposals are: Repeal the 2007 B&B Act and the 2010 and 2021 amendment Acts. Allow the Government to select the commencement date through a future Gazette notification. Preserve earlier actions taken under the repealed laws, to the extent stated in the savings provisions. Preserve rights, privileges, obligations, and liabilities already acquired, accrued, or incurred. Allow investigations, legal proceedings, and remedies connected with earlier rights or liabilities to begin, continue, or be enforced. Apply section 6 of the General Clauses Act, 1897, to the repeal. Support a transition to an executive policy framework for Delhi B&B establishments. The Bill does not contain the full replacement registration or operating system. It does not prescribe the future application form, fee, eligibility criteria, classification method, certificate period, inspection system, or renewal process. Those matters are expected to be addressed through the proposed policy or related administrative measures. When Will the Repeal Take Effect? The Bill does not provide a fixed calendar date. Clause 1(2) says that the proposed Act will come into force on a date appointed by the Government through notification in the Official Gazette. The Memorandum Regarding Delegated Legislation adds an important detail: the Government intends to align commencement with notification of the new policy framework for bed and breakfast establishments. The Statement of Objects and Reasons similarly states that the repeal is proposed to take effect upon notification of the policy. This creates three practical stages: Stage Status or trigger Business meaning Introduction of the Bill Introduced on 7 August 2026 The repeal proposal entered the legislative process Completion of legislative and approval steps Must be verified from subsequent official records Passage alone should not be confused with commencement Commencement of the repeal Future Official Gazette notification under clause 1(2) Passage alone should not be confused with commencement There are no specific start date and compliance date provided in the attached Bill. Companies are advised to refer to the Official Gazette and the Tourism Department, rather than relying on unofficial sources and guessed dates. Repeal, Savings and Continuing Liabilities Not all aspects under the earlier law are erased by repeal. Section 2 provides for saving clauses that preserve previous legal actions and consequences. Actions already taken The Bill says that anything done or any action taken under the repealed Acts may continue to be recognised, provided it is not inconsistent with the proposed Repeal Act. The listed examples include: Registration already granted Certificate already issued Order already made Approval already given Proceeding already initiated The clause states that these actions will be treated as having been taken under the corresponding provisions of the proposed Act. However, the Repeal Bill itself does not contain a new detailed registration framework. The replacement policy will therefore be important in explaining how this continuity will work in practice. Rights, privileges, duties, and liabilities The repeal is not intended to affect a right, privilege, obligation, or liability already acquired, accrued, or incurred under the earlier Acts. This protects both the existing benefits and burdens. Operators should not presume that once a repeal has occurred, the liability is no longer in effect. Neither should certificate holders think that all rights about the previous certificate shall remain the same indefinitely. All these will depend on the savings provision, the notice of coming into force, the policies, and the transition instructions. Investigations and proceedings Clause 2(3) allows an investigation, process, or action arising from a right, obligation, or liability about a previous certificate to continue as if there were no repeal of the Acts. The Statement of Objects and Reasons is consistent with this approach. It says that penalties, liabilities, non-compliances, and legal proceedings arising under the existing Act will continue to be dealt with under that Act. General Clauses Act protection The clause makes use of Section 6 of the General Clauses Act of 1897 with regard to the repeal. In simpler terms, the repeal is not intended to revoke anything done under the repealed law, except where otherwise provided by the repeal. For businesses, the practical message is clear: past compliance records and unresolved matters remain important even if the regulatory structure changes. Status of Fresh and Pending Registration Applications The Statement of Objects and Reasons says that, during the transition period: Fresh registrations under the existing Act will remain in abeyance. Processing of pending applications under the existing Act will also remain in abeyance. “In abeyance” means temporarily kept on hold. It does not necessarily mean permanently rejected or automatically approved. This statement is highly relevant to applicants, but the Bill's operative clauses do not provide a detailed procedure for handling the pause. The source does not expressly specify: The period when the abeyance begins Whether additional applications are possible but will not be processed Whether paid application fees will be transferred or refunded Whether an applicant needs to apply again according to the new policy How deficiencies or queries already issued will be handled Whether applications at an advanced inspection or approval stage will receive separate treatment A deadline for deciding pending applications Candidates should keep all the above-mentioned documents, such as the acknowledgement, payment receipt, letter of correspondence, inspection report, and the deficiency notice. Where a pending application may impact operations, funding, property use, or contractual obligations, the candidate should get written confirmation of their status. What Happens to Existing Registrations and Certificates? The Bill attempts to protect registrations and certificates already granted, while the Statement of Objects and Reasons says that these matters will be suitably addressed under the proposed policy. The transition is expected to cover: Existing registrations Existing certificates Listing of registered premises Records held by operators Grievance redress issues Pending appeals Classification requirements The above source does not indicate that all existing certificates lapse upon the repeal of this Act. It is also not clear from the above source that all certificates would remain unaltered until their respective expiration dates. The final policy or transition order may need to answer whether existing certificate holders will be: Automatically recognised under the new policy Required to migrate or re-enrol Given a temporary continuation period Requested to provide updated documentation or property information Categorized under new classifications Undergo new safety or municipal inspections Unless the authorities give new instructions, operators should maintain their current certificate, inspection report, guest list, and other documents. Existing Privileges Need Specific Clarification The 2007 Act did more than establish a registration procedure. It also gave registered establishments specific statutory treatment. For example, the existing Act contains provisions under which qualifying registered establishments are not required to obtain certain licences for providing food or lodging and are not treated as commercial units for specified purposes. These privileges are not expressly replicated in the Repeal Bill. The general provisions that are contained in the Bill may be enough to secure any rights that have been accumulated thus far but do not define what will happen thereafter. This is a material issue for property owners and B&B operators. They should not assume that every exemption or residential treatment under the 2007 Act will automatically continue under an executive policy. The final policy and any connected legal notifications should be checked for their effect on: Municipal licensing Land-use or residential-use treatment Property-tax treatment Electricity and water tariff classification Food-service permissions Fire and safety approvals Police-related requirements Other laws and authorities may also govern these subjects. A policy issued by the Tourism Department cannot be presumed to override another statute unless the legal basis clearly permits that result. Pending Appeals, Complaints and Legal Proceedings Bill ensures continuity of investigation, legal actions, and remedy in respect of previous rights and liabilities. The transitional provisions include grievance redressal and pending appeals, according to the explanatory note. This means businesses should continue responding to existing proceedings. Repeal should not be treated as a reason to ignore: A show-cause notice A complaint made by a guest An inspection finding A revocation matter Appeal or revision process that is pending Liability due to non-compliance previously Legal action or proceeding The transitional provisions in the new framework must indicate which authority will deal with pending issues once implementation begins, and whether the same forms, timeframes, and appeal procedures will be maintained. The Proposed Policy-Based Framework The Government proposes to regulate and promote B&B establishments through an executive policy framework. According to the Statement of Objects and Reasons, the policy is intended to be more liberal, supportive, and facilitative than the current statutory structure. The document states that a comprehensive policy is being formulated and will be submitted to the Council of Ministers for approval. It also says the policy will address existing registrations, certificates, directories, operator records, grievance redressal, pending appeals, and classification standards. As of now, there is an Official Draft of the Delhi Bed & Breakfast Policy for 2026 from the Delhi Tourism Department. A draft is not supposed to be considered the approved policy. Operators must compare the final approved policy with the draft one before considering any eligibility criteria, process, etc. The movement from an Act to a policy may allow the Government to update the framework more easily as the accommodation market changes. It may also reduce the need for frequent legislative amendments. At the same time, operators will need clarity about the legal basis, stability, and enforceability of their rights and obligations under the policy. Other Laws Will Continue to Apply The Bill's explanatory statement specifically says that the new policy approach will continue to ensure compliance with laws relating to safety, public health, municipal governance, and public order. Repeal of the B&B-specific Act would not mean that a property can operate without regard to other applicable laws. Depending on the property, services, and operating model, an operator may still need to assess requirements administered by municipal bodies, fire authorities, police, health authorities, tax authorities, or other regulators. The source does not provide a complete list of continuing approvals. Therefore, businesses should carry out a property-specific applicability assessment instead of using a generic checklist. The exact position may depend on matters such as location, number of rooms, food service, building use, ownership, employment, guest profile, and additional services. Delegated Power to Fix the Commencement Date Clause 1(2) allows the Government to select the date on which the proposed Act will commence. The Memorandum Regarding Delegated Legislation describes this as a routine administrative power and says it does not involve excessive delegation of legislative power. It is further stated in the Memorandum that there is no other clause in the Bill that confers legislative powers. In practical terms, time becomes an important aspect of delegation. It gives the Government the opportunity to ensure that the two systems can be coordinated in the process of replacing one with the other. Financial Implications The Financial Memorandum says the proposed repeal will not create recurring or non-recurring expenditure from the Consolidated Fund of the National Capital Territory of Delhi. It adds that the proposed policy will be implemented through administrative measures and existing institutional mechanisms. If implementation requires expenditure, it will be covered by the approved budget allocation of the concerned department. This statement refers to Government expenditure. This doesn’t imply that there won’t be any private compliance or transition costs for B&B establishments. The policy that may eventually be implemented can impact costs such as documentation, inspection, technology, safety procedures, classification, professional support, and others. There are no such costs mentioned in the Repeal Bill. Matters Not Expressly Specified The Bill establishes the repeal mechanism but leaves many operational questions for future policy or related directions. The source does not expressly specify: The exact commencement date The final approval or notification date of the new policy Eligibility conditions under the new policy Whether registration will remain mandatory, voluntary, or be replaced by another form of recognition Forms to be filled out and how to submit Registration fees/policy enrolment fees Validity and renewal of certificates Classification process Applications in the classification process at the time of transition Migration process for holders of certificates Future status of statutory entitlements under the 2007 Act Authority to deal with old appeals and complaints Timeline for deciding pending cases Portal or online system to be used Detailed enforcement mechanism under the policy These are not minor details. They determine how an operator will enter, continue, or exit the regulated B&B system. Businesses should wait for the final approved policy and implementation directions before making irreversible decisions. Impact on Businesses Existing B&B operators The operators will undergo a transition process in both administration and legislation. The Bill does not directly deregister these operators, but the way forward will be determined by the policy direction taken. Their main priorities are to preserve records, continue complying with currently applicable duties, monitor commencement, and determine whether migration or reclassification will be required. New applicants Persons planning to start a B&B may face delays because fresh registrations are stated to remain in abeyance during the transition. They should not assume that a new application will be processed under the 2007 system or that the proposed policy already allows operations. Property investment, renovation, launch schedules, and platform listings should account for this uncertainty. Applicants with pending cases Potential applicants can be the most directly impacted. Processing is supposed to continue as on hold. Still, the author does not go into detail about how the current costs, inspections, deficiencies, or temporary rulings will transfer to the new system. These applicants should maintain a complete application record and seek formal clarification from the concerned authority. Guests and consumers The Government states that protections for public health, safety, municipal governance, and public order will continue. The final policy will need a clear method for guest complaints, service standards, operator accountability, and classification information. Compliance and operations teams Companies with multiple properties or professional accommodation businesses would have to assess each property individually for its status. One may be holding a legitimate certificate, another may have its application under consideration, while yet another is in the planning phase. Applying the same transition assumption to all properties can lead to unnecessary risks. Stakeholder Immediate impact Likely operational effect Priority concern Existing certificate holder Await transition rules Possible migration or reclassification Validity and benefits of current certificate Pending applicant Processing stated to remain in abeyance Launch or investment delay Treatment of application, fee, and inspection New applicant Fresh registration stated to remain in abeyance Uncertain route to lawful operation Final policy and application opening Tourism and hospitality business Shift from statute to policy The compliance system may change Interaction with municipal, safety, and public-health laws Guest The complaint and classification system may change Need for clear consumer safeguards Continuity of standards and grievance redressal Is This a Right Decision or an Additional Burden? The decision to replace Delhi’s existing bed and breakfast law with a policy-based system may be helpful, but its real effect will depend on the final policy. The current law was introduced in 2007. Since then, the way people book and use short-stay accommodation has changed. Online booking platforms, homestays, and other forms of residential accommodation are now more common. A flexible policy may allow the Government to respond to these changes more easily than a detailed law. Area Possible benefit Possible burden Registration process The new policy may introduce a simpler and faster process. The new procedure, documents, fees, and timelines have not yet been specified. Existing registrations The Bill contains provisions intended to protect registrations and certificates already issued. It is unclear whether existing operators will need to migrate, reapply, or obtain a new classification. Pending applications Pending cases may eventually be handled under a more suitable policy. Their processing will remain on hold during the transition, and no final decision date has been given. New applicants The new system may make registration easier for small property owners. Fresh registrations are also expected to remain on hold until the new framework is ready. Policy flexibility The Government may update the rules more quickly when the hospitality market changes. Frequent policy changes may make long-term planning difficult for operators. Business costs A simpler system may reduce paperwork and repeated formalities. Migration, fresh inspections or new safety requirements may create additional expenses. Existing benefits The new policy may continue or improve support available to registered B&B establishments. The Bill does not clearly confirm whether all licensing, residential-use and other statutory benefits under the 2007 Act will continue. Guest protection Safety, public health and municipal laws will continue to apply. Operators may have to deal with different authorities if the new policy does not provide a coordinated process. Complaints and appeals The new framework may introduce a simpler grievance process. The authority and procedure for pending complaints and appeals are not yet clear. Complaints and appeals The repeal is proposed to be aligned with the new policy, which may prevent a regulatory gap. Businesses will remain uncertain until the final policy and commencement notification are issued. At the same time, the change creates uncertainty for existing B&B operators and new applicants. The Bill does not explain the complete registration process that will apply under the new policy. It also does not provide a fixed commencement date or clearly state how long pending applications will remain on hold. Why the Decision May Be Helpful A policy-based system may be easier to update than an Act. If registration conditions or accommodation models change, the Government may be able to revise the policy without going through a lengthy legislative amendment process. This could help small property owners if the final policy reduces paperwork, provides an online application system and gives clear approval timelines. It may also allow Delhi to include newer accommodation models that were not widely used when the 2007 Act was introduced. The proposed repeal is also expected to take effect at the same time as the new policy. If both are properly coordinated, operators may be able to move from the old system to the new one without a complete regulatory gap. Why It May Become an Additional Burden The main concern is the lack of clarity during the transition. Existing certificate holders do not yet know whether their registrations will remain valid until expiry or whether they will need to apply again. Applicants with pending cases may also face delays. The source says that pending applications will remain in abeyance, which means they will be temporarily kept on hold. However, it does not say when processing will restart or whether applicants will have to submit fresh documents. The other issue concerns the advantages available under the 2007 Act. The registered premises currently enjoy some advantage in terms of licensing and residential status. The bill is silent on whether this advantage will be preserved in the new policy framework. Final Assessment The proposal can be considered a reasonable decision because the hospitality sector has changed considerably since 2007. A simpler, more flexible policy may suit current business conditions better than the existing law. However, the change will help businesses only if the final policy is clear and practical. It should explain the treatment of existing certificates, pending applications, registration fees, required documents, inspections, classification, complaints, and appeals. It should also provide enough time for operators to move to the new system. It is not therefore entirely good or inherently bad, but can simplify the system for B&Bs in Delhi, provided that proper planning is done for the changeover. This will ultimately depend on the policy decision and directives issued before the repeal. Benefits and Challenges of the Proposed Change Possible benefits With the development of accommodation models, it becomes easier to update the policy framework. There is no need for the government to continuously amend the entire legislation in terms of operational criteria. The new policy framework can accommodate newer types of accommodations available in home and alternative modes. A proper transition process will ensure the preservation of operators under the old system while modernising the sector's classification and administration. These are possible outcomes, not guaranteed results. Their value will depend on the final policy text and its implementation. Main challenges Operators may face uncertainty until commencement and transition rules are issued. Pending applications are likely to face delays without a clear timeframe for how long the process is taking. Current certificate owners need information on validity, migration, and classification. Different laws could handle privileges under the 2007 Act. A policy-based system must clearly identify enforcement, appeals, and grievance mechanisms. Businesses must continue to check other applicable laws rather than assume deregulation. The proposed direction may make administration more adaptable, but the transition must be precise. Flexibility is useful only when operators can clearly understand their status, duties and rights. What Businesses Should Do Next Ensure the legal standing before proceeding. Ensure that the Bill has passed through all necessary legislative processes and that a notice of commencement has been given. Do not consider the attached Bill to be the repeal date. Clause 1(2) calls for a separate Gazette notification. Comply with the law until its official repeal. Do not cease keeping records and complying with notices simply because there is a proposal for repeal. Create a transition file for each property. Keep the registration certificate, application acknowledgement, payment receipt, inspection report, classification record, guest register, police or authority correspondence, complaint records and appeal documents together. Record the status of every application. Distinguish fresh, pending, renewal, deficiency, inspection, appeal, and grievance cases. Seek written clarification for pending matters. This is especially important where a delayed decision affects property use, launch dates, financing, or contractual commitments. Review statutory privileges separately. Examine whether the business currently relies on licensing exemptions, residential classification, tariffs or tax treatment linked to the 2007 Act. Check other applicable laws. Review fire safety, public health, municipal, police, building-use, and other requirements based on the property and operating model. Compare the final policy with the draft. Do not rely on a draft condition unless it appears in the approved and operative version. Monitor official sources. Watch the Delhi Gazette, Delhi Legislative Assembly, and Delhi Tourism Department for the final Act, policy notification, commencement notification, and transition directions. How Corpseed Can Help The proposed transition may affect existing B&B operators, pending applicants, and people planning to start a new establishment in different ways. Corpseed provides regulatory compliance services to help businesses understand their current position, organise their documents, and prepare for the new policy. 1. Legal Status and Applicability Assessment Verify the current legal position concerning the Repeal Bill and notices. Determine if the existing/proposed regulatory regime is relevant to the property in question. Identify those regulations that are currently in effect and those that are merely proposed. 2. Review of Existing Registrations Analyze B&B registration, certification, and classification. Validate the certificate's status and check the documents. Determine if there are any issues of migration, renewal, or reclassification. 3. Pending Application Support Analyze pending applications, receipts, and correspondence. If there is any missing document or reply, help the applicant clarify with the concerned authority. Help applicants seek clarification from the concerned authority. 4. Compliance Gap Assessment Review property, guest and operational records. Identify possible gaps in municipal, safety, hygiene, and public health compliance. Suggest practical steps to organise missing or outdated records. 5. Transition and Migration Readiness Assess how the proposed policy may affect existing operations. Prepare a transition checklist for each property. Help businesses organise documents that may be required for migration or fresh registration. 6. Regulatory Monitoring Keep track of the final policy and instructions for completion and implementation. Notify companies of the agreed-upon changes, including any implementation deadlines. Distinguish between official guidelines and proposed drafts or updates. 7. Registration and Documentation Support Help with registration once the final system is fully functional. Help with filling out and checking any necessary forms. Coordinate with the relevant authorities when required. 8. Ongoing Compliance Support Help businesses maintain organised compliance records. Support renewal, inspection and regulatory-response preparation. Review future changes affecting B&B operations. The support required will depend on the property’s registration status, application stage and operating model. Corpseed assists with regulatory interpretation, documentation, and compliance coordination. Final registration, approval, certificate continuity, and processing timelines remain subject to the applicable policy and the concerned authority. Existing operators and new applicants can speak with a Corpseed regulatory compliance consultant before changing their operations or submitting a fresh application. Key Takeaways The Delhi Bed and Breakfast Establishments (Repeal) Bill, 2026, proposes replacing Delhi's 2007 statutory B&B framework with an executive policy system. The attached document is a repeal Bill and does not itself provide a fixed commencement date. The Bill was published on 7 August 2026 as Bill No. 08 of 2026. The proposed repeal is of the Act of 2007 and its amendments of 2010 and 2021. Commencement needs a fresh Gazette notification. New registrations and applications will supposedly be put on hold during the transitional period. Existing proceedings, liabilities, rights, and actions need to be protected by savings clauses. Existing registrations and certificates have not been explicitly cancelled; however, their future treatment requires transition directions. Safety, public health, municipal, and public order laws will be relevant. Companies must keep records and comply with the law until the policy comes into effect.

Subject

Summary: The Securities and Exchange Board of India (SEBI) has modified the regulatory framework for Online Bond Platform Providers (OBPPs). The circular, issued on 14 August 2026, permits OBPPs to offer products, securities or services regulated by the International Financial Services Centres Authority (IFSCA). It also permits them to offer bonds issued under section 54EC of the Income-tax Act, 1961 or section 85 of the Income-tax Act, 2025. The SEBI OBPP framework update 2026 does more than expand the product list. It also lays down conditions for presenting overseas instruments, explaining tax-specific bonds, displaying grievance-redressal information and appointing a compliance officer. The circular came into force immediately, so affected platforms and recognised stock exchanges need to assess their systems, disclosures and governance arrangements without waiting for a separate transition date. Notification at a Glance Particular Verified details Issuing authority Securities and Exchange Board of India (SEBI) Issuing department Department of Debt and Hybrid Securities Document type Circular Circular number HO/17/11/(2)2026-DDHS-POD1/I/18769/2026 Date of issue 14 August 2026 Effective date 14 August 2026; the circular states that it comes into force with immediate effect Governing framework SEBI Act, 1992; SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021; NCS Master Circular dated 15 October 2025 Provisions modified Clause 5.2 of Chapter XXI and clause 1.1 of Annexure XXIA of the NCS Master Circular Main stakeholders OBPPs, recognised stock exchanges and stock brokers Core development Wider permitted product list, product-specific disclosure conditions and revised compliance-officer requirement Separate compliance deadline Not expressly specified; requirements apply immediately Nature of requirement Mandatory amendment to the regulatory framework The circular is narrow but operationally important. It does not replace the full OBPP framework. It modifies selected provisions dealing with permitted offerings and compliance-officer arrangements while leaving every other provision of the NCS Master Circular unchanged. The Regulatory Framework SEBI introduced a specific framework for entities operating, or proposing to operate, as OBPPs through a notification dated 9 November 2022 under regulation 51A of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. Later circulars refined registration, operational requirements and the types of products or services that an OBPP could offer. The combined provisions have been provided in Chapter XXI of SEBI’s Master Circular on “Issue and Listing of Non-Convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities & Commercial Papers”. SEBI published this Master Circular on 15 October 2025. The NCS Master Circular is the overall master circular governing the OBPPs. The 14 August 2026 circular amends two parts of that framework: Clause 5.2 of Chapter XXI, which identifies the products, securities and services that an OBPP may offer. Clause 1.1 of Annexure XXIA, which deals with the appointment of a compliance officer. SEBI issued the circular under section 11(1) of the Securities and Exchange Board of India Act, 1992, read with regulation 55(1) of the SEBI NCS Regulations, 2021. The circular states that these powers are being exercised to protect investors, develop the securities market and regulate it. Regulatory Status and Legal Effect This is an SEBI circular and not a discussion paper or a draft paper. It is effective from 14 August 2026, immediately after its issuance. There is no mention of a transition period in the circular. SEBI had already issued a discussion paper on 5 May 2026 for the same three topics. This discussion paper was aimed at getting feedback on the IFSCA-regulated issues, tax bonds, and the compliance officer regime. This final circular incorporates the suggestions accepted. This is a final SEBI circular, not a consultation paper or draft. It became operative with immediate effect on 14 August 2026. No separate transition period or deferred compliance date is stated. The amendment permits the new categories only within stated conditions. It should not be read as a general permission for OBPPs to offer any financial or overseas product. Each offering must fall within clause 5.2 and remain subject to the directions of the regulator that governs it. Why SEBI Introduced the Changes SEBI states that it received suggestions from stakeholders to promote ease of doing business. The circular responds in three areas: Explicitly adding IFSCA to the list of financial-sector regulators whose regulated products, securities or services may be offered by OBPPs. Removing uncertainty around whether OBPPs may offer tax-specific bonds issued under section 54EC of the 1961 Act or section 85 of the 2025 Act. Aligning the OBPP compliance-officer requirement with the framework applicable to stock brokers. The final structure attempts to maximize product access and maintain regulatory boundaries. International documents should have their own labeling; tax-based bonds should be labeled with relevant information; and all complaints should be addressed to the right authority. Scope and Applicability The circular is meant for all businesses that operate as OBPPs, recognized stock exchanges and all stock brokers. The effect of this circular is most directly felt by those OBPPs who have the intention to introduce products regulated by IFSCA or tax-related securities. Stakeholder Covered? Relevant condition Main responsibility Existing OBPPs Yes Applies to permitted offerings and compliance-officer arrangements Update product controls, disclosures, complaint information and governance Entities seeking to operate as OBPPs Yes, through the wider framework Must satisfy the OBPP and stock-broker framework applicable to them Build the amended requirements into the platform and compliance setup Entities seeking to operate as OBPPs Yes Express directions appear in paragraph 6 of the circular Implement systems, amend rules where required and disseminate the circular Stock brokers Yes The circular is to be brought to their notice; the compliance-officer provision also refers to the stock-broker framework Review relevance to any OBPP activity and related compliance arrangements Issuers of specified tax-specific bonds Indirectly relevant Investor grievances for these instruments lie with the issuer under the circular Maintain an effective issuer-level grievance process Investors Affected as users of the platform Product category, regulatory jurisdiction and tax eligibility may differ Review disclosures and applicable conditions before investing The circular does not state that every OBPP must begin offering the newly permitted products. It allows these categories to be offered, subject to the stated conditions. An OBPP that chooses to add them must implement the connected controls. What Has Changed in the SEBI OBPP Framework Update 2026 SEBI has expanded clause 5.2 and revised the compliance-officer clause in Annexure XXIA. The main changes are set out below. Compliance area Earlier position New position from 14 August 2026 Business meaning Financial-sector regulator list Clause 5.2.5 named SEBI, RBI, IRDAI and PFRDA IFSCA is now expressly included Eligible IFSCA-regulated offerings may be made available, subject to the circular and other applicable laws Tax-specific bonds The permitted-product list did not expressly include the specified bonds IFSCA is now expressly included OBPPs may offer them with separate placement, disclosures and issuer-level grievance information Overseas instrument presentation No express IFSCA-specific labelling condition in the earlier clause IFSCA-regulated products must be clearly labelled as international or overseas instruments Platform design must reduce the risk of confusion with domestic debt securities Grievance information Clause 5.2.5 now expressly requires the mechanism for non-core regulated offerings to be shown OBPPs must specify the applicable grievance-redressal mechanism on the platform Complaint pathways must match the product and its regulator or issuer Compliance officer Earlier clause required a Company Secretary as compliance officer Appointment must follow the SEBI (Stock Brokers) Regulations, 2026, with the prescribed NISM Series III-A certification requirement OBPPs must review the appointment basis and certification status The circular does not remove the existing permitted categories. Instead, it restates clause 5.2 and adds IFSCA-regulated offerings and the specified tax-specific bonds. Products and Services Permitted on an Online Bond Platform Under the revised clause 5.2, an OBPP may offer only the following categories on its online bond platform: Listed debt securities, listed municipal debt securities and listed securitised debt instruments. Debt securities, municipal debt securities and securitised debt instruments proposed to be listed through a public offering. Listed Government Securities, State Development Loans and Treasury Bills. Listed Sovereign Gold Bonds. Other products, securities or services regulated by a financial-sector regulator, namely SEBI, the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, IFSCA or the Pension Fund Regulatory and Development Authority. Bonds issued under section 54EC of the Income-tax Act, 1961 or section 85 of the Income-tax Act, 2025. The words “shall offer only” are important. An OBPP should map every current and proposed offering to an authorised category before publishing it. The new amendment expands the list, but it does not turn an OBPP into an unrestricted marketplace for financial products. Conditions for Offering IFSCA-Regulated Products The addition of IFSCA is subject to specific conditions. An OBPP cannot rely only on SEBI registration when presenting these products. 1. Separate presentation Products, securities or services covered by clause 5.2.5 may be offered under a different tab on the online bond platform or through another website or platform. This separation helps users understand that the product may sit under a regulatory regime different from the domestic debt products displayed elsewhere. 2. Rules of the relevant regulator The product continues to be governed by the directions and stipulations of its own financial-sector regulator. The OBPP's role as a platform does not shift the product into SEBI's jurisdiction when another regulator governs it. 3. GIFT-IFSC operating conditions For an IFSCA-regulated product, security or service, the OBPP must offer it in the manner specified for SEBI-registered stock brokers operating within the Gujarat International Finance Tec-City International Financial Services Centre, commonly called GIFT-IFSC. 4. Overseas investment and FEMA rules In this context, the circular clearly states that all the relevant guidelines regarding the Foreign Exchange Management Act, 1999 have to be followed. There are provisions with regard to the overseas investment rules and limits of the Liberalized Remittance Scheme. The exact requirement may vary depending upon the type of instrument, the investor, the nature of the transaction, and its route. The circular does not impose a uniform remittance limit for all offers. 5. International/overseas designation For IFSCA-regulated offers, there has to be an international or overseas designation. As per SEBI, this is needed so that there is no confusion about the instruments being domestic debt instruments. A brief mention of it somewhere buried in the terms of the offer will not suffice. Conditions for Offering Section 54EC or Section 85 Bonds The circular permits OBPPs to offer bonds issued under section 54EC of the Income-tax Act, 1961 or section 85 of the Income-tax Act, 2025. It treats these as tax-specific instruments and applies a separate disclosure and grievance framework. 1. Separate tab or platform The instruments may be placed under a different tab on the online bond platform or offered through another website or platform. This reduces the chance that an investor will treat them as identical to an ordinary listed debt security. 2. Mandatory tax-specific disclaimer The OBPP must state that these are tax-specific instruments. It must also explain that the grievance-redressal mechanism for these bonds does not lie with SEBI and instead lies with the issuer. 3. Product features that must be disclosed The platform must disclose the relevant features of the 54EC bonds, including: Eligible issuers Lock-in period Investment limit Non-transferable status Tax features Application size Exemption from listing requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The circular requires these matters to be disclosed but does not itself set out every applicable number or eligibility test. The OBPP should source the current details from the governing tax law, notifications and issuer documents before publishing an offering. 4. Prominent eligibility warning The platform must prominently disclose that these instruments are intended for investors seeking the associated tax benefit, subject to the eligibility criteria and other conditions under the applicable provisions of the Income-tax Act. This wording matters because displaying a tax-oriented instrument does not mean every investor or transaction qualifies for relief. The platform should not describe the tax outcome as automatic or guaranteed. Disclosure, Labelling and Grievance-Redressal Requirements The amendment creates a product-sensitive disclosure model. The information shown to an investor must reflect who regulates the product and where a complaint should go. Offering type Required presentation Required disclosure Grievance route stated by circular Product regulated by a financial-sector regulator under clause 5.2.5 Different tab or another website/platform is permitted State the applicable grievance-redressal mechanism Mechanism applicable to the relevant product and regulator must be specified on the platform IFSCA-regulated product Follow the manner specified for SEBI-registered stock brokers in GIFT-IFSC; label as international or overseas Show the overseas nature and applicable regulatory context Display the mechanism applicable to that IFSCA-regulated offering Section 54EC or section 85 bond Different tab or another website/platform is permitted Tax-specific disclaimer, product features and prominent eligibility statement Grievances lie with the issuer, not SEBI The practical lesson is simple: an OBPP should not use one generic grievance statement for every product. The customer-facing route must match the instrument displayed. Revised Compliance-Officer Requirement The earlier clause 1.1 of Annexure XXIA stated that the entity had appointed a Company Secretary as its compliance officer. The amended provision now requires the entity to appoint a compliance officer in accordance with the SEBI (Stock Brokers) Regulations, 2026. The compliance officer must also meet the certification requirement prescribed for stock brokers from time to time. The circular expressly identifies the NISM Series III-A: Securities Intermediaries Compliance (Non-Fund) Certification Examination. This amendment changes the wording from a profession-specific appointment requirement to the stock-broker compliance framework. It should not be read as a blanket statement that any person may be appointed. An OBPP must check the applicable stock-broker regulations, SEBI directions and current certification requirements before confirming eligibility. SEBI published the SEBI (Stock Brokers) Regulations, 2026 on 8 January 2026. NISM describes Series III-A as establishing a common minimum knowledge benchmark for persons engaged in compliance functions at specified securities intermediaries. Its official page explains the NISM Series III-A examination and its focus on market structure, the regulatory framework and the role of the compliance officer. Immediate governance checks for OBPPs An OBPP should review: Whether its compliance officer appointment is documented under the correct regulatory provision. Whether the officer holds the prescribed NISM Series III-A certification or satisfies the certification position currently prescribed by SEBI. Whether the certification remains valid and supported by records. Whether the role description covers monitoring regulatory compliance and investor-grievance responsibilities under the applicable stock-broker framework. Whether the board, partners or senior management have approved necessary changes to appointment records and internal policies. The final three points are practical controls. The circular itself does not prescribe a separate board-resolution format, record list or transition period. Responsibilities of Recognised Stock Exchanges SEBI has issued three direct instructions to recognised stock exchanges. They must: Take necessary steps and put suitable systems in place to implement the circular. Amend relevant bye-laws, rules and regulations wherever necessary. Bring the circular to the notice of stock brokers and publish it on their websites. These directions mean implementation is not limited to individual OBPP websites. Exchange-level systems and regulatory documents may also need adjustment. OBPPs should monitor communications from the exchange or exchanges through which they are registered or operate. What Remains Unchanged Paragraph 4 of the circular states that all other provisions of the NCS Master Circular remain unchanged. The amendment should therefore be applied narrowly. It does not, by itself: Replace the OBPP registration framework. Remove existing operational obligations under Chapter XXI. Exempt an OBPP from requirements applicable to it as a stock broker. Shift an IFSCA-regulated product into SEBI's regulatory jurisdiction. Make a tax benefit automatic for every investor in a section 54EC or section 85 bond. Provide a new fee schedule, penalty table or separate transition period. Existing obligations under the NCS Master Circular and other applicable laws continue unless a provision has been specifically changed. Impact on Businesses The commercial benefit is a wider potential product range. The compliance impact is a more layered platform, because the regulator, disclosure, complaint route and investor eligibility may differ across offerings. Stakeholder Immediate impact Likely operational or cost effect Priority concern OBPPs May add eligible IFSCA-regulated offerings and specified tax-specific bonds Website, product-governance, legal-review and disclosure work may be required Launch only after mapping all applicable regulatory conditions Compliance teams Must apply the revised compliance-officer framework and review product controls Certification and policy-review effort Confirm the appointment and current NISM position Technology and product teams Must support separation, labelling and product-specific disclosures Interface and workflow changes may be needed Prevent domestic and overseas products from being confused Customer-service teams Need product-specific complaint routing Training and escalation changes may be required Do not direct tax-bond complaints to SEBI when the circular assigns them to the issuer Recognised stock exchanges Must implement systems and amend rules where required Exchange-level implementation work Timely communication to stock brokers and OBPPs Issuers of specified tax bonds Become the stated grievance point for these instruments Investor-service capacity may need review Keep contact and escalation information accurate Investors Gain a broader choice of products through online platforms Must assess different risks, laws and eligibility conditions Understand the regulator, tax conditions and complaint forum before investing Impact on OBPP product strategy The permission may allow platforms to serve investors looking for international or tax-oriented products. However, the new categories should not simply be added to the existing domestic bond catalogue. Each category needs a documented legal basis, product approval process, disclosure set and complaint route. Impact on platform operations The circular may require changes to tabs, product cards, filters, warning banners, terms, grievance pages and customer-support scripts. International or overseas labelling must remain visible enough to prevent confusion. Tax-specific bond pages need more than a short marketing description; they must disclose the features listed by SEBI. Impact on governance The compliance-officer amendment may reduce the rigidity of the earlier wording, but it brings OBPPs directly into alignment with the stock-broker framework and certification requirements. Appointment records and certification evidence should be checked together. Operational Challenges and Risks to Avoid The circular does not prescribe a detailed implementation manual. That leaves OBPPs responsible for converting short legal requirements into workable controls. Risks to avoid include: Treating the addition of IFSCA as permission to list any overseas instrument without checking IFSCA, FEMA, Overseas Investment Rules and LRS conditions. Displaying an overseas product beside domestic debt securities without a clear international or overseas label. Using the same grievance statement for every product even when jurisdiction differs. Presenting the possible tax benefit of a bond as assured without checking the investor's eligibility and the applicable law. Publishing outdated information about eligible issuers, lock-in, investment limits, transferability, application size or tax treatment. Assuming that the earlier Company Secretary wording continues unchanged. Appointing or continuing a compliance officer without verifying the stock-broker framework and prescribed NISM certification. Assuming that the amendment replaces other obligations under Chapter XXI of the NCS Master Circular. No specific fine or penalty is stated in the circular. Any discussion of enforcement consequences should be based on the applicable SEBI Act, regulations, exchange rules and the facts of the case rather than an invented penalty figure. What Businesses Should Do Next As the circular itself is already good, OBPPs must consider this review a task that requires compliance immediately. Match each product to the new clause 5.2. Ensure that each product, existing and proposed, is included in a specific list of allowed products. Determine the regulator. For each non-core product, determine whether SEBI, RBI, IRDAI, IFSCA, PFRDA, the issuer, or any other regulator regulates that particular product. Consider the eligibility of IFSCA-regulated international products. Before selling such products, ascertain the conditions of the GIFT-IFSC route as well as FEMA and OIR. Update platform presentation. Create or revise tabs, product classifications, and labels so international or overseas instruments cannot be confused with domestic debt securities. Prepare product-specific disclosures. For section 54EC or section 85 bonds, verify and display the issuer, lock-in, investment limit, transferability, tax features, application size, listing exemption and investor-eligibility statement. Correct grievance routing. Make the applicable complaint mechanism visible for each regulated category. State clearly that grievances for the specified tax bonds lie with the issuer and not SEBI. Review the compliance officer position. Check the appointment against the SEBI (Stock Brokers) Regulations, 2026 and verify the NISM Series III-A requirement prescribed from time to time. Update internal controls and training. Align product approval, legal review, customer support, sales communication and escalation procedures with the amended framework. Monitor exchange implementation. Track new circulars, system requirements, by-law amendments and operational instructions issued by the relevant recognised stock exchange. Retain evidence of the review. Maintain approved disclosures, regulatory mapping, certification evidence and implementation records as recommended internal controls. The circular does not prescribe this exact ten-step process. It is a practical roadmap built from the duties stated in the source. How Corpseed Can Help? The amendment connects securities regulation, digital-platform design, tax-oriented product communication and cross-border compliance. Corpseed can support affected businesses through focused securities market compliance consulting without treating one regulator's permission as a substitute for another legal requirement. Relevant support may include: Assessing whether an existing or proposed offering fits within revised clause 5.2. Mapping SEBI, IFSCA, FEMA and other regulator-specific requirements affecting the platform. Reviewing product pages, disclaimers, labels and grievance-redressal disclosures. Conducting a compliance gap assessment against Chapter XXI of the NCS Master Circular. Reviewing compliance-officer appointment and NISM certification records. Supporting internal policy, product-approval and escalation-process updates. Assisting with implementation-readiness reviews for exchange instructions. Providing ongoing regulatory monitoring and compliance support. The appropriate scope will depend on the OBPP's registration, products, operating model and investor journey. Corpseed's role is to help the business identify applicable requirements, organise evidence and reduce avoidable implementation gaps regulatory approval or a particular tax outcome cannot be guaranteed. OBPPs planning to add IFSCA-regulated offerings or tax-specific bonds can seek securities market compliance consulting from Corpseed for an applicability and implementation review before publishing the products. Key Takeaways The SEBI OBPP framework update 2026 expands the permitted product list while requiring clearer separation between domestic, overseas and tax-specific offerings. It also aligns the OBPP compliance-officer requirement with the stock-broker framework. The circular is final and has been in force since 14 August 2026. IFSCA is now expressly included in clause 5.2.5. IFSCA-regulated offerings must follow applicable GIFT-IFSC, FEMA, overseas-investment and LRS conditions. International or overseas instruments must be clearly labelled. Section 54EC or section 85 bonds may be offered with detailed features, a prominent eligibility statement and an issuer-level grievance disclaimer. The compliance officer must be appointed under the SEBI (Stock Brokers) Regulations, 2026 and meet the prescribed NISM Series III-A requirement. Recognised stock exchanges must implement the change and communicate it to stock brokers. All other provisions of the NCS Master Circular remain unchanged.

Subject

Summary: The Securities and Exchange Board of India (SEBI) has proposed a new digital Know Your Customer (KYC) route for individual Persons Resident Outside India (PROI). The proposal covers Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals who are outside India and want to enter or maintain an account-based relationship in the Indian securities market. The proposal under consideration is straightforward. An eligible offshore client need not come all the way to India to perform digital KYC. SEBI is looking into the possibility of permitting digital KYC from an FATF-compliant jurisdiction, based on document verification, VIPV, location matching, spoofing measures, audit, and cybersecurity measures. It is not the end of the story yet. SEBI came out with a consultation paper and Press Release No. 46/2026 on 14th August 2026. Comments can be provided to SEBI till 4th September 2026. Notification at a Glance Particular Verified details Issuing authority Securities and Exchange Board of India Document Consultation Paper: Review of Know Your Client Process for Individual Persons Resident Outside India Related press release PR No. 46/2026 Date of issue August 14, 2026 Legal status Consultation proposal accompanied by a draft circular; not a final binding circular Public-comment deadline September 4, 2026 Proposed effective date Thirty days after the date of the future final circular; the date is blank in the draft Governing framework SEBI Act, 1992; SEBI KYC Master Circular dated October 12, 2023; PMLA and PML Rules; KRA Regulations, 2011 People covered Individual NRIs, OCIs and foreign nationals located outside India Main condition Overseas digital onboarding is proposed for clients in FATF-compliant countries Main regulated entities SEBI-registered intermediaries and KYC Registration Agencies Core proposal Digital KYC without requiring the eligible client to be physically present in India Immediate compliance duty None created by the consultation paper itself The September 4 date is the deadline for submitting comments. It is not the date on which the proposed KYC system becomes mandatory. Document Status and Enforceability SEBI has invited public views on a set of proposals and attached a draft circular to the consultation paper. The draft describes how the framework could operate if SEBI decides to issue it in final form. Until that happens, businesses should not present the proposals as current law. The draft circular says that the new provisions would take effect 30 days after the final circular is issued. However, the issue date and corresponding effective date are left blank. Therefore, there is presently no confirmed commencement date. For now, intermediaries should continue following the existing KYC framework. They may assess technology, documentation, risk and operational changes that could be needed if the draft is finalised. Investors and industry bodies may also submit comments by the stated deadline. The Regulatory Framework SEBI sets out the KYC process for securities-market clients. It deals with KYC forms, supporting documents, verification, the duties of intermediaries and validation of records by KYC Registration Agencies (KRAs). The framework is aligned with the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. The existing digital KYC process generally requires the intermediary's application to confirm that the client is physically located in India. That condition creates a practical barrier for a person who lives abroad and wants to complete the entire onboarding process remotely. SEBI had already provided limited relief on December 10, 2025. That circular relaxed the India geo-location condition for an existing NRI client undertaking re-KYC. The present consultation goes further: it considers a wider process for first-time KYC and re-KYC of NRIs, OCIs and foreign nationals in FATF-compliant jurisdictions.  The consultation also refers to the Foreign Exchange Management Act, 1999, the Information Technology Act, 2000, the SEBI (KYC Registration Agencies) Regulations, 2011 and the Central KYC Records Registry (CKYCRR). These connected frameworks matter because overseas status, electronic signatures, source verification and sharing of KYC records do not sit within SEBI's KYC circular alone. Key Definitions in Simple Language Person Resident Outside India For this consultation, an individual PROI includes an NRI, an OCI and a foreign national located outside India. The expression “person resident outside India” comes from section 2(w) of the Foreign Exchange Management Act, 1999. KYC Registration Agency A KYC Registration Agency, commonly called a KRA, maintains KYC records for the securities market. It verifies available attributes against official or source databases and makes the record available to intermediaries under the applicable framework. Officially Valid Document An Officially Valid Document, or OVD, is a document recognised under the Prevention of Money Laundering Rules for identity or address verification. The proposed process also refers to deemed OVDs and equivalent electronic documents. CKYC ID and CKYCRR A CKYC ID is the unique identifier assigned through the Central KYC Records Registry. Under the proposal, an intermediary would ask for this ID when available and use the KRA channel to retrieve CKYCRR records. Video In-Person Verification VIPV is a live video process used by an authorised official of an intermediary to verify the client. The draft does not treat it as a casual video call. It proposes consent, live-action checks, location controls, encryption, anti-spoofing measures and concurrent audit. FATF-compliant country The draft links overseas digital onboarding to the country status published by the Financial Action Task Force. Clients in FATF non-compliant countries would remain under the existing KYC process. Who Would Be Covered? The proposed framework is aimed at individual PROI clients who are outside India and seek securities-market onboarding or re-KYC through a SEBI-registered intermediary. Stakeholder or case Proposed treatment NRI in a FATF-compliant country May use the proposed overseas digital KYC route OCI in a FATF-compliant country May use the proposed overseas digital KYC route Foreign national in a FATF-compliant country May use the proposed route, subject to applicable securities and foreign-exchange rules Individual in a FATF non-compliant country Existing KYC process would continue Foreign national seeking registration as an FPI Separate FPI Master Circular would apply KYC completed before the future circular takes effect Existing KYC provisions would continue to govern that earlier KYC The proposal does not create a general exemption from KYC. It changes the possible location and method of completing the process. Identity checks, documentation, risk assessment, verification and intermediary responsibility would continue. How the Existing First-Time KYC Process Works The consultation paper describes seven broad stages in a first-time KYC process: Filling and signing the KYC form Providing self-attested OVDs or supporting documents Verification of original documents In-person verification, including a liveness check and additional due diligence Uploading the record to the KRA database Verifying KYC information against source databases Creating the KYC record An overseas client can presently use a physical route, such as visiting an intermediary's office or providing certified documents. In some situations, documents must be certified and sent to India. A fully digital route is difficult because the existing process checks that the client is physically in India. SEBI identifies practical problems with courier delays, document certification, overseas mobile verification, availability of Aadhaar-linked services and repeated KYC when records are not fully validated. The proposal seeks to reduce these difficulties without removing customer-identification and anti-money-laundering controls. Why SEBI Is Reviewing the Process SEBI says it received representations seeking relief from the requirement that an overseas client be in India during digital onboarding. Stakeholders also raised concerns about original-document verification, signatures and KYC portability. The consultation links the review to wider efforts to make participation in Indian securities easier for the overseas Indian community and eligible foreign nationals. It also refers to changes announced for overseas investment in listed Indian companies and the June 12, 2026 amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. The intended balance is clear: reduce unnecessary physical and paper-based steps while retaining reliable identity checks, risk-based due diligence and secure video verification. What SEBI Has Proposed? Area Existing concern Proposal Main condition or safeguard Client location Complete digital KYC generally requires the overseas client to be in India Permit digital onboarding while the client is abroad Client must be in India or a FATF-compliant country KYC form Overseas clients may depend on physical forms and courier Accept physical, scanned or digital forms through electronic signature Electronic-signature and verification conditions apply Specimen signature Digital submission may not provide a directly observed wet signature Accept a cropped image under electronic signature Client gives a wet signature during VIPV for matching Address Overseas address evidence can be difficult where the OVD differs from the current address Allow a current-address self-declaration in a defined case OVD must be verifiable through an official or source database Mobile and email Verification of foreign or overseas mobile numbers can be difficult Collect both; verify mobile if feasible and verify email OTP or another verifiable mechanism Document certification Current certification routes can be inconvenient Add eligible officials of overseas banks linked to Indian banks Official must fall within the proposed recognised list KYC portability A record may not be portable unless fully validated Treat PROI records as portable with attribute-level tags New intermediary may perform additional risk-based checks Third-party reliance Records may exist with another regulated financial entity Permit reliance through KRA/CKYCRR channels Intermediary keeps ultimate KYC responsibility Video verification Overseas digital onboarding creates impersonation and location risks Permit VIPV with detailed controls Consent, liveness, geo-location, anti-spoofing, encryption and audit These points remain proposals. The detailed draft circular shows SEBI's intended operating model, but the final text may differ. Proposal-Wise Analysis Digital KYC from Outside India The draft would remove the need for an eligible PROI client to be physically present in India during digital onboarding. The intermediary could accept KYC information and related documents from a client located in a FATF-compliant country. This is a location relaxation, not a KYC waiver. The intermediary would still need to identify the client, verify identity, understand the purpose and intended nature of the relationship, and apply enhanced measures where the risk profile requires them. PAN and Passport Requirements PAN would continue to be collected and checked against the Income Tax database. The intermediary would not need to insist on the original PAN card or a copy once the information is verified through the database. The KRA would also verify the PAN and the client's name and mark the verified attributes as validated. NRIs, OCIs and foreign nationals would continue to provide a passport copy. An OCI card would also be collected where applicable. If a passport is shared through DigiLocker and can be verified, the KRA would tag that attribute as validated. KYC Form and Electronic Signature The intermediary could collect KYC information using the CKYC template for individuals. The form could be received as: An original physical form A scanned physical form submitted under electronic signature A digital KYC form submitted under electronic signature The term electronic signature would carry the meaning given in the Information Technology Act, 2000. The practical availability of some foreign electronic-signature routes may still depend on recognition and technical arrangements outside SEBI's direct control. Specimen Signature During VIPV The proposal would allow a client to provide either a wet signature on a physical form or a cropped image of the specimen signature under electronic signature. Where the signature is submitted digitally, the client would make a wet signature in front of the intermediary during VIPV. The intermediary would compare it with the submitted specimen. This is intended to preserve a live verification step even when the onboarding begins online. Overseas Address and Self-Declaration For a PROI client, the current address is expected to be an overseas address. The client would provide an OVD or deemed OVD for identity and address. If a foreign national's OVD does not contain an address, the draft allows the intermediary to collect a document issued by a foreign government department or a letter issued by a foreign embassy or mission in India. The client may self-declare a current address that differs from the address on the submitted OVD, but only where that OVD can be verified through an official or source database. This proposed relief does not remove the need to provide identity documentation. Original Seen and Verified Alternatives Where the original document is not produced, the draft lists alternative routes: An equivalent e-document obtained through DigiLocker An equivalent e-document issued by the issuing authority through a verifiable mechanism OTP-, biometric- or face-authentication-based Aadhaar e-KYC A copy attested by a recognised certifying authority The proposed certifier list includes a notary public, an authorised official of an overseas branch of an Indian scheduled commercial bank, an eligible branch of an overseas bank having a relationship with an Indian bank, a court magistrate, a judge, and the Indian embassy or consulate general in the client's country of residence. The intermediary would record the authorised official's details and the date and time of Original Seen and Verified checks. Mobile Number and Email Verification The intermediary would collect both the client's mobile number and email address. The mobile number would be verified if feasible, while email verification would remain expected through OTP or another verifiable mechanism. The KRA would follow a similar approach and tag verified attributes accordingly. This proposal recognises that sending or receiving an OTP on a foreign mobile number can be difficult or costly. It does not suggest that intermediaries should stop collecting the mobile number. Portable KYC Records Under the existing framework, a fully validated KYC record is portable, meaning the client generally does not repeat the entire process with another intermediary. For a PROI client, validation of every attribute can be difficult because overseas mobile numbers, addresses or documents may not be verifiable against Indian databases. SEBI proposes treating PROI KYC records as portable while showing which individual fields have been source-verified or validated. A new intermediary could use the existing record and carry out additional checks based on its own risk assessment. Portability would therefore reduce repetition, but it would not eliminate an intermediary's right or duty to request additional information where the record is incomplete, out of date, inconsistent or high risk. Reliance on KYC Performed by Other Financial-Sector Entities An intermediary may be allowed to rely on KYC completed by another SEBI-registered intermediary, using the record obtained from a KRA. It may also rely on KYC performed by an entity regulated by the Reserve Bank of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, or International Financial Services Centres Authority, using records obtained from CKYCRR through the KRA. The intermediary would still carry ultimate responsibility for its client. It would need to apply enhanced KYC measures proportionate to the risk. Reliance on an existing record is therefore an efficiency measure, not a transfer of accountability. KRA Upload and Record Updating The draft would require the intermediary to submit completed PROI KYC information to the KRA within three working days from completion of the KYC process. Where an existing record changes, the intermediary would provide the update to the KRA. The KRA would update the record and inform other intermediaries that maintain an account-based relationship with the client. The draft also envisages KRAs furnishing KYC information and updates to CKYCRR after the KRAs are integrated with that registry. VIPV and Cybersecurity Safeguards The proposed VIPV process is one of the most operationally important parts of the consultation. Where physical IPV is not feasible, the intermediary would conduct VIPV and build a verifiable record of the process. The draft safeguards include: Recording client consent in an auditable, alteration-resistant manner Using random live actions to show that the interaction is not pre-recorded Making an uninterrupted video recording with live GPS coordinates, date and time Using tamper-resistant technology Blocking spoofed IP addresses, virtual private networks and proxy servers Confirming that the IP address originates in India or a FATF-compliant country Matching the detected country with the KYC form and address document Clearly capturing and matching the client's face with the submitted photograph Using end-to-end encryption between the customer's device and the intermediary's hosting point Requiring an authorised official of the intermediary to conduct the VIPV Using face-liveness and spoof-detection controls that do not exclude persons with special needs Subjecting the process to concurrent audit Intermediaries could add further controls under their risk-management policy. The technology used for KYC would also have to comply with SEBI's Cybersecurity and Cyber Resilience Framework. For intermediaries, this means the proposal could reduce paper and travel barriers but increase responsibility for secure video infrastructure, location assurance, evidence retention, access controls and audit readiness. What Would Remain Unchanged? The consultation does not propose abandoning core KYC requirements. Several controls would remain: PAN would continue to be mandatory for securities-market participants, subject to existing exemptions. NRIs, OCIs and foreign nationals would continue to provide a passport copy. OCI clients would provide an OCI card where applicable. Overseas address evidence would remain relevant. Intermediaries would continue to perform IPV or VIPV as applicable. Risk-based and enhanced due diligence responsibilities would remain with the intermediary. Clients in FATF non-compliant countries would continue under the existing process. Foreign nationals applying as Foreign Portfolio Investors would remain governed by the separate FPI framework. The proposal therefore changes how eligible overseas clients may complete KYC, not whether KYC is required. Proposed Timeline and Transitional Treatment Event Date or proposed rule Meaning Consultation paper issued August 14, 2026 Public consultation opened Last date for comments September 4, 2026 Comments should be submitted through SEBI's portal Final circular Not yet issued SEBI may revise the draft after consultation Proposed commencement 30 days after the future final circular Exact date is not presently known Earlier completed KYC Would remain under existing provisions No proposed retrospective replacement of completed KYC FATF non-compliant countries Existing process continues Overseas digital relaxation would not apply The draft also says that the 2023 KYC Master Circular and the December 10, 2025 NRI re-KYC circular would be superseded only to the extent covered by the new final provisions. How to Submit Public Comments? SEBI seeks views on the main question of whether an intermediary should be allowed to onboard an individual PROI digitally without physical presence in India when the client is in a FATF-compliant country. It also invites comments on: Digital acceptance of KYC forms and OVDs under electronic signature Acceptance of a cropped specimen-signature image followed by wet-signature verification during VIPV Possible relaxation in mobile-number verification Mandatory collection of email addresses Expansion of the document-certifier list to eligible overseas-bank officials Self-declaration of a current address where the OVD is source-verifiable Whether further VIPV safeguards are needed Whether KRAs should share PROI records that are not fully validated or source-verified Any additional comments on the proposed onboarding process Comments should be filed through SEBI's public-comment portal by September 4, 2026. The consultation paper provides email contacts for technical problems with the portal; these emails are for submission difficulties and should not be treated as the primary filing route where the portal works. Drafting Inconsistency in the Consultation Paper The consultation paper contains inconsistent references to the earlier NRI re-KYC circular. One passage refers to December 10, 2026, while a related footnote refers to December 30, 2025. SEBI's published circular is dated December 10, 2025, and the consultation paper itself uses that date correctly in other places. This appears to be a drafting inconsistency in the consultation paper. It does not change the central proposal, but a publication-ready analysis should use December 10, 2025 when referring to the official circular and acknowledge the inconsistency where detailed legal review is relevant. Impact on Investors and Regulated Entities NRIs, OCIs and Foreign Nationals Eligible overseas investors could complete KYC without travelling to India or relying as heavily on physical courier processes. They may also benefit from greater KYC portability when moving between securities-market intermediaries. The benefit would depend on the investor's country, available documents, access to acceptable electronic verification and successful completion of VIPV. A person in a FATF non-compliant country would not receive the proposed location relaxation. SEBI-Registered Intermediaries Brokers, depository participants, mutual-fund intermediaries and other covered entities may gain access to a smoother overseas onboarding route. They would, however, need to update procedures, applications, customer communication, risk engines and audit controls. Intermediaries would remain responsible for client KYC even when they rely on records produced by another regulated entity. They would need clear rules for accepting a record, requesting further information and applying enhanced due diligence. KYC Registration Agencies KRAs would need to support attribute-level validation and portability. Their systems may need to show clearly which fields have been checked against an official source and which have not. They would also play a central role in passing CKYCRR records to intermediaries and distributing updates. Technology, Cybersecurity and Audit Teams These teams would need to translate the VIPV safeguards into working controls. Important areas include secure video capture, consent records, GPS and IP checks, VPN and proxy detection, end-to-end encryption, liveness detection, accessibility, evidence retention and concurrent audit. Stakeholder Likely immediate effect Overseas investor Less dependence on travel and courier Intermediary New digital onboarding opportunity KRA More portable PROI records Compliance team Revised procedures and controls Technology team VIPV and integration changes Internal auditor Concurrent review of VIPV Benefits and Implementation Challenges The proposal could make securities-market access easier for overseas individuals while reducing paper movement and repeated verification. It may also help intermediaries serve overseas clients more efficiently. Likely benefits include: Remote onboarding from an eligible overseas location Reduced travel and courier dependence Wider use of electronic documents and signatures Better reuse of available KYC records More transparent tagging of verified attributes A defined route for relying on other financial-sector KYC records Clearer video-verification safeguards Implementation will still require careful work. Intermediaries may face challenges in verifying foreign contact details, determining FATF-country status, recognising acceptable documents, integrating KRA and CKYCRR data, testing anti-spoofing tools and supporting clients with limited access to Indian mobile-linked services. The proposed framework is therefore not simply a relaxation. It exchanges some physical-process burdens for stronger technology, evidence and risk-management expectations. What Stakeholders Should Do Next Because the consultation is not yet binding, the immediate task is review and preparation rather than implementation. For SEBI-Registered Intermediaries Compare the draft with current KYC and re-KYC procedures. Identify every system rule that assumes the client must be in India. Assess whether the VIPV platform can capture consent, live actions, GPS, IP location, facial matching and tamper-resistant records. Review VPN, proxy and spoofed-IP detection. Map KRA and CKYCRR integration gaps. Define when additional KYC or enhanced due diligence would be required. Estimate training, audit and customer-support requirements. Submit evidence-based comments before September 4, 2026, where operational concerns exist. For KRAs Review readiness for attribute-level validation and portable PROI records. Assess how unvalidated fields will be displayed and shared. Evaluate CKYCRR integration and update-notification workflows. Consider whether three-working-day submissions and downstream updates require system changes. For NRIs, OCIs and Foreign Nationals Do not assume the proposed digital route is already available. Continue following the process communicated by the chosen intermediary. Keep PAN, passport, OCI card where applicable, overseas-address evidence and contact details current. Monitor SEBI's website for a final circular. Submit comments if the proposed process creates a practical concern that SEBI should consider. How Corpseed Can Help? The proposed framework requires businesses to read the consultation, the draft circular and the existing KYC rules together. Corpseed can support intermediaries and related businesses through focused securities regulatory compliance services without treating the draft as a final obligation. Corpseed can assist with: Applicability and stakeholder assessment Clause-wise review of the consultation paper and draft circular Comparison with current KYC and re-KYC procedures Consultation-response drafting and submission support KYC process and documentation gap assessment VIPV control and audit-readiness review KRA and CKYCRR workflow assessment Internal policy, standard operating procedure and customer-communication updates after the final circular is issued Professional review can help an intermediary identify technical and operational concerns early, present clear comments to SEBI and avoid building a process around provisions that may still change. Businesses seeking securities regulatory compliance services may contact Corpseed for a document-specific assessment of the proposed PROI KYC framework. Key Takeaways SEBI's August 14, 2026 consultation proposes allowing individual NRIs, OCIs and foreign nationals in FATF-compliant countries to complete securities-market KYC digitally without being physically present in India. It also proposes electronic document submission, address self-declaration in a limited case, portable KYC records, cross-regulator reliance and detailed VIPV controls. The framework is a proposal, not a final binding rule. Public comments are due by September 4, 2026. The overseas digital route would be limited to India and FATF-compliant countries. Core identity, document, IPV and risk-based KYC duties would continue. Intermediaries would retain ultimate responsibility even when using third-party KYC records. The final circular, if issued, is proposed to take effect 30 days after its issue date. Investors and intermediaries should monitor the final SEBI decision before changing their process.

Subject

Summary: The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing to replace the SEBI (Settlement Proceedings) Regulations, 2018 with a new framework, the Securities and Exchange Board of India (Settlement of Proceedings) Regulations, 2026. For now, this is only a proposal. It does not create any new compliance requirement. SEBI may make changes after reviewing stakeholder comments and completing its internal process. Until a final notification is issued and the new rules take effect, the 2018 regulations continue to apply. The proposed changes are important for listed companies, market intermediaries, directors, key managerial personnel, individual applicants and other persons facing, or expecting, eligible SEBI enforcement proceedings. SEBI has invited comments on the draft by 4 September 2026. Legal Status: The 2026 Regulations Are Still a Proposal A consultation paper allows the regulator to place a policy proposal before the public and obtain feedback before making a final decision. It can explain the regulator's preferred approach, but it is not the same as a notified and effective regulation. The draft states that the proposed 2026 Regulations would take effect on a date to be inserted. That date has been left blank. Businesses should therefore avoid treating the comment deadline, the PDF creation date or the publication of the consultation paper as the commencement date. The consultation paper also says that the draft may change after public comments and internal review. Any compliance plan based on the proposal should consequently be treated as scenario planning, not as implementation of an existing legal duty. Background: Why SEBI Is Reviewing the Settlement Framework SEBI's settlement process gives eligible parties another way to close certain civil and administrative proceedings. Instead of going through a long enforcement and appeal process, a matter can be settled on agreed financial terms and, where required, other conditions. The settlement framework received statutory recognition through amendments to the SEBI Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996. The first settlement regulations were notified in 2014. They were later replaced by the SEBI (Settlement Proceedings) Regulations, 2018, which came into force on 1 January 2019. SEBI says it reviewed the existing framework after discussions with stakeholders and a clause-by-clause examination of the 2018 Regulations. The proposals were also considered by the High Powered Advisory Committee. The consultation paper identifies a practical concern with the existing financial model. According to SEBI's study of selected unsuccessful or withdrawn settlement applications from the preceding two years, after excluding outliers, the calculated settlement amount was on average about eight times the penalty ultimately imposed. SEBI estimates that its proposals could bring this comparison down to about four times. This observation comes from the study described in the consultation paper, it should not be read as a universal ratio for every case. SEBI wants the settlement process to remain strict enough to discourage violations, while making it easier to understand, more predictable and less dependent on discretion. The aim is also to make settlement a more practical option than lengthy litigation. Existing Framework versus the Proposed Approach Area Existing position described by SEBI Proposed approach Settlement amount Indicative amount based on multiplying and benchmark factors, plus legal costs Base amount multiplied by stage, regulatory history, gravity, aggravating and mitigating factors Application limitation Generally 60 days from service of the show-cause notice for pending Board proceedings Proposed increase to 90 days Fast disposal Summary settlement for specified violations Violation-based and monetary-threshold-based fast-track routes Monetary fast-track threshold No general threshold route described Up to Rs 10 lakh where no non-monetary term applies Filing fee for a natural person Rs 15,000 Rs 25,000 Filing fee for other entities Rs 25,000 Rs 35,000 Refiling after withdrawal 50% additional settlement amount 20% additional settlement amount Pre-show-cause opportunity Lower calculation factor exists, but the paper says there is no general mechanism to alert a person Proposed settlement notice before a show-cause notice, subject to exceptions Timeline relaxation No specific relaxation provision identified Up to 30 days in qualifying circumstances, excluding the main limitation period Pending applications No specific relaxation provision identified Proposed transition options based on the stage reached This table captures the direction of the proposals. The actual outcome in any matter would still depend on the final regulations, the alleged defaults, the enforcement stage, applicable factors and SEBI's decision-making process. The 21 Proposals at a Glance The 21 proposals cover changes to settlement calculations, application rules, fees, timelines and other key parts of the settlement process. No. Proposal Main proposed change Draft reference 1 Settlement-amount calculation Replace the existing model with BA × (S + R + G + A - M) Regulations 10-20 2 Application limitation Increase the post-show-cause period from 60 to 90 days Regulation 4(1) 3 Pre-disclosures Move disclosure compliance to a later stage in the settlement process Regulation 25(4)(c) 4 Market-wide impact and investor loss Permit committee-level examination of whether monetary and non-monetary terms can address the concerns Regulation 22(4)(c) 5 Non-monetary terms in adjudication Ordinarily avoid non-monetary terms where the show-cause notice seeks only monetary penalty, except disclosure terms Regulation 5(iv) 6 Voluntary debarment or suspension Set clearer circumstances for using these terms Regulation 5(v) 7 Filing fees Raise fees to Rs 25,000 for natural persons and Rs 35,000 for others Schedule I, Part B 8 Refiling after withdrawal Reduce the additional amount from 50% to 20% Regulation 4(5) 9 Application after rejection Permit a fresh application at a later stage if the reason for rejection no longer applies, with 20% additional amount Regulation 4(4) 10 Fast-track settlement Create violation-based and Rs 10 lakh threshold-based routes Regulations 26-30 11 Pre-show-cause settlement notice Give a proposed 60-day opportunity before a show-cause notice, subject to exceptions Regulation 31 12 Hearing before revocation Provide an opportunity for a hearing before revoking a settlement order Regulation 41(2) 13 Relaxation of timelines Allow limited relaxation where delay is beyond the applicant's control Regulation 44 14 Redundant provisions Remove provisions concerning adjudication penalty formula and compounding terms that SEBI says are not used Reflected through omission from the new draft 15 Application form Simplify and clarify required information Schedule I, Part A 16 Definitions Add or revise key expressions such as alleged default, days and specified proceeding Regulation 2 17 Terms affecting non-applicants Generally restrict settlement terms to the applicant Regulation 5(vii) 18 Financial misstatement and fund diversion Provide disclosure, restoration and related settlement treatment Regulation 18(3) 19 Calendar days Replace mixed references to working and calendar days with “days” meaning calendar days Regulations 2, 22 and 25 20 Multiple applicants Calculate the settlement amount separately for each applicant, while preserving joint treatment where applicable for disgorgement Regulation 10(3) and Regulation 17(2) 21 Pending applications Apply different transition routes depending on the application's stage Regulation 46 Detailed Explanation of the 21 Proposals The proposed changes cover key parts of the settlement process, including the settlement amount, application timelines, fees, fast-track routes and pending cases. Here is a closer look at what each proposal would change. 1.    A New Settlement-Amount Formula The draft proposes a new formula for working out the settlement amount: Settlement Amount = BA × (S + R + G + A - M) The calculation would take into account the applicant's role, the stage of the case, any previous regulatory action, the seriousness of the alleged violation, and factors that may increase or reduce the amount. The committees could still recommend a different amount in a particular case, but the reasons would have to be recorded. 2. Ninety Days to Apply After a Show-Cause Notice The proposed time limit would increase from 60 to 90 days from the date of service of the show-cause notice or supplementary notice, whichever is later. This would give applicants more time to review the allegations, collect records and decide whether to pursue settlement. Different rules would apply to matters pending before the Securities Appellate Tribunal or the Supreme Court. 3. Disclosure Compliance at a Later Stage The draft proposes moving certain disclosure requirements to a later stage in the settlement process. The applicant would make the disclosure after approval by the Panel of Whole Time Members but before the settlement order is passed. This could reduce the risk of making a sensitive disclosure before knowing whether the settlement will actually be approved. 4. Market-Wide Impact and Investor Loss The draft would allow the relevant committees to examine whether serious concerns involving investor loss, market integrity or market-wide impact can be addressed through monetary and non-monetary terms. This does not mean such matters would automatically qualify for settlement. The Panel of Whole Time Members would still have the final say. 5. Non-Monetary Terms in Adjudication Cases Where a show-cause notice proposes only a monetary penalty, the draft says non-monetary settlement terms should generally not be added. Disclosure-related terms would remain an exception where corrective action is needed. 6.    Clearer Use of Voluntary Debarment and Suspension The draft seeks to provide clearer situations for using voluntary debarment or suspension. These terms may apply in serious cases, including those involving key operators, main beneficiaries or repeat defaulters. They may not be necessary where monetary terms are sufficient to address the issue. 7. Higher Non-Refundable Filing Fees The proposed fees would increase as follows: Applicant Existing fee Proposed fee Natural person Rs 15,000 Rs 25,000 Other applicants Rs 25,000 Rs 35,000 The filing fee would remain separate from the settlement amount and other financial terms. 8. Lower Additional Amount after Withdrawal The additional settlement amount for refiling after withdrawal would fall from 50% to 20%. This could make it easier for applicants to reconsider settlement later, although withdrawal would still have consequences under the proposed framework. 9. A Later Application After Rejection An applicant whose settlement application was rejected could apply again at a later stage if the reason for rejection no longer exists. A 20% additional settlement amount would apply, and a fresh application would not guarantee acceptance. 10. Two Fast-Track Settlement Routes The draft proposes two fast-track options: Violation-based route: For specified defaults such as delayed filings and certain disclosure-related violations. Amount-based route: Where the settlement amount is up to Rs 10 lakh and no non-monetary term applies. The violation-based route would generally require payment and compliance within 30 days, with a possible 15-day extension in appropriate cases. 11. Settlement Notice Before a Show-Cause Notice In specified cases, SEBI proposes giving a person a 60-day opportunity to apply for settlement before issuing a show-cause notice. There would be exceptions, including certain prosecution and fast-track matters. SEBI could also change the proposed charges later. 12. Hearing Before Revocation Before revoking a settlement order, the applicant would get an opportunity to be heard. This is important because revocation could bring the underlying proceedings back into action, while amounts already paid would not be refunded. 13. Limited Relaxation of Timelines The draft would allow limited relaxation where a delay was caused by circumstances beyond the applicant's control. The power would apply only within the proposed limits and would not extend the main 90-day application period. A 1% increase in the settlement amount may apply in certain payment-related extensions. 14. Removal of Redundant Provisions SEBI proposes removing provisions it considers unnecessary because they have not been used in practice. These include provisions dealing with penalty calculations in adjudication matters and certain compounding matters that are handled under separate legal processes. 15. A Revised Settlement Application Form The application form would be simplified and clarified. Applicants would still need to provide details about the proceedings, alleged violations, proposed terms, disclosures and supporting documents. Missing key information could result in the application being returned. 16. New and Revised Definitions The draft proposes clearer definitions for terms such as alleged default, days, settlement term and specified proceeding. It also proposes treating “days” as calendar days, which would make the calculation of deadlines more consistent. 17. Settlement Terms for Applicants The draft generally seeks to prevent settlement terms from requiring someone other than the applicant to take or avoid a particular action, unless the regulations specifically allow it. This could provide greater clarity for directors and key personnel who are not themselves applicants. 18. Financial Misstatement and Fund Diversion The draft provides specific treatment for cases involving financial misstatements or diversion of funds. Depending on the circumstances, settlement terms may require public disclosure, corrections to financial statements or restoration of diverted funds with applicable interest. 19. “Days” to Mean Calendar Days The draft proposes using calendar days instead of having different references to working days and calendar days. This would make deadlines easier to interpret, although applicants would need to account for weekends and holidays when planning filings and payments. 20. Separate Calculation for Each Applicant Where multiple applicants are involved, the settlement amount would generally be calculated separately for each person. However, joint treatment may still apply to disgorgement, investor losses or other amounts where joint and several liability exists. 21. Transitional Treatment of Pending Applications The draft proposes different treatment depending on where a pending application stands when the new framework begins. Applications with approved terms could continue under the existing rules, while some applications would get an option to move to the new framework. Applications that have not yet received a recommendation could be processed under the proposed new regulations. How the Proposed Settlement Amount Would Be Calculated The proposed formula is: Settlement Amount (SA) = BA × (S + R + G + A - M) If the total of S + R + G + A - M is below one, the draft says it must be treated as one. 1. Base Amount (BA) The base amount would begin with the minimum penalty under the relevant securities law, multiplied by a factor based on the applicant category: Applicant category Proposed multiplier Independent director 2 Natural person 2.5 Non-executive director 3 Executive director, promoter in control or key managerial person 3.5 Company, intermediary, pooled investment vehicle and others 4 Market infrastructure institution 5.5 The draft contains additional rules for multiple defaults, overlapping violations, lead conspirators and independent directors alleged to have actively participated in or benefited from fraud. It also says the base amount should not be less than the penalty already imposed for the alleged default. 2. Stage-of-Proceeding Factor (S) Stage when application is filed Proposed S value Voluntary or suo motu 0.20 Before show-cause notice 0.40 After show-cause notice 0.60 Pending before specified Board/designated-member stage 0.80 Pending before Securities Appellate Tribunal 1.00 Pending before Supreme Court 1.50 Where several proceedings arise from the same cause of action, the factor for the most advanced proceeding would apply. 3. Regulatory Action Factor (R) The factor reflects the applicant's prior regulatory history: Prior action Proposed value No prior order 0 Administrative warning 0.10 per warning Settlement order 0.20 per order Adjudication, direction or disciplinary order 0.30 per order The draft says stayed orders would also be counted. It also appears to contain duplicate numbering for sub-regulation (3), which should be corrected in the final drafting. 4. Gravity Factor (G) An additional 0.25 is proposed for applications made without admitting the violation. Other specified gravity values include 0.25 for failure to make an open offer, 0.50 for certain offer-document violations, 0.50 for specified insider-trading violations and 1.50 for fraudulent and unfair trade-practice violations. 5. Aggravating Factor (A) An aggravating factor would increase the settlement amount. Each applicable factor carries a value of 0.20, with a maximum of five factors. These may include obstructing the investigation, giving incorrect information, continuing the violation for a long period, causing client losses above ₹5 crore, ignoring earlier regulatory directions, gaining financially from the violation, repeated defaults and serious internal control failures. 6. Mitigating Factor (M) A mitigating factor would work in the opposite direction and could reduce the settlement amount. Each factor carries a value of 0.20, with up to five factors considered. Examples include limited involvement, strong cooperation, accepting responsibility early, taking corrective action, compensating investors, financial difficulty and a change in management after the violation. 7. Minimum Amount and Other Additions The draft proposes a minimum settlement amount of: Rs 3 lakh for a first-time applicant, and Rs 7 lakh for other applicants. Legal costs may be added for proceedings defended by SEBI before the Securities Appellate Tribunal or Supreme Court. A 20% additional amount is proposed where settlement covers a proceeding under Section 12(3) of the SEBI Act together with another proceeding arising from the same cause of action. Disgorgement and interest are separate matters. Draft Regulation 20 proposes 9% annual interest from the transaction date to the application date where no final Board order exists. Where a final order exists, it proposes 9% until the final order and 12% thereafter until the application. Interest would be charged only on the principal disgorgement amount, not on accumulated interest. Because the calculation depends on the alleged defaults, statutory minimum penalty, applicant category, procedural stage and case-specific factors, a generic worked example could be misleading. A proper estimate should use the actual record and the final notified regulations. Who May Seek Settlement Under the Draft? The draft would allow an entity to apply for settlement of a “specified proceeding.” This expression broadly covers eligible proceedings that may be initiated by SEBI, proceedings pending before SEBI and appeals pending before the Securities Appellate Tribunal or the Supreme Court under the statutory provisions identified in the draft. The proposed scope is not unlimited. Settlement would generally be unavailable where an audit, investigation, inspection or examination concerning the cause of action is still pending, except for a confidentiality application. It would also exclude an applicant categorised as a wilful defaulter, fraudulent borrower or fugitive economic offender. Most importantly, Draft Regulation 6 preserves the Panel of Whole Time Members' authority to accept or reject an application in the interests of investors or development and regulation of the securities market. Eligibility to apply should not be confused with a right to obtain settlement. How the Proposed Process Would Work The ordinary process can be understood as follows: Application: The applicant files the prescribed form with the non-refundable fee, undertaking and waiver, proposed terms and settlement-amount calculation. Completeness review: An incomplete or non-conforming application may be returned. The draft allows 15 days to submit a complete revised application after communication from SEBI. Internal Committee: The committee considers whether the matter may be settled and what the terms should be. The applicant receives an opportunity for a physical or virtual hearing. Revised terms: The Internal Committee may permit revised settlement terms within up to 21 days. High Powered Advisory Committee: Except for qualifying threshold-based fast-track matters, the revised terms and Internal Committee recommendation go to the advisory committee. A matter involving non-monetary terms goes to this committee even if the amount is Rs 10 lakh or less. Panel of Whole Time Members: The panel considers the recommendation and may accept, reject, return or seek re-examination. Demand and compliance: If settlement is accepted, a notice of demand is proposed to be issued within ten days. The applicant must pay within 30 days of receiving it and comply with other terms within the specified time. Settlement order: After payment and compliance, the competent authority or panel passes the settlement order. Filing an application would not automatically stop the enforcement process. The draft says proceedings may continue, but the final enforcement order would be kept in abeyance until the settlement application is decided. Interim directions may still be issued to protect investors or market integrity. Fast-Track Settlement Explained The draft proposes two fast-track routes to make settlement quicker in certain lower-risk or lower-value matters, while keeping the required approvals and compliance checks in place. Violation-Based Fast Track Before initiating proceedings for specified, generally procedural defaults, SEBI could issue a fast-track notice stating the alleged violation, proposed amount and any non-monetary term. The recipient would generally have 30 days to file, pay and comply. A correction to the calculation could be requested when filing. This notice would not prevent SEBI from changing the enforcement action or charges. Failure to use the route within time may mean that a later settlement application is permitted only at the Tribunal or Supreme Court stage after the Board or adjudication proceeding ends. Monetary-Threshold Fast Track If the settlement amount worked out by the Internal Committee is up to Rs 10 lakh and no non-monetary term is involved, the matter could skip the High Powered Advisory Committee. The revised terms would go directly to the Panel of Whole Time Members for consideration. The proposed route may reduce processing layers for lower-value matters, but it still requires a decision by the appropriate authority and compliance with the approved terms. Non-Monetary Terms under the Draft The proposed regulations contain a broad, non-exhaustive list of possible non-monetary terms. These include improved internal procedures, employee training, enhanced audit and reporting, temporary suspension of business activity, exit from management, clawback, disgorgement, restrictions on acting as an officer or director, cancellation or lock-in of securities and temporary restraint from accessing the securities market. The selection of a non-monetary term would depend on the applicant's conduct, role, gravity of the alleged default, market impact, investor harm, gains, remedial measures and the need to prevent recurrence. Businesses should not assume that payment alone will conclude every matter. For serious governance, disclosure or investor-harm cases, corrective conduct may be as important as the monetary amount. Settlement with Confidentiality The draft retains a separate route under which an applicant may seek confidentiality in return for limited admission for settlement purposes and cooperation in relation to an alleged violation. An application would need to provide detailed information about the applicant, other participants, the arrangement, its duration, involved persons, other authorities approached and the evidence offered. Interim confidentiality and assurance may be available while SEBI evaluates cooperation. The draft proposes possible reductions in the calculated settlement amount based on priority status: up to 90% for first priority, up to 50% for second priority and up to 25% for third or later priority. These are maximum possible reductions, not automatic entitlements. Confidentiality should not be understood as blanket immunity. The applicant would need to provide full, true and continuing cooperation, and the draft contains conditions governing protection and disclosure. Forms, Undertakings and Records Document Main purpose Important point Settlement application Gives identity, case, facts, charges and proposed terms Full and true disclosure is required Processing-fee proof Shows payment of non-refundable fee Separate from settlement amount Undertaking and waiver Records jurisdictional, procedural and appellate waivers Continues to have consequences even after rejection or withdrawal in specified respects Settlement calculation statement Sets out BA, S, R, G, A and M Legal costs and disgorgement shown separately Fast-track notice Offers settlement for specified violations before proceedings Subject to strict filing and payment period Settlement notice Gives pre-show-cause settlement opportunity Does not freeze or guarantee the stated charges Confidentiality application Provides information and evidence for cooperation-based protection Must include prescribed particulars and supporting undertaking Applicants would also need the relevant show-cause notice or communication, authorisation or board resolution, identity and registration documents, details of related proceedings and supporting calculations. Material Drafting Issues and Points Requiring Clarification The draft still has a few areas that may need clarification before the final regulations are issued: Blank commencement date: Draft Regulation 1 does not specify an effective date yet. This is expected at the consultation stage, so the date cannot be confirmed at present. Draft notification number: The notification number contains blank placeholders and is not a final reference number. Inconsistent title style: The consultation discusses “Settlement of Proceedings” Regulations, while the existing regulations use “Settlement Proceedings.” The final instrument should use one consistent title. Undertaking cross-reference: Clause 10 of the proposed undertaking refers to the 2018 Regulations even though the form is part of the proposed 2026 Regulations. This appears to require correction or explanation. Duplicate numbering: Draft Regulation 13 appears to contain two sub-regulations numbered (3). Draft language: Several grammatical, punctuation and cross-reference issues should be cleaned up before notification because procedural regulations need precise wording. Discretion in the formula: The proposed formula gives more structure to the settlement amount, but the committees can still recommend a higher or lower amount with reasons. Stakeholders may want clearer guidance on how this discretion will work in different cases.  Settlement as the general rule: Draft Regulation 5 appears to treat settlement as the usual approach, while Draft Regulation 6 still gives SEBI wide discretion to accept or reject an application. The draft could clarify how these two provisions are meant to work together. Changes after the initial notice: The proposed pre-show-cause notice could help applicants settle matters early. However, SEBI can still change the charges later. The draft could explain what happens if those changes are significant after the applicant has already applied for settlement. These observations concern the drafting of the proposal. They do not amount to a conclusion that the provisions are invalid or that SEBI will adopt them without correction. Likely Impact if the Proposals Are Adopted The proposed changes could affect different applicants in different ways, depending on their role, the stage of the matter and the nature of the alleged violation. 1. Listed Companies and Market Intermediaries The longer 90-day application period may give larger organisations more time to assess their options. However, higher base amounts and possible disclosure or corrective terms could make serious matters more costly. 2. Directors, Promoters and Key Managerial Personnel The proposed framework gives importance to the person's actual role and involvement. Decision records and evidence showing who was responsible could become more important when determining the settlement amount. 3. Natural Persons and Smaller Applicants The proposed filing fee for natural persons would increase to Rs 25,000. The draft also provides for lower minimum settlement amounts in some cases, while factors such as limited involvement, cooperation and financial difficulty may be considered. 4. Applicants With Pending Matters Those with pending applications may need to compare the treatment available under the existing and proposed framework before deciding which route is more suitable. 5. Compliance, Legal and Finance Teams The changes would require these teams to work closely. They may need to assess eligibility, prepare disclosures, review financial exposure and gather documents before deciding whether settlement is the right option. Benefits and Possible Burdens The proposed changes could make the settlement process easier in some situations, but they may also increase the cost and work involved for applicants. The main points are: Potential benefits A clearer formula could make the settlement amount easier to understand. The 90-day application window would give applicants more time to decide and prepare. Lower-value matters could move through the fast-track process more quickly. A pre-show-cause settlement option could give applicants a chance to resolve a matter earlier. Applicants would get a hearing before a settlement order is revoked. The draft also sets out how pending applications would be handled under the new framework. Possible burdens Filing fees may rise. The final amount could depend on several facts specific to the case. Serious matters could still involve disclosure, restoration or other non-monetary conditions. Applicants would need to make full disclosures and give the required waivers. Since deadlines would generally be counted in calendar days, teams would need to keep a closer track of due dates. The final impact will depend on the wording of the final regulations and how the formula and available discretion are applied in actual cases. Questions Stakeholders Should Consider Before Commenting Does the new formula create enough predictability while preserving necessary regulatory discretion? Are the proposed applicant-category multipliers proportionate? Is the 90-day limitation sufficient for overseas and complex corporate applicants? Should the Rs 10 lakh fast-track threshold be adjusted or reviewed periodically? Are the proposed consequences of missing a fast-track opportunity too restrictive? Are the safeguards for changed charges after a settlement notice adequate? Are the transition options fair to applicants who have already participated in committee proceedings? Do the disclosure and fund-restoration provisions clearly distinguish alleged findings from established facts? Are the conditions for voluntary debarment, suspension and other non-monetary terms sufficiently objective? Should SEBI publish additional guidance on deviations from the calculated settlement amount? Are the forms and undertakings internally consistent and limited to information genuinely needed for settlement? Public Comment Deadline and Submission Process SEBI has invited comments on the draft regulations by 4 September 2026. Comments should be submitted through the SEBI public-comment portal. If a person faces a technical problem with the web-based form, the consultation paper provides the email address settle-help@sebi.gov.in. It specifies the subject line: “Public comments on Review of SEBI (Settlement Proceedings) Regulations, 2018”. Stakeholders should submit early enough to address portal errors or document-upload issues. The paper does not say that late comments will be accepted. What Businesses and Market Participants Should Do Next The consultation does not require immediate implementation. It does, however, justify a focused review by organisations that may be affected. Identify relevant exposure. Check whether the organisation or its officers are involved in an existing, expected or appellate-stage SEBI proceeding. Review pending applications. Map each application to the proposed transition categories. Compare financial outcomes carefully. Use actual alleged defaults, statutory penalty provisions, applicant category and proceeding stage. Do not rely on broad estimates. Review non-monetary consequences. Check whether the case could also involve disclosures, corrective steps, and changes in management or repayment of money. Get the paperwork in order. Keep the relevant notices, approvals, calculations, investor-loss details and case records ready before filing. Keep comments practical. Point out the exact provision that creates a problem, explain why it may be difficult to follow and suggest a clear alternative. Wait for the final rules. Do not base a compliance decision on the draft alone. Check the final notification and effective date once SEBI issues them. These are practical recommendations, not duties imposed by the consultation paper. What Happens After the Consultation? SEBI may review the public comments, conduct further internal analysis and modify the draft. It may accept some proposals, revise them or decide not to proceed with particular provisions. The consultation paper does not expressly specify when final regulations will be notified or brought into force. Businesses should therefore monitor SEBI's official legal and consultation pages rather than plan around an assumed date. How Corpseed Can Help The proposed framework combines securities-law interpretation, financial calculation, documentation and operational remediation. Corpseed can support businesses in understanding the proposal and preparing for the next regulatory step. Proposal-wise applicability and impact assessment Comparison of the 2018 framework with the proposed 2026 Regulations Review of settlement-application documentation and internal records Compliance-gap and process-readiness assessment Coordination of legal, compliance, finance and management inputs Review and organisation of supporting documents Assistance in preparing structured consultation comments Monitoring and analysis of the final notified framework Each SEBI enforcement matter has its own facts and procedural history. Professional support can help a business organise its records, understand the process and make an informed decision, but it cannot guarantee acceptance, settlement, a particular amount or any regulatory outcome.