Law Updates

Subject

Summary: The Indian Government has made a new rule about radio equipment. This rule is called the DoT Telecommunications (Radio Equipment Possession Authorisation) Rules, 2026. In simple words, this rule tells us who is allowed to keep, use, buy, sell, rent, repair, test, or show off radio equipment in India, and what steps they must follow to get permission from the government. It also tells us who does NOT need this permission. This rule was made under a bigger law called the Telecommunications Act, 2023, and it came out in the Official Gazette on 8th July 2026. Below, we explain everything in very easy words so that anyone - even a student - can understand what this rule means and why it matters. What are These Rules, and When Did They Start? The Central Government has made a new set of rules called the Telecommunications (Radio Equipment Possession Authorisation) Rules, 2026. These rules come from a bigger law, the Telecommunications Act, 2023. Rule Name: "Telecommunications (Radio Equipment Possession Authorisation) Rules, 2026." These rules started working on the very day they were printed in the Official Gazette (which is like the government's official newspaper). What the Rules Try to Do? These rules build a new online system (using a "portal," which is just a government website) for businesses and other groups that want to keep or use radio equipment for work or technical reasons. The rules cover things like: Who must get permission before keeping radio equipment. Who is allowed to apply for this permission? How to apply - what forms to fill out, which website to use, and what fees to pay. How the government gives, renews, changes, or cancels this permission. Rules about where to keep the equipment, how to test it, how to show it to others, how to throw it away safely, and how to report if something goes wrong. Who does not need this permission at all - like people who already have other licenses, hobby radio users, or normal phone users. In short, these new rules replace old, messy rules (like the ones from the Indian Wireless Telegraphy Act of 1933) with one clear, modern system under the new Telecommunications Act, 2023. Who Needs Authorisation, and Who is Eligible? Use cases that need authorisation According to Rule 4(1), if someone wants to keep radio equipment for certain reasons, they must apply for permission first: Group (a): Keeping radio equipment for one or more of these reasons: Making it (manufacturing) Bringing it into India (importing) Selling it Renting it out Fixing it (repair) Testing it Showing it to others (demonstration) Group (b): Keeping radio equipment only for: Bringing it in, buying it, or renting it to test it or show it to someone. So this rule applies to makers, importers, sellers, rental companies, repair shops, testing labs, and demo centres. Who is eligible (Rule 4(2)) People or groups who can apply for this permission include: Companies or LLPs (a type of business), including those with money coming from other countries, as long as they follow India's foreign investment rules and other laws. Individual people, partnership firms, or one-person businesses that already have a valid licence, permit, or registration to run their business. Government bodies - either the Central Government, State Governments, or any group appointed by them to hold radio equipment. People who already hold a licence under an older rule called the Indian Wireless Telegraph (Possession) Rules, 1965. This covers most serious companies and government offices that deal with radio equipment, not just regular people using a phone. How to Apply and What Fees are Involved? Application process (Rule 4(3)) Applications must be done online, on the DoT (Department of Telecommunications) website, called the "portal" (this is explained in Rule 15). When applying, people must give: Details about the radio equipment - its brand, model, and how many pieces. Any other papers or details asked for on the website. Application fee: Everyone must pay Rs. 1,000, and this money will not be given back. If the equipment can block or disturb other telecom signals (like jammers), the person must also show proof that they already got special permission under Section 48 of the Telecommunications Act. What happens to old pending applications Rules 4(4) and 4(5) talk about old, unfinished applications made under the earlier 1933 law: If someone applied for a licence under the old 1933 law but never actually got the licence before these new rules started, that old application is now cancelled automatically. Such people can apply again, but under the new rules. Any fee they already paid earlier can be counted towards the new fee. They only need to pay the extra amount, if any. This basically brings everyone into the new system and clears out old, pending paperwork. How is authorisation granted and its Duration? Grant of authorisation (Rule 5) After someone applies under Rule 4, the government can: Check the application as thoroughly as it wants to make sure the person is eligible. Ask for more information if needed. For Group (a) applicants (manufacture/import/sale/hire/repair/testing/demo), the government may also do a security check, following the steps listed on the website. If satisfied, the government sends an "offer letter" through the website. This letter tells the applicant: What conditions they still need to meet. The full fee they must pay for the entire time period of the permission. Authorisation fee (this money is not refunded): Rs. 10,000 per year for Group (a) permissions. Rs. 2,000 per year for Group (b) permissions (only testing/demo), with a smaller amount charged if the time period is less than a year, but never less than Rs. 500. Once all conditions are met and the fee is fully paid, the government grants permission. This permission will clearly state: Details of the radio equipment (brand, model, quantity). The address where the equipment must be kept. How the equipment should be tested. Rules for demonstrating or showing the equipment. The start date and how long the permission lasts. What the permission is for, whether it's for making/importing/selling/renting/repairing/testing/showing, or a mix of these, or just importing/buying/renting for testing/demo. Duration (Rule 6) For Group (a) permissions: at least 1 year and up to 5 years. For Group (b) permissions: up to 12 months. Renewal (Rule 7) For Group (a) permissions: The renewal application must be sent at least one month before the old permission ends, through the website. If someone misses this deadline, they can still ask for more time. The government may allow it if there is a good reason, but a late fee will apply. When renewed, the new permission lasts as long as stated in Rule 6 and must follow whatever rules and laws are active on the website at that time. Who is Exempt and Does Not Need Authorisation? Rule 10 lists people who do NOT need this new permission: People who already have a licence, registration, or permission under the older Indian Telegraph Act, 1885, or the Indian Wireless Telegraphy Act, 1933, and are still following those older rules under the new Act's Section 3(6). People who already have permission under some other rule of the new Act, where that rule doesn't ask for this kind of possession permission. People who already have general exemptions under Section 3(3) or Section 4(6) of the Act. People who have exemptions specifically for radio equipment under Section 3(4) or Section 4(7) of the Act. People who already have spectrum (radio frequency space) given to them under Sections 4(4), 4(8), or 4(9). Hobby (amateur) radio operators who hold an Amateur Station Operator Certificate under the Telecommunications (Amateur Services) Rules, 2024. People who own radio equipment that can only hold up to four SIM cards. Ordinary users who can show proof that they are already customers of a telecom company. Important note: People on this exempt list are NOT allowed to manufacture, sell, or rent out radio equipment. They can only use the equipment they already legally have. Conditions and Obligations for Authorised Entities? Rules 8 and 9 explain the responsibilities that come with getting this permission. Who can receive possession (Rule 8) A Group (a) permission-holder can only hand over the equipment to: someone listed under Rule 10 (the exempt people), or someone who also has permission under these rules. A Group (b) permission-holder (testing/demo only) cannot hand the equipment to anyone else at all. This restriction does not apply when equipment is being properly disposed of under Rule 12. General terms and conditions (Rule 9) A person or company with this permission must: Keep the radio equipment safely, exactly as described in the permission papers. Continue to meet the eligibility rules the whole time they hold the permission. Make sure the equipment doesn't break any law, is used only for its permitted purpose, and doesn't cause any safety or health danger. Make sure the equipment follows any technical standards the government sets from time to time. Tell the government immediately, through the website, if their name, address, or contact details change. Keep an updated list of:  All the radio equipment they own, Papers, accounts, estimates, and reports about the equipment, And any other information the website asks for. Help the government or its officers when they come to check the equipment physically. Immediately report on the website if any equipment is lost, stolen, or misused. Testing and demonstration rules When testing or showing radio equipment: If the equipment doesn't send out radio waves, or sends very weak ones (up to 100 milliwatts), then:  The testing/demo must not disturb anyone else's telecom equipment, network, or service. They also cannot complain if someone else's signal disturbs theirs. If the equipment sends out stronger signals (more than 100 milliwatts), it must follow the terms of whatever spectrum permission was already given under the law. "Interference" means unwanted signals messing up someone else's radio reception, causing errors or loss of information. Non-transferability This permission cannot be given, sold, or passed on to someone else - not even partly, and not directly or indirectly. No agreement or partnership can be made to transfer it either - unless the government specially allows it under conditions it decides. This matters a lot for businesses going through mergers, acquisitions, or restructuring. Surrender and Disposal Surrender (Rule 11) If a company wants to give up (surrender) its permission, it must apply at least 30 days before the date it wants to stop, through the website. The application must include proof that all dues (money owed) have been paid up to that date, along with any other information asked for. The government can approve the surrender, but the company must still follow the disposal rules (Rule 12) and pay any remaining dues. Disposal (Rule 12) Rule 12 has a table that lists different situations (like when a permission expires or is cancelled) and how much time the company gets to get rid of ("dispose of") safely the radio equipment in each situation. Disposal must be done safely and legally, and the company must update its records and the website to show it has been done. Why did DoT Come Up with These Rules, and What Need They Address? Modernising regulatory control Radio and telecom technology have changed a lot over time. The old rules from 1885 and 1933 were made a very long time ago and were not designed for today's advanced radio equipment. The new Telecommunications Act, 2023, wants modern rules that properly manage: Who possesses radio equipment. How it is used. How it is safely thrown away. How to stop people from misusing it. Managing interference, security, and safety Radio equipment, if not controlled, can: Disturb licensed telecom networks. Be misused for illegal communication or signal-jamming. Become dangerous to people's safety or health. So the government needs one central system to know who has what equipment, where it is kept, and why - and to make sure everyone follows proper safety standards and reports problems quickly. Formalising business ecosystems Many companies - manufacturers, importers, testing labs, and system builders - handle radio equipment in loose or informal ways today. These new rules: Put them under one clear legal system. Make everyone's duties very clear. Help the government enforce the law fairly and keep the market disciplined. Impact on Businesses in India and How They Benefit Directly affected businesses Companies that make radio equipment (like base stations, radios, and testing tools). Companies that import or distribute radio equipment. Repair shops and equipment rental companies. Testing and certification labs. Companies that build systems using radio parts, such as IoT devices or private networks. Government departments running technical radio projects. Benefits Clear rules: Now there is one simple set of rules explaining who needs permission, who doesn't, how to apply, and what must be followed. Predictable process and costs: The application fee (Rs. 1,000) and the permission fees (Rs. 10,000 or Rs. 2,000 per year) are all clearly written down, along with how long permissions last and how to renew them. Modern online system: Everything - applying, renewing, changing details, surrendering, updating inventory, and reporting problems - can be done through one website. Less confusion: Businesses can now be confident that keeping their radio equipment is fully legal and properly documented, which lowers the risk of trouble with the government later. More trust from customers and investors: Following DoT's rules shows that a company is reliable and trustworthy, which helps its reputation. Burdens New costs, like the authorisation fee. Extra staff time is needed for paperwork, updating the website, and managing inventory lists. Need to carefully track renewal dates so the permission doesn't expire by mistake. Permission cannot automatically be passed on if the company is restructured or sold. Even so, for serious businesses, these efforts are small compared to the risk of operating without any legal permission at all. Is This the Right Decision or Unfair to Telecom Companies? The right decision from a policy standpoint Radio equipment plays a very important role in: Keeping the country safe. Managing spectrum (radio frequency space) properly. Protecting public safety. The old rules were outdated, so these new rules match today's technology and the 2023 law. Importantly, these rules focus on business and technical use of radio equipment - not on regular people using their phones normally. Telecom operators and industry Companies that already have a telecom licence are mostly exempt under Rule 10, as long as they keep following their existing licence conditions. These new rules mainly affect companies handling radio equipment outside of normal telecom operator networks. So, this is not unfair to telecom companies - in fact, it protects them by preventing random or unmanaged radio devices from disturbing their signals. Businesses that were earlier working informally, without proper permission, will feel the biggest change. But this change is fair because it helps prevent signal disturbance, illegal radio use, and safety risks for everyone. Quality, Consumer Satisfaction and Environmental Conditions Quality and reliability Having to follow official technical standards will improve the overall quality of radio equipment. Keeping proper inventory and records will help companies manage their equipment better and more responsibly. Consumer satisfaction Less signal interference and fewer illegal radio devices mean telecom services will work more smoothly for everyone. Clear rules help keep network performance steady and reduce sudden, unexplained service problems. Environment and safety The disposal rules and safety conditions encourage companies to properly handle old equipment when it's no longer needed - which is important for reducing electronic waste. These rules also make sure equipment doesn't become dangerous to people's health or safety, protecting workers, the public, and the environment from unsafe or abandoned radio devices. Impact on the Indian Economy and Other Countries Indian economy Good effects: Strengthens how telecom infrastructure is managed, which is very important for India's digital growth. Encourages more companies to work formally and legally in the radio equipment business. Reduces the risk of illegal radio use harming licensed telecom networks, which supports more investment in telecom. Cost: Businesses, especially smaller ones, will have new compliance costs to manage. Overall, clearer rules usually build more confidence among investors and make the telecom sector more stable. Other countries Foreign companies that make or sell radio equipment in India must now follow these rules too, often by working with local Indian partners. Having clear rules makes India a more predictable and trustworthy market, which is attractive to foreign technology companies. Countries that export radio or testing equipment to India may see steady demand, backed by this proper, formal permission system. Business Opportunities for Corpseed Corpseed can offer many helpful services connected to these new rules: Authorisation Application Support Complete, end-to-end help with the online application, including: Checking if a company is eligible. Fill out the forms correctly. Collecting all needed documents (equipment details, business licences). Handling the application fee payment. Regulatory Eligibility and Exemption Advisory Helping businesses figure out: Whether they actually need this permission. Whether they might already be exempt under Rule 10 (like telecom operators, amateur radio users, or simple SIM devices). Inventory and Compliance Systems Setting up tools and processes to: Track radio equipment inventory. Keep proper records and generate reports. Update the government portal regularly and stay compliant. Renewal and Modification Management Keeping track of when permissions are about to expire. Managing renewal applications (including handling late fees if needed). Helping with requests to change permission details under Rule 5(4). Surrender and Disposal Planning Helping companies with: Filing surrender applications. Calculating any dues owed. Planning safe and proper disposal under Rule 12. Training and Capacity Building Running workshops for manufacturers, importers, testing labs, and system integrators, covering: Who needs this permission. How to follow the rules properly. How to avoid causing signal interference. Support for Foreign Entrants Helping foreign companies understand: India's local eligibility rules. The full permission application process. How to partner with Indian companies. M&A and Restructuring Advisory Since permissions cannot be transferred, Corpseed can advise on: How to manage permissions during company acquisitions or restructuring. When and how to request special government approval for a transfer.

Subject

Summary: The Bureau of Indian Standards (BIS) has announced Amendment No. 1 to IS 4246:2025, the standard for domestic LPG gas stoves and built-in hobs. Along with the amendment, BIS has provided manufacturers with a six-month transition period allowing them enough time to review the updated requirements and make the necessary changes before the revised standard becomes mandatory. The move is intended to support a smooth shift to the new requirements while helping maintain the safety and quality of LPG appliances available in the Indian market. What the Notification Says Issuing Authority: Bureau of Indian Standards (BIS), Department of Consumer Affairs. Notification Date: 1 July 2026  Standard Amended: IS 4246:2025 "Domestic Gas Stove and Built-in Hob for Use with LPG Specification" (Sixth Revision). Amendment: Amendment No. 1 (June 2026). Date of Establishment: 29 June, 2026. Transition Period: The existing version of IS 4246:2025 will continue to remain valid until 28 December 2026, giving manufacturers enough time to review the amendment, make any required changes, and transition to the revised standard before compliance becomes mandatory. The document itself is a short administrative gazette notice confirming that the amendment has been formally established; it does not reproduce the detailed technical clauses being changed (these would appear in the BIS standard document IS 4246:2025 Amendment No. 1 itself, available separately from BIS). Why Has BIS Introduced Amendment No. 1 to IS 4246:2025? BIS periodically amends product standards like IS 4246 (LPG gas stoves and built-in hobs) for several standard reasons: Safety Improvements: LPG stoves are high-risk consumer appliances gas leakage, burner instability, and flame control issues can cause fires and explosions. Amendments typically tighten safety-critical parameters (burner design, valve safety, ignition mechanisms, and structural stability). Energy Efficiency: Amendments often refine thermal efficiency requirements, pushing manufacturers toward better fuel-to-heat conversion which reduces LPG consumption per household relevant given India's LPG subsidy burden, and import dependence. Material and Product Quality: BIS may update requirements to improve the durability, reliability, and overall quality of LPG gas stoves and built-in hobs, helping products perform consistently throughout their expected lifespan. Testing and Certification Practices: Standards are also revised to keep testing methods and certification requirements relevant to current manufacturing practices, ensuring products are evaluated using updated quality and safety benchmarks Response to Field Data and Complaints: Amendments often follow accident reports, consumer complaints, or manufacturer feedback identifying practical issues with the original 2025 sixth revision. Since IS 4246:2025 was itself only recently issued (Sixth Revision), Amendment No. 1 likely represents a quick correction or refinement identified shortly after the revised standard came into force, common when a major revision uncovers implementation issues that need fast follow-up correction. Compliance Requirements for Businesses Manufacturers, importers, and other stakeholders should begin reviewing the amended standard early to identify compliance requirements and complete the necessary updates within the transition period. Immediate actions for manufacturers of LPG stoves and built-in hobs Obtain and study Amendment No. 1 in detail from BIS (the gazette notice itself only confirms establishment; the technical amendment document carries the actual clause changes). Review Amendment No. 1 carefully and determine whether any changes are required in product design, materials, manufacturing processes, testing procedures or documentation before the transition period ends. Update test reports and technical files held with BIS for existing product certifications (CRS/ISI mark certifications) to reflect compliance with the amended clauses. Coordinate with BIS-recognised testing laboratories to re-test products against the amended requirements before the transition deadline. Plan production transition: Since the un-amended standard remains valid until 28 December 2026, manufacturers can continue producing and selling stock compliant with the pre-amendment standard until that date but must be fully compliant with Amendment No. 1 from 29 December 2026 onward. Update ISI marking and labelling if any labelling or declaration requirements are affected by the amendment. Notify supply chain partners and component suppliers (burners, valves, and regulators, hob glass/steel panels) to ensure their inputs also meet the revised specification. For Importers and Distributors Imported LPG stoves and hobs sold in India must also carry ISI certification against the amended standard once the transition period lapses, import compliance documentation should be updated accordingly. For Retailers Retailers should track supplier compliance status to avoid stocking non-compliant products after 28 December 2026. Who Will Benefit the Most from BIS Amendment No. 1 to IS 4246:2025? The amendment creates opportunities for businesses that prioritise quality, timely compliance, and product safety while strengthening consumer confidence in certified LPG appliances. Established, Quality-focused Manufacturers Larger, well-resourced LPG stove and hob manufacturers (with in-house R&D, testing labs, and established BIS relationships) can adapt quickly, using compliance as a market differentiator an opportunity to market their products as meeting the latest, more stringent safety and efficiency standards ahead of smaller competitors. These companies often already track BIS standard revisions closely and can turn compliance into a competitive advantage. Testing Laboratories and Certification Bodies BIS-recognised labs handling LPG stove testing see increased business as manufacturers rush to re-test and re-certify products against the amended clauses within the transition window. Consumers (Indirect Beneficiary) Improved safety, efficiency, and build-quality standards translate into safer, more fuel-efficient stoves for households, reducing the risk of gas-related accidents and lowering LPG consumption costs over time. Component Suppliers Who Upgrade Quickly Burner, valve, and regulator manufacturers who proactively align their components to the amended specification gain preferred-supplier status with OEM stove manufacturers. Who May Face Challenges Due to BIS Amendment No. 1 to IS 4246:2025? While the amendment supports higher quality standards, some businesses may face compliance costs, operational adjustments and tighter timelines during the transition period. Small and Unorganized Manufacturers Many LPG stove manufacturers in India are small-scale or unorganized-sector units, often operating on thin margins. For them: Re-testing and re-certification costs are a real burden. Retooling production lines to meet amended specifications (if structural or material changes are involved) requires capital they may not readily have. The compressed six-month transition window is tight for smaller players without dedicated regulatory/quality teams. Manufacturers with Existing Non-compliant Inventory Companies holding large unsold inventory built to the pre-amendment specification must sell through stock before 28 December 2026, or risk being unable to sell non-compliant units afterward creating potential inventory write-offs or forced discounting. Component Suppliers Slow to Adapt Suppliers of burners, valves, or other parts who don't update designs in time risk losing contracts with OEMs who need amendment-compliant components. Was There a Genuine Requirement for This Amendment? Yes, periodic refinement of safety-critical appliance standards is standard regulatory practice, and the very short gap between the Sixth Revision (2025) and Amendment No. 1 (June 2026) suggests one of the following typical triggers: •    A safety or performance gap was identified soon after the 2025 revision came into force, requiring urgent correction. •    Industry feedback during the initial implementation period pointing out impractical or ambiguous clauses needing clarification. •    Alignment with a related standard update (e.g., LPG regulator or valve standards) that necessitated a consequential amendment to IS 4246. Since LPG stoves are used in nearly every Indian household and gas-related accidents remain a public safety concern, BIS's responsiveness in issuing a timely correction reflects good regulatory practice rather than unnecessary interference. Impact on India's Economy The amendment primarily focuses on product standards and is expected to support long-term industry growth while creating some temporary compliance challenges for businesses. Positive Impact Improved Consumer Safety: Stronger quality standards can help reduce the risk of LPG-related accidents, lowering healthcare expenses, property damage and other economic losses over time. Potential Energy Efficiency Gains: If the amendment introduces improved efficiency requirements, it could contribute to lower LPG consumption helping reduce India's dependence on imported LPG in the long run. Stronger Manufacturing Standards: Regular updates to BIS standards encourage manufacturers to adopt better quality practices, improving the competitiveness of India's domestic appliance industry. Growth in Testing and Certification Services: The transition is likely to increase demand for BIS-recognised testing laboratories and certification services, supporting employment and strengthening India's quality infrastructure. Short-Term Challenges Smaller manufacturers may experience higher compliance costs related to product testing, documentation, and certification. Businesses holding inventory manufactured under the earlier standard may need to carefully manage stock before the transition period ends. Suppliers and manufacturers may incur additional costs if product or component changes are required to meet the amended standard. The economic impact is modestly positive, particularly given the safety and efficiency angle, with manageable short-term transitional costs. Is This the Right Decision, or an Additional Compliance Burden? The amendment reflects BIS's ongoing efforts to keep safety standards up to date while giving businesses adequate time to transition. Although compliance may require additional effort, the phased implementation helps minimize disruption. Why It Is the Right Decision Supports Consumer Safety: LPG gas stoves are safety-critical products, and regular updates to BIS standards help ensure they continue to meet evolving safety and quality requirements. Provides Sufficient Transition Time: Manufacturers have until 28 December 2026 to comply with the amended standard, allowing them to review requirements, update processes, and manage existing inventory without immediate disruption. Encourages Continuous Quality Improvement: Since amendments generally address specific areas of a standard rather than replacing it entirely, businesses can focus on targeted improvements instead of undertaking a complete product redesign. Where It May Create Challenges Higher Compliance Costs for Smaller Manufacturers: Small and medium-sized businesses may need to invest in additional testing, documentation, certification, and, where applicable, product modifications. Supply Chain Adjustments: If the amendment requires changes to components or manufacturing processes, suppliers and manufacturers may need additional time to align their operations before the compliance deadline. Overall, the amendment represents a balanced regulatory update that promotes product safety and quality while providing businesses with a reasonable transition period to achieve compliance. How Will the Amendment Improve Product Quality, Consumer Confidence, and Environmental Sustainability? By encouraging manufacturers to meet updated BIS requirements, the amendment is expected to strengthen product quality, improve consumer trust and support sustainable manufacturing practices where applicable. Quality and consumer satisfaction Tighter or clarified specifications typically translate into more reliable, durable and safer stoves, fewer field failures, better burner performance and improved consumer confidence in ISI-marked products. Consistent enforcement of amended standards helps weed out substandard products from the unorganized or grey market, improving overall market quality perception. Environmental Benefit If the amendment includes tightened thermal efficiency norms (a common feature of LPG appliance standard revisions), it directly supports: Lower per-household LPG consumption, cutting associated carbon emissions from fossil fuel combustion. Reduced import burden, since India imports a substantial share of its LPG requirement, indirectly supporting energy security goals. Better burner and valve design can also reduce incomplete combustion, which lowers indoor air pollution and associated carbon monoxide risks, a meaningful public health and environmental benefit given how widely LPG stoves are used across urban and rural India. Implementation Timeline Summary Date Event June 2026 Amendment No. 1 to IS 4246:2025 issued 29 June 2026 Amendment formally established 1 July 2026 Gazette notification published Until 28 December 2026 Pre-amendment standard remains valid (transition period) From 29 December 2026 Full compliance with Amendment No. 1 becomes mandatory Corpseed Offering: Ensuring Seamless Compliance with the New Amendment This amendment opens clear, actionable service opportunities: 1. BIS Certification Gap Assessment Help LPG stove and hob manufacturers assess their current ISI certification against Amendment No. 1 requirements, identifying design, material, or documentation gaps before the December 2026 deadline. 2. Re-testing and Re-certification Coordination Manage the process of coordinating with BIS-recognised labs for re-testing products against amended clauses, handling paperwork, and tracking certification renewal timelines. 3. Transition Planning for Manufacturers Advise manufacturers on a production and inventory transition strategy on how to sell through existing compliant stock before the deadline while ramping up amended-compliant production in parallel. 4. Component Supplier Compliance Audits Offer compliance audit services to burner, valve, and regulator manufacturers to ensure their components meet the amended IS 4246 requirements, protecting their OEM relationships. 5. SME Compliance Support Packages Since smaller manufacturers are most vulnerable to compliance cost and timeline pressure, offer a simplified, cost-effective compliance package specifically targeted at small-scale LPG appliance producers, combining gap assessment, documentation support, and lab liaison in one bundle. 6. BIS Regulatory Monitoring Subscription Offer an ongoing monitoring service that alerts appliance manufacturers to future BIS amendments across related standards (LPG regulators, cylinders, valves, other kitchen appliances), so they are never caught off-guard by a compressed transition window again. 7. Training Workshops Conduct workshops for manufacturer quality teams explaining the technical changes in Amendment No. 1 and how to implement them in design and manufacturing processes.

Subject

Summary: SEBI has introduced an important amendment to the SEBI (Mutual Funds) Regulations, 2026, allowing mutual fund schemes to undertake intraday borrowing to manage temporary cash flow mismatches between the inflows and outflows of a scheme. The borrowing is permitted only for addressing same-day liquidity gaps and will be subject to conditions specified by SEBI. While the amendment does not change the broader restrictions on mutual fund borrowing it provides fund houses with greater operational flexibility to ensure timely redemption payments and more efficient cash management. What the Notification Actually Says Issuing authority: Securities and Exchange Board of India (SEBI) Notification date: 3 July 2026, Mumbai, published as the SEBI (Mutual Funds) (Amendment) Regulations, 2026 Effective date: The amendment came into effect on 3 July 2026, the date of its publication in the Official Gazette. Parent regulation amended: SEBI (Mutual Funds) Regulations, 2026, originally notified on 15 January 2026. Key amendment: Chapter VII, Regulation 42(2) has been substituted with the following provision: "Nothing in sub-regulation (1) shall restrict the mutual funds from intraday borrowing for addressing timing mismatch between outflows and inflows of a scheme, subject to such conditions as specified by the Board." In plain terms: if a mutual fund scheme has payments going out and money coming in on the same day, but the timing doesn't line up perfectly (e.g., redemption payouts due before securities-sale proceeds are credited), the fund can now borrow money intraday to cover that gap as long as it follows whatever specific conditions SEBI separately prescribes (limits, disclosure, repayment timing, permissible lenders, etc.). Why SEBI Introduced This Amendment Mutual fund schemes regularly experience temporary timing mismatches between cash inflows and outflows during their day-to-day operations. Redemption payments to investors are usually processed within a fixed T+1 or T+2 settlement cycle. At the same time, proceeds from the sale of portfolio securities, subscription money, or dividend and coupon receipts may be credited later in the day due to settlement cycles, clearing house processes or banking cut-off timings. Without a formal borrowing mechanism, fund managers would either have to maintain higher cash reserves, which could affect portfolio returns, or risk delays in meeting redemption obligations. Regulatory rationale 1. Investor protection and timely redemptions: Ensuring that investors receive their redemption proceeds on time is essential for maintaining confidence in mutual funds. By permitting intraday borrowing, SEBI has provided fund houses with a legitimate mechanism to meet redemption obligations even when expected inflows are received later in the day. 2. Reducing idle cash holdings: Earlier, fund managers often maintained higher cash buffers as a precaution against temporary liquidity gaps. While this improved liquidity, it also meant that a portion of the scheme's assets remained uninvested. The amendment allows funds to manage liquidity more efficiently without keeping excessive idle cash. 3. Alignment with global practices: Many mature financial markets, such as UCITS funds in Europe and mutual funds regulated under the US Investment Company Act, permit short-term borrowing for liquidity management subject to strict regulatory limits. By introducing a similar provision, SEBI brings India's mutual fund framework closer to internationally accepted practices. 4. Removing regulatory ambiguity: The earlier Regulation 42 already placed restrictions on borrowing by mutual funds to prevent excessive borrowing and protect investors. However, it did not clearly explain whether funds could borrow to manage temporary cash flow gaps during the day. The amendment clears up this position by allowing intraday borrowing only for such situations. 5. Responding to changing market dynamics: With T+1 settlement becoming the norm in Indian equity markets and the increasing use of debt and hybrid investment products, temporary gaps between cash inflows, and outflows have become a regular part of mutual fund operations. The amendment allows fund houses to manage these situations in a regulated and transparent manner. How Businesses (AMCs, Trustees, Custodians) Will Comply Since the actual "conditions" for this intraday borrowing are to be "specified by the Board" (SEBI) separately likely through a circular Asset Management Companies (AMCs) need to prepare on multiple fronts: 1. Await and implement SEBI's detailed conditions circular This will likely specify: borrowing limits (as a % of the scheme's net assets), permissible lenders (banks, clearing corporations), maximum borrowing tenure (must be same-day/intraday only), repayment timing, permissible schemes (equity, debt, hybrid) and interest cost treatment. 2. Update scheme documentation and SID/SAI Scheme Information Documents (SID) and Statement of Additional Information (SAI) should be updated to disclose the fund's intraday borrowing policy, limits and risk factors. 3. Establish internal treasury and liquidity management protocols AMCs need documented internal policies for: When intraday borrowing will be triggered  Approval workflows (fund manager, CFO, risk committee sign-off) Selection of counterparties/lenders for such borrowing Same-day repayment tracking 4. Board and Trustee approval AMC boards and mutual fund trustees will likely need to approve internal intraday borrowing policies and set scheme-specific limits within SEBI's overall framework. 5. Risk management and reporting systems Systems must be built or upgraded to track intraday cash positions in real time, flag mismatches, and execute borrowing/repayment within the same trading day. 6. Disclosure to investors Funds will likely need to disclose instances and costs of intraday borrowing in periodic scheme disclosures (portfolio disclosures, annual reports) for transparency. 7. Custodian and banking relationship management AMCs will need to formalise intraday credit facilities with custodian banks or clearing corporations, including documentation, credit limits, and interest rate terms. Who Gets the Maximum Benefit? The amendment is expected to benefit several stakeholders by improving liquidity management, operational efficiency and timely fund settlements. Asset Management Companies (AMCs) and mutual fund houses All SEBI-registered AMCs will benefit from greater flexibility in managing short-term liquidity, helping reduce the risk of technical delays in processing redemption payments. Funds with high redemption volumes or fluctuating daily cash flows, particularly liquid funds, ultra-short duration debt funds and overnight funds, are expected to benefit the most, as they are more likely to experience temporary timing mismatches.  Mutual fund investors (unit-holders) Investors are likely to benefit through: More reliable and timely redemption payouts, even when there are temporary settlement-related timing gaps. Better cash management by fund houses, allowing a larger portion of scheme assets to remain invested instead of being held as precautionary cash buffers, which may support overall fund performance. Custodian banks and clearing corporations Banks and clearing corporations that provide intraday credit facilities to AMCs may benefit from an additional source of fee or interest income by offering short-term liquidity support. Liquid and short-duration debt funds Liquid funds, overnight funds and other short-duration debt schemes, which handle large volumes of daily subscriptions and redemptions, are expected to experience the most significant operational benefits from this amendment. Who May Face Challenges or Additional Burden? While the amendment offers operational benefits, some stakeholders may need to strengthen their systems and compliance processes. Smaller AMCs with limited treasury infrastructure Smaller or newly established AMCs without advanced treasury and real-time risk management systems may need to invest in technology, internal processes and compliance frameworks before they can effectively use the intraday borrowing facility.  They may also find it more difficult to secure favourable intraday credit facilities compared to larger AMCs with well-established banking relationships. AMCs required to formalise internal processes AMCs will need to establish formal policies, documentation and approval procedures for intraday borrowing. Although this improves governance, it may also increase operational and compliance responsibilities. Compliance and audit teams Real-time monitoring, proper audit trails and periodic reporting of borrowing transactions will increase the workload for compliance and audit teams, particularly after SEBI issues the detailed operational guidelines. Risk of misuse As the exemption is limited to managing intraday timing mismatches, AMCs must ensure that it is not used as a substitute for broader borrowing or leverage. SEBI is also expected to maintain strict oversight to prevent misuse of the facility. What Was the Requirement/Need for This Amendment? The amendment addresses a practical operational gap while continuing to uphold the existing safeguards against excessive borrowing by mutual funds. Under the original SEBI (Mutual Funds) Regulations, 2026, which came into effect on 15 January 2026, Regulation 42(1) imposed broad restrictions on mutual fund borrowing as a prudential measure to prevent excessive leverage and protect investor interests. However, this general restriction also meant that mutual funds had no explicit regulatory provision allowing them to borrow even for the limited purpose of managing temporary intraday timing mismatches between redemption payouts and expected inflows, such as sale proceeds or subscription receipts. The amendment fills this gap by introducing a narrowly defined exception for intraday borrowing to address same-day liquidity mismatches. It does not relax the overall restriction on borrowing but permits this limited flexibility subject to the conditions that SEBI will prescribe separately. Impact on the Indian Economy The amendment is expected to strengthen the operational efficiency of the mutual fund industry while supporting overall market stability. Positive impacts Improved efficiency in the mutual fund industry: India's mutual fund industry manages assets worth over Rs 60 lakh crore. Better liquidity management can improve operational efficiency and help deliver better value to millions of investors. Strengthened investor confidence: Ensuring reliable, on-time redemptions strengthens trust in mutual funds as a savings and investment vehicle supporting continued growth in financial inclusion and household participation in capital markets (SIP flows, retail AUM growth). Deepening of money markets: Intraday borrowing facilities, once operationalized, could contribute to deeper, more liquid short-term money markets in India, as banks and clearing corporations develop dedicated intraday lending products for AMCs. Alignment with global regulatory standards: Bringing Indian mutual fund regulation in line with global norms (UCITS, US 1940 Act framework) makes the Indian fund management industry more comparable and attractive to global institutional allocators and potential foreign fund managers considering India-domiciled products. Minor economic risks or considerations If not tightly conditioned, there is a theoretical systemic risk if many funds simultaneously seek intraday borrowing during a market stress event, potentially straining short-term interbank/money market liquidity though SEBI's forthcoming conditions are expected to cap and structure this risk appropriately. Additional operational and compliance costs for the industry, though these are proportionate to the benefit and are typical of any regulatory refinement. Impact on India and Other Countries Although the amendment is primarily aimed at India's mutual fund industry, it also reflects the country's efforts to align its regulatory framework with global standards. For India specifically The amendment is a domestic regulatory change focused on improving liquidity management within India's Rs 60+ lakh crore mutual fund industry. It has no direct cross-border regulatory impact. At the same time, it supports India's broader objective of building a mature and globally competitive capital market. A stronger regulatory framework can enhance investor confidence, encourage greater foreign portfolio investment and support the growth of GIFT City as an international financial services hub. For other countries The amendment does not directly affect mutual fund regulations in other jurisdictions. However: Global asset managers with operations in India will need to align their India-specific treasury and liquidity management practices with the new provision. The amendment may also serve as a useful reference for emerging market regulators considering similar liquidity management measures for their domestic mutual fund industries. Is This the Right Decision, or an Additional Burden? The amendment strikes a balance between improving operational flexibility and maintaining regulatory discipline. Why this is a sound, well-calibrated regulatory decision It addresses a genuine operational challenge without weakening the existing safeguards against excessive borrowing by mutual funds. Since the exemption is subject to conditions prescribed by SEBI, the regulator continues to retain full control over borrowing limits, safeguards and monitoring. The amendment aligns India's mutual fund framework with internationally accepted liquidity management practices, reflecting the continued evolution of the country's capital market regulations. Its immediate implementation suggests that SEBI considers this an operational refinement rather than a major regulatory overhaul requiring a phased transition. Where it does create some burden AMCs, especially smaller ones, will need to build new treasury, risk, and compliance infrastructure to safely and transparently use this facility once SEBI's detailed conditions are released. Until SEBI issues its conditions circular, there is a period of regulatory uncertainty. AMCs know the exception exists, but cannot yet operationalize it without knowing the specific limits and safeguards. Overall, the amendment represents a practical regulatory improvement rather than an additional compliance burden. While AMCs may need to enhance their internal processes, the benefits of improved liquidity management and timely redemption payments are expected to outweigh the additional compliance efforts. How Will This Amendment Improve Market Efficiency and Investor Confidence? The amendment is expected to improve the overall functioning of the mutual fund industry while strengthening investor confidence. Investor satisfaction Timely redemption payments are one of the key factors influencing investor confidence. By reducing the possibility of payment delays caused by temporary settlement mismatches the amendment helps improve the overall investor experience. Better liquidity management may also enable fund managers to reduce unnecessary cash holdings and keep a larger portion of scheme assets invested, supporting overall fund efficiency. Market quality and transparency By clearly permitting intraday borrowing under defined conditions, the amendment removes regulatory uncertainty and provides greater clarity for the mutual fund industry. Once SEBI issues the detailed operational framework, disclosure requirements are expected to improve transparency around the use of intraday borrowing and liquidity management practices. Impact on the financial ecosystem Although the amendment has no direct environmental impact, it strengthens the resilience and efficiency of India's financial ecosystem. It also supports the development of a more structured short-term money market by encouraging formal intraday lending arrangements between AMCs, banks and clearing corporations. Implementation Timeline Date Event 15 January 2026 SEBI (Mutual Funds) Regulations, 2026, originally published 3 July 2026 SEBI (Mutual Funds) (Amendment) Regulations, 2026, notified Regulation 42(2) substituted 3 July 2026 (immediate) Amendment comes into force on the date of gazette publication Pending SEBI is expected to issue a separate circular specifying detailed conditions (limits, tenure, permissible lenders, disclosure requirements) governing intraday borrowing Corpseed Offering: Ensuring Seamless Compliance with the New Amendment This amendment creates a set of specialized advisory opportunities in the capital markets/AMC compliance space: 1. SEBI Compliance Advisory for AMCs Help AMCs interpret the amended Regulation 42(2) and prepare internal policies ahead of SEBI's detailed conditions circular, so they are ready to operationalize intraday borrowing as soon as the framework is finalized. 2. Treasury and Liquidity Risk Policy Design Assist AMCs (especially smaller/mid-sized ones) in designing formal intraday borrowing policies: approval workflows, borrowing limits, lender empanelment criteria and repayment tracking mechanisms. 3. SID/SAI and Scheme Document Updates Support AMCs in updating Scheme Information Documents and Statement of Additional Information to incorporate intraday borrowing disclosures once SEBI's conditions are known. 4. Custodian/Bank Facility Structuring Advise AMCs on structuring intraday credit facility agreements with custodian banks or clearing corporations, including documentation and regulatory compliance review. 5. Board and Trustee Governance Support Help AMC boards and mutual fund trustees draft and approve governance frameworks for intraday borrowing oversight, ensuring compliance with SEBI's eventual conditions. 6. Regulatory Monitoring and Alerts Service Offer a subscription-based SEBI regulatory tracking service for AMCs and fund houses, ensuring they don't miss the follow-up circular specifying the detailed conditions for this intraday borrowing exception and any future amendments to mutual fund regulations. 7. Training for Fund Operations and Compliance Teams Conduct focused training sessions for AMC treasury, risk and compliance teams on the new provision, its intended scope, likely regulatory expectations and best practices drawn from global mutual fund liquidity management standards.

Subject

Summary: SEBI has made a change that sounds small but actually matters a lot. Until now, when foreign investors wanted to invest in India, they had to pay certain fees in US Dollars. From now on, those same fees will be counted in Indian Rupees instead (though the investor can still pay using any foreign currency that is accepted). Along with this money change, SEBI has also updated some of the rules about when fees must be paid, what information investors must share, and how fast banks must send the collected money to SEBI. What the Notification Actually Says? Who made this rule: SEBI announced this rule on 3 July 2026 in Mumbai. It is called the SEBI ( Foreign Portfolio Investors ) (Amendment) Regulations, 2026. Which older rule does it change: It updates the SEBI (FPI) Regulations, 2019, which had last been changed in 2025. When it starts: Most of the new rules will start 180 days after this notice was printed in the government gazette, which works out to around early January 2027. But one small part of the rule (about removing an old cross-reference line) started immediately, on 3 July 2026. Key changes Fees are now counted in Rupees, not Dollars: Almost every fee that used to be a fixed number of US Dollars is now a fixed number of Rupees (though it can still be paid in any accepted foreign currency). When one must pay: Earlier, an investor had to pay the registration fee at the time they submitted their form. Now, they must pay it before SEBI gives them their registration certificate, so the fee must be settled a little earlier in the process. A new question has been added to the form: Investors must now also tell SEBI their date of birth (for a person) or the date their company/trust/partnership was formed. This is a new piece of information that wasn't asked for before. Faster money transfer to SEBI: The banks and firms that collect these fees from investors (called Designated Depository Participants, or DDPs) must now send the money to SEBI, in Rupees, within 5 working days of receiving it. A small cleanup: One confusing sentence in the old rule, which pointed to another part of the rulebook, has been removed because it was no longer needed. Fee item Old (in US Dollars) New (in Rupees) Registration fee (Category I FPI) 2,500 US Dollars Rs. 2,30,000 Registration fee (Category II FPI) 250 US Dollars Rs. 23,000 Late/renewal fee (higher slab) 50/day US Dollars Rs. 4,500/day Late/renewal fee (lower slab) 5/day US Dollars Rs. 500/day Application fee under Regulation 43B(2) 1,000 US Dollars Rs. 90,000 Offshore Derivative Instrument (ODI) fee per subscriber 800 US Dollars Rs. 75,000 Why SEBI Introduced This Amendment? Core rationale Making the money math simpler: Years ago, SEBI decided to charge foreign investors in US Dollars because it felt like a fair, steady currency to use worldwide. But SEBI itself collects and spends money in Rupees. So having fees in Dollars while everything else is in Rupees made the accounting messy. Switching to Rupees makes life easier for SEBI's own bookkeeping. Less confusion from currency ups and downs: A Dollar fee set many years ago slowly drifts away from its "real" Rupee value as exchange rates change over time. A Rupee-based fee stays steady and easy to plan around. Knowing investors better: By asking for the date of birth or the date a company was formed, SEBI can check more carefully who exactly is investing, this helps stop people from hiding behind shell companies or fake identities. Closing a small loophole: Before, someone could submit their form without having fully paid. Now, payment must be completed before they get their certificate, which tightens up the process. Getting the fee money faster: The new 5-day rule means SEBI receives the collected fees (and the details about them) much sooner, so it can keep better track of who is registering. Fits with SEBI's other July 2026 updates:  SEBI announced this rule on the very same day as some other fee-related changes (for custodians and mutual funds), showing this is part of a bigger cleanup effort happening at the same time. Compliance Requirements for Businesses For Foreign Portfolio Investors (FPIs) themselves Recalculate the registration, renewal, and late-fee budgets using the new Rupee amounts instead of the old Dollar amounts. Be ready to share the date of birth (if an individual) or date of formation (if a company, trust, or partnership) when registering or renewing. Make sure the fee is fully paid before SEBI issues the registration certificate, not just when one submits the form. If anyone deals in Offshore Derivative Instruments (ODIs), then one must now pay the new fee of Rs. 75,000 (or its foreign-currency equivalent) per subscription. For Designated Depository Participants (DDPs) Send all fees collected from investors to SEBI within 5 working days, whether it's a first-time registration fee, a renewal fee, or a late fee. Along with the money, submit the required details in the format SEBI asks for. Update the internal computer systems so they calculate fees in Rupees instead of old Dollar amounts. Add the new date-of-birth/formation-date field to the registration forms. Transition timing to note Most changes, the new fee amounts, the new form question, and the faster money-transfer rule, will only start 180 days after this notice was published, giving everyone about six months to prepare. The one small rule about removing the old cross-reference line started right away, on 3 July 2026. Benefits for Businesses Steadier fee planning: Since fees are now in Rupees, investors and DDPs don't have to keep worrying about Dollar-to-Rupee exchange rate swings affecting their costs. Easier accounting: No more juggling between Dollar-based regulatory fees and Rupee-based day-to-day accounting. Clearer registration process: Paying before getting the certificate removes any confusion about whether a registration is truly valid. Quicker processing: The faster 5-day money-transfer rule helps the whole registration system move more smoothly, so investors get certainty sooner. Who Benefits Most vs Who Faces Challenges? Because thousands of pension funds, sovereign wealth funds, hedge funds, and asset managers around the world invest in India through the FPI route, this change touches a very large group of investors, even though most of the individual changes are just administrative or currency-related, not big new restrictions. Category Likely Impact Large global custodians/DDPs (major banks) Manageable, they already have the systems needed to handle currency conversion and faster money transfers. Smaller/boutique FPIs (Category II) May see a small increase in effective cost depending on exchange rates, plus new paperwork to complete ODI subscribers (P-Note issuers) Fee recalculated from 800 US dollars to about Rs. 75,000, a currency adjustment, not a real fee hike. New FPI applicants Must get used to paying fees earlier and filling in the new date field from the start Existing registered FPIs Need to recalculate renewal and late fees in Rupees and update their compliance calendars. What Was the Requirement/Need for This Amendment? The old FPI Regulations from 2019 had fees fixed in US Dollars, a leftover choice from when SEBI wanted a currency that felt globally recognizable to foreign investors. Over time, this created friction: SEBI collects and spends money in Rupees domestically, but prices a large chunk of its fees in a foreign currency. This made its revenue swing up and down depending on exchange rates and made internal reporting harder. On top of that, global standards for knowing who really owns and controls an investing entity have gotten stricter, which is why the new date-of-formation question was added. The amendment also fixes the gap where fee payment wasn't firmly tied to getting the certificate, and it shortens how long DDPs can hold onto collected fees before sending them to SEBI. Impact on the Indian Economy Positive impacts More predictable fee income for SEBI: Rupee-denominated fees eliminate any unpredictability due to the movement in currency, which makes it easier for SEBI to plan its budget. Stronger checks support market trust: Stricter verification processes strengthen the market's trust. Requesting the incorporation date or date of birth makes sure that India's foreign investment system remains clean and transparent. Barely any change in cost of entry: Since this is mostly a currency relabelling rather than a real fee increase, it is unlikely to discourage foreign money from flowing into India. Smoother registration flow: Faster fee transfers from DDPs help keep the whole FPI registration system moving efficiently, which supports continued foreign investment. Minor economic considerations It is possible that some of the smaller FPIs, particularly those belonging to Category II and ODI Subscribers, may face an increase or decrease in their cost by a very small margin due to the application of the new Rupee cost, depending on what level the exchange rate is at during that time. Impact on India and Other Countries For India This change is part of SEBI's ongoing effort to modernize how India's capital markets are regulated, especially around keeping currency accounting consistent and knowing foreign investors better. It supports India's image as a well-run, trustworthy place for global investors to put their money. For other countries / global FPI ecosystem Global fund managers, pension funds, and sovereign wealth funds that invest in India through the FPI route will need their India compliance teams to: Update their internal fee budgets from Dollar figures to Rupee figures. Make sure their paperwork includes the newly required incorporation or formation date. Global custodian banks and DDPs operating in India will also need to update their systems for the new fee amounts and the 5-day transfer rule, but this is just an operational adjustment, not a barrier stopping them from investing. Nothing here suggests foreign investors will be discouraged from putting money into India; it's a currency and process cleanup, not a new restriction. Is This the Right Decision, or an Additional Burden? Why is this a sound decision Switching fees from Dollars to Rupees is a smart, practical update that removes currency confusion without really raising the true cost for most investors. The 180-day waiting period (except for the tiny immediate cleanup) gives everyone, investors, DDPs, and custodians, plenty of time to update their systems and paperwork. Asking for a formation or birth date is a light-touch addition that matches what other countries already require, without creating heavy extra paperwork. Tightening the payment timing and the money-transfer deadline improves discipline in the system without adding real cost. Where it creates some burden •    FPIs and DDPs will need to update their systems and paperwork to handle the new Rupee-based fees and the extra data field, a one-time setup cost. •    Firms that used to plan their budgets strictly in Dollars will need to redo their financial models, especially larger firms managing many FPI registrations across different countries. •    Having to pay the fee before getting the certificate (instead of at the time of submission) slightly tightens the timing for new applicants, though this is a minor procedural shift. Overall, this looks like a sensible, low-burden update to modernize the currency and process, not a new obstacle for foreign investment. The changes are mostly about paperwork and process, not about making it harder to invest. How This Improves Quality, Transparency, and Market Conditions? Regulatory quality and transparency Rupee-denominated charges will increase the clarity of the system of fees, being in line with the way of accounting in India, and hence less confusing for SEBI as well as the foreign investors. New requirements regarding the date of incorporation or birth would help SEBI check who the investors actually are and would contribute to making the foreign investment process more transparent. Investor confidence A fee system that is consistent in currency and well-documented helps global institutional investors trust that India's market rules are organized and well-run. No direct environmental angle This is purely a financial and administrative reform about market rules and fees, it has no connection to environmental matters. Implementation Timeline Category Likely Impact Large global custodians/DDPs (major banks) Manageable, they already have the systems needed to handle currency conversion and faster money transfers. Smaller/boutique FPIs (Category II) May see a small increase in effective cost depending on exchange rates, plus new paperwork to complete ODI subscribers (P-Note issuers) Fee recalculated from 800 US dollars to about Rs. 75,000, a currency adjustment, not a real fee hike. New FPI applicants Must get used to paying fees earlier and filling in the new date field from the start Existing registered FPIs Need to recalculate renewal and late fees in Rupees and update their compliance calendars. Corpseed Offering: Ensuring Seamless Compliance with the New Amendment This new rule opens up several ways to help the many foreign investors and firms affected by it: FPI Fee Transition Advisory: Help FPIs, DDPs, and custodians work out their new registration, renewal, and late-fee costs under the Rupee-based system before the 180-day deadline arrives, so no one makes a payment mistake during the switch. KYC/Documentation Update Support: Help FPIs prepare and submit the newly required date of birth, incorporation, or formation information as part of their registration or renewal filings. Registration Sequencing Compliance: Guide new FPI applicants through the updated rule that requires paying fees before receiving their certificate, so their registration goes through without delay. DDP Process Redesign Support: Help Designated Depository Participants update how they collect, convert, and transfer fees so they meet the new 5-working-day rule and reporting format. ODI Subscriber Compliance: Support entities dealing in Offshore Derivative Instruments in adjusting to the new Rs. 75,000 (foreign-currency equivalent) fee. Global FPI Client Advisory Desk: Offers dedicated support to international asset managers and custodian banks with India-related FPI operations, helping them handle the currency change and new paperwork smoothly, without disturbing their other compliance work across markets. Regulatory Monitoring Bundle: Since SEBI tends to release several related updates around the same time (as seen with the FPI, custodian, and mutual fund changes), offer a combined SEBI-tracking subscription for custodians, DDPs, and FPI-related firms to stay ahead of future rule changes.

Subject

Summary: The Securities and Exchange Board of India (SEBI) has amended the SEBI (Custodian) Regulations, 1996, to change the payment frequency of custodian registration fees from an annual basis to a monthly basis. The amendment will come into effect on 1 October 2026. This is primarily an operational change rather than a financial one. It does not introduce a new fee or significantly increase the overall registration cost for custodians. Instead, it changes the timing of fee payments and requires custodians to submit their Assets under Custody (AUC) details monthly rather than once a year. The amendment is intended to improve regulatory oversight while making fee payments more regular and aligned with business activity. Key Highlights of the SEBI Notification Issuing authority: Securities and Exchange Board of India (SEBI), Mumbai. Regulation amended: SEBI (Custodian) Regulations, 1996 (last amended 23 September 2025). Effective date: 1 October 2026 (a fixed future commencement date, unlike the mutual fund amendment, which took immediate effect). Key changes 1. Regulation 9(d) and Regulation 26(i): The word "annual" is replaced with "monthly" wherever it appears regarding fee payment. 2. Second Schedule, Part A, clause (iii) fee amount itself: The amendment also revises the fee structure under Part A, Clause (iii) of the Second Schedule. Earlier Fee Structure Annual fee of Rs 10,00,000 (Rs 10 lakh), or  0.0005% of the Assets Under Custody (AUC),  Whichever is higher.  Revised Fee Structure Monthly fee of Rs 85,000, or  0.0000416% of the monthly Assets Under Custody (AUC),  Whichever is higher.  Although the payment frequency has changed, the annual financial impact remains almost the same. Paying Rs 85,000 per month amounts to approximately Rs 10.20 lakh per year, which is only marginally higher because of rounding. This indicates that SEBI has restructured the payment schedule rather than increasing the registration fee. 3. Second Schedule, Part B, clause (II) payment mechanics: The amendment introduces a new payment mechanism for both existing and newly registered custodians. For New Custodians (Registered on or after 1 October 2026) A proportionate fee will be payable for the month in which registration is granted.  From the following month onwards, the full monthly registration fee must be paid.  Every payment must be made within 15 days from the end of the relevant month.  For Existing Custodians (Registered before 1 October 2026) They must pay a proportionate annual fee for the remaining period of FY 2026-27.  This payment must be made within 15 days from the commencement of the amendment.  Any annual registration fee already paid for a period extending beyond 1 October 2026 will be adjusted against the revised fee payable.  Starting the following month, custodians must switch to the monthly payment system. 4. Reporting requirement (sub-clause 4): Custodians must now submit their Assets under Custody (AUC) statement every month (instead of annually) along with the fee payment, in a SEBI-specified format, certified by the Functional Head of Custody Services as accurate and complete. Why Has SEBI Introduced This Change? SEBI has introduced this amendment to make the registration fee framework more efficient, improve regulatory reporting, and align fee payments more closely with the actual scale of custodial business. Aligning fee cash flows with actual business activity: Custodian AUC balances fluctuate throughout the year with market movements, fund inflows/outflows, and new client onboarding. An annual fee based on a single point-in-time AUC snapshot can be a poor proxy for the custodian's actual scale of business over the full year. Monthly fees based on monthly AUC make the fee structure more dynamically accurate. Improved regulatory oversight through more frequent data: Requiring a monthly AUC statement (rather than annual) gives SEBI far more granular, timely visibility into custodian balance sheets and market-wide custody trends useful for systemic risk monitoring, especially as India's AUM/AUC base has grown substantially. Smoothing SEBI's own fee revenue and administrative cash flow: Annual lump-sum collection creates uneven cash inflows for SEBI, monthly collection provides steadier, more predictable regulatory fee revenue. Reducing large one-time payment burden on custodians: Paying Rs 85,000/month (or the AUC-based equivalent) is administratively easier for many custodians than budgeting for a single Rs 10+ lakh annual outflow, improving cash flow predictability on the custodian's side too. Consistency with other SEBI fee-frequency reforms: SEBI has been moving multiple categories of market intermediaries toward more frequent, data-linked fee and reporting cycles as part of a broader modernization of its regulatory fee framework, improving real-time regulatory data rather than annual retrospective snapshots. Compliance Requirements for Custodians To ensure a smooth transition to the new fee payment framework, SEBI has prescribed separate compliance requirements for existing and newly registered custodians. In addition to changing the payment frequency, custodians will also need to adopt a monthly reporting process for their Assets under Custody (AUC). For Existing Custodians (Registered Before 1 October 2026) Custodians already registered before the amendment comes into effect must comply with the following requirements: Pay the Transition Fee: A proportionate annual registration fee for the remaining period of FY 2026-27 (1 October 2026 to 31 March 2027) must be paid within 15 days from 1 October 2026.  Adjust Previously Paid Fees: If an annual registration fee has already been paid for a period extending beyond 1 October 2026 the amount will be adjusted against the revised fee payable under the new framework.  Begin Monthly Fee Payments: From November 2026 onwards, custodians must pay the applicable monthly registration fee within 15 days after the end of each month.  Submit Monthly AUC Statements: Every monthly fee payment must be accompanied by an Assets under Custody (AUC) statement in the format prescribed by SEBI. The statement must also be certified by the Functional Head of Custody Services.  For New Custodians (Registered On or After 1 October 2026) Custodians obtaining registration on or after 1 October 2026 must comply with the following requirements: Pay a proportionate registration fee for the month in which registration is granted.  Pay the full monthly registration fee from the following month onwards within 15 days from the end of each month. Submit a certified monthly AUC statement along with every monthly fee payment from the beginning of their registration.  Operational Changes Required for Compliance To comply with the amended regulations, custodians will need to update their internal processes and systems. While the overall fee remains largely unchanged, the monthly compliance cycle requires several operational adjustments. Operational/systems changes needed Finance and treasury teams must move from an annual fee-budgeting cycle to a monthly recurring payment process requiring updated internal calendars, approval workflows and possibly automated payment scheduling. AUC reporting systems must be capable of generating accurate monthly (not just annual) AUC figures, since the fee is based on AUC in that specific month. Certification workflow: The Functional Head of Custody Services must review and certify each monthly AUC statement formalizing an internal monthly sign-off process where an annual one previously sufficed. Fee calculation logic: Systems need to compute the higher of (Rs 85,000 flat) or (0.0000416% of that month's AUC) every month, rather than once a year. Benefits Businesses (Custodians) Get Although the amendment introduces more frequent reporting, it also offers several operational and financial advantages for custodians. Improved Cash Flow Management: Replacing a single annual payment with monthly payments spreads the financial outflow across the year. This allows custodians to manage their cash flows more efficiently and makes budgeting easier, particularly for mid-sized institutions. Better Alignment between Fees and Business Size: Since the AUC-based fee is calculated every month, the registration fee reflects the custodian's current level of business more accurately. Organisations with fluctuating AUC will no longer rely on a single annual snapshot that may not represent their overall operations. Reduced Upfront Financial Burden: Monthly payments eliminate the need to arrange a large lump-sum payment once a year. This improves working capital management and allows organisations to distribute compliance costs more evenly throughout the year. More Consistent Regulatory Compliance: Submitting monthly AUC statements encourages continuous compliance instead of concentrating reporting activities into a single annual exercise. This can help custodians maintain better regulatory records as well as strengthen internal compliance practices. Who Benefits Most vs Who Faces More Burden Aspect Larger/Established Custodians Smaller/Newer Custodians Cash flow impact Minimal large balance sheets easily absorb monthly vs annual timing More favourable spreads cost, easing working capital pressure Reporting infrastructure Likely already capable of monthly AUC reporting May need to build new monthly reporting/certification processes Compliance overhead Marginal increase (12 filings vs 1) Proportionately larger burden relative to their compliance team size Net effect Slight administrative increase, otherwise neutral Net positive on cash flow, but added reporting workload Since only a handful of SEBI-registered custodians operate in India (mainly banks and large financial institutions offering custody services, e.g., major banks and specialized custody arms of financial groups), this amendment is a sector-specific, relatively low-impact operational change rather than one affecting large numbers of businesses. Impact on India's Economy Although the amendment affects only a small group of SEBI-registered custodians, it strengthens regulatory oversight and improves the efficiency of the compliance framework without creating any significant economic impact. Positive Impact Better Regulatory Oversight: Monthly AUC reporting gives SEBI access to more timely and accurate data, helping it monitor custody-related risks more effectively and strengthen oversight of India's growing capital markets. Improved Cash Flow Planning: Monthly fee payments replace a single annual payment, making it easier for custodians to manage cash flows and budget compliance expenses throughout the year. Supports Regulatory Modernisation: The amendment aligns with SEBI's broader objective of introducing more frequent reporting and improving the efficiency of regulatory supervision across market intermediaries. Limited Economic Impact: Since the amendment applies only to a limited number of custodians, it is unlikely to have any significant impact on India's overall economy or financial markets. Impact on India and Other Countries Limited to India: The amendment applies only to SEBI-registered custodians operating in India and has no direct impact on foreign regulatory frameworks.  Global Custodians in India: International custody service providers operating in India must update their Indian compliance and reporting processes, while their overseas operations remain unaffected.  No Cross-Border Market Impact: The amendment is an administrative compliance reform and is not expected to influence global financial markets or international regulations. Is This the Right Decision, or an Additional Burden? Overall, the amendment is a balanced regulatory reform. While it introduces more frequent reporting requirements, it does not significantly increase the financial burden on custodians. Instead, it modernises the fee payment framework, and maintains regulatory oversight. Why This Is a Positive Change No significant increase in registration fees: Although the payment frequency changes, the annual fee remains almost the same. This confirms that the amendment is aimed at improving the payment structure rather than increasing costs.  Better alignment with business activity: Monthly AUC-based fee calculations reflect the custodian's actual scale of operations more accurately than a single annual assessment.  Well-planned transition: SEBI has provided a clear implementation timeline, allowing custodians sufficient time to update their systems, processes, and compliance workflows before the amendment takes effect.  Improved regulatory efficiency: Monthly reporting enables SEBI to monitor market developments more effectively and respond to potential risks in a timely manner.  Additional Compliance Requirements More frequent reporting: Custodians must now submit 12 AUC statements each year instead of one annual statement. System and process upgrades: Organisations may need to update their finance, reporting, and internal approval systems to support monthly fee calculations, payments, and certifications. Overall Assessment The amendment is more of an operational change than a significant compliance burden. While custodians will have to move to monthly fee payments and reporting, the overall cost remains almost the same, making the transition practical and manageable. How This Improves Quality, Transparency, and Market Conditions The amendment strengthens regulatory transparency by introducing more frequent reporting, improving data quality and supporting more effective supervision of custodians. Stronger Regulatory Oversight Monthly AUC reporting provides SEBI with more timely and reliable information, enabling better supervision of custodians and improving its ability to identify potential risks within the financial system. Improved Data Accuracy The requirement for certification by the Functional Head of Custody Services strengthens accountability and encourages organisations to maintain accurate and up-to-date custody records. Better Protection of the Financial System Although custodians do not directly deal with retail investors, they play a critical role in safeguarding assets held by mutual funds, pension funds, insurance companies, and foreign portfolio investors. Better regulatory visibility over custodians indirectly supports the safety and integrity of India's capital markets. No Environmental Impact The amendment relates solely to the payment of registration fees and reporting requirements. It does not have any direct environmental or sustainability implications. Implementation Timeline The following timeline highlights the key compliance deadlines under the SEBI (Custodian) (Amendment) Regulations 2026, helping stewards prepare for a smooth transition to the new framework. Date Event 16 May 1996 Original SEBI (Custodian) Regulations, 1996, published 23 September 2025 Last prior amendment to Custodian Regulations 3 July 2026 SEBI (Custodian) (Amendment) Regulations, 2026 notified 1 October 2026 Amendment comes into force monthly fee regime begins Within 15 days of 1 October 2026 Existing custodians must pay a proportionate annual fee for remainder of FY 2026-27 From November 2026 onward Full monthly fee and monthly AUC statement due within 15 days of each month-end Corpseed Offering: Ensuring Seamless Compliance with the New Amendment Since SEBI-registered custodians are a small, concentrated group of large financial institutions, Corpseed's opportunity here is narrower but high-value: 1. Transition Compliance Advisory Help custodians calculate the correct proportionate annual fee for the FY 2026-27 transition period, including adjustment credits for fees already paid, ensuring accurate payment within the 15-day window after 1 October 2026. 2. Monthly Fee and AUC Reporting Process Design Design and implement a recurring monthly compliance calendar/process for fee calculation, payment and AUC statement submission, replacing the old annual cycle. 3. Internal Certification Workflow Support Help custodians formalize the internal sign-off process by the Functional Head of Custody Services, ensuring monthly AUC statements are accurate, complete and audit-ready. 4. SEBI Format Compliance Track and advise on the SEBI-specified format for monthly AUC statements once formally circulated, ensuring custodians' reporting templates stay aligned with regulatory expectations. 5. Regulatory Monitoring Subscription Given SEBI's pattern of issuing multiple related amendments together (custodian fees, mutual fund borrowing, on the same date), offer custodians and AMCs a consolidated regulatory tracking service covering all SEBI notifications affecting their specific business line. 6. Training for Finance and Compliance Teams Conduct focused sessions for custodian finance and compliance teams on the new fee mechanics, transition-period calculations, and monthly reporting obligations ahead of the 1 October 2026 effective date.