Description

SEBI defers the December 15, 2025 deadline for Phase III implementation of revised nomination facilities in mutual funds to a future date to be notified separately.

Summary

SEBI has deferred the timeline for implementing Phase III of the revised nomination facilities circular from December 15, 2025 to a future date to be notified separately. This deferment comes in response to representations from various stakeholders regarding structural implications and the need for additional time for system developments and process changes. The circular affects Asset Management Companies (AMCs), Registrars and Transfer Agents (RTAs), depositories, and depository participants.

Key Points

  • Phase III implementation deadline extended from December 15, 2025 to a future date (to be notified)
  • Deferment granted due to operational difficulties and structural implications raised by stakeholders
  • Previous phases: Phase I implemented, Phase II was August 8, 2025, Phase III now deferred
  • All other provisions from earlier circulars dated January 10, 2025, February 28, 2025, and July 30, 2025 remain unchanged
  • Circular issued under SEBI Act Section 11(1), Depositories Regulations 60A, and Mutual Funds Regulations 29A

Regulatory Changes

No new regulatory changes introduced. This circular provides a timeline extension for the implementation of previously announced nomination facility reforms. The structural requirements and provisions outlined in the January 10, 2025 circular remain intact, with only the implementation deadline for Phase III being deferred.

Compliance Requirements

Applicable to:

  • Asset Management Companies (AMCs) of Mutual Funds
  • Registrars to an issue and Share Transfer Agents (RTAs)
  • Association of Mutual Funds in India (AMFI)
  • Recognized Depositories
  • Registered Depository Participants

Requirements:

  • Continue compliance with Phase I provisions (already implemented)
  • Continue compliance with Phase II provisions (implemented August 8, 2025)
  • Phase III requirements deferred - stakeholders have additional time for system development and process changes
  • Monitor for future SEBI notification announcing new Phase III implementation date

Important Dates

  • January 10, 2025: Original nomination facilities circular issued
  • February 28, 2025: Amendments and phased implementation announced
  • July 30, 2025: Phase II and III timelines extended
  • August 8, 2025: Phase II implementation completed
  • December 11, 2025: Current circular issued
  • December 15, 2025: Original Phase III deadline (now deferred)
  • Effective Date: Immediate effect
  • New Phase III Deadline: To be notified separately

Impact Assessment

Positive Impact:

  • Provides operational relief to AMCs, RTAs, depositories, and depository participants
  • Allows additional time for critical system developments and infrastructure upgrades
  • Reduces implementation risk and potential operational disruptions
  • Demonstrates regulatory flexibility in response to industry concerns

Neutral Impact:

  • No changes to already implemented Phase I and Phase II requirements
  • Investor protection objectives remain intact
  • No immediate action required beyond monitoring for future notifications

Market Implications:

  • Mutual fund industry operations continue normally without disruption
  • Stakeholders gain time to properly address structural implications
  • Quality of implementation may improve with extended timeline
  • Uncertainty regarding final implementation date may require ongoing resource planning

Impact Justification

Operational relief provided to mutual fund industry stakeholders by deferring Phase III nomination facility implementation deadline, addressing system development and process change concerns