Description

Comprehensive regulations governing depositories and participants in India's securities market, establishing the framework for depository operations, participant eligibility, and regulatory compliance requirements.

Summary

SEBI has published the consolidated Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018, last amended on November 22, 2025. These regulations establish the comprehensive legal framework for depositories and participants operating in India’s securities market, covering registration, operations, governance, and compliance requirements. The regulations were originally notified on October 3, 2018, and have been subsequently amended, with the latest amendment on November 22, 2025.

Key Points

  • Regulations enacted under section 30 of SEBI Act, 1992 and section 25 of Depositories Act, 1996
  • Original notification date: October 3, 2018; Last amended: November 22, 2025
  • Defines critical terms including “change in control” for listed and unlisted entities
  • Establishes requirements for applicants holding minimum 15% shareholding in depositories
  • Introduces comprehensive definition of “associate” aligned with Stock Exchanges and Clearing Corporations Regulations, 2018
  • Specifies “key management personnel” requirements for depositories and participants
  • Provides framework for Board inspection through authorized inspecting officers
  • Establishes governing board structure for depositories

Regulatory Changes

Change in Control Definition (Amended January 17, 2023)

  • For listed body corporates: Control construed per regulations under clause (h) of sub-section (2) of section 11 of SEBI Act
  • For unlisted body corporates: Control defined per sub-section (27) of Section 2 of Companies Act, 2013
  • For non-body corporates: Change in legal formation, ownership, or controlling interest (minimum 50% voting rights or interest)

Key Management Personnel

  • Regulation 2(1)(k) defines key management personnel requirements (specific details in subsequent pages of full regulation)

Associate Definition

  • Aligned with Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

Compliance Requirements

For Depository Applicants:

  • Must hold at least 15% shareholding in the proposed depository
  • Can act alone or in combination with other persons
  • Subject to change in control provisions as defined

For Depositories:

  • Must maintain governing board (board of directors)
  • Subject to SEBI inspection by authorized inspecting officers
  • Must comply with form requirements as specified in First Schedule
  • Must adhere to all provisions under Depositories Act, 1996 and SEBI Act, 1992

For Participants:

  • Subject to regulations governing participant operations
  • Must comply with key management personnel requirements
  • Subject to change in control notification and approval requirements

Important Dates

  • October 3, 2018: Original notification and commencement date
  • January 17, 2023: Amendment to change in control definition effective
  • November 22, 2025: Last amendment date
  • December 2025: Current consolidated version published

Impact Assessment

Market Infrastructure Impact: These regulations form the foundational framework for India’s depository system, affecting all market participants who hold securities in dematerialized form. The regulations ensure standardized operations, governance, and compliance across all depositories and participants.

Regulatory Impact: The November 22, 2025 amendment reflects SEBI’s ongoing efforts to strengthen regulatory oversight of market infrastructure institutions. The refined definitions of change in control and key management personnel enhance regulatory certainty and align with broader corporate governance standards.

Operational Impact:

  • Depositories must maintain robust governance structures with properly constituted governing boards
  • Change in control provisions require careful planning for any ownership restructuring
  • Participants must ensure compliance with eligibility and operational requirements
  • Enhanced inspection powers enable SEBI to maintain effective market surveillance

Compliance Impact: All existing depositories and participants must ensure ongoing compliance with amended provisions, particularly regarding change in control notifications and key management personnel disclosures. New entrants must meet the 15% shareholding threshold and satisfy all regulatory requirements before commencing operations.

Impact Justification

Fundamental regulatory framework governing depositories and participants; last amended November 22, 2025, with critical definitions for change in control and key management personnel affecting all market participants