Description

Comprehensive regulatory framework governing intermediaries in the securities market, including definitions, registration requirements, inspection provisions, and compliance obligations for market intermediaries.

Summary

The Securities and Exchange Board of India (Intermediaries) Regulations, 2008, as last amended on December 5, 2025, establishes the comprehensive regulatory framework for all intermediaries operating in the Indian securities market. Originally notified on May 26, 2008, these regulations define the scope of intermediaries, their registration requirements, inspection procedures, and compliance obligations. The regulations apply to various market participants including foreign portfolio investors, clearing members, trading members, and asset management companies, while excluding foreign venture capital investors, mutual funds, collective investment schemes, and venture capital funds from the definition of intermediaries.

Key Points

  • Regulations came into force on different dates for different classes of intermediaries as notified by SEBI
  • Chapters V and VI became effective on the date of publication in the Official Gazette (May 26, 2008)
  • Intermediaries include clearing members, trading members, foreign portfolio investors, and asset management companies
  • Excludes foreign venture capital investors, mutual funds, collective investment schemes, and venture capital funds from the definition
  • Defines key terms including ‘associate’, ‘control’, ‘change of status or constitution’, and ‘principal officer’
  • Certificate of registration required from SEBI for intermediaries to operate
  • Provisions for inspection of books, accounts, records, and documents by SEBI-appointed inspecting authorities
  • Control includes direct or indirect power to control management or policy decisions

Regulatory Changes

The regulations have been amended multiple times since the original notification in 2008, with the last amendment dated December 5, 2025. Key amendments include:

  • Addition of foreign portfolio investors to the definition of intermediaries
  • Inclusion of currency derivatives segment trading members
  • Removal of certain categories from the intermediary definition (specific category removed but not fully visible in the excerpt)
  • Enhanced definitions of ‘associate’ and ‘control’ to capture various relationships and corporate structures
  • Expanded scope of ‘change of status or constitution’ to cover amalgamations, demergers, consolidations, and control changes

Compliance Requirements

  • All intermediaries must obtain certificate of registration from SEBI under relevant regulations
  • Intermediaries must notify SEBI of any change of status or constitution, including amalgamations, demergers, changes in control, or changes in legal status
  • Principal officers (proprietors, partners, directors, trustees, or designated key employees) are responsible for intermediary activities
  • Intermediaries must maintain books, accounts, records, and documents subject to SEBI inspection
  • Compliance with provisions applicable to specific intermediary categories as per their respective regulations
  • Associates of intermediaries are subject to regulatory scrutiny and defined relationships

Important Dates

  • May 26, 2008: Original notification and publication in the Official Gazette
  • May 26, 2008: Chapters V and VI came into force
  • December 5, 2025: Date of last amendment to the regulations
  • Varied dates: Different provisions came into force for different classes of intermediaries as notified by SEBI in the Official Gazette

Impact Assessment

These regulations form the bedrock of intermediary regulation in India’s securities market, impacting all registered market intermediaries including brokers, portfolio investors, clearing members, and asset management companies. The December 2025 amendments reflect SEBI’s evolving approach to market regulation, particularly with the inclusion of foreign portfolio investors and currency derivatives segment participants. The comprehensive definition of ‘control’ and ‘associate’ ensures that regulatory oversight extends to related entities and persons who may influence intermediary operations. The inspection provisions empower SEBI to conduct thorough examinations of intermediary activities, enhancing market integrity and investor protection. Intermediaries must ensure ongoing compliance with registration requirements and promptly notify SEBI of material changes in their status or constitution to maintain their operational licenses.

Impact Justification

Foundation regulation governing all market intermediaries with latest amendments as of December 5, 2025. Critical for compliance by all intermediaries including foreign portfolio investors, clearing members, and trading members.