SEBI News Updates - May 2025
- Suhail Ahmed
- Aug 4, 2025
- 12 min read
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
1. Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations)
Press Release No. IBBI/PR/2025/14, dated 30th May 2025
Overview
The Insolvency and Bankruptcy Board of India (IBBI) has amended the CIRP Regulations, 2016 to enhance the efficiency, transparency, and flexibility of the Corporate Insolvency Resolution Process (CIRP). The Fourth Amendment Regulations, 2025, which came into immediate effect, are focused on streamlining resolution timelines, safeguarding creditor interests, and encouraging greater participation in the resolution process.
Key Amendments
1. Part-Wise Resolution Enabled
· What’s new: Resolution professionals with the approval of Committee of Creditors (CoC), can now invite Expressions of Interest (EOIs) for submission of resolution plans for:
o The corporate debtor as a whole, or
o The sale of one or more individual assets of the corporate debtor, or
o Both concurrently.
· Impact: Enables faster resolution, prevents value erosion, and attracts more investors by offering flexibility in the resolution approach.
2. Timelines for Staged Payments Harmonized
· Provision: When a resolution plan involves staged payments, dissenting financial creditors must be paid:
o At least pro rata, and
o In priority over consenting financial creditors in each stage.
· Purpose: Balances the rights of dissenting creditors with the practical realities of implementing payment plans in phases.
3. Interim Finance Observers Allowed in CoC
· Change: The Committee of Creditors (CoC) can instruct the Resolution Professional (RP) to invite interim finance providers to attend CoC meetings as observers (without voting rights).
· Benefit: Provides interim finance providers with better insights into the corporate debtor’s operations, promoting more informed funding decisions regarding funding requirements.
4. All Resolution Plans Must Be Presented to CoC
· New requirement: RPs must present all received resolution plans, including those not compliant with the Code or Regulations, to the CoC along with relevant details.
· Goal: Promotes full transparency, enables better informed decision-making, and potentially increases the effectiveness of the resolution process.
These amendments reflect IBBI’s ongoing efforts to refine the CIRP framework by prioritizing creditor interests, enhancing market participation, and ensuring procedural clarity. The changes are likely to result in more robust resolutions, improved creditor recoveries, and greater investor confidence in the insolvency ecosystem.
2. Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2025.
Notification No: IBBI/2025-26/GN/REG126, dated 19th May 2025
Overview
The IBBI has introduced the Third Amendment Regulations, 2025, to enhance compliance and accountability in the Corporate Insolvency Resolution Process (CIRP) by overhauling Regulation 40B, which pertains to the filing of forms by resolution professionals. These amendments come into effect from 1st June 2025 and are aimed at ensuring timely, complete, and accurate filings with the Board through its electronic platform.
Key Provisions (Revised Regulation 40B)
1. Mandatory Electronic Filing
· Resolution professionals (interim or full) must file the prescribed forms online on the IBBI’s electronic platform, adhering to stipulated timelines.
2. Dynamic Availability of Forms
· The Board will host and update these forms on the platform as needed, ensuring up-to-date compliance requirements.
3. Accuracy and Completeness
· RPs must ensure that all filed forms and attached records are accurate and complete no scope for casual or partial submissions.
4. Late Filing Penalty
· A late filing fee of ₹500 (Indian Rupees Five Hundred) per form per each calendar month will apply for delays, including those due to corrections or updates. The applicable date will be notified by the Board separately.
5. Disciplinary Consequences
· The Board may take disciplinary action, including refusal to issue or renew Authorisation for Assignment (AFA), if an RP:
o Fails to submit the form with required details,
o Files incomplete or inaccurate information or records,
o Delays in submission.
Conclusion
This amendment reinforces compliance discipline, timely reporting, and transparency within the CIRP framework. It signals a move towards stricter enforcement of procedural norms and greater accountability of insolvency professionals.
3. Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2025.
Notification No. IBBI/2025-26/GN/REG127, dated 26th May 2025
Overview
The Fourth Amendment to the CIRP Regulations, 2016, notified by the IBBI and effective from the date of publication in the Official Gazette, aims to enhance efficiency, inclusivity, and transparency in the Corporate Insolvency Resolution Process (CIRP). It introduces several structural and procedural reforms to better align the process with practical needs and creditor expectations.
Key Amendments
1. Interim Finance Providers as Observers
· New Sub-Regulation 18(5):
The Committee of Creditors (CoC) may now direct the Resolution Professional (RP) to invite interim finance providers to attend such CoC meetings as observers (without voting rights), as the committee may decide.
2. Flexibility in Inviting Resolution Plans
· New Sub-Regulation 36A(1A):
The RP, with CoC approval, may invite Expressions of Interest (EOIs) for submission of resolution plans for:
o The entire corporate debtor, or
o The sale of one or more individual assets of the corporate debtor, or
o Both simultaneously. Encourages segmented resolutions and quicker recovery of viable parts.
3. Omission of Regulation 36B(6A)
· A sub-regulation that previously restricted certain procedural flexibility is now omitted, allowing a more streamlined resolution plan submission process.
4. Priority to Dissenting Financial Creditors in Staged Payments
· Amended Regulation 38(1)(b) (with new proviso):
(a) In clause (b), for the word and mark “plan.”, the word and mark “plan:” shall be substituted. The amended clause is provided below:
“(b) to the financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid in priority over financial creditors who voted in favour of the plan:”
(b) Where a resolution plan involves staged payments, dissenting financial creditors must be paid:
o At least pro rata, and
o In priority to those who voted in favor, at each stage. Protects the interest of dissenting creditors while ensuring fairness.
5. Presentation of All Plans to CoC – Including Non-Compliant Ones
· Regulation 39(2) modified:
o In sub-regulation (2) of 39, the words “which comply with the requirements of the Code and regulations made thereunder” is now omitted and after the words “along with the details of”, the words “non-compliant plans and” have been inserted.
o RPs must present all resolution plans, including non-compliant ones, to the CoC with relevant details.
o Encourages transparency and informed decision-making.
· Regulation 39(3)(a) updated:
o In sub-regulation (3) of 39, in clause (a), after the words “under sub-regulation (2)”, the marks and words “, which comply with the requirements of the Code and regulations made thereunder,” have been inserted.
o The above modification specifies that only compliant plans are eligible for CoC’s vote.
4. Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2025.
Notification No. IBBI/2025-26/GN/REG125, dated 19th May 2025.
Overview
The IBBI, in exercise of the powers conferred by clause (t) of sub-section (1) of section 196, section 240 read with clause (e) of section 2 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), has amended the 2019 regulations governing the insolvency resolution process for personal guarantors to corporate debtors. This amendment introduces a new provision to address cases where a repayment plan is not submitted by the debtor during the resolution process.
Key Provision: New Regulation 17B – Non-submission of Repayment Plan
· Where the debtor fails to submit a repayment plan under Section 105 of the Insolvency and Bankruptcy Code, 2016:
o The Resolution Professional (RP), with the approval of creditors,
o Must apply to the Adjudicating Authority,
o Intimating the non-submission and seeking appropriate directions.
· Ensures procedural continuity and judicial oversight in cases where the process is stalled due to the absence of a repayment plan.
· Avoids indefinite delays and empowers the RP and creditors to seek further action from the tribunal.
· The amendment comes into force immediately upon its publication in the Official Gazette.
SECURITIES EXCHANGE BOARD OF INDIA
1. Limited relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
Circular Reference: SEBI/HO/DDHS/DDHS - PoD-1/P/CIR/2025/83, dated June 05, 2025
Overview:
The Securities and Exchange Board of India (SEBI), issued extended relaxations from physical dispatch of financial statements and related documents to certain security holders, provided under Regulation 58(1)(b) of the Listing Obligations and Disclosure Requirements Regulations, 2015 (LODR), which through its circular dated October 06, 2023, mandates that listed entities send hard copies of statements with key financial documents to holders of non-convertible securities without registered email IDs. This aligns with the relaxations provided by the Ministry of Corporate Affairs (MCA) through General Circular No. 09/2024 dated September 19, 2024.
Key Provisions:
MCA, via General Circular No. 09/2024 dated September 19, 2024, has extended the exemption from sending physical copies till September 30, 2025, for AGMs held up to that date.
Entities having listed non-convertible securities, not sending hard copies of the statement containing salient features of financial and other documents (as required under Section 136 of the Companies Act, 2013) to such holders who have not registered their email addresses, will not face penal action under Regulation 58(1)(b) if they comply with the MCA Circular 09/2024.
Similar relaxation continues, for the period from June 06, 2025 to September 30, 2025, for entities with listed non-convertible securities, from complying with Regulation 58(1)(b) of the LODR Regulations. It is provided that:
The advertisement made under Regulation 52(8) must include a web link to the statement containing salient features of the documents under Section 136 of the Companies Act, 2013.
This ensures such holders can access the information digitally.
The circular is effective immediately.
Stock exchanges must inform all listed entities and publish the circular on their websites.
Issued under powers of Section 11(1) of the SEBI Act, 1992 and Regulation 101 of the LODR Regulations.
The relaxations are subject to changes in the Companies Act, 2013 and its associated rules.
2. Margin obligations to be given by way of Pledge/Re-pledge in the Depository System
Circular Reference: SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/82, dated June 03, 2025
Overview
SEBI has amended its February 25, 2020, circular and Para 41 of the Master Circular for Stock Brokers dated August 09, 2024, to address operational challenges in handling client securities after the invocation of margin pledge. The amendments aim to:
· Prevent the accumulation of unsold invoked securities in brokers’ accounts.
· Streamline the process of invocation and sale of pledged securities.
· Introduce a combined automated mechanism for ease of operations and investor protection.
These changes are in response to observations and representations from the Brokers’ Industry Standard Forum (Brokers’ ISF).
Key Provisions
· Circular effective from: September 5, 2025
· Operating guidelines to be issued by depositories: on or before July 1, 2025
· Issued under:
o Section 11(1) of Chapter IV of SEBI Act, 1992
o Regulation 30 of Chapter VII of SEBI (Stock Brokers) Regulations, 1992
· Brokers were required to accept collateral from client in the form of securities only via margin pledge.
· Operational process was detailed in Annexure A of the 2020 circular and Para 41.11 of the 2024 Master Circular.
· Invoked client securities were not being sold, leading to accumulation in brokers' demat accounts (i.e. ‘Client Securities Margin Pledge Account’ or ‘Client Securities under Margin Funding Account’).
· Clients selling their own pledged securities involved a cumbersome manual process of unpledging and re-instructing delivery, as highlighted by the Brokers’ Industry Standard Forum (Brokers’ISF).
· In case where client sells the securities, which are pledged in favor of TM/CM as Margin pledged securities (including pledged funded stock) /CUSPA pledge, A single automated instruction, “Pledge release for early pay-in”, will be available. This releases the pledge and creates a delivery block in the client’s demat account simultaneously. Eliminates the need for manual instructions (physical instruction or electronic instruction), DDPI, or POA. Applies only up to the extent of the delivery obligation of that client as provided by CCs to depositories.
· Invoked securities, other than mutual fund units that are not traded on the exchanges, will be blocked for early pay-in in the client's demat account. A trail will be maintained in the broker's Margin Pledge Account (TM/CM’s ‘Client Securities Margin Pledge Account’ / ‘Client Securities under Margin Funding Account’). Again, limited to the client’s actual delivery obligation.
· In case of invocation of Mutual fund (MF) units that are not traded on the exchange, new functionality: “Invocation cum redemption” wherein invoked Mutual fund (MF) units will be redeemed automatically after reaching the broker’s account.
· In case where client’s trading account is frozen or client trading codes are marked as ‘Not permitted to trade’ or equivalent at the stock exchanges subsequent to creation of pledge, the broker must sell under proprietary code and ensure same-day pay-in to avoid accumulation.
3. Measure for Ease of Doing Business–Facilitation to SEBI registered Stock Brokers to undertake securities market related activities in Gujarat International Finance Tech-city –International Financial Services Centre (GIFT-IFSC) under a Separate Business Unit (SBU)
Circular Reference: SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/61, dated May 2, 2025
Overview
SEBI has eased the regulatory framework for SEBI-registered stock brokers wanting to undertake securities market activities in Gujarat International Finance Tec-City – International Financial Services Centre (GIFT-IFSC).
To promote ease of doing business, SEBI has:
· Allowed a flexible structure (Separate Business Unit (SBU) or Subsidiary) to operate in GIFT-IFSC.
· Introduced safeguards to ensure ring-fencing from the Indian securities market operations.
· SEBI-registered stock brokers can now operate in GIFT-IFSC without seeking separate SEBI approval.
· Stock brokers can carry out GIFT-IFSC activities via:
o A Separate Business Unit (SBU) under the same entity.
o A branch that qualifies as an SBU.
o An existing subsidiary or joint venture, which may also be dismantled and replaced with an SBU, at the entity’s discretion.
· All SBU operations in GIFT-IFSC will fall under the exclusive jurisdiction of the International Financial Services Centres Authority (IFSCA).
· Matters like policy, eligibility, risk management, grievance redressal, and enforcement will be governed by the regulatory framework prescribed by IFSCA.
· Indian market activities and GIFT-IFSC activities must be operationally and financially ring-fenced.
· The SBU must engage only in activities permitted by IFSCA.
· Maintain separate accounts for SBU operations on an arm’s-length basis.
· SBU’s net worth must be independent of the Indian stock broker’s net worth.
· Indian net worth requirements are to be met excluding the SBU’s.
· SEBI’s SCORES platform, Stock Exchange Investor Protection Funds (IPF), and grievance mechanisms to investors using SBU services in GIFT-IFSC.
· Investors will be protected under the IFSCA framework only.
· Existing subsidiaries/JVs in GIFT-IFSC may continue or be converted into SBUs at the discretion of the broker.
· Issued under:
o Section 11(1) of Chapter IV of the SEBI Act, 1992
o Regulation 30 of SEBI (Stock Brokers) Regulations, 1992
4. Publishing Investor Charter for KYC (Know Your Client) Registration Agencies (KRAs) on their Websites.
Circular Reference: SEBI/HO/MIRSD/PODFATF/P/CIR/2025/62, dated May 06, 2025
SEBI has introduced Charter for an Investor KRAs with the aim of increasing transparency, investor awareness, and ensuring standardized service delivery by KYC Registration Agencies (KRAs). The Charter outlines the roles, responsibilities, and expectations from KRAs as well as investors, thereby improving investor experience and grievance redressal.
Key Provisions
SEBI has developed a standardized Investor Charter for KRAs which includes:
o Services provided to investors
o Rights of investors
o Functions and responsibilities of KRAs
o Do’s and Don’ts for investors
o Grievance redressal mechanisms
All registered KRAs are required to take active steps to disseminate the Investor Charter to both existing and new investors through the following means:
(a) Publishing the Investor Charter on their websites and share the same with the investors via email
(b) Displaying the Investor Charter at prominent places in their offices
· These requirements are in addition to existing SEBI-mandated disclosures and not a replacement for them.
· Issued under:
o Section 11(1) of Chapter IV of the SEBI Act, 1992
o Intended to protect investors, develop the securities market, and enhance regulatory oversight.
· The provisions of this circular are effective immediately from the date of issuance.
5. Simplification of operational process and clarification regarding the cash flow disclosure in Corporate Bond Database pursuant to review of Request for Quote (RFQ) Platform framework.
Circular Reference: SEBI/HO/DDHS/DDHSPOD1/P/CIR/2025/72, dated May 13, 2025
SEBI, based on recommendations from a working group and public consultation, has introduced simplifications and additional disclosure requirements to streamline the Request for Quote (RFQ) Platform operations and enhance the corporate bond database. These changes aim to improve transparency, standardisation, and ease of doing business in the bond markets.
Key Provisions
· Applicable to listed Non-Convertible Securities (NCS), Securitised Debt Instruments, Municipal Debt Securities, and Commercial Papers.
· New Clause (9) added to Chapter XXII of the NCS Master Circular:
o For yield to price computation for non-convertible securities, the cash flow dates (interest/dividend/redemption) will now be based on the due date as per the cash flow schedule.
o These dates will not be adjusted based on day count conventions or actual payment date.
· Issuers must disclose the interest/dividend/redemption payment schedule at the time of ISIN activation.
· New Paragraph 57 inserted in Annex XIV-A of NCS Master Circular, detailing the format for such disclosures. The information must include:
o Particulars (Payment of interest/dividend/redemption)
o Due date
o Payment date as per day count convention
· Updates to cash flow information must be made within one (1) working day if changes occur during the tenure of the security.
· These disclosure requirements:
o Apply to all prospective issuances of debt securities.
o Also applies to residual maturity of already listed ISINs.
· The circular comes into effect from August 18, 2025.
· Stock Exchanges must:
o Notify market participants.
o Disseminate the circular on their websites.
o Amend relevant byelaws/rules/regulations to ensure uniform implementation.
· Issued under:
o Section 11(1) of the SEBI Act, 1992.
o Regulation 55(1) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
· To protect investor interest, develop, and regulate the Indian securities market, particularly debt markets.
6. Accessibility and Inclusiveness of Digital KYC to Persons with Disabilities
Circular Reference: SEBI/HO/MIRSD/SECFATF/P/CIR/2025/74, dated May 23, 2025
Overview
In response to the Supreme Court's directive to ensure equal and accessible inclusion of persons with disabilities (PwDs) in financial services, SEBI has revised its framework to enhance the digital KYC process for such individuals. The goal is to make account-opening processes inclusive, especially for persons with visual impairments.
Key Provisions
· The Hon’ble Supreme Court (April 30, 2025) directed that the digital KYC process be made accessible to persons with disabilities, ensuring equal financial inclusion.
· SEBI reaffirms its commitment to equal access for all investors, including those with disabilities.
· Emphasis is placed on providing inclusive access across all services of SEBI-registered intermediaries.
· All registered intermediaries must ensure their digital platforms are:
o Accessible to PwDs
o In line with the revised FAQ
· Includes accessibility features for visually impaired clients as well.
· Issued under Section 11(1) of the SEBI Act, 1992, empowering SEBI to protect investors and regulate the securities market.
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