Understanding Key Amendments - October 2025

SECURITIES EXCHANGE BOARD OF INDIA

Relaxation in Timeline for Submission of Net Worth Certificate by Stock Brokers Offering Margin Trading Facility

Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2025/120, dated August 26, 2025

Overview

SEBI has revised the submission timelines for auditor-certified net worth certificates applicable to stockbrokers offering a Margin Trading Facility (MTF). As per the Master  Circular  for  Stock  Exchanges  and  Clearing Corporations (SECC) dated December 30, 2024, stock brokers shall submit to the stock exchange(s) a half-yearly certificate as per the timelines prescribed, in order to be eligible to offer the margin trading facility to their clients. This change was introduced through Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2025/120 dated August 26, 2025, the provisions of which shall come into effect immediately. The move is aimed at harmonising net worth certification deadlines with the financial reporting timelines under Regulation 33 of the SEBI Listing Obligation and Disclosure Requirement  (LODR) Regulations, 2015.

Key Changes

• Earlier requirement (Master Circular, December 30, 2024):

  • Net worth certificates for the half-year ending March 31 to be submitted by April 30

  • Net worth certificate for the half-year ending September 30 to be submitted by October 31

• Revised timelines (effective from the new circular):

  • For the half-year ending March 31 – submission by May 31

  • For the half-year ending September 30 – submission by November 15

The revised timelines give stock brokers more time to submit net worth certificates, align the process with financial reporting cycles, and ease compliance pressure. This pragmatic move reduces duplication, improves efficiency, and signals SEBI’s intent to further harmonise reporting timelines for a streamlined compliance framework.

SEBI Notifies Third Amendment to InvIT Regulations, 2025

Notification No. SEBI/LAD-NRO/GN/2025/259, dated September 01, 2025

Overview

SEBI, in exercise of the powers conferred under Section 30 read with Sections 11 and 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), through its Third Amendment to the SEBI (Infrastructure Investment Trusts) Regulations, 2014, notified on September 1, 2025, has introduced several measures to enhance regulatory clarity, streamline disclosures, and align compliance timelines with financial reporting cycles. The amendments touch upon definitions, reporting obligations, valuation practices, investment thresholds, and distribution of cash flows, thereby refining the operational and compliance framework for InvITs.

Key Changes

• Definition of Public: Excludes related parties, sponsors, sponsor groups, and managers or project manager or investment manager, but includes qualified institutional buyers (QIBs) in an offer even if otherwise excluded.

• Reporting Alignment: Disclosure of under-construction project status and quarterly manager disclosures are now aligned with financial reporting timelines by substituting the words “such time as may be specified by the Board for submission of quarterly financial results” after the words “status of development of under-construction  projects, within”, the words “thirty days of end of such quarter”.

• Valuation Reports: Annual (March 31), half-yearly (September 30), and quarterly (if leverage exceeds 49%) valuations to be submitted with financial results. All valuation reports must also be submitted to trustees and stock exchanges simultaneously.

• Investment Threshold: Minimum investment reduced from ₹1 crore to ₹25 lakhs; the earlier ₹25 crore threshold for certain InvITs has been removed.

• Distribution of Cash Flows: Holding Companys (“HoldCo”) can offset negative distributable cash flows against Special Purpose Vehicles (SPV) inflows, subject to disclosure, as deemed appropriate in this regard to the unitholders in such form and manner as may be specified by the Board.

• Reporting Obligations: Half-yearly reports aligned with September results; high-leverage InvITs (over 49% borrowing) must provide quarterly reports.

  
  

The amendments ease entry for a wider investor base by lowering the minimum ticket size while removing barriers for large-scale investments. Alignment of reporting and valuation timelines with financial results reduces compliance burden and improves transparency. By mandating simultaneous submission of valuation reports to trustees and exchanges, SEBI strengthens oversight and ensures timely disclosures. Allowing HoldCos flexibility in managing cash flow distributions provides operational efficiency, though coupled with mandatory disclosures to safeguard investor interests.

Framework for AIFs to make co-investment within the AIF structure under SEBI (Alternative Investment Funds) Regulations, 2012

Circular No. SEBI/HO/AFD/AFD-POD-1/P/CIR/2025/126, dated September 09, 2025

Overview

On September 9, 2025, SEBI introduced a framework allowing Category I and II Alternative Investment Funds (“AIFs”) to offer co-investment opportunities to accredited investors directly within the AIF structure through separate Co-Investment Schemes (“CIVs”). This move formalises an alternative to the existing Portfolio   Managers   under SEBI   (Portfolio   Managers)   Regulations,   2020 (“PMS”) route and aims to bring clarity, governance safeguards, and uniform compliance standards for co-investments.

Key Provisions

• CIV Schemes: Category I and II AIFs can launch CIVs within their structure to facilitate co-investment alongside the main scheme i.e., the existing Portfolio Management Services (“PMS”) route.

• Exclusive Route: AIF managers must choose either the PMS route or CIV scheme route for a given co-investment not both. CIVs require a Shelf Placement Memorandum with governance and regulatory details and principal terms of co-investment.

• Structural Safeguards: CIVs must maintain separate bank and demat accounts, with ring-fenced assets.

• Investment Limit: Investor co-investment in a company via CIVs cannot exceed 3x their main AIF scheme investment, except for (i) Multilateral/ Bilateral Development finance institutions (DFIs), government-owned entities, sovereign wealth funds, and central banks.

• Restrictions: Investors excused, excluded, or defaulting in the main AIF cannot co-invest via CIV in that company. CIVs must not invest in a manner that create indirect exposures, require extra disclosures if done directly, or breach eligibility norms for direct investment . Further, borrowing or leverage is prohibited.

• Profit & Expenses: Proceeds and rights distributed pro-rata, subject to carried interest where applicable; expenses shared proportionally between the main AIF and CIV.

• Industry Standards: CIVs must adhere to standards developed by the Standard Setting Forum of AIFs (SFA) in consultation with SEBI, to be published by industry associations (Indian Venture and Alternate Capital Association (IVCA), Private Equity Venture Capital Chief Financial Officer Association (PEVCCFO) and Trustee Association of India).

• Compliance: Trustees/sponsors must confirm adherence in the Compliance Test Report (CTR) under SEBI’s AIF Master Circular.

The framework provides accredited investors with a transparent, regulated co-investment avenue while ensuring investor protection through strict safeguards on structure, reporting, and limits. By prohibiting leverage, requiring ring-fenced assets, and mandating proportional cost-sharing, SEBI has sought to balance investor flexibility with risk containment. This move is expected to deepen co-investment activity in Indian private markets, broaden investor participation, and drive standardisation across the industry, aligning with global best practices.

RESERVE BANK OF INDIA

Regulation of Payment Aggregators by the Reserve Bank of India

Notification No. RBI/DPSS/2025-26/141, dated September 15, 2025

Overview

On September 15, 2025, the Reserve Bank of India (RBI) issued a Master Direction on Regulation of Payment Aggregators (PAs), consolidating and standardising rules for entities handling payment aggregation across online platforms and physical point-of-sale (“POS”) systems. This step builds on earlier guidelines issued in 2020 (circular DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020) and 2021 (circular CO.DPSS.POLC.No.S33/02-14-008/2020-2021 dated March 31, 2021), separate rules for Regulation of Payment Aggregator – Cross Border (“cross-border PAs”) in 2023 (circular CO.DPSS.POLC.No.S-786/02-14-008/2023-24 dated October 31, 2023), and draft directions on POS aggregators on April 16, 2024. The Master Direction seeks to provide a single, comprehensive framework to ensure consistency, oversight, and transparency in the PA ecosystem.

Key Provisions

• Consolidation of Earlier Guidelines: Integrates the March 17, 2020 and March 31,2021 online PA guidelines, the October 31, 2023 cross-border PA framework, and the April 16, 2024 draft POS proposals.

• Applicability Across Models: Covers online PAs, cross-border PAs, and those operating in physical POS environments, bringing all categories under a uniform regulatory umbrella.

• Operational Standards: Establishes clear rules on governance, capital adequacy, customer protection, settlement timelines, escrow norms, and technology/security standards.

• Cross-Border Transactions: Reinforces earlier directives, ensuring compliance with FEMA provisions and additional scrutiny of international fund flows.

• Rationalised Compliance: Aligns reporting, disclosure, and risk management requirements across PA categories to reduce overlap and regulatory ambiguity.

• Draft Directions on Physical Point of Sale (“POS”): On April 16, 2024, the RBI published for public comment the following two key documents: (i) Draft Directions on Regulation of Payment Aggregators at POS; (ii) Proposed Amendments to the Existing Directions on Payment Aggregators. These draft directions aimed to bring greater clarity and standardization to the functioning of Payment Aggregators in physical POS environments.

The Master Direction is a significant rationalisation step, replacing multiple circulars with a single cohesive framework for payment aggregators. By covering online, cross-border, and physical POS operations, RBI has created a level playing field and improved regulatory clarity. For PAs, this means more structured compliance obligations, but also reduced uncertainty and standardised rules across business models. For merchants and consumers, it enhances trust and safeguards around payments. Going forward, the framework is expected to deepen confidence in India’s payments ecosystem, streamline PA operations, and align domestic practices with global regulatory standards.

Reserve Bank of India (Authentication mechanisms for digital payment transactions) Directions, 2025

Notification No: RBI/2025-26/79 CO.DPSS.POLC.No. S 668/02-14-015/2025-2026 dated September 25, 2025

Overview

On September 25, 2025, the RBI issued the Authentication Mechanisms for Digital Payment Transactions Directions, 2025, consolidating and updating rules on authentication for digital payments. The framework moves beyond the SMS-based OTP model and sets broad principles for adopting new authentication technologies while ensuring security, interoperability, and customer protection. The directions cover all domestic digital transactions and prescribe specific requirements for cross-border card-not-present (“CNP”) transactions, aiming to strengthen trust and flexibility in India’s fast-growing digital payments ecosystem.

Key Provisions

• Two-Factor Authentication: All domestic digital transactions must use at least two factors of authentication, with one being dynamic (e.g., One Time Password or OTP, token, biometric proof).

• Exemptions: Certain categories such as small-value contactless card payments, recurring transactions (post first), select prepaid instruments, NETC toll payments, offline small-value payments, and specific corporate travel bookings remain exempt.

• Interoperability: Authentication and tokenisation services must be made available across applications, devices, and token requestors in the same environment.

• Risk-Based Approach: Issuers may, in line with their internal risk management policies, use behavioural and contextual data (location, device attributes, past patterns) to trigger additional authentication checks. Based on the perceived risk associated with the transaction, additional checks beyond the minimum two-factor authentication may be resorted to. DigiLocker may be explored for high-risk transaction confirmations.

• Issuer Responsibility: Issuers must ensure robustness of systems, compensate customers for any losses due to non-compliance, and adhere to data protection obligations under the Digital Personal Data Protection Act, 2023.

• Cross-Border CNP Transactions: By October 1, 2026, issuers must put in place systems to validate non-recurring cross-border CNP card transactions, register Bank Identification Numbers (BINs) with networks, and adopt a risk-based framework for such payments.

• Repeals: Several earlier RBI circulars on card security and authentication (2009–2016) stand repealed, consolidating norms under this single direction.

  
  

The new framework modernises India’s digital payment security standards, shifting from a one-size-fits-all OTP reliance to a more flexible, risk-based authentication model. By mandating dynamic factors and interoperability, RBI paves the way for wider adoption of biometrics, device-based tokens, and other advanced tools. The clear accountability placed on issuers especially full customer compensation for compliance failures raises the bar on security. Cross-border provisions will tighten scrutiny on card-not-present flows, balancing customer convenience with forex and fraud risk management. Looking ahead, these directions are expected to encourage innovation in authentication technologies while reinforcing consumer trust in digital payments.

Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025

Notification: RBI/2025-26/82, DoR.MCS.REC.50/01.01.003/2025-26, dated September 26, 2025

Overview

The Reserve Bank of India issued the Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025, consolidating and updating rules on nomination, survivorship, and claim settlement in deposit accounts, safe deposit lockers, and articles in safe custody. The framework aims to minimise delays and hardships for nominees, survivors, and legal heirs by standardising documentation, streamlining procedures, and ensuring timely settlement with compensation for delays. The Directions apply to all commercial and co-operative banks (excluding government savings schemes) and will take effect no later than March 31, 2026.

Key Provisions

• Nominee/Survivorship Clause Accounts: Payment to nominee(s) or survivor(s) constitutes full discharge of bank liability; no legal documents like Succession Certificate or Probate required. A bank’s liability is discharged when it pays a deceased depositor’s balance to verified nominee(s)/survivor(s), with no court restraint, and after clarifying they hold the funds in trust for legal heirs.

• Accounts without Nominee/Survivorship Clause: Simplified settlement permitted up to a threshold of ₹15 lakh (₹5 lakh for co-operative banks) based on claim form, death certificate, identity proof, indemnity bond, and legal heir certificate/affidavit. Above threshold, succession or court documents may be required.

• Locker/Articles in Safe Custody: Access given to nominee(s)/survivor(s) with inventory procedure in presence of witnesses; no legal documents required unless nomination is disputed. Simplified procedure for cases without nominee/survivorship clause.

• Missing Persons: Settlement requires court order declaring civil death. For amounts up to ₹1 lakh, FIR and police non-traceable report may suffice.

• Premature Termination of Deposits: Allowed without penalty on depositor’s death; joint accounts with survivorship clause can permit survivor withdrawal if mandate exists.

• Standardisation: Banks must use uniform claim forms (Annex I-A to I-H), make them available online, and provide tracking facilities for claim status.

• Timelines & Compensation: Claims must be settled within 15 days of complete documentation. Delay attracts compensation—Bank Rate + 4% interest for deposits, and ₹5,000 per day for lockers/articles.

• Certification of Overseas Death Certificates: Banks to accept proof certified via embassy, apostille, overseas bank branches, or other approved authorities.

• Customer Awareness: Banks must publicise nomination/survivorship facilities and claim settlement procedures.

• Repeal: Previous circulars on settlement of deceased customer claims stand repealed.

These Directions significantly improve customer service by making claim settlement faster, standardised, and less burdensome on families. By removing insistence on legal documents where nomination exists and introducing time-bound settlement with compensation, RBI has increased accountability for banks. Digital claim lodgement and tracking will add transparency. Looking forward, this framework is likely to reduce litigation and disputes, promote wider adoption of the nomination facility, and set a benchmark for fair treatment of claimants in the banking system.

Reserve Bank of India (Interest Rate on Advances) (Amendment Directions), 2025

Notification: RBI/2025-26/83, DOR.CRE.REC.51/13.03.00/2025-26 dated September 29, 2025

Reference:

• Directions: Reserve Bank of India (Interest Rate on Advances) Directions, 2016

• Circular: Reset of Floating Interest Rate on Equated Monthly Instalments (“EMI”)-based Personal Loans, August 18, 2023

• FAQs: Issued January 10, 2025

Key Amendments:

• Interest Rate on Advances Directions, 2016

  • In Chapter IV, a proviso is added after sub-paragraph 8(e):

Banks may reduce other spread components for a loan category before three years for customer retention, provided the reduction is justified, non-discriminatory, and aligned with the bank’s policy.

• Circular on Reset of Floating Interest Rate on EMI-based Personal Loans (August 18, 2023)

  • Paragraph 2(ii) is modified to allow banks the option to offer borrowers the choice to switch to a fixed interest rate at the time of reset.

  • The switch is subject to the bank’s Board-approved policy, which may include limits on the number of times a borrower can exercise this option during the loan tenure.

• Banks now have flexibility to adjust spreads for retention purposes in a fair and justified manner.

• Borrowers gain the ability to switch between floating and fixed rates, offering more control over interest costs, while banks can regulate this option through internal policies.

Reserve Bank of India (Lending Against Gold and Silver Collateral) – (1st Amendment) Directions, 2025

Notification: RBI/2025-26/84, DOR.CRE.REC.52/21.01.023/2025-26, dated September 29, 2025

Reference:

• Directions: Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025

  
  

Background:

• Based on market feedback, the RBI has issued amendments to clarify certain aspects of the Directions.

Key Amendments:

1. Paragraph 12 (Prohibition on advances/loans):

   • Prohibited:

     • Loans for purchase of gold in any form (primary gold, ornaments, jewellery, coins) or for financial assets backed by gold (e.g., units of Exchange-traded funds (ETFs) or mutual fund units).

     • Loans against primary gold or silver or financial assets backed by them (e.g., ETFs or mutual fund units).

   • Exemption:

     • Scheduled Commercial Banks or Tier 3/4 UCBs may provide need-based working capital finance where gold or silver is used as raw material or input in manufacturing/industrial processes, and can be accepted as security.

     • A Bank extending such finance must not facilitate acquisition or holding of gold for the purpose of investment or speculation.

2. Annex 2 (Insertion of references to earlier circulars):

   • Four circulars relating to Bank Finance for Purchase of Gold are added after serial number 17:

     • 17A: DBOD.No.Dir.BC.57/13.03.00/2012-13, November 19, 2012

     • 17B: RPCD.CO.BC.50/03.05.33/2012-13, December 5, 2012

     • 17C: UBD.BPD.(PCB) Cir No.36/13.05.001/2012-13, February 6, 2013

     • 17D: RPCD.RCB.BC.No.64/07.51.014/2012-13, February 7, 2013

Effective Date:

• From the date of adoption of the Directions.

• For lenders that have already adopted the Directions, effective from October 1, 2025.

LABOUR AND EMPLOYMENT

The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025

The Karnataka government has rolled out the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 to extend legal and social protections to workers engaged through digital platforms.

Key provisions include:

• Automatic registration: Every gig worker onboarded by a platform will be automatically registered and assigned a single ID that works across all platforms.

• Platform responsibilities: Aggregators must register with the state Board, share worker data, and follow fair contract practices covering payment terms, deductions, incentives, and the worker’s right to decline tasks.

• Algorithmic transparency: Platforms must disclose how automated monitoring and decision-making systems operate.

• Job security: Workers cannot be dismissed without valid reasons and due process.

• Earnings and work standards: Platforms are obliged to ensure timely payments, adequate rest breaks, and safe working conditions.

  
  

Social Security & Welfare Fund:

A dedicated fund will be created, financed through a welfare fee of 1–5% on transaction payouts, contributions from workers, and government support. The fund will be used only for gig workers’ welfare, with strict limits on administrative costs. All transactions and deductions will pass through a Payment and Welfare Fee Verification System to maintain transparency. It will be funded by: (i) welfare fee collected under this law, (ii) contributions by platform-based gig workers, (iii) grants-in-aid from both central and state governments, (iv) grants, gifts, donations, or transfers, and (v) any other sources.

Grievance redressal:

A two-stage mechanism is introduced: disputes are first handled by an internal platform-level committee, and if unresolved, can be escalated to the state Board or an appellate authority. Any grievances arising out of payouts, deductions, or terminations will go to the Internal Dispute Resolution Committee of  the aggregator. Non-compliance will attract penalties and fines. Annual audits and reports will ensure platforms remain accountable.

If the worker does not receive an action taken report from the Committee within 14 days, the grievance will go to the Board, whose decision shall be final.  Gig workers may file a petition with the Grievance Redressal Officer, in relation to any grievances arising out of entitlements or payments.  The state government may also designate an Ombudsman for grievance redressal.  Appeals may be filed with the Appellate Authority within 90 days of the order.

This framework could set a precedent for other states and at the national level, leading to a more uniform legal regime for gig work in India. Stronger safeguards may make gig work a more viable and respected form of employment, encouraging more people to join the sector. At the same time, compliance costs and welfare contributions may push platforms to rework their business models, possibly leading to more sustainable practices but also sparking debate on pricing and consumer costs. Over time, this ordinance could redefine the relationship between workers and digital platforms, influencing how labour rights evolve in the age of algorithm-driven employment.

Welfare Board

The Bill proposes the establishment of a Gig Workers Welfare Board, which will be appointed by the state government. This Board will be responsible for overseeing the registration process of both aggregators and gig workers, as well as developing, recommending, and monitoring various welfare schemes. It will also actively engage with gig worker unions and conduct regular consultations with them. The Board will include the following members: (i) the state Labour Minister, (ii) secretaries from relevant government departments, (iii) a Chief Executive Officer, (iv) four gig worker representatives, (v) four aggregator representatives, and (vi) two civil society representatives.