Legalaxy - Monthly Newsletter - September 2025

SEBI UPDATES

• SEBI revises framework for conversion of private listed InvIT into public InvIT

RBI & IFSC UPDATES

• IFSCA notifies the regulatory framework for global access in IFSC
• RBI transitions cheque truncation system to "continuous clearing and settlement on realisation"
• RBI notifies Know Your Customer (KYC) Amendment Directions, 2025
• RBI issues Non-Fund Based Credit Facilities Directions, 2025

CORPORATE UPDATES

• MCA substitutes Web Form RD-1

ENVIRONMENTAL UPDATES

• MoEFCC'S revised methodology for calculating green credits under the Green Credit Rules,
  2023
• MoEFCC notifies Environment Audit Rules, 2025
• Van (Sanrakshan Evam Samvardhan) Amendment Rules, 2025 – Notified

OTHER UPDATES

• The Online Gaming Act, 2025: Regulation, recognition and the blanket ban on money gaming
• National Sports Governance Act, 2025: Integrity and accountability in sports
• India updates maritime framework – 4 critical legislations enacted

SEBI REVISES FRAMEWORK FOR CONVERSION OF PRIVATE LISTED INVIT INTO PUBLIC INVIT

Securities and Exchange Board of India ("SEBI"), vide its circular dated August 8, 2025, has revised certain norms for conversion of private listed Infrastructure Investment Trust ("InvIT") into public InvIT by introducing changes to the Master Circular for InvITs dated May 15, 2024 ("InvIT Master Circular"). The key changes include:

• Sponsor Contribution and lock-in requirements: Sponsors of private listed InvITs were required to contribute at least 15% of the units issued through the public issue or to the extent of 15% of the post-issue capital. Units offered towards minimum sponsor(s)
  contribution were locked-in for a period of 18 months from the date of listing of units allotted in such public issue. SEBI has removed the minimum sponsor contribution requirement at the time of conversion and eliminated the associated lock-in period.
• Lock-in for units held by the sponsor(s) in excess of minimum sponsor(s) contribution: Such units were subject to a lock-in period of 1 year from the date of listing of units allotted in the public issue. This restriction has been removed by SEBI.
• Procedure and disclosure norms: Previously, when a private InvIT converted into a public InvIT, the units issued during the conversion were treated as an initial offer through public issue and had to follow the detailed disclosure requirements under Chapter 2 of the InvIT Master Circular, which cater to first-time public investors. Under this circular, such conversion-related
  issuances are now subject to the disclosure norms applicable to follow-on public offers prescribed under SEBI (InvIT) Regulations, 2014, instead of being classified as initial public offerings.

To read the circular click here

IFSCA NOTIFIES THE REGULATORY FRAMEWORK FOR GLOBAL ACCESS IN IFSC

International Financial Services Centres Authority ("IFSCA"), vide its notification dated August 12, 2025, has notified the framework for global access ("Regulatory Framework for Global Access"), which aims to provide a regulatory framework for global access in the International Financial Services Centres ("IFSC") which applies to all the Global Access Providers ("GAP"), broker dealers and clients accessing global markets directly or indirectly through a GAP. The Regulatory Framework for Global Access supersedes the previously issued IFSCA circulars on 'Global Access to Broker Dealers' and 'Global Access - Clarifications'.

'The key highlights of the Regulatory Framework for Global Access are as follows:

1. Obligation to seek authorisation for GAPs: Any broker dealer or a subsidiary of a recognised stock exchange intending to operate as a GAP in the IFSC must first obtain formal authorisation from IFSCA (as specified in Annexure 2 along with applicable fee as specified in Annexure 1 of the Regulatory Framework for Global Access) before commencing operations. However, those already carrying out such activities as of August 12, 2025, must seek authorisation on or before October 31, 2025. A subsidiary of a recognised stock exchange authorised as a GAP will be considered a 'Broker Dealer' under the IFSCA (Capital Market Intermediaries) Regulations, 2025 ("CMI Regulations") and the relevant norms thereunder, and the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022 ("AML-CFT-KYC Guidelines") shall apply mutatis mutandis on such GAP. However, such a subsidiary is not required to obtain trading membership of a recognised stock exchange.
2. Net worth requirements: GAP category entities are supposed to maintain a minimum net worth of USD 500,000 at all times (applicable to GAPs providing global market access to clients). For GAP accessing global markets only on proprietary basis, the minimum net worth requirement is USD 200,000 and for other broker dealers (which is not a GAP) and accessing global markets on a proprietary basis through a GAP, it is USD 100,000. This net worth is separate and in addition to the net worth requirements applicable for other permitted activities that these entities may engage in. The timeline for net worth compliance for GAP, which are already accessing global markets as on the date of the circular, is October 31, 2025.
3. Fit and proper requirements and code of conduct: A GAP shall ensure that the entity and its directors, key managerial personnel and controlling shareholders are 'fit and proper' persons in accordance with the criteria specified under Regulation 8 of the CMI Regulations. Further, GAP or introducing broker engaged in global access shall comply with the code of conduct specified under the CMI Regulations.
4. Clients: The clients who are allowed to access global markets under the Regulatory Framework for Global Access include persons resident in India and persons resident outside India, as permitted under the Foreign Exchange Management Act, 1999 ("FEMA") and the rules, regulations made thereunder. A GAP or an introducing broker may onboard clients directly or through a referral arrangement with an entity based in India, IFSC or a foreign jurisdiction, in accordance with the conditions laid down in the Regulatory Framework for Global Access. Referral arrangements must be disclosed to clients with written agreements detailing fees, responsibilities and compliance obligations. If a GAP partners with an introducing broker in the IFSC for global access, either party may fulfil the compliance obligations, but their agreement must clearly outline all material details of their relationship and allocation of responsibilities for compliance with the Regulatory Framework for Global Access.
5. Permitted products through global access: A GAP shall provide access to financial products listed on recognised stock exchanges in foreign jurisdictions. When providing access to persons resident in India, the GAP must have adequate systems in place to ensure that only those financial products permitted under FEMA and the rules, regulations made thereunder, are accessible. Additionally, a GAP that is a subsidiary of a recognised stock exchange may enter into agreements with brokers, platforms, distributors, investment advisors or asset management companies in foreign jurisdictions to offer access to capital market products and services. Further, a GAP shall not provide access to global markets for dealing in index derivatives, single stock derivatives, bond derivatives or USD-INR/ INR-USD derivatives that are available on recognised stock exchanges in the IFSC.
6. Responsibilities of GAPs: A GAP is required to maintain adequate infrastructure, systems, manpower, and financial resources suitable to the size, scale and complexity of its global access operations. It must have agreement(s) with foreign broker(s) and ensure robust risk management and internal controls to safeguard client interests. GAPs must also ensure that client funds are routed through a bank account in the IFSC and put in place proper complaint handling mechanisms. Additionally, they must, inter alia, monitor trading activities, enter into required agreements and comply with any additional requirements in relation to global access specified by IFSCA, etc.
7. KYC, AML and CFT norms: A GAP and an introducing broker onboarding clients are responsible for complying with the Prevention of Money Laundering Act, 2002, the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, the AML-CFT-KYC Guidelines and other applicable circulars and guidelines.
8. Periodic reporting: A GAP must submit quarterly reports to IFSCA as per the prescribed reporting norms and the broker dealers accessing global markets shall follow specific reporting and compliance requirements. GAPs and introducing brokers must conduct an annual audit of their global access activities through an independent professional, which is to be completed within 6 months of the financial year-end. Other reporting requirements as specified in the Regulatory Framework for Global Access shall be complied with.
9. Miscellaneous: GAPs and introducing brokers must maintain a dedicated webpage on its website or that of its group entity with information on global access arrangements and operate separate bank accounts for global access and IFSC activities, held with an International Banking Unit in the IFSC. Further, the clients' funds shall be segregated from the proprietary trading fund. Furthermore, the GAP or introducing broker shall ensure that true, correct and adequate disclosures are made to the investors in writing. Additionally, they must maintain all user, transaction and trade data within the IFSC and provide it to IFSCA upon
   request. Any kind of advertisement must be clear, fair, accurate, and not misleading or exaggerated in any form.

To read the Regulatory Framework for Global Access click here

RBI TRANSITIONS CHEQUE TRUNCATION SYSTEM TO "CONTINUOUS CLEARING AND SETTLEMENT ON REALISATION"

Reserve Bank of India ("RBI"), vide its notification dated August 13, 2025, has announced the transition of cheque truncation system ("CTS") from its current approach of batch processing to continuous clearing with settlement on realisation, to be implemented in 2 phases – with Phase 1 to be implemented on October 4, 2025 and Phase 2 on January 3, 2026.

The key modalities for continuous clearing with settlement on realisation in CTS are as follows:

1. There shall be a single, continuous presentation session from 10:00 am to 4:00 pm, during which banks will send scanned cheque images to the clearing house, which will in turn release the cheque images to drawee banks on a continuous basis with continuous delivery.
2. Drawee banks have a continuous confirmation session from 10:00 am to 7:00 pm, during which the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques) in respect of every cheque presented to it. Processing by drawee banks is to be done continuously throughout the day and on a real time basis as soon as cheque images are received and information of positive/ negative confirmation shall be sent by drawee banks to the clearing house immediately after processing.
3. Each cheque shall contain an "Item Expiry Time". In the event confirmation is not provided by the drawee bank within such time, the cheque will be considered approved.
4. During phase 1 (from October 4, 2025 to January 2, 2026), drawee banks shall be required to confirm (positively/ negatively) cheques presented on them latest by end of confirmation session, else those will be deemed to have been approved and included for settlement. Inphase 1, the item expiry time for all cheques shall be set as 7:00 pm, whereas in Phase 2 (from January 3, 2026), the item expiry time of cheques shall be changed to T+3 clear hours.
5. Settlements, based only on positive or deemed approvals, will occur hourly from 11:00 am, with presenting banks required to credit customers within an hour from successful settlement, subject to usual safeguards.

To read the notification click here

To view the full pdf, click here.

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