**Executive Summary:**
This SEBI circular, dated July 29, 2020, further extends the timelines for regulatory compliance for Trading Members, Clearing Members, and Depository Participants due to the ongoing COVID-19 pandemic. It provides relaxations on reporting requirements, audit submissions, and other compliance matters, with most extended timelines now running until September 30, 2020. Certain Income Tax Permanent Account Number updates are allowed an extended five-month period from the due date.
**Key Points / Main Content:**
* **Extension of Timelines:** Further extends timelines for compliance with regulatory requirements mentioned in earlier SEBI circulars.
* **Client Funding Reporting:** The deadline for Client Funding Reporting for June and July 2020 is extended till September 30, 2020.
* **AI/ML Reporting:** The deadline for reporting on Artificial Intelligence (AI) and Machine Learning (ML) applications for the quarter ended June 30, 2020, is extended.
* **Compliance Certificates & Audit Reports:** Timelines are extended for submitting compliance certificates, internal audit reports, system audit reports, and net worth certificates for various segments, mostly related to the half-year ended March 31, 2020.
* **KYC Norms:** Period of exclusion for uploading KYC application forms and supporting documents of clients on the KRA system is extended to September 30, 2020 (period of exclusion is from March 23, 2020).
* **Enhanced Supervision:** The deadline for submission towards weekly monitoring of client funds and monthly data on clients and fund balance under Enhanced Supervision is extended till September 30, 2020.
* **Income Tax Permanent Account Number Update:** Key Management Personnel/Directors have five months from the due date to update their Income Tax Permanent Account Number.
* **Cyber Security Audit:** Deadline for Cyber Security/Cyber Resilience Audit for the year ended March 31, 2020, is extended till September 30, 2020.
* **Other Conditions:** All other conditions specified in the previously issued circulars remain applicable.
**Impact Analysis:**
**Recognized Stock Exchanges and Clearing Corporations (including those in International Financial Services Centres):**
* *Impact:* Required to bring the provisions of this circular to the notice of their members/participants and disseminate the information on their websites.
* *Action Required:* Notify members/participants and update websites with the details of the extended timelines.
**Trading Members, Clearing Members, and Depository Participants (including those in International Financial Services Centres):**
* *Impact:* Benefit from extended timelines for various compliance requirements, including reporting, audit submissions, and KYC norms.
* *Action Required:* Review the extended timelines and ensure compliance with the revised deadlines for the specified regulatory requirements.
**KYC Registration Agencies:**
* *Impact:* Impacted by the extended timelines for uploading KYC documents.
* *Action Required:* Be aware of the extended timelines for uploading KYC documents
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body issuing the circular, responsible for regulating the securities markets in India.
COVID19: The Coronavirus disease (COVID-19) pandemic, which is the primary reason for the relaxations in regulatory timelines.
Stock Exchanges: Recognized stock exchanges in India that are addressees of the circular and responsible for disseminating the information to their members.
Clearing Corporations: Clearing corporations in India that are addressees of the circular and responsible for disseminating the information to their members.
International Financial Services Centres: Specific zones within India that are treated as foreign jurisdictions for economic purposes; stock exchanges and clearing corporations within these zones are included in the circular.
Trading Members: Entities that are members of stock exchanges and are involved in trading activities.
Clearing Members: Entities that are members of clearing corporations and are responsible for clearing and settling trades.
Depository Participants: Entities that provide depository services to investors, holding securities in electronic form.
CIRCULAR
SEBI/HO/MIRSD/DOP/CIR/P/2020/141 July 29, 2020
To,
1. All Recognised Stock Exchanges and Clearing Corporations (including those in
International Financial Services Centres)
2. Trading members / Clearing Members through Stock Exchanges and Clearing
Corporations (including those in International Financial Services Centres)
3. KYC Registration Agency
Madam / Sir,
Subject: Relaxation in timelines for compliance with regulatory requirements
1. In view of the situation arising due to COVID-19 pandemic, lockdown imposed by the
Government and representations received from Stock Exchanges, SEBI had earlier
provided relaxations in timelines for compliance with various regulatory requirements
by the trading members / clearing members / depository participants, vide circular nos.
SEBI/HO/MIRSD/DOP/CIR/P/2020/61 dated April 16, 2020,
SEBI/HO/MIRSD/DOP/CIR/P/2020/62 dated April 16, 2020, and
SEBI/HO/MIRSD/DOP/CIR/P/2020/68 dated April 21, 2020. Later, vide circular nos.
SEBI/HO/MIRSD/DOP/CIR/P/2020/82 dated May 15, 2020 and
SEBI/HO/MIRSD/DOP/CIR/P/2020/101 dated June 19, 2020, timelines / period of
exclusion was further extended for certain compliance requirements.
2. In view of the prevailing situation due to Covid-19 pandemic and representations
received from the Stock Exchanges, it has been decided to further extend the timelines
for compliance with the regulatory requirements by the Trading Members / Clearing
Members / Depository Participants, mentioned in the SEBI circulars, as under:
Compliance requirements for which S. Nos. for Extended timeline /
timelines were extended vide SEBI which timeline Period of exclusion
circular is extended
SEBI/HO/MIRSD/DOP/CIR/P/2020/61
dated April 16, 2020.
Client Funding Reporting for the I Till September 30,
months of June and July 2020. 2020.
II
Reporting for Artificial Intelligence (AI)
and Machine Learning (ML) applications
for the quarter ended on June 30, 2020.
Compliance certificate for Margin III
Trading for CM Segment for the half
year ended (HYE) on March 31, 2020.
Page 1 of 3Risk based supervision for the year IV
ended March 31, 2020.
Internal Audit Report for HYE March 31, V
2020.
System Audit Report (Algo) for HYE VI
March 31, 2020.
Annual System Audit Report for the year VII
ended March 31, 2020.
Net worth certificate in Margin Trading VIII
for CM Segment for HYE March 31,
2020.
Net worth certificate for all members for IX
HYE March 31, 2020.
Maintaining call recordings of XI
orders/instructions received from
clients.
Compliance requirements for which S. Nos. for Extended timeline /
timelines were extended vide SEBI which timeline Period of exclusion
circular is extended
SEBI/HO/MIRSD/DOP/CIR/P/2020/62
dated April 16, 2020.
III Period of exclusion
KYC application form and supporting
shall be from March 23,
documents of the clients to be uploaded
2020 till September 30,
on system of KRA within 10 working days.
2020.
Compliance requirements for which S. Nos. for Extended timeline /
timelines were extended vide SEBI which timeline Period of exclusion
circular is extended
SEBI/HO/MIRSD/DOP/CIR/P/2020/68
dated April 21, 2020.
Submission towards weekly monitoring of I Till September 30,
client funds under the provisions of 2020.
Enhanced Supervision.
Submission of data on monthly basis II
towards clients’ and fund balance under
the provisions of Enhanced Supervision.
Daily margin trading reporting. III
Update in Income Tax Permanent IV Five months from the
Account Number of Key Management due date.
Personnel / Directors.
Issue of Annual Global Statement to V
clients.
New relaxation (not included in above SEBI circulars)
Cyber Security & Cyber Resilience Audit - Till September 30,
for the year ended March 31, 2020. 2020.
3. All other conditions specified in the aforementioned circulars shall continue to remain
applicable.
Page 2 of 34. Stock Exchanges, Clearing Corporations and Depositories are directed to bring the
provisions of this circular to the notice of their members / participants and also
disseminate the same on their websites.
5. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of investors
in securities and to promote the development of, and to regulate the securities markets.
Yours faithfully
Narendra Rawat
General Manager
Market Intermediaries Regulation and Supervision Department
Page 3 of 3