Executive Summary:
This SEBI circular, dated June 19, 2020, further extends previously granted relaxations in timelines for regulatory compliance due to the ongoing COVID-19 pandemic. It applies to Trading Members, Clearing Members, and Depository Participants. The extended timelines for various compliance requirements, as detailed in earlier circulars, now generally run until July 31, 2020, with specific extensions detailed within.
Key Points / Main Content:
* **Extension of Timelines:**
* Timelines for compliance requirements mentioned in SEBI circulars SEBIHOMIRSDDOPCIRP202061, SEBIHOMIRSDDOPCIRP202062, and SEBIHOMIRSDDOPCIRP202068 have been further extended.
* **Specific Extensions Under SEBIHOMIRSDDOPCIRP202061:**
* Client Funding Reporting: Extended till July 31, 2020, for April, May, and June 2020.
* Reporting for AI/ML Applications: Extended till July 31, 2020, for the quarter ended March 31, 2020.
* Compliance Certificate for Margin Trading (CM Segment): Extended till July 31, 2020.
* Internal Audit Report for HYE March 31, 2020: Extended till July 31, 2020.
* Net Worth Certificate in Margin Trading (CM Segment) for HYE March 31, 2020: Extended till July 31, 2020.
* Net Worth Certificate for all members for HYE March 2020: Extended till July 31, 2020.
* Penalty for non-collection/short collection of upfront margins in the cash segment: Extended till July 31, 2020.
* Maintaining call recordings of orders/instructions received from clients: Extended till July 31, 2020.
* **Specific Extensions Under SEBIHOMIRSDDOPCIRP202062:**
* KYC application form and supporting documents of the clients to be uploaded on system of KRA within 10 working days: Period of exclusion shall be from March 23, 2020 till July 31, 2020.
* **Specific Extensions Under SEBIHOMIRSDDOPCIRP202068:**
* Submission towards weekly monitoring of client funds under Enhanced Supervision: Extended till July 31, 2020.
* Submission of data on monthly basis towards clients and fund balance under Enhanced Supervision: Extended till July 31, 2020.
* Daily margin trading reporting: Extended till July 31, 2020.
* Update in Income Tax Permanent Account Number of Key Management Personnel/Directors: Three months from the due date.
* Issue of Annual Global Statement to clients.
* **Other Conditions:**
* All other conditions specified in the aforementioned circulars remain applicable.
Impact Analysis:
Stock Exchanges, Clearing Corporations, and Depositories:
* Impact: Responsible for disseminating the circular's provisions to their members/participants.
* Action Required: Bring the provisions of this circular to the notice of their members/participants and disseminate the same on their websites.
Trading Members, Clearing Members, and Depository Participants:
* Impact: Directly affected by the extended timelines for regulatory compliance.
* Action Required: Note the extended timelines and ensure compliance with the revised deadlines for the specified regulatory requirements.
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 pandemic, which is the primary reason for the relaxations in regulatory timelines.
Stock Exchanges: Recognised stock exchanges in India, including those in International Financial Services Centres, to whom the circular is addressed.
Clearing Corporations: Clearing corporations including those in International Financial Services Centres, to whom the circular is addressed.
Depositories: Entities that hold securities in electronic form, to whom the circular is addressed.
Trading Members: Members of stock exchanges involved in trading, to whom the circular is addressed.
Clearing Members: Members of clearing corporations responsible for clearing and settling trades, to whom the circular is addressed.
Depositories Act, 1996: One of the acts under which the circular is issued, related to depositories.
CIRCULAR
SEBI/HO/MIRSD/DOP/CIR/P/2020/101 June 19, 2020
To,
1. All Recognised Stock Exchanges and Clearing Corporations (including those in
International Financial Services Centres)
2. All Depositories
3. Trading members / Clearing Members through Stock Exchanges and Clearing
Corporations (including those in International Financial Services Centres)
4. Depository Participants through Depositories
5. KYC Registration Agencies
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 no.
SEBI/HO/MIRSD/DOP/CIR/P/2020/82 dated May 15, 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. No. in circular Extended timeline
timelines were extended vide SEBI for which timeline / Period of
circular No. is extended further exclusion
SEBI/HO/MIRSD/DOP/CIR/P/2020/61
dated April 16, 2020.
Client Funding Reporting I Till July 31, 2020 for
the months of April,
May and June 2020.
II Till July 31, 2020 for
Reporting for Artificial Intelligence (AI)
the quarter ended
and Machine Learning (ML) applications.
on March 31, 2020.
Page 1 of 3Compliance certificate for Margin III Till July 31, 2020.
Trading for CM Segment.
Risk based supervision. IV
Internal Audit Report for half year ending V Till July 31, 2020 for
(HYE) March 31, 2020. the half year ended
Net worth certificate in Margin Trading for VIII on March 31, 2020.
CM Segment for HYE March 31, 2020.
Net worth certificate for all members for IX
HYE March 2020.
Penalty for non-collection / short X Till July 31, 2020.
collection of upfront margins in cash
segment.
Maintaining call recordings of XI
orders/instructions received from clients.
Compliance requirements for which S. No. in circular Extended timeline
timelines were extended vide SEBI for which timeline / Period of
circular No. is extended further exclusion
SEBI/HO/MIRSD/DOP/CIR/P/2020/62
dated April 16, 2020.
KYC application form and supporting III Period of exclusion
documents of the clients to be uploaded shall be from March
on system of KRA within 10 working 23, 2020 till July 31,
days. 2020.
Compliance requirements for which S. No. in circular Extended timeline
timelines were extended vide SEBI for which timeline / Period of
circular No. is extended further exclusion
SEBI/HO/MIRSD/DOP/CIR/P/2020/68
dated April 21, 2020.
Submission towards weekly monitoring I Till July 31, 2020.
of client funds under the provisions of
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 Three months from
Account Number of Key Management the due date.
Personnel / Directors.
Issue of Annual Global Statement to V
clients.
3. All other conditions specified in the aforementioned circulars shall continue to remain
applicable.
4. 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.
Page 2 of 35. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, and Section 19 of the Depositories
Act, 1996 to protect the interests of investors in securities and to promote the
development of, and to regulate the securities markets.
Yours faithfully
D Rajesh Kumar
General Manager
Market Intermediaries Regulation and Supervision Department
Page 3 of 3