The Securities and Exchange Board of India (SEBI) on March 04, 2026, issued a circular regarding Guidelines for Custodians.
The following has been stated: -
•Securities and Exchange Board of India has issued this Circular pursuant to amendments to the SEBI (Custodian) Regulations, 1996 (September 18, 2025), prescribing detailed conditions on segregation of financial services, outsourcing, vault specifications, and governance for Custodians.
•Non-bank Custodians must segregate regulated and unregulated financial services through separate SBUs, maintain arms-length accounts, meet independent net worth norms, and implement conflict-of-interest safeguards.
•Enhanced obligations include board-level governance committees, comprehensive risk management (including STR reporting), scalable IT capacity (1.2x transaction load), BCP-DR framework with seismic/geographical safeguards, and an orderly wind-down mechanism.
•Certain duplicate reporting requirements to SEBI are discontinued, with most provisions effective March 24, 2026 (wind-down framework by September 23, 2026; DRS compliance by March 23, 2029).
[Circular No.: HO/19/(1)2025-AFD-FPICELL/I/5928/2026]
