Source: ET
Context:
In September 2025, the Securities and Exchange Board of India (SEBI) increased the minimum net worth requirement for custodians from ₹50 crore to ₹75 crore to strengthen risk management systems.
Key Highlights:
- Regulatory Amendment: Through the SEBI (Custodian) (Amendment) Regulations, 2025, modifying the SEBI (Custodian) Regulations, 1996.
- Separate Capital Requirement: New capital adequacy must be maintained separately from other business funds. This means that custodians must keep the funds required to meet SEBI’s new minimum net worth (Rs 75 crore) distinct from any other business or operational funds.
- Custodian: In the financial markets, a custodian is a specialized financial institution that safeguards and manages financial assets on behalf of clients, such as mutual funds, banks, corporations, or individual investors.
Custodian Responsibilities:
- Maintain strong governance structures.
- Implement robust risk management policies.
- Develop scalable infrastructure and adequate technical capacity.
- Prevent financial loss due to theft, fraud, or professional misconduct.
- Avoid exaggerated claims regarding services or achievements.
