Context: Union Finance Minister Nirmala Sitharaman chaired the 29th meeting of the Financial Stability and Development Council (FSDC) in Mumbai on June 11, 2025, where she emphasized reducing unclaimed assets and ensuring seamless refund to rightful owners. The meeting also reviewed macro-financial stability, regulatory reforms, and investment strategies. Key Highlights: Focus on Unclaimed Assets What is Unclaimed Assets? Unclaimed assets refer to financial assets (money, shares, mutual funds, etc.) that have been left unclaimed or inactive by their owner for an extended period. These assets can become unclaimed due to various reasons, including death of the account holder, a change of address, or simply forgetting about them. 

Context: The Securities and Exchange Board of India (SEBI) has launched an investigation into the activities of Jane Street, a global proprietary trading firm, for potential manipulation of benchmark indices through algorithmic trades in India’s Nifty 50 and banking indices. The probe spans the last three years and follows complaints from rival firms over unusual trading patterns and supernormal profits. What Is Jane Street? Why Is SEBI Investigating Jane Street? What is Algorithmic Manipulation? Algorithmic Manipulation refers to the intentional use of algorithmic trading systems—such as automated, high-frequency, or black-box algorithms. This includes generating false or misleading signals about supply, demand, or price of securities, often to mislead other market participants for unfair gain. Key Elements: India’s Current Legal Framework: BS

Context: The Securities and Exchange Board of India (SEBI) has extended the deadline for winding up expired Venture Capital Funds (VCFs) by one year, allowing more time for liquidation. However, it has mandated migration to the Alternative Investment Fund (AIF) framework by 19 July 2025, with one additional year granted for full liquidation after migration. What Are Alternative Investment Funds (AIFs)? Alternative Investment Funds (AIFs) are privately pooled investment vehicles that raise funds from investors to invest in non-traditional assets such as private equity, venture capital, hedge funds, infrastructure, and social impact ventures. These differ from conventional instruments like stocks and mutual funds and are governed under the SEBI (Alternative Investment Funds) Regulations, 2012. Legal Structure: AIFs in India can be formed as: Types of AIFs in India Category I: Growth-Oriented and Impact Investments Focus: Promote innovation, start-ups, SMEs, and social impact. Category II: Private and Debt-Oriented Funds Focus: Invest in private equity and debt without leverage. Category III: High-Risk, Market-Linked Strategies Focus: Aggressive strategies, including leverage and arbitrage. Investor Eligibility and Requirements: Key Benefits of AIFs:

Context: The Securities and Exchange Board of India (SEBI) has initiated recovery proceedings against OPG Securities and its directors for failing to pay penalties linked to the NSE co-location case, involving unfair trading access. NSE Co-Location Case The NSE co-location case involves allegations that the National Stock Exchange of India (NSE) granted preferential access to certain stockbrokers through its co-location facility, giving them an unfair speed advantage in executing trades. This case has raised serious concerns about market integrity, transparency, and regulatory oversight in India’s capital markets. Key Aspects of the NSE Co-Location Case Co-Location Facility: Secondary Server Access: Tick-by-Tick (TBT) Data Feed: Unfair Market Advantage: Regulatory and Legal Actions:

Context: On June 5, 2025, the Securities and Exchange Board of India (SEBI) introduced a comprehensive operational framework for ESG debt securities. This applies to Social Bonds, Sustainability Bonds, and Sustainability-Linked Bonds (SLBs), excluding green bonds (which are already covered under a separate regulation). Objective: To ensure transparency, credibility, and accountability in ESG-labelled debt instruments and to curb “purpose-washing” (misuse of ESG labels without genuine impact). Key Highlights: Significance:

Context: AU Small Finance Bank (AU SFB) has entered into a strategic partnership with the International Finance Corporation (IFC) to embed climate risk into its core banking systems. This initiative enhances the bank’s alignment with global climate resilience standards and the Reserve Bank of India’s evolving climate-related financial guidelines. Objective: To build climate risk resilience into AU SFB’s governance, risk management, strategy, and ESG disclosures—boosting long-term sustainability and compliance with frameworks like TCFD and NGFS. Key Features of the Climate Risk Program: Significance: About AU Small Finance Bank (AU SFB): About International Finance Corporation (IFC):

Context: The Reserve Bank of India (RBI), in its Annual Report 2024–25, highlighted a paradox in India’s foreign direct investment (FDI) landscape. While gross FDI inflows rose by 13.7%, net FDI sharply dropped to just $0.4 billion, compared to $44 billion in FY 2020–21, driven by high disinvestments and repatriation. What is FDI? Foreign Direct Investment (FDI) is investment by foreign entities in India’s productive sectors (equity, joint ventures, greenfield, etc.), aimed at: Key Findings – RBI Annual Report 2024–25: Structural Challenges in India’s FDI Framework: Policy Recommendations – The Way Forward: