{"id":90352,"date":"2026-03-17T15:55:57","date_gmt":"2026-03-17T10:25:57","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=90352"},"modified":"2026-03-17T15:57:34","modified_gmt":"2026-03-17T10:27:34","slug":"sebi-custodian-compliance-updates-requirements","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-custodian-compliance-updates-requirements\/","title":{"rendered":"SEBI Custodian Guidelines 2026: Key Changes, Requirements, and Compliance Explained"},"content":{"rendered":"<p>Custodians play a crucial role in the Indian securities <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a>.&nbsp;They essentially safeguard the securities and financial assets of investors and manage them in compliance with various regulatory norms.&nbsp;Large institutional investors, especially&nbsp;<a href=\"https:\/\/enterslice.com\/foreign-portfolio-investment-sebi\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>foreign portfolio investors<\/strong><\/a>&nbsp;(FPIs), mutual funds,&nbsp;<a href=\"https:\/\/enterslice.com\/alternative-investment-fund-registration\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>alternative investment funds<\/strong><\/a>&nbsp;(AIFs), and portfolio managers, rely on custodians to&nbsp;properly manage&nbsp;their investments.&nbsp;<\/p>\n\n\n\n<p>The Indian capital market is growing rapidly and is currently worth over&nbsp;$5 trillion. It is&nbsp;very important&nbsp;to keep investors&rsquo; assets safe and to&nbsp;properly manage&nbsp;transactions in this large market. So, SEBI has issued new guidelines for custodians on 4 March&nbsp;2026. These guidelines are based on the SEBI (Custodian) Regulations, 1996, as amended on 18 September&nbsp;2025.&nbsp;<\/p>\n\n\n\n<p>The Key&nbsp;objectives&nbsp;of these new rules are-&nbsp;&nbsp;<\/p>\n\n\n\n<ul>\n<li>to strengthen corporate governance&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>to improve risk management&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>to enhance investor protection&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>to simplify compliance processes in some cases&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>SEBI has also increased the minimum net worth for custodians from &#8377;50 crore to &#8377;75&nbsp;crore so&nbsp;that they can&nbsp;operate&nbsp;on a stronger financial footing.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a Custodian in the Securities Market?&nbsp;<\/h2>\n\n\n\n<p>A custodian is a SEBI-registered intermediary that safely stores the securities and financial assets of investors. They play a vital role in ensuring that transactions in the market are executed properly and in compliance with the rules.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Key functions of a custodian are:&nbsp;<\/h3>\n\n\n\n<ul>\n<li>Safe custody of securities&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Ensuring settlement of trades&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Maintaining investor accounts&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Complying with&nbsp;various regulatory norms&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Providing necessary reports to regulatory agencies&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Custodians play&nbsp;an important role&nbsp;in managing the assets and transactions of foreign investors, especially when they invest in the Indian market.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Did SEBI Introduce New Custodian Guidelines?&nbsp;<\/h2>\n\n\n\n<p>The rapid expansion of the Indian capital market has&nbsp;necessitated&nbsp;a strengthening of the regulatory framework. Ensuring risk management, data protection, and transparency has become&nbsp;very important&nbsp;with the increase in investment in the market.&nbsp;<\/p>\n\n\n\n<p>Several key reasons behind the new guidelines:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Rapid growth of the Indian securities market&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Increasing foreign investment&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Increasing data security risks&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Need for strong corporate governance&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>In 2025, significant changes were made to the custodian regulations, and Regulation 19B was added. This new regulation has further strengthened the risk management and governance framework for custodians.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Regulatory Development Table&nbsp;<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Year<\/strong>&nbsp;<\/td><td><strong>Major Development<\/strong>&nbsp;<\/td><\/tr><tr><td>1996&nbsp;<\/td><td>Custodian Regulations introduced&nbsp;<\/td><\/tr><tr><td>2025&nbsp;<\/td><td>Net worth requirement increased&nbsp;<\/td><\/tr><tr><td>2026&nbsp;<\/td><td>Detailed operational guidelines issued&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>SEBI wants to modernize and make the custodian system efficient so that the assets of investors are&nbsp;safe&nbsp;and the confidence in the market increases.&nbsp;<\/p>\n\n\n\n<div style=\"margin:30px 0; padding:30px; background-color:#0b5ed7; border-radius:8px;\"> \n  <div style=\"max-width:900px; margin:0 auto; color:#ffffff;\">\n\n    <h3 style=\"color:#ffffff; font-size:22px; font-weight:600; margin-bottom:12px;\">\n      Ensure Compliance with SEBI Custodian Guidelines 2026\n    <\/h3>\n\n    <p style=\"color:#ffffff; font-size:16px; margin-bottom:16px;\">\n      Get expert assistance from <strong style=\"color:#ffffff;\">EnterSlice<\/strong> to understand and comply with \n      <strong style=\"color:#ffffff;\">SEBI Custodian Guidelines 2026, regulatory requirements, and compliance frameworks<\/strong> \n      to avoid penalties and ensure smooth operations.\n    <\/p>\n\n    <ul style=\"font-size:15px; margin-bottom:20px; padding-left:20px;\">\n      <li style=\"margin-bottom:8px; color:#ffffff;\">\n        <strong style=\"color:#ffffff;\">Expert guidance on SEBI compliance and custodian regulations<\/strong>\n      <\/li>\n      <li style=\"color:#ffffff;\">\n        <strong style=\"color:#ffffff;\">End-to-end support for regulatory filings and adherence<\/strong>\n      <\/li>\n    <\/ul>\n\n    <a href=\"https:\/\/enterslice.com\/consultation?sid=L21SeEdzNEpobVZQdHFIQkF3SDFOQT09\" target=\"_blank\" style=\"\n       display:inline-block;\n       padding:14px 28px;\n       background-color:#ffffff;\n       color:#0b5ed7;\n       text-decoration:none;\n       font-size:16px;\n       font-weight:600;\n       border-radius:6px;\" rel=\"noopener\">\n       Book a Free Consultation\n    <\/a>\n\n  <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Segregation of Custodian Activities through Strategic Business Units (SBUs)&nbsp;<\/h2>\n\n\n\n<p>The SEBI must&nbsp;operate&nbsp;different financial services separately in the new guidelines. Especially custodians who are not banks will have to keep their SEBI-regulated services and financial services outside SEBI, separate.&nbsp;<\/p>\n\n\n\n<p>They will have to create separate units called Strategic Business Units (SBUs). Each service will be&nbsp;operated&nbsp;within a separate structure, and regulatory transparency will be&nbsp;maintained&nbsp;through this.&nbsp;<\/p>\n\n\n\n<p>Several important conditions in this system-&nbsp;&nbsp;<\/p>\n\n\n\n<ul>\n<li>Separate accounts will have to be&nbsp;maintained&nbsp;for each unit.&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>All transactions and financial activities will have to be conducted on an arm-length <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a>.&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Custodians will have to meet their net worth conditions separately.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Also, if a custodian offers services that are not regulated by SEBI, then it will have to be clearly&nbsp;disclosed&nbsp;to the clients. A written acknowledgement should also be taken from the clients that SEBI will not resolve any complaints&nbsp;regarding&nbsp;such services.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Resource Sharing with Conflict-of-Interest Safeguards&nbsp;<\/h2>\n\n\n\n<p>SEBI has provided facilities to custodians in some areas. They can share human resources, technology, and infrastructure between different financial services. This reduces the operational costs of the institutions and increases the efficiency of work.&nbsp;<\/p>\n\n\n\n<p>However, some important safeguards should be in place while using this facility. For example, Chinese walls or a restricted flow of information should be ensured between separate teams. In addition, access to information will be given on a &ldquo;Need-to-Know&rdquo; basis so that no one can see sensitive information unnecessarily.&nbsp;<\/p>\n\n\n\n<p>These guidelines have been prepared with SEBI&rsquo;s circular. This aims to simplify operations and prevent misuse of investor information.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">SEBI Custodian Guidelines 2026:&nbsp;Outsourcing Rules for Custodian Activities&nbsp;<\/h2>\n\n\n\n<p>Custodian institutions often outsource some of their work to other organizations. SEBI has laid down clear rules in this regard.&nbsp;<\/p>\n\n\n\n<p>According to the new rules, custodians will be able to outsource only non-core activities. Administrative or support-related work can be done through other organizations.&nbsp;However, core custodian services or important compliance-related work cannot be outsourced.&nbsp;<\/p>\n\n\n\n<p>The Custodians and DDPs Standards Setting Forum (CDSSF) will divide various activities into core and non-core categories to bring clarity to this issue.&nbsp;<\/p>\n\n\n\n<p>These rules aim to&nbsp;maintain&nbsp;control over the core work of custodian institutions and increase their work efficiency and operational convenience.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Relaxation in Vault Rules&nbsp;<\/h2>\n\n\n\n<p>Earlier, it was mandatory for custodian institutions to maintain a secure vault for storing physical&nbsp;security.&nbsp;But SEBI has made some changes to this rule in the new guidelines.&nbsp;&nbsp;<\/p>\n\n\n\n<p>If a custodian does not keep any physical securities, then it is not necessary to&nbsp;maintain&nbsp;a separate vault for them. This will reduce costs and make it easier for many institutions to work.&nbsp;<\/p>\n\n\n\n<p>However, if a custodian stores physical securities, then they must use a secure vault or equivalent secure storage.&nbsp;<\/p>\n\n\n\n<p>Also, information&nbsp;regarding&nbsp;the size and security of the vault will have to be&nbsp;submitted&nbsp;in the form of a quarterly report. Any other secure storage system recognized in the industry can also be used with the client&rsquo;s consent.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Strong Governance Framework for Custodians&nbsp;&nbsp;<\/h2>\n\n\n\n<p>In the new guidelines, SEBI has emphasized creating a strong corporate governance framework for custodian institutions. It will be possible to manage the institutions in a more transparent, accountable, and secure manner.&nbsp;<\/p>\n\n\n\n<p>According to these rules, custodians will have to form some important committees at the board level.&nbsp;<strong>Such as:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Audit Committee&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Nomination &amp; Remuneration Committee&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Risk Management Committee&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The key responsibility of these committees will be to regularly&nbsp;monitor&nbsp;the activities of the institution and&nbsp;identify&nbsp;potential risks or problems in advance.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The key responsibilities are:&nbsp;<\/h3>\n\n\n\n<ul>\n<li>Monitoring operational risks&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Reviewing any incidents or weaknesses&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Monitoring the issues of protecting the interests of investors&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Monitoring the financial condition of the institution&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Also, the chief financial officer (CFO) of the institution will have to&nbsp;submit&nbsp;various information to the board or audit committee regularly. For example:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Financial condition of the institution&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>related-party transactions&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>internal financial controls&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>regulatory compliance&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>However, custodians who are part of the bank or a subsidiary of the bank can rely on the existing group-level governance structure of the bank.&nbsp;<\/p>\n\n\n\n<div style=\"margin:30px 0; padding:30px; background-color:#0b5ed7; border-radius:8px;\"> \n  <div style=\"max-width:900px; margin:0 auto; color:#ffffff;\">\n\n    <h3 style=\"color:#ffffff; font-size:22px; font-weight:600; margin-bottom:12px;\">\n      Ensure Compliance with SEBI Custodian Guidelines 2026\n    <\/h3>\n\n    <p style=\"color:#ffffff; font-size:16px; margin-bottom:16px;\">\n      Get expert assistance from <strong style=\"color:#ffffff;\">EnterSlice<\/strong> to understand and comply with \n      <strong style=\"color:#ffffff;\">SEBI Custodian Guidelines 2026, regulatory requirements, and compliance frameworks<\/strong> \n      to avoid penalties and ensure smooth operations.\n    <\/p>\n\n    <ul style=\"font-size:15px; margin-bottom:20px; padding-left:20px;\">\n      <li style=\"margin-bottom:8px; color:#ffffff;\">\n        <strong style=\"color:#ffffff;\">Expert guidance on SEBI compliance and custodian regulations<\/strong>\n      <\/li>\n      <li style=\"color:#ffffff;\">\n        <strong style=\"color:#ffffff;\">End-to-end support for regulatory filings and adherence<\/strong>\n      <\/li>\n    <\/ul>\n\n    <a href=\"https:\/\/enterslice.com\/consultation?sid=MG9Pb0xVaitKUU1saTk3ZVRFelMvdz09\" target=\"_blank\" style=\"\n       display:inline-block;\n       padding:14px 28px;\n       background-color:#ffffff;\n       color:#0b5ed7;\n       text-decoration:none;\n       font-size:16px;\n       font-weight:600;\n       border-radius:6px;\" rel=\"noopener\">\n       Book a Free Consultation\n    <\/a>\n\n  <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Rules Related to Risk Management and Operational Security&nbsp;<\/h2>\n\n\n\n<p>SEBI has given special importance to creating a strong risk management framework for custodians. Because a huge volume of transactions is done in the securities market every day, and even a small mistake can create big risks.&nbsp;<\/p>\n\n\n\n<p>So, custodians must create a written and clear risk management policy.&nbsp;This policy should have a plan to deal with various types of risks.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">These risks include:&nbsp;<\/h3>\n\n\n\n<ul>\n<li>Operational risk &ndash; Risks that may arise during daily operations&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Legal risk &ndash; Potential for legal issues or violations&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Data protection risk &ndash; Security of investor information&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Misuse of client information &ndash; Misuse of client information&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Some&nbsp;additional&nbsp;rules must also be followed:&nbsp;<\/h2>\n\n\n\n<ul>\n<li>In case of suspicious transactions, a Suspicious Transaction Report (STR) must be&nbsp;submitted&nbsp;to the Financial Intelligence Unit (FIU)&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>An automated compliance monitoring system must be used&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>A senior risk management officer must be appointed for risk management&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Another important rule is that the custodians&rsquo; technical systems must be designed so they can handle at least 1.2 times the average transaction load of the previous year. This aims to increase the service capacity with the rapidly growing capital market in India.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Business Continuity Plan (BCP) and Disaster Recovery Framework&nbsp;<\/h2>\n\n\n\n<p>SEBI has made it mandatory for custodians to have a Business Continuity Plan (BCP). It will be possible to keep the service running even&nbsp;in the event of&nbsp;any technical problem, natural disaster, or other emergency.&nbsp;<\/p>\n\n\n\n<p>As part of this plan, custodians will have to create a Disaster Recovery Site (DRS). In addition, DR drills will have to be conducted regularly, and the performance of the system will have to be&nbsp;monitored.&nbsp;<\/p>\n\n\n\n<p>Another important thing is to regularly&nbsp;sync&nbsp;data between the Primary Data Centre (PDC) and the Disaster Recovery Site (DRS).&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Disaster Recovery Infrastructure Rules&nbsp;<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Requirement<\/strong>&nbsp;<\/td><td><strong>Details<\/strong>&nbsp;<\/td><\/tr><tr><td>Geographic separation&nbsp;<\/td><td>Preferably&nbsp;located&nbsp;in different seismic zones&nbsp;<\/td><\/tr><tr><td>Minimum distance&nbsp;<\/td><td>At least 250 km between two data centers&nbsp;<\/td><\/tr><tr><td>Annual DR drill&nbsp;<\/td><td>Mandatory once every year&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>According to these rules, BCP should be implemented quickly. However, the deadline for completing full DR infrastructure compliance has been given till 23 March 2029.&nbsp;<\/p>\n\n\n\n<p>This system keeps investors&rsquo; assets safe in the event of a disaster or major technical problem.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Orderly Wind-Down Framework for Custodians&nbsp;<\/h2>\n\n\n\n<p>SEBI has directed the new guidelines to create an orderly wind-down framework for custodian institutions. The process should be completed in an orderly manner when the institution wants to close its business or is forced to close.&nbsp;<\/p>\n\n\n\n<p>This framework should ensure several things:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Easy transfer of clients to another custodian&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Full protection of investors&rsquo; money and securities&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Proper prior notice to clients&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>No major disruption in the market&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>If a custodian is closed due to financial problems or regulatory action, the entire process will be managed under the supervision of SEBI. The deadline for implementing this wind-down framework is&nbsp;23rd September&nbsp;2026.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Reduction in Reporting Burden&nbsp;<\/h2>\n\n\n\n<p>SEBI has&nbsp;made&nbsp;some repetitive reporting obligations in the new guidelines to simplify the compliance process. Earlier, custodians had to&nbsp;submit&nbsp;many types of data separately that were already available from other sources.&nbsp;&nbsp;<\/p>\n\n\n\n<p>The administrative burden will be reduced by&nbsp;eliminating&nbsp;such unnecessary reports. So, it will save time and&nbsp;money&nbsp;for custodians. Since this information is already stored with NSDL and CDSL, there is no need to&nbsp;submit&nbsp;separate reports. This will make the entire reporting process more efficient and easier.&nbsp;<\/p>\n\n\n\n<p>Some of the discontinued reports are:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Fortnightly FPI AUC report&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Category-wise AUC data&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Country-wise AUC data&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Monthly&nbsp;custodians&nbsp;change report&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The reports can be&nbsp;discontinued&nbsp;because the information is already stored with NSDL and CDSL, or there is no need to&nbsp;submit&nbsp;the same information repeatedly.&nbsp;&nbsp;<\/p>\n\n\n\n<p>So, the compliance costs will be reduced, administrative work will be simplified, and the reporting process will be more efficient.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Impact of the New SEBI Custodian Guidelines&nbsp;2026&nbsp;<\/h2>\n\n\n\n<p>SEBI&rsquo;s new custodian guidelines&nbsp;2026&nbsp;are&nbsp;an important step&nbsp;towards enhancing transparency, accountability, and operational stability in the Indian capital markets. These rules ensure a strong governance framework and improved risk management for custodians. This will enable investors to invest in a safer environment. While some institutions may have to develop&nbsp;new technology&nbsp;or infrastructure, compliance costs may increase slightly. These rules will enhance market confidence and strengthen the Indian capital markets&nbsp;in the long run.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Positive Impact:&nbsp;<\/h3>\n\n\n\n<ul>\n<li>Investor protection will be strengthened&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Corporate governance standards will improve&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Operational stability will increase&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Transparency will increase&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Short-term Challenges:&nbsp;<\/h3>\n\n\n\n<ul>\n<li>Increasing compliance costs&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Technology and infrastructure upgrades&nbsp;required&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Governance framework restructure&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Long-term Outcomes:&nbsp;<\/h3>\n\n\n\n<ul>\n<li>Increasing investor confidence&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Strengthening market credibility&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How Can&nbsp;Enterslice&nbsp;Help with Custodian Compliance?&nbsp;<\/h2>\n\n\n\n<p>Complying with&nbsp;the new SEBI guidelines can be complex for custodian institutions.&nbsp;Enterslice&nbsp;provides professional support to institutions throughout the entire compliance process. Their team of experts&nbsp;assists&nbsp;at every step, from SEBI registration to creating a risk management framework, legal documentation, and regulatory reporting. So, institutions can easily conduct business in compliance&nbsp;and&nbsp;avoid potential legal issues.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Enterslice&nbsp;helps in the following areas:&nbsp;<\/h2>\n\n\n\n<ul>\n<li>SEBI Custodian Registration&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Compliance advisory&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Governance structure setup&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Risk management framework development&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Regulatory reporting support&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Legal documentation and audit preparation&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">To Wrap Up&nbsp;<\/h2>\n\n\n\n<p>SEBI&rsquo;s new guidelines&nbsp;for&nbsp;2026 are&nbsp;an important step&nbsp;towards strengthening governance, transparency, and operational stability in the custodian industry. These reforms allow custodians&nbsp;to expand their services responsibly. This will help increase confidence and stability in the Indian capital markets&nbsp;in the long run.&nbsp;<\/p>\n\n\n\n<p>If your institution wants to register as a custodian or&nbsp;comply with&nbsp;the new SEBI regulations,&nbsp;<a href=\"https:\/\/enterslice.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Enterslice&rsquo;s<\/strong><\/a>&nbsp;expert team can provide you with complete regulatory&nbsp;assistance, documentation support, and compliance advice so you can easily meet all legal requirements.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FAQs Related To SEBI Custodian Guidelines 2026<\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3>What is a Custodian in the Securities Market?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">A custodian is a financial institution that safely stores investors' shares, bonds, or other securities in the securities market. So, it acts as a custodian of investors' assets. It&nbsp;maintains&nbsp;records of transactions,&nbsp;assists&nbsp;in the share transfer process, and handles corporate actions such as dividends or bonus shares. Their assets are safe and are being managed properly.<\/p><\/li><li style=\"list-style-type: none\"><h3>What are the new SEBI guidelines for custodians?<\/h3><p class=\"saswp-faq-answer-text\">SEBI has introduced some new rules for custodian institutions. These rules aim to bring more transparency and security to the market. The new guidelines state that custodian institutions must have strong governance mechanisms. They must also follow clear rules for risk management, data protection, and service management. SEBI wants investors' assets to be better protected and confidence in the market to increase.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>What are Strategic Business Units (SBUs) in Custodian operations?<\/h3><p class=\"saswp-faq-answer-text\">SBUs are separate departments of an organization where specific types of work are done. Creating SBUs in custodian services allows for a clear division of work for each department.&nbsp;For example, one department will handle transactions, and another department will handle risk management.&nbsp;This reduces confusion, and responsibilities are clear. This manages the organization's work more securely.<\/p><\/li><li style=\"list-style-type: none\"><h3>Can custodians outsource their services?<\/h3><p class=\"saswp-faq-answer-text\">Yes, custodians can outsource certain tasks to other service providers. The key responsibility lies with the custodian according to SEBI rules.&nbsp;Its liability will remain with the custodian if the work is done by another organization.&nbsp;While outsourcing, the organization must ensure&nbsp;good quality&nbsp;of the service and that all regulatory rules are being followed.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>Do custodians have to keep a vault for storing securities?<\/h3><p class=\"saswp-faq-answer-text\">Custodians must&nbsp;maintain&nbsp;a safe storage system in some cases. Physical securities or important documents are to be stored. So,&nbsp;a secure&nbsp;vault or secure storage is used. There is a&nbsp;high-level security system. As a result, important documents or securities are protected from theft, damage, or unauthorized access.<\/p><\/li><li style=\"list-style-type: none\"><h3>What is the purpose of a Business Continuity Plan (BCP)?<\/h3><p class=\"saswp-faq-answer-text\">A BCP is a contingency plan.&nbsp;It is prepared for situations when an unexpected problem occurs.&nbsp;In the event of&nbsp;a natural disaster, technical problem, or cyberattack, it is planned how the organization will continue to&nbsp;operate.&nbsp;BCP is very important for custodian institutions.&nbsp;It reduces the risk of service interruption and protects the assets of investors.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>How can&nbsp;Enterslice&nbsp;help with SEBI Custodian Compliance?<\/h3><p class=\"saswp-faq-answer-text\">Enterslice&nbsp;helps institutions&nbsp;comply with&nbsp;SEBI's Custodian Rules. Our expert team guides them through the entire registration process. We also&nbsp;provide&nbsp;compliance advice, help prepare the necessary documents, and create risk management frameworks. This allows organizations to&nbsp;comply with&nbsp;regulations easily and&nbsp;operate&nbsp;their services in a safe and orderly manner.<\/p><\/li><\/ol><\/div>\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Custodians play a crucial role in the Indian securities market.&nbsp;They essentially safeguard the securities and financial assets of investors and manage them in compliance with various regulatory norms.&nbsp;Large institutional investors, especially&nbsp;foreign portfolio investors&nbsp;(FPIs), mutual funds,&nbsp;alternative investment funds&nbsp;(AIFs), and portfolio managers, rely on custodians to&nbsp;properly manage&nbsp;their investments.&nbsp; The Indian capital market is growing rapidly and is [&hellip;]<\/p>\n","protected":false},"author":61,"featured_media":90353,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2828,1599],"tags":[377,2181],"acf":{"service_id":"996"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEBI Custodian Compliance Updates &amp; Requirements 2026<\/title>\n<meta name=\"description\" content=\"Learn key updates in SEBI custodian compliance, requirements, and regulatory changes impacting custodial services and market participants in India.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/sebi-custodian-compliance-updates-requirements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEBI Custodian Compliance Updates &amp; Requirements 2026\" \/>\n<meta property=\"og:description\" content=\"Learn key updates in SEBI custodian compliance, requirements, and regulatory changes impacting custodial services and market participants in India.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/sebi-custodian-compliance-updates-requirements\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2026-03-17T10:25:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-17T10:27:34+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2026\/03\/SEBI-Custodian-Guidelines-2026.webp\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Monisha Chaudhary","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2022\/04\/Monisha-Chaudhary-150x150-1.jpg","authorDescription":"Monisha Chaudhary is a distinguished partner at Enterslice with 10+ years of relevant industry experience in company incorporation, fintech, regulatory compliance, insurtech consulting, and M&amp;A. Her creative thought process pushes her to draft excellent writeups. Besides effortlessly tackling business challenges, she invests her free time in writing blogs and articles.","postViews":40,"readingTime":8,"nextPost":{"id":90370,"slug":"singapore-entrepass-vs-techpass-vs-employment-pass-guide"},"prevPost":{"id":90335,"slug":"irdai-ind-as-plan-for-insurers-policyholder-insights"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2026\/03\/SEBI-Custodian-Guidelines-2026.webp","postTerms":"SEBI","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90352"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=90352"}],"version-history":[{"count":3,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90352\/revisions"}],"predecessor-version":[{"id":90356,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90352\/revisions\/90356"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/90353"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=90352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=90352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=90352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}