SEBI on Wednesday presented proposals for changes in the regulatory framework for custodians. This also includes a proposal to double the minimum limit of net worth for them. According to SEBI, in view of the increasing business of custodians, there is a proposal to tighten their rules. Along with this, SEBI has proposed changes in the rules of angel funds in such a way that more and more investors can be attracted towards the funds.

What is the proposal for change for custodians?

Custodians keep assets safe and maintain security accounts for their clients such as foreign portfolio investors, mutual funds, portfolio managers. Currently, there are 17 registered custodians in the country. The assets under custody of these custodians have increased from Rs 2.7 lakh crore in 2002 to Rs 278 lakh crore in September 2024. In view of the rapid increase in the functioning of custodians, SEBI has proposed to bring their rules in line with the rules of stock brokers, under which it is proposed to increase the minimum limit of net worth of the custodian from Rs 50 crore to Rs 100 crore. At the same time, there is a proposal to remove the rule of keeping a vault for those custodians who do not hold physical assets. SEBI has sought suggestions on these proposals regarding custodians by November 28. What are the proposals regarding angel funds? Along with this, SEBI has issued a consultation paper on November 13 regarding changes in the framework for angel funds. SEBI's proposals include increasing the maximum limit of investment made by each angel fund from Rs 10 crore to Rs 25 crore and reducing the minimum investment limit from Rs 25 lakh to Rs 10 lakh. The purpose of this proposal is to attract more and more investors towards this so that start-ups can get more funds. Apart from this, proposals have also been made to change the rules regarding the number of investors in each fund, the maximum investment limit in any one venture.