JSA Corporate InVision | May 2026 Edition

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SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

‘Significant Indices’ under SEBI (Index Providers) Regulations, 2024

SEBI, vide circular dated May 5, 2026, has specified that a benchmark or index (including index of indices) based on listed securities will be considered as ‘Significant Indices’, if the daily average cumulative Asset Under Management (“AUM”) tracking the benchmark or index across schemes of mutual fund(s) exceeds INR 20,000 crore (Indian Rupees twenty thousand crore) for each of the past 6 (six) months, ending on June 30 and December 31 each year.

Further, an index specified by SEBI in the list of ‘Significant Indices’ will continue to remain in the list of ‘Significant Indices’ unless the value of cumulative AUM tracking or benchmarking of such index does not meet the specified threshold for a continuous period of 3 (three) years (i.e., 6 (six) consecutive half-yearly reviews). Accordingly, the list of ‘Significant Indices’ is specified for the period from July 1, 2025, to December 31, 2025.

Index Providers providing any of the ‘Significant Indices’ must submit an application to SEBI for registration as an Index Provider within a period of 6 (six) months from May 5, 2026. This requirement will not apply to Index Providers if all the ‘Significant Indices’ provided are indices notified by the Reserve Bank of India (“RBI”) as ‘Significant Indices’ or classified by RBI as ‘Authorised Benchmarks’.

If an entity registered with SEBI in any other capacity also provides ‘Significant Indices’ by undertaking Index Provider activities departmentally, it will be required to form a separate legal entity to carry out the activities of an Index Provider within a period of 2 (two) years from the date of this circular.

Recourse to grievance redressal under the SEBI (Index Provider) Regulations, 2024 will apply to ‘Significant Indices’ provided by Index Providers registered with SEBI.

 

Advisory on emerging advanced artificial intelligence tools for vulnerability detection (like Mythos)

Due to the interconnectedness and interdependency of market participants in the securities market ecosystem, a periodic coordinated approach for vulnerability management, information sharing and monitoring/assessment is required to prevent a cascading impact. In view of the above, SEBI, vide circular dated May 5, 2026, has constituted a task force, namely cyber-suraksha.ai, comprising representatives from market infrastructure institutions, qualified registrars and transfer agents, all qualified regulated entities, and other related stakeholders with the mandate to:

• closely examine the cybersecurity risks posed by artificial intelligence based models and devise a uniform mitigation strategy against the risks posed by such models;
• facilitate sharing of threat intelligence, best practices on vulnerability management, use cases and playbooks to respond to the threat vector;
• report on a priority basis, cyber incidents or malicious activities, significant attack vectors, information on vulnerabilities that may be relevant to strengthen the cyber security posture of the securities markets; and
• review the cyber security posture of the third-party application service providers including empaneled vendors.

The task force convened a meeting to review potential risks posed by AI platforms and to discuss mitigating measures and issued an advisory that should be read in conjunction with applicable SEBI circulars (including but not limited to the Cybersecurity and Cyber Resilience framework).

 

Status of special purpose vehicles post conclusion or termination of concession agreement

SEBI, vide circular dated May 15, 2026, has clarified the status and treatment of Special Purpose Vehicles (“SPVs”) after the conclusion or termination of concession agreements in infrastructure projects held by Infrastructure Investment Trusts (“InvITs”). The circular prescribes the conditions and timelines for exiting such investments or acquiring new infrastructure projects, while also mandating detailed disclosures to ensure transparency, investor protection, and proper regulatory oversight. The investment manager must:

• either exit investment in such SPV by way of sale / liquidation / winding-up / merger of such SPV, or acquire any new infrastructure project in such SPV, within 1 (one) year from completion/termination of concession agreement or such other agreement of similar nature or conclusion of all pending claims/litigations/tax assessments and related appeals, or completion of defect liability period, whichever is later; and
• adequate disclosures must be made in the annual report of the InvIT, wherein the concession agreement or such other agreement of similar nature has ended/terminated that includes inter alia the following:
  • a detailed breakup of the value of investments (gross and net basis) in the SPV(s); and
  • additional disclosures pertaining to each SPV, including details of the project, assets and liabilities of the SPV, contingent liabilities as set out in the annual audited financial statements, debt repayment along with the repayment schedule, whether SPV has sufficient assets to meet its liabilities and if not, how such liabilities are planned to be met, exit strategy and timeline and other material details related to such SPV including details related to pending claims, litigations, assessment, statutory/contractual obligations, balance period of defect liability period.

 

SEBI widens the permissible end-use of fresh borrowings by highly leveraged InvITs

SEBI, vide circular dated May 15, 2026, has liberalised the permitted end-uses of borrowings by highly leveraged InvITs. In particular, such InvITs can now avail debt financing for the purposes of capital expenditure, major maintenance and limited refinancing. While the revised regime will enhance operational flexibility for InvITs and is expected to facilitate infrastructure financing, it also introduces the need for more scrutiny and granular compliance tracking for potential lenders.

For a detailed analysis, please refer to the JSA Prism of May 19, 2026.

 

Modified norms for nomination in demat accounts and mutual fund folios

To simplify investor onboarding, ease the nomination process, and reduce the creation of unclaimed assets, SEBI, vide circular dated May 29, 2026, has revised the norms for dematerialised accounts and mutual fund folios. Some of the key aspects are as follows:

• nomination is mandatory for all newly opened single-holder accounts and folios unless the investor formally chooses to opt out, while nomination remains optional for jointly held accounts and folios. Further, the consent of all the joint holders is essential for providing or changing nominee regardless of mode of operations;
• regulated entities will provide nomination form to the investors according to the prescribed format;
• investors may nominate up to 3 (three) nominees. In case of multiple nominees, upon the demise of the investor, the nominees may either continue in the same account/folio or open a separate account/folio for their respective holdings. Investors will submit or modify nominations either online or offline, and provide basic nominee details as mandatory information, with most other details remaining optional;
• investors can provide, change or cancel nominations any number of times; and
• the regulated entities are obligated to:
  • either print the name of the nominee(s) or provide information whether or not nomination has been made by the investor in the periodic statement of account/ holding statement furnished to the investor; and
  • send bi-annual messages via SMS or email/pop-up message to investors guiding them to provide nomination for existing and newly opened accounts/folios, without nomination (including opt-outs).

These provisions will come into effect from September 1, 2026.

 

RESERVE BANK OF INDIA (RBI)

Foreign Exchange Management (Authorised Persons) Regulations, 2026

To govern the authorisation framework for entities dealing in foreign exchange, RBI, vide notification no. FEMA 401/2026-RBI dated April 30, 2026, has issued the Foreign Exchange Management (Authorised Persons) Regulations, 2026 (“Regulations”). Some of the key features of the Regulations are as follows:

• It is mandated that no person will act as an authorised person without obtaining an authorisation from RBI, and persons seeking such authorisation may apply to RBI through the PRAVAAH portal (https://pravaah.rbi.org.in);
• Application for fresh authorisation will be considered under 3 (three) categories namely – Authorised Dealer (“AD”) Category-I, AD Category-II and AD Category-III. While licensed banks may apply for registration as AD Category-I, licensed banks or non-banking financial companies registered with RBI may apply for registration as AD Category-II and AD Category-III applicants must be entities: (a) required to deal in foreign exchange incidental to their activities, or (b) which intend to offer innovative products/services that involve dealing in foreign exchange.
• The eligibility conditions for an applicant seeking authorisation as an authorised person are prescribed and include inter alia the following:
  • the applicant must be a company incorporated under the Companies Act, 2013 and its Memorandum of Association must include the foreign exchange related activity for which the authorisation is being sought;
  • the applicant must fulfil the prescribed eligibility conditions applicable to the relevant AD category at the time of application including minimum positive net worth requirements; and
  • the applicant, its promoters, directors and key managerial personnel must be ‘fit and proper’ in respect of the prescribed parameters.
• An entity conducting activities as an authorised person as on the date of coming into force of the Regulations may continue to act in accordance with their existing authorisation until their expiry and may apply for renewal of its existing authorisation subject to fulfillment of the prescribed minimum net worth requirements;
• An applicant whose application for authorisation has been rejected or an authorised person whose authorisation has been revoked by RBI may appeal to the Executive Director in charge of the Foreign Exchange Department, Central Office, RBI, Mumbai within 45 (forty-five) calendar days from the date of receipt of the letter intimating such rejection or revocation. The Appellate Authority may, after affording an opportunity of being heard, pass a reasoned order within 60 (sixty) calendar days from the date of receipt of the appeal.
• The Regulations further lay down the considerations for processing applications, conditions of authorisation, scope of permitted activities for each of the AD categories, as well as the framework for appointment of Forex Correspondents by AD Categories-I and II conducting money changing business under a principal – agent model.
• The Regulations also govern the grant of authorisations as full-fledged money chargers (“FFMC”) and specify that fresh applications as FFMC would not be considered by the RBI, except those under process as of the date of coming into force of the Regulations.

 

MINISTRY OF CORPORATE AFFAIRS (MCA)

Corporate Social Responsibility implementation through Zero Coupon Zero Principal instrument

MCA, through 2 (two) notifications dated May 27, 2026, has permitted companies to undertake Corporate Social Responsibility (“CSR”) expenditure through zero coupon zero principal instruments issued by eligible non-profit organisations listed on the social stock exchange. This introduces a regulated and transparent mechanism for CSR deployment, subject to prescribed caps, timelines, and reporting requirements. The framework expands CSR avenues while strengthening governance, accountability, and impact visibility.

For a detailed analysis, please refer to the JSA Prism of June 11, 2026.

 

Enforcement of provisions under the Insolvency and Bankruptcy Code (Amendment) Act, 2026

MCA, vide notification no. S.O. 2625(E) dated May 25, 2026, has enforced several provisions of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (“IBC Amendment”) with effect from May 26, 2026. These include a wide range of amendments proposed under Sections 2 to 6, 8 to 33, 35 to 39, 41, 43 to 44, 46, 48 to 59, 61 to 66, 68, 72 and specific clauses of Sections 34, 69, and 70 of the IBC Amendment which have been brought into effect. The enforced provisions pertain inter alia to the following:

• initiation of the Corporate Insolvency Resolution Process (“CIRP”) by a financial creditor, operational creditor or corporate applicant, admissions and withdrawal of applications for initiating CIRP and initiation of liquidation and the restoration of CIRP;
• appointment of the Interim Resolution Professional (“IRP”), duties of the IRP and resolution professional and powers and duties of the liquidator;
• the omission of certain provisions concerning the consolidation and verification of claims;
• penalties and punishments for the initiation of frivolous or vexatious proceedings, contravention of the moratorium or an approved resolution plan and non-disclosure of a dispute or payment of debt by an operational creditor; and
• provisions concerning bankruptcy of individuals and partnership firms including those concerning transactions defrauding creditors.

 

MINISTRY OF FINANCE (MoF)

Foreign Direct Investment: Government specifies the criteria for identifying ‘beneficial ownership’ of foreign investment into India

On May 1, 2026, the Government of India amended the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 to specify the criteria for identifying the ‘beneficial ownership’ of foreign direct investment flowing into India. The Department for Promotion of Industry and Internal Trade has also issued a revised standard operating procedure for proposals where prior approval of the Government of India is required. This prism provides a brief overview of the key changes and examines their implications for mergers and acquisition transactions that businesses should closely track as the revised framework comes into effect.

For a detailed analysis, please refer to the JSA Prism of June 23, 2026.

 

Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026

Pursuant to the Press Note 1 (2026), MoF, vide notification no. S.O. 2186(E) dated May 2, 2026, has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“NDI Rules”). Some of the key amendments are as follows:

• serial number F.8 of Schedule I to the NDI Rules (concerning foreign investment in the insurance sector) has been revised. In line with Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, the amendment permits up to 100% investment by foreign investors (including portfolio investors) under the automatic route in the paid-up equity capital of Indian insurance companies, subject to approval and verification by the Insurance Regulatory and Development Authority of India (“IRDAI”);
• the sectoral conditions applicable to an Indian insurance company with foreign investment have been aligned with the revised Indian Insurance Companies (Foreign Investment) Rules, 2015 (“FI Rules”) which require Indian insurance companies to have at least 1 (one) among the chairperson of the board, managing director or chief executive officer to be resident Indian citizens. Accordingly, the sectoral condition regarding a majority of directors and key managerial personnel being resident Indian citizens has been omitted. Notably, recent amendments to the FI Rules have also further simplified the foreign investment regime by omitting certain other conditionalities applicable to Indian insurance companies with foreign investment in excess of 49% (i.e., stipulations concerning independent director requirements and requirement to transfer profits to general reserves in case of dividend payouts in certain situations); and
• further, in line with recent amendments to the FI Rules, certain sectoral conditions applicable to an insurance intermediary (with majority foreign shareholding) relating to obtaining prior IRDAI permission for repatriating dividends, stipulations governing payments to foreign promoters or their associated entities and composition of board of directors and key management persons, have been omitted.

 

 

JSA UPDATES

The Supreme Court of India classifies Air Force Group Insurance Society as a ‘State’ under Article 12 of the Constitution of India

The Hon’ble Supreme Court of India (“Supreme Court”) reaffirmed the tests to be satisfied to qualify as ‘State’ under Article 12 of the Constitution of India (“Constitution”). It emphasised that the modern interpretation of Article 12 under the Constitution is not just limited to the test of ownership. At present, various factors come into play, viz. degree of governmental control (both administrative and financial), and the nature of activity being carried out. The Supreme Court also rejected the practice of entities whereby they availed tax benefits by claiming the status of ‘State’, however denied this status when it did not suit their purpose to evade their constitutional obligations.

For a detailed analysis, please refer to the JSA Prism of May 2, 2026.

 

Supreme Court holds that foreign judgments passed in summary jurisdiction are unenforceable in India if it fails the ‘conclusiveness’ test under Section 13 of the Code of Civil Procedure, 1908 

In a significant ruling, the Supreme Court has held that a foreign judgment passed in summary jurisdiction, despite the presence of triable issues, cannot be enforced in India since it fails to satisfy the requirements under Section 13 of the Code of Civil Procedure, 1908 (“CPC”).

This ruling has serious implications because it restricts the parameters for enforceability of foreign judgments. It clarifies that summary judgments which fail to meet the ‘conclusiveness’ test under Section 13 of the CPC will be rendered unenforceable in India.

As a result, the enforcement risk for foreign creditors seeking to execute foreign judgments in India by relying on summary or expedited procedures increases and hence such parties must rely on more robust litigation strategies abroad. This also prompts lenders and investors to revisit dispute resolution clauses in cross-border transactions involving Indian parties.

For a detailed analysis, please refer to the JSA Prism of May 2, 2026.

 

Supreme Court holds that an unsuccessful party in an arbitration is entitled to seek relief under Section 9 of the Arbitration and Conciliation Act, 1996 at the post award stage

The Supreme Court has laid down that Section 9 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) may be invoked by any party to the arbitration right until the judicial process has reached its culmination and that Section 9 of the Arbitration Act does not draw a distinction between a successful and an unsuccessful party. In doing so, the Supreme Court has answered a substantial question of law which has far-reaching consequences given that different High Courts had adopted differing views and had in fact, prevented award debtors from availing relief under Section 9 of the Arbitration Act. The judgment harmonises the provisions of Section 9 and Section 34 of the Arbitration Act and recognises the importance of interim relief to award debtors who may be able to successfully challenge an arbitral award.

For a detailed analysis, please refer to the JSA Prism of May 5, 2026.

 

Legal representatives of a deceased party can avail the statutory remedy under Section 34 of the Arbitration Act

The Supreme Court has recently held that legal representatives of a deceased party can avail the statutory remedy under Section 34 of the Arbitration Act to challenge an arbitral award and not seek recourse under Section 115 of the CPC or Article 227 of the Constitution. The Supreme Court clarified that a legal representative is permitted to challenge an arbitral award, as the scheme of the Arbitration Act envisages continuity of arbitral proceedings upon death of a party. Consequently, a legal representative cannot be compelled to discharge obligations under an arbitral award without being offered an opportunity to challenge the validity of award in accordance with law.

For a detailed analysis, please refer to the JSA Prism of May 5, 2026.

 

Supreme Court clarifies that an order appointing an arbitrator prior to the 2015 amendment operates as res judicata on the existence and validity of the arbitration agreement 

In a recent judgment, the Supreme Court clarified that an unchallenged order appointing an arbitrator under Section 11 of the Arbitration Act, passed under the pre-2015 regime, operates as res judicata on the existence and validity of the arbitration agreement and cannot be re-agitated at the Section 34 stage. The Supreme Court held that a party which accepts a Section 11 of the Arbitration Act order without appeal is precluded from subsequently contesting the foundational question of whether a valid arbitration agreement exists, whether before the arbitral tribunal or in challenge proceedings.

This decision has significant implications for clients, particularly those with pending or prospective Section 34 proceedings arising from pre-2015 arbitrations. It forecloses a commonly attempted avenue of challenge, contesting the validity of the arbitration agreement at the Section 34 stage where the Section 11 appointment order was accepted and not appealed.

For a detailed analysis, please refer to the JSA Prism of May 5, 2026.

 

Supreme Court holds that a letter of intent is not a concluded contract, and without a specific reference to arbitration clause in tender documents, does not give rise to an arbitration agreement under the Arbitration Act

The recent ruling of the Supreme Court is of considerable significance as it clarifies the legal interplay between letters of intent, concluded contracts, and arbitration agreements in the context of public procurement and infrastructure projects. The Supreme Court has firmly reaffirmed that a letter of intent issued in anticipation of a formal contract is merely a preliminary step and does not, by itself, crystallise into a binding agreement. Consequently, an arbitration clause embedded in tender documents cannot be invoked to establish a valid arbitration agreement under Section 7 of the Arbitration Act, unless the letter of intent expressly incorporates such clause by reference.

This ruling has direct practical implications for contractors operating in the infrastructure sector, particularly those engaged with government entities. These contractors, at times are constrained to approach courts by way of a Section 11 application for appointment of an arbitrator owing to the failure of the government party to participate in the arbitration process. In the absence of a clearly worded arbitration clause or a formally concluded contract, contractors may find it significantly difficult to invoke arbitration for dispute resolution. This highlights the need for greater caution and due diligence at the stage of entering into such commercial transactions.

For a detailed analysis, please refer to the JSA Prism of May 8, 2026.

 

Supreme Court explains the limits of supervisory jurisdiction under Article 227 of the Constitution and clarifies interpretation of guideline value in execution proceedings

In a decision on the scope of supervisory jurisdiction under Article 227 of the Constitution and the interpretation of guideline value, the Supreme Court, has reiterated that High Courts cannot act as appellate forums while exercising supervisory jurisdiction under Article 227 of the Constitution. The judgment provides clarity on the limited scope of interference in execution proceedings and guidance on the interpretation of guideline value notifications in determining compensation.

For a detailed analysis, please refer to the JSA Prism of May 12, 2026.

 

Supreme Court clarifies that formal entry in register of members not prerequisite for maintaining oppression and mismanagement proceedings

The Supreme Court ruled that formal entry in a company’s register of members is not an absolute prerequisite for seeking relief in oppression and mismanagement petitions. With this, the Supreme Court clarifies a pivotal question of maintainability of such petitions, in which the issue of who qualifies as a ‘member’ frequently arises as a threshold question. The decision of the Supreme Court departs from the established legal principle that ordinarily, entry of a person’s name in the register of members confers and evidences the status of membership in a company. It gives effect to the remedial purpose of oppression and mismanagement proceedings by holding that technical and procedural rigidity cannot defeat the equitable jurisdiction, and the objective of minority protection contemplated under such cases. At the same time, the decision ensures that statutory compliance is not unduly diluted. It clarifies that, although entry in the register of members ordinarily confers and evidences membership, this requirement may be relaxed only where a person is able to establish title to membership, i.e., a proprietary interest in the company’s shares, through other cogent evidence.

For a detailed analysis, please refer to the JSA Prism of May 20, 2026.

 

Compensation received for losses caused by defective aircraft engines is not ‘supply’ under the goods and services tax laws – Delhi High Court

The High Court of Delhi has granted interim relief to IndiGo, taking a prima facie view that the compensation received for business losses caused by defective aircraft engines is not ‘supply’ under the Central Goods and Services Tax Act, 2017. Rejecting the tax department’s INR 458,00,00,000 (Indian Rupees four hundred and fifty-eight crore) demand treating it as consideration for ‘tolerating an act’, the order is a welcome check on the tendency to tax genuine compensation or damages received as a taxable ‘supply’ and offers comfort to businesses receiving such breach related payments.

For a detailed analysis, please refer to the JSA Prism of May 29, 2026.

 

Government expands Aviation Turbine Fuel framework to include sustainable aviation fuel blends

The Ministry of Petroleum and Natural Gas, vide notification dated April 17, 2026, has notified the Aviation Turbine Fuel (“ATF”) (Regulation of Marketing) Amendment Order, 2026 (“Amendment Order”), under Section 3 of the Essential Commodities Act, 1955. The Amendment Order modifies the ATF (Regulation of Marketing) Order, 2001 (“ATF Control Order”) to expand the scope of what constitutes ATF. The Amendment Order has been issued in the backdrop of India’s efforts to promote Sustainable Aviation Fuel (“SAF”) and align with global decarbonisation initiatives in the aviation sector. By bringing SAF-blended ATF within the scope of the ATF Control Order, the Government seeks to enable operationalisation of SAF blending targets and provide regulatory clarity for marketing and sale of such fuels.

For a detailed analysis, please refer to the JSA Prism of May 8, 2026.

 

This Newsletter has been prepared by:

Ronak Ajmera Partner	Mary Julie John Partner	Udit Rao Senior Associate
Shilpa Shankar Associate	Archita Tiwari Associate

 

For more details, please contact km@jsalaw.com