SEBI Replaces Annual Custodian Fee Regime With Monthly Payments, Effective October 1 2026

The Securities and Exchange Board of India (SEBI) on 3 July notified the SEBI (Custodian) (Amendment) Regulations, 2026, replacing the existing annual fee mechanism for custodians with a monthly fee payment system. The amendments will come into force on 1 October 2026.

Under the amended regulations, custodians will pay Rs. 85,000 per month or 0.0000416 per cent of their assets under custody, whichever is higher, instead of the existing annual fee of Rs. 10 lakh or 0.0005 per cent of assets under custody.

The amended regulations require custodians to pay the monthly fee within 15 days from the end of each month.

Custodians registered on or after 1 October 2026 must pay a proportionate monthly fee for the month in which registration is granted, followed by the full monthly fee from the subsequent month. For custodians registered before 1 October 2026, SEBI has provided a transition mechanism. They will pay a proportionate annual fee up to 30 September 2026 and shift to monthly fee payments from 1 October 2026.

Any annual fee already paid for the period after 1 October 2026 will be adjusted against future monthly fee payments.