28 November, 2015
MINISTRY OF CORPORATE AFFAIRS
Service rules applicable to members of National Company Law Tribunal and National Company Law Appellate Tribunal –
The draft versions of the National Company Law Tribunal (Salary, Allowances and other Terms and Conditions of Service of President and other Members) Rules, 2015 (NCLT Service Rules) applicable to the president and other members of the National Company Law Tribunal and the National Company Law Tribunal (Salary, Allowances and other Terms and Conditions of Service of President and other Members) Rules, 2015 applicable to the chairperson and other members of the National Company Law Appellate Tribunal (NCLAT Service Rules) are now available on the website of the Ministry of Company Affairs (MCA). The NCLT Service Rules and NCLAT Service Rules inter alia prescribe the pay scale, leave entitlement and facility for conveyance. These rules will become effective on their publication in the official gazette. |
Companies (Management and Administration) Amendment Rules, 2015 –
Rule 23 and Form MGT-7 (relating to filing of annual returns by a company) of the Companies (Management and Administration) Rules, 2014 have been amended pursuant to the Companies (Management and Administration) Amendment Rules, 2015 dated August 28, 2015. Now, a special notice required to be provided to a company shall be signed by members holding shares on which an aggregate amount of not less than Rs. 500,000 (USD 7,561 approx.) has been paid as against the existing limit of not more than Rs. 500,000 (USD 7,561 approx). Further, the draft version of the Companies (Management and Administration) Second Amendment Rules, 2015 has been placed on the website of MCA for comments from the public. A company is now required to provide its PAN under Form MGT-7 (form for filing annual returns). |
Companies (Accounts) Second Amendment Rules, 2015
The Companies (Accounts) Second Amendment Rules, 2015 (Accounts Amendment Rules) have amended the Companies (Accounts) Rules, 2015 (Accounts Rules). The Accounts Amendment Rules define 'Indian Accounting Standards' and provide the revised Form AOC-4 (Form for filing financial statements and other documents with the Registrar) and Form AOC-4 CFS (Form for filing consolidated financial statements and other documents with the Registrar).
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Companies (Filing of documents and forms in extensible business reporting language) Rules, 2015 –
The draft version of the Companies (Filing of documents and forms in extensible business reporting language) Rules, 2015 (Draft Rules) are now available on the website of MCA. The Draft Rules inter alia provide that company with paid up capital of at least Rs. 50 million (USD 760,683 approx.) or turnover of Rs. 1 billion (USD 15,213,650 approx.), listed companies and their subsidiaries shall file the financial statement with the Registrar of Companies in the Form AOC-4 XBRL provided therein. However, companies in banking, insurance, power and non-banking financial companies are exempt from filing Form AOC-4 XBRL. These Draft Rules will become effective on their publication in the official gazette. |
Companies (Acceptance of Deposit) Second Amendment Rules, 2015 –
The draft version of Companies (Acceptance of Deposit) Second Amendment Rules, 2015 has been placed on the website of MCA. Post the amendment coming into effect, the Companies (Acceptance of Deposit) Rules, 2014 shall not apply to money received from the relative of a director of the Company (subject to the furnishing of the prescribed declarations). These rules will become effective on their publication in the official gazette.
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RESERVE BANK OF India
Relaxation in branch authorisation –
Pursuant to the circulars dated September 19, 2013 and October 21, 2013, the Reserve Bank of India (RBI) had permitted the domestic scheduled commercial banks to open branches in Tier 1 and Tier 6 centres without the prior permission of the RBI. In order to provide greater operational freedom, the RBI has revised its instructions regarding merger, closure, shifting, and reporting requirements. Pursuant to its circular dated August 6, 2015, the RBI has permitted the banks to shift their metropolitan, urban and semi urban branches outside the state and their rural branch outside the block without prior approval of the RBI. The RBI has further allowed the banks to part shift their branches to a new location subject to the condition that such new location is within 1 (one) kilometre of the existing location. The RBI has also revised the format of annual reporting by the banks of any new branches opened in a particular year. Exposure norms limit for the standalone primary dealers –
Pursuant to a circular dated March 27, 2014, the RBI had prescribed the exposure norms limits for standalone primary dealers in corporate bonds. The circular dated August 6, 2015 increases the exposure limits for single borrower/counterparty from 25% (twenty five percent) to 50% (fifty percent) and group borrower from 40% (forty percent) to 65% (sixty five percent) of the latest audited net owned fund in respect of investments in in AAA rated corporate bonds. Conduct of Government Business by Agency Banks – Payment of Agency Commission –
The Master Circular on Conduct of Government Business by Agency Banks – Payment of Agency Commission prescribes the transactions eligible for agency commission. Pursuant to a circular dated August 13, 2015, the RBI has clarified that the following transactions will not be eligible for agency commission: (i) bank guarantees furnished by government contractors or suppliers through private sector banks, (ii) banking business of autonomous/statutory bodies, (iii) payments of capital nature such as capital contributions/ subsidies/ grants made by governments to cover losses incurred by autonomous/statutory bodies, and (iv) prefunded scheme implemented by the Central Government/ State Government without reference to RBI.
Foreign Direct Investment – Reporting under FDI Scheme on the e-Biz platform –
Pursuant to a circular dated August 21, 2015, the RBI has enabled the filing of Form FC-TRS through the e-Biz portal. The services will be operational from August 24, 2015. The e-Biz portal will allow the customers to login and download the Form FC-TRS, fill in the details and upload them using their digitally signed certificates. The Authorised Dealer Banks (AD Banks) will download the completed Form FC-TRS, verify the contents and call for additional information, if required. Thereafter, the AD Banks will upload the verified forms for further processing and allotment of 'Unique Identification Numbers' by the RBI. Currently, this option is available in addition to the existing manual reporting mechanism. Security and risk mitigation measures for card present and electronic payment transactions – Issuance of EMV Chip and PIN Cards –
Pursuant to a circular dated August 27, 2015, the RBI has extended the time for the banks to compulsorily issue new cards with EMV chip and PIN cards from September 1, 2015 to January 31, 2016 except cards issued under Prime Minister Jan Dhan Yojna or any other government scheme for which the due date shall be September 30, 2016. However, all cards for international usage should compulsorily be EMV chip and PIN cards. Cash Withdrawal at Point-of-Sale – Enhanced limit at Tier III to VI Centres –
Pursuant to a circular dated August 27, 2015, the RBI has enhanced the limit for cash withdrawal at point of sale in Tier III to VI centres from Rs. 1000 (USD 15 approx.) to Rs. 2000 (USD 30 approx.). The limits applicable in Tier I and II centres remain unchanged. Reporting requirement under Foreign Account Tax Compliance Act and Common Reporting Standards –
Pursuant to its circular dated August 28, 2015, the RBI has directed the financial institutions to comply with the reporting requirements related to 'reportable accounts' as prescribed under the Income Tax (11th Amendment) Rules, 2015. Post the registration as 'Reporting Financial Institution' on e-filing portal, the financial institutions can submit reports online by uploading Form 61B. The circular provides a list of issues that the financial institution needs to keep in mind while complying with such reporting requirements. Changes in the real time gross settlement time window –
Pursuant to notification dated August 20, 2015, the Central Government has declared the second and fourth saturday of every month as a public holiday [for banks] for the purposes of Section 25 of the Negotiable Instruments Act, 1881. Further to the declaration, the RBI's circular dated September 1, 2015 has modified the window for real time gross settlement (RTGS) to exclude the second and fourth Saturday. However, this window will be available for the full day on a working Saturday. Exchange Earners' Foreign Currency Account- Discontinuation of statement –
The RBI's circular dated February 14, 2003 required AD Banks to report transactions relating to exchange earners' foreign currency account to the RBI on a quarterly basis. The RBI's circular dated September 10, 2015 discontinues the requirement for submission of such statement by AD Banks. Guidelines for grant of authorisation for additional branches of full fledged money changers and Authorised Dealer Category II Banks –
Pursuant to the circular dated September 10, 2015, the RBI has simplified the guidelines for grant of authorisation for additional branches of full fledged money changers and Authorised Dealer Category II. Now the applicant will be required to submit inter alia (i) only a certificate from the proprietor/partner/director/CFO on the net owned funds of the applicant, and (ii) a declaration along with application for each new branch that no proceedings are pending before the Directorate of Enforcement. The revised guidelines exempt the applicant from submitting confidential report from their banker. Trade credit policy – Rupee denominated trade credit –
Pursuant to the circular dated September 10, 2015, the RBI has permitted resident importers to raise trade credits from overseas lenders under a loan agreement subject to compliance with the framework prescribed under this circular. The framework inter alia provides that (i) a trade credit can be raised for all items permissible under the extant Foreign Trade Policy other than gold, and (ii) the time period for which the trade credit can be availed for both capital (upto five year)/non-capital goods (upto one year). Guidelines on compensation of chief executive officer/whole time directors –
Pursuant to the circular dated September 16, 2015, the RBI has permitted the banks to grant loans and advances to their chief executive officer/whole time director subject to the following conditions: (i) such loans and advances are approved by the board of directors as a part of compensation/remuneration policy, (ii) interest rates charged on such loans and advances should not be lower than the rate charged by banks on loans to other employees, and (iii) such loans and advances should be permitted under section 20 of the Banking Regulation Act, 1949. Review of equity investment by banks –
Pursuant to the RBI's circular dated September 16, 2015, banks having cash to risk asset ratio of at least 10% (ten percent) are now exempted from seeking prior approval from RBI for equity investments. This exemption is subject to the condition that the bank holds less than 10% (ten percent) individually and less than 20% (twenty percent) through its subsidiaries/joint ventures of the paid up share capital of the investee company. Guidelines on partial credit enhancement to corporate bonds by banks –
Pursuant to the circular dated September 24, 2015, the RBI has issued the guidelines on partial credit enhancement (PCE) of corporate bonds by banks. The guidelines allow the banks to offer PCE (in aggregate) up to 20% (twenty percent) of the bond issue size in the form of a non-funded irrevocable contingent line of credit. Processing and settlement of import and export related payments facilitated by online payment gateway service providers –
Pursuant to the circular dated September 24, 2015, the RBI has permitted AD Banks to make payments for import of goods and software of value not exceeding USD 2,000 (United States Dollar Two Thousand) by entering into arrangements with online payment gateway service providers. The conditions applicable for repatriation of export related remittances remain unchanged. Opening of foreign currency accounts in India by ship-manning / crew-management agencies –
Pursuant to the circular dated September 24, 2015, the RBI has prescribed guidelines for operation of foreign currency accounts opened with AD Banks by foreign shipping or airline companies which inter alia provides no credit facility should be granted against security of funds held in such accounts. Framework for revitalising distressed assets in the economy – Review of the guidelines on Joint Lenders’ Forum and Corrective Action Plan –
Pursuant to the circular dated September 24, 2015, the RBI clarified that the banks should depute sufficiently empowered senior level officers to attend the meeting of Joint Lenders Forum (JLF). Further, the JLF may, subject to the approval of the JLF empowered group, decide to restructure an account despite being classified as doubtful in books of one of the lenders if such account is assessed as viable under techno-economic viability study. The RBI has further prescribed the duration of application of penal provisions in cases relating to the failure by the lenders to convene the JLF or act in accordance with corrective action plan (CAP) within timelines prescribed, withdrawal of restructuring decision by lenders under the CAP after agreeing to it initially. The JLF also has the option to initiate strategic debt restructuring scheme (SDR Scheme) in case of failure of rectification as CAP.
Further, pursuant to the circular dated October 29, 2015, the aforementioned modifications to the framework shall apply mutatis mutandis to NBFCs. Prudential norms on change in ownership of borrowing entities –
Pursuant to the circular dated September 24, 2015, the RBI has allowed banks to change the ownership structure of the borrowing entities outside the SDR Scheme by upgrading the credit facilities extended to such borrowing entities to standard category subject to conditions such as: (i) the change in ownership of such borrowing entity is by sale of shares acquired by the lender by invocation of pledge or conversion of debt into equity, and (ii) the new promoter should acquire at least 51% (fifty one percent) of the paid up share capital of the borrowing entity or the maximum permissible foreign investment limit, as the case may be. Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015 –
The RBI has put in place the Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015 exempt a person from any proceeding under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Black Money Act) if he has declared the undisclosed assets abroad and paid the tax and penalty in accordance with the provisions of the Black Money Act. External Commercial Borrowings policy – Issuance of rupee denominated bonds overseas –
Pursuant to the circular dated September 29, 2015, a framework has been introduced for issuance of rupee denominated bonds overseas within the overall framework of the policy on external commercial borrowings. Under this framework, bodies corporate, real estate investment trusts, infrastructure investment trust are the eligible issuers, and the investor should belong to a Financial Action Task Force compliant jurisdiction. Further, the minimum maturity of any bonds issued under this framework must be 5 (five) years. Non-Banking Financial Company-Micro Finance Institutions – Directions – Modifications –
Pursuant to the circular dated October 1, 2015, the direction on maximum variance between the minimum and maximum interest rate on loans as provided under the master circular on Non-Banking Financial Company-Micro Finance Institutions’ (NBFC-MFIs) – Directions issued by the RBI on July 1, 2015 shall not apply to loans extended by NBFC-MFI against funding by National Scheduled Castes Finance & Development Corporation (NSFDC). Such NBFC-MFI shall make disclosures including quantum of funds received from NSFDC, loans disbursed therefrom, rate of interest on such loans and the number of beneficiaries in their balance sheet. Investment by Foreign Portfolio Investors in government securities –
In accordance with the Medium Term Framework proposed under the Fourth Bi-monthly monetary policy statement for the year 2015-16 and pursuant to the circular dated October 6, 2015, the limit for investment by foreign portfolio investors (FPI) in government securities has been enhanced. Now, FPIs may invest a total of INR 1,665 billion (USD 25.64 billion approx.) with effect from October 12, 2015 and INR 1,795 billion (USD 27.64 billion approx.) with effect from January 1, 2016 in central government securities. Also, FPIs may now invest a total of INR 1,700 billion (USD 26.18 billion approx.) with effect from October 12, 2015 and INR 1,865 billion (USD 28.72 billion approx.) with effect from January 1, 2016 in state development loans. The other existing conditions in relation to investment of coupon outside the limits and investments being restricted to securities with a minimum maturity of 3 (three) years shall continue to apply. Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Ninth Amendment) Regulations, 2015 –
Pursuant to the notification dated October 6, 2015, Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (FEMA 20) has been amended. Now, Non-Resident Indians (NRIs), who are eligible under the Pension Fund Regulatory and Development Authority Act, 2013, are permitted to subscribe to New Pension Scheme (NPS) governed by the Pension Fund Regulatory and Development Authority. Payments for such subscription shall be by inward remittance through normal banking channels or out of funds in the NRE/FCNR/NRO account. Risk management & inter-bank dealings: Booking of forward contracts – Liberalisation –
Pursuant to the circular dated October 8, 2015, the limit for resident individuals, firms and companies to book foreign exchange forward and FCY-INR options contracts has been increased from the existing limit of USD 250,000 to USD 1,000,000 on the basis of a self-declaration i.e. without production of underlying documents. Other conditions applicable including suitability and appropriateness norms shall continue to apply. Advance against pledge of gold ornaments/jewellery –
Pursuant to the circular dated October 15, 2015, co-operative banks are now permitted to use historical spot gold price data of the preceding 30 days publicly disseminated by a commodity exchange regulated by the Securities and Exchange Board of India to value the gold jewellery accepted as security. Annual Return on Foreign Liabilities and Assets – Reporting by Limited Liability Partnerships –
Pursuant to the circular dated October 21, 2015, all limited liabilities partnerships that have received foreign investment or made investments abroad in the previous years as well as in the current year are henceforth required to file the foreign liability and assets return by July 15 of each year. Gold Monetisation Scheme, 2015 –
The Reserve Bank of India (Gold Monetization Scheme) Direction, 2015 (Gold Monetisation Directions) has now substituted the Gold Deposit Scheme, 1999 (Gold Deposit Scheme) and Gold Metal Loan Scheme. The Gold Monetisation Directions have been issued with the intention of mobilising gold held by households and institutions of the country and to facilitate its use for productive purposes, and in the long run, to reduce country's reliance on imported gold. The deposits outstanding under the Gold Deposit Scheme shall continue till their maturity. Resident individuals, Hindu unified families, trusts (including Mutual Funds registered with SEBI) are permitted to make deposit for at least 30 grams of raw gold of 995 fineness under the Gold Monetisation Directions. The Gold Monetisation Scheme does not prescribe the maximum limit for deposit. Prevention of Money Laundering (Maintenance of Records) Rules, 2005 –
Pursuant to a notification dated September 22, 2015, the Government of India has amended the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules). The PML Rules now provide that a document shall be deemed to be an officially valid document even if there is a change of name subsequent to its issuance due to reasons of marriage, if it is supported by a marriage certificate issued by the State Government or Gazette notification indicating such change in name. (cc) Permission to operate Liaison Office by foreign law firms in India –
Pursuant to a circular dated October 29, 2015, foreign law firms shall not be permitted to open liaison offices in India. Foreign law firms granted permission prior to the circular shall continue to operate till the permission is valid. |
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SECURITIES AND EXCHANGE BOARD OF INDIA SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2015 –
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR Regulations) have been amended by the SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2015 notified on August 11, 2015 (ICDR (3rd Amendment) Regulations). The ICDR (3rd Amendment) Regulations inter alia provide that Regulation 6, Regulation 7 and Regulation 8 shall not apply to an issuer if the average market capitalisation of public shareholding is Rs. 10 billion (USD 151,216,300 approx.) in case of public issue, and Rs. 2.5 billion (USD 37,804,075 approx.) in case of right issue. SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2015 –
ICDR Regulations have been amended through the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2015 notified on August 14, 2015 (ICDR (4th Amendment) Regulations). Pursuant to the ICDR (4th Amendment) Regulations, Chapter XC relating to 'Listing on Institutional Trading Platform' has been amended and Schedule XIX A relating to 'Information Document' has been deleted. These amendments provide significant relaxations to the disclosure requirements required for listing on the regular platform of the BSE and the NSE, and are aimed at encouraging start-ups to tap institutional investors for funds. SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2015 –
The SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2015 has amended the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations) to inset a proviso that clarifies that the Takeover Regulations shall not apply to direct or indirect acquisition of shares, voting rights or control over a company listed without making a public offer on institutional trading platform of a recognised stock exchange. SEBI (Delisting of Equity Shares) (Second Amendment) Regulations, 2015 –
SEBI (Delisting of Equity Shares) (Second Amendment) Regulations, 2015 has inserted a proviso to Regulation 3 which provides that SEBI (Delisting of Equity Shares) Regulations, 2009 shall not apply to securities listed without making a public issue, on the institutional trading platform of a recognised stock exchange. SEBI (Alternative Investment Funds) (Amendment) Regulations, 2015 –
SEBI (Alternative Investment Funds) (Amendment) Regulations, 2015 provides that after the commencement of ICDR (4th Amendment) Regulations, any investment by Category I and Category II Alternative Investment Funds in the shares of entities listed on the institutional trading platform shall be deemed to be investment in unlisted securities for the purpose of SEBI (Alternative Investment Funds) Regulations, 2012 SEBI (Issue of Capital and Disclosure Requirements) (Fifth Amendment) Regulations, 2015 –
The ICDR Regulations have been amended by the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2015 (ICDR (5th Amendment) Regulations). Pursuant to the amendments, the lead manager is required to dispatch issue material to registrar to issue and share transfer agents, depository participants, stock brokers along with the designated stock exchange, syndicate members, underwriters, bankers to the issue, investors' associations and 'Self Certified Syndicate Banks' in advance. The ICDR (5th Amendment) Regulations also amend Regulation 65 of the ICDR Regulations. The amended Regulation 65 provides that in case of public issue, the lead manager is not required to issue initial post issue report but only final post issue report within 7 (seven) days from the date of either finalization of basis of allotment or refund of money (in case of failure of issue), as the case may be. Further, the lead manager is no longer required to submit a due diligence certificate along with the final post issue report. Anchor investors in public issue –
In its meeting of August 24, 2015, the board of the SEBI approved the removal of the maximum number of anchor investors for anchor allocation of public offers above Rs. 2.5 billion (USD 37,791,495 approx.). For every allocation beyond Rs. 2.5 billion (USD 37,791,495 approx.), 10 (ten) additional anchor investors may be appointed subject to each of such anchor investor being allotted at least Rs. 50 million (USD 755,829 approx.).
Following the decision of the SEBI board meeting, corresponding amendments have been made to the SEBI (Issue of Capital and Disclosure) Regulations, 2009 in Schedule XI Part A pursuant to the [Amendment Regulations]. Guidance note on SEBI (Prohibition of Insider Trading) Regulations, 2015 –
The SEBI has issued a guidance note dated August 24, 2015 on the SEBI (Prohibition of Insider Trading) Regulations, 2015 (Insider Trading Regulations). The guidance note clarifies the intention of SEBI to prohibit creation or invocation of pledge while possessing unpublished price sensitive information. A financially independent spouse would also be presumed to be an 'immediate relative' for the purpose of Insider Trading Regulations. The note also clarifies that the pledgor or pledgee may demonstrate that the creation or invocation was bona fide and prove innocence SEBI (Listing Obligations and Disclosure) Regulations, 2015 –
The SEBI (Listing Obligations and Disclosure) Regulations, 2015 (Listing and Disclosure Regulations) have been issued pursuant to the notification dated September 2, 2015. The Listing and Disclosure Regulations provide for listing and disclosure related obligations of a listed entity. Any entity which has listed any of its securities, including non-convertible debt securities, non-convertible preference shares, units issued by mutual funds, on a recognised stock exchange must comply with the listing and disclosure obligations prescribed on the Listing and Disclosure Regulations. The obligations of a listed entity include appointment of company secretary as compliance officer, preservation of documents classified in two categories (permanent and minimum period of 8 (eight) years), and the filing of documents with the electronic platform of the recognised stock exchange. Except for the provisions relating to resolution for related party transactions and re-classification of promoters as public shareholders, the Listing and Disclosure Regulations will come into force on the expiry of 90 days from the date of publication in the official gazette. Disclosure by NBFCs in offer document for public issue of debt securities –
Pursuant to the circular dated September 15, 2015, the SEBI has aligned the disclosure requirements in an offer document for public issue of debt securities with the requirements prescribed by the RBI. Accordingly, SEBI's circular of June 17, 2014 is amended to provide that the offer document for public issue of debt securities shall include details of loans overdue and classified as non-performing in accordance with the guidelines prescribed by RBI. The SEBI has also prescribed additional disclosures to be made by an NBFC in its offer document which include (i) quantum and percentage of secured vis-à-vis unsecured borrowing by NBFC; and (ii) change in holding of promoter of NBFC beyond 26% (twenty six percent) in the last financial year. The revised disclosure requirements will apply to offer documents filed on or after November 1, 2015. SEBI (Procedure for Search and Seizure) Repeal Regulations, 2015 –
Pursuant to the notification dated September 17, 2015, the SEBI (Procedure for Search and Seizure) Regulations, 2014 have been repealed. Guidelines on overseas investment by venture capital funds and alternate investment funds –
Pursuant to the circular dated October 1, 2015, venture capital funds (VCF) registered under the SEBI (Venture Capital Funds) Regulations, 1996 and alternate investment funds (AIF) are now permitted to, with the prior approval of SEBI, invest up to 25% (twenty five percent) of the investible funds of the VCF or scheme of the AIF in offshore venture capital undertakings which have an Indian connection. VCFs and AIFs are restricted from investing in joint venture/wholly owned subsidiaries while making overseas investment. Further, the maximum investment by alternate investment funds (AIF) including the investment by VCFs in equity and equity linked instruments of offshore venture capital undertaking is now capped at USD 500 million. Comprehensive risk management framework for National Commodity Exchange Derivatives –
Pursuant to the circular dated October 1, 2015, a comprehensive risk management framework has been issued by the SEBI with the objective of aligning and streamlining the risk management framework across national commodity derivatives exchanges in India. The provisions of the circular are to be implemented by January 1, 2016. Format of uniform Listing Agreement –
Following its circular of September 2, 2015 on the Listing and Disclosure Regulations, the SEBI has issued a simplified listing agreement pursuant to the circular dated October 13, 2015 for all types of securities, i.e. specified securities, non-convertible debt securities, non-convertible redeemable preference shares, securitised debt instruments and mutual funds. Further, an entity which has previously entered into a listing agreement shall execute a fresh listing agreement by March 2, 2016. Regulation of Commodity Derivatives Market –
Pursuant to the decision of the central government to merge the SEBI with the Forward Markets Commission, SEBI shall regulate the commodity derivative market with effect from September 28, 2015. Accordingly, SEBI has created new departments to regulate the commodity derivative market. |
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MINISTRY OF FINANCE Income Tax (Eleventh) Amendment Rules, 2015 –
Pursuant to the notification dated August 7, 2015, the Central Board of Direct Taxes (CBDT) has issued the Income Tax (Eleventh) Amendment Rules, 2015 (Amendment Rules). The Amendment Rules inter alia provides for the requirement and manner of conducting due diligence by financial institutions to identify reportable accounts and the manner of reporting by the financial institutions. Income Tax (Twelfth) Amendment Rules, 2015 –
Pursuant to the notification dated August 17, 2015, the Central Board of Direct Taxes has inserted Rule 126 to the Income Tax Rules, 1962. Rule 126 provides for the computation of the period of stay in India for citizens of India serving as members of the crew of a ship. Income Tax (Fourteenth) Amendment Rules, 2015 –
Pursuant to the notification dated September 29, 2015, the CBDT has simplified the format and procedure for self-declaration in Form 15G under section 197A of the Income Tax Act, 1962. Now, a payee can submit a self-declaration in either paper form or in electronic form. The deductor shall allot a unique identification number (UIN) on receipt of Form 15G and mention the UIN in the quarterly TDS statement. The revised procedure comes into effect from October 1, 2015. |
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Arbitration and Conciliation Bill, 2015
The cabinet of the Government of India approved the amendments to the Arbitration and Conciliation Bill, 2015 on the lines of the Law Commission's recommendations. The key features of these amendments are reported to inter alia include (i) disclosure of any interest by the arbitrator prior to his appointment; (ii) explanation to the meaning of 'Public Policy of India' as a ground to challenge arbitral award, (iii) providing arbitral tribunal the power to grant all kinds of interim relief which the court can provide, and (iv) setting the time limit within which the arbitral tribunal is required to make its award. |
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Second and fourth Saturday as public holiday
Pursuant to a notification dated August 20, 2015, the Central Government has declared that the second and fourth Saturday of every calendar month will be a public holiday. The notification became effective from September 1, 2015. |
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DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION
Clarification on facility sharing arrangement between group companies –
Pursuant to the notification dated September 15, 2015, the Department of Industrial Policy and Promotion has clarified that any facility sharing arrangement between group companies through leasing/sub-leasing for achieving business interest shall not be treated as 'real estate' business for the purposes of the policy on foreign direct investments. This is subject to the condition that such arrangements are made on arm's length basis and the annual lease rent earned by the lessor company does not exceed 5% (five percent) of its total revenue. |
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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
Guidelines on "Indian Owned and Controlled" –
Pursuant to the notification dated October 19, 2015, the Insurance Regulatory and Development Authority of India (IRDAI) has issued the guidelines in respect to the insurance companies being "Indian controlled and owned" (Guidelines). The Guidelines inter alia provide that the direct and indirect holding in the Indian insurance company should not be more than 49% (forty nine percent). Further, in order to ensure 'Indian control', majority of directors should be nominated by Indian promoter/investor and such board should exercise control over significant policies of the insurance company. The insurance companies are required to file an undertaking signed by Chief Executive Officer and Chief Compliance Officer along with a resolution of the insurance company confirming the compliance with the Guidelines. All existing insurance companies are required to comply with the Guidelines within 3 (three) months of the issuance of the Guidelines. Such period may be extended by the IRDAI for a further 3 months (subject to a maximum of 6 months) on an application made by the existing insurer citing "valid reasons". All new insurance companies are required to comply with the Guidelines as a pre-condition to the grant of the certificate of registration
For further information, please contact:
Sawant Singh, Partner, Phoenix Legal sawant.singh@phoenixlegal.in
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