22 March, 2018
Online Filing System for Offer Documents, Schemes of Arrangement, Takeovers and Buy backs
On January 19, 2018, SEBI, in order to facilitate ease of operations in terms of seeking observations on draft offer documents, draft letter of offers and draft schemes of arrangement under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Buy Back of Securities) Regulations, 1998 and various circulars issued thereunder, has introduced an online system for filings related to public issues, rights issues, institutional placement programme, schemes of arrangement, takeovers and buy backs. The simultaneous filing of documents i.e. physical and online shall start from February 1, 2018 and continue till March 31, 2018. Thereafter, from April 1, 2018 physical filing of the aforesaid documents shall be discontinued and only online filing will be accepted.
Ministry of Corporate Affairs notifies certain sections of the Companies Amendment Act, 2017
On January 23, 2018, the Ministry of Corporate Affairs released a circular appointing, January 26, 2018 as the date on which the provisions of section 1 and section 4 of the Companies Amendment Act, 2017 shall come into force.
Section 1 is the short title and the commencement of the Companies (Amendment) Act, 2017 whereas the notified amendment in Section 4(5)(i) is as under:
“Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of twenty days from the date of approval or such other period as may be prescribed: Provided that in case of an application for reservation of name or for change of its name by an existing company, the Registrar may reserve the name for a period of sixty days from the date of approval.”
Companies (Registered Valuer’s and Valuation) (Amendment) Rules 2018
On February 9, 2018, the Ministry of Corporate Affairs (“MCA”) notified the Companies (Registered Valuer’s and Valuation) (Amendment) Rules 2018, which amend Rule 11 on ‘transitional arrangement’. By way of this amendment, persons who were rendering valuation services on the date of commencement of the original rules can now continue to do so without registration under the rules up to September 30, 2018.
Notification of sections of the Companies (Amendment) Act 2017
On February 9, 2018, the MCA issued a notification notifying certain sections of the Companies (Amendment) Act 2017 and appointing February 9, 2018 as the date on which the provisions of the said act shall come into force. The amendments to the notified sections, amongst others, relate to, the definitions clause, the authentication of a document by an officer or employee of a company, the civil liability for mis- statements in a prospectus, voting rights, prohibition on issue of shares on a discount, further issue of share capital, convening of an extra ordinary board meeting, notice of a meeting, postal ballot, declaration of dividend, eligibility and qualifications of auditors, powers and duties of auditor and auditing standards, appointment of directors, application for allotment of DIN, number of directorships, restriction on powers of the board, disclosure of interest by a director and related party transactions.
SEBI issues a circular on Electronic book mechanism for issuance of securities on private placement basis
On January 5, 2018, SEBI issued the revised guidelines for the Electronic Book Mechanism for issuance of debt securities on private placement basis. Electronic book mechanism is a process carried out through a web based portal for online bidding of private placement of debt securities which are proposed to be listed on exchanges. The revisions made to the existing framework are aimed at further streamlining the procedure for private placement of debt securities, allowing private placement of other classes of securities which are in the nature of debt securities and enhancing transparency in the issuance, resulting in better discovery of price. The revised guidelines for the Electronic Book Mechanism shall come in to force with effect from April 1, 2018.
Easing of Access Norms for investment by FPIs
On February 15, 2018, the Securities and Exchange Board of India (“SEBI”) in consultation with stakeholders has decided to make following changes in extant regulatory provisions to ease the access norms for investment by Foreign Portfolio Investors (FPIs):
a) Discontinuance of requirements for seeking prior approval from SEBI in case of change in local custodian/ Designated Depository Participant (DDP);
b) Rationalization of procedure for submission of PCC/MCV Declarations and Undertakings (D&U) and Investor grouping requirement at the time of continuance of registration of FPIs;
c) Placing reliance on due diligence carried out by erstwhile DDP at the time of change of Custodian/ DDP of FPIs;
d) Exemption to FPIs having Multiple Investment Managers (MIM) structure from seeking prior approval from SEBI in case of Free of Cost (FOC) transfer of assets;
e) Simplification of process for addition of share class;
f) Permitting FPIs operating under the Multiple Investment Managers (MIM) structure to appoint multiple custodians;
g) Permitting appropriately regulated Private Bank/ Merchant Bank to invest on their behalf and also on behalf of their clients;
h) The facility of granting conditional registration shall also be extended to existing funds, proposing to convert as India dedicated funds. However, existing India dedicated funds will be given time of 90 days to achieve ‘broad based status’.
Bills approved by the Union Parliament in a major policy initiative to protect the savings of the investors
The Union Cabinet on February 20, 2018, has given its approval to introduce the following bills in the Parliament:-
a) Banning of Unregulated Deposit Schemes Bill, 2018 – this Bill is aimed at tackling the menace of illicit deposit taking activities in the country. Companies/ institutions running such schemes exploit existing regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard- earned savings; and
b) Chit Funds (Amendment) Bill, 2018 – in order to facilitate orderly growth of the Chit Funds sector and remove bottlenecks being faced by the Chit Funds industry, thereby enabling greater financial access of people to other financial products, certain amendments to the Chit Funds Act, 1982 have been proposed.
For further information, please contact:
Mustafa Motiwala, Partner, Clasis Law
mustafa.motiwala@clasislaw.com
