29 June, 2019
Companies (Incorporation) Fifth Amendment Rules, 2019
The Ministry of Corporate Affairs (“MCA”) on May 10, 2019 issued the Companies (Incorporation) Fifth Amendment Rules, 2019 further amending the Companies (Incorporation) Rules, 2014. The amended rule provides for the matters required to be considered by MCA while granting approval/ reservation of name of a company. The provisions of Rule 8 of the Companies (Incorporation) Rules, 2014 have been replaced providing new set of rules to be considered for names which resemble too nearly with name of existing companies. Additionally, two new rules viz. rule 8A and 8B have been introduced which provides clarity on names to be considered as undesirable names and names where prior approval of Central Government would be required.
Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2019
The Ministry of Corporate Affairs on May 8, 2019 issued Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2019 to further amend Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. The amended rules provide for the following:
(i) Filing of all the pending overdue returns in Form No. AOC-4 and MGT-7, up to the end of the financial year in which the company ceased to carry its business operations before filing an application for striking off in Form No. STK-2;
(ii) IncreaseinthefilingfeeforFormNo.STK-2fromINR 5,000 to INR 10,000;
(iii) Restriction on filing of application for striking off in Form No. STK-2, once the Registrar has issued notice for removal of the name of the company in Form No. STK-7; and
(iv) Introduction of the format of statement of account to be submitted by the company along with the striking off application in Form No. STK 2.
Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2019
The Ministry of Corporate Affairs (“MCA”) vide its notification dated May 16, 2019 issued Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2019 as a further amendment to Companies (Appointment and Qualification of Directors) Rules, 2014 thereby inserting rule 12 B. The new rules provide that, if a company is required to file e- form ACTIVE as per the provisions of the Companies (Incorporation) Rules, 2014 but the filings are not completed within the specified time, the DIN of directors of such companies shall be marked as “Director of ACTIVE non-compliant company”.
However, once the e- form ACTIVE is filed in such companies, the status of the DIN of such directors will be marked as “Director of ACTIVE compliant company”.
Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019
The Ministry of Corporate Affairs (“MCA”) on May 22, 2019 issued the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019 thereby further amending the Companies (Prospectus and Allotment of Securities) Rules, 2014. The amendment provides for substitution of sub- rule 8 of Rule 9A with a new sub-rule, which provides for introduction of a new form PAS-6 to be submitted by every unlisted public company falling under Rule 9A. The form PAS 6 is to be submitted on a half yearly basis with the Registrar providing the details of the share capital held in physical/ dematerialised form. Additionally, new sub- rule 8A has been inserted which provides that a company needs to apprise the depositories in case of any difference in its issued capital and capital held in dematerialised form. The new Rules would be effective from September 30, 2019.
Permitting Foreign Portfolio Investors to invest in Municipal Bonds
On May 9, 2019, the Securities and Exchange Board of India (“SEBI”) issued a circular permitting Foreign Portfolio Investors (FPIs) to invest in municipal bonds in accordance with the provisions of Regulation21(1) (p) of SEBI (Foreign Portfolio Investors) Regulations, 2014.
Extension of the relaxation on the guidelines to NBFCs on securitisation transactions
On May 29, 2019, the RBI issued a circular to extend the dispensation provided for relaxation on the guidelines to NBFCs on securitisation transactions.
On November 29, 2018, the RBI, in order to encourage NBFCs to securitise/assign their eligible assets, decided, to relax the Minimum Holding Period (MHP) requirement for originating NBFCs, in respect of loans of original maturity above 5 years, to receipt of repayment of six monthly instalments or two quarterly instalments (as applicable), subject to the following prudential requirement:
Minimum Retention Requirement (MRR) for such securitisation/assignment transactions shall be 20% of the book value of the loans being securitised/20% of the cash flows from the assets assigned.
This dispensation was applicable to securitisation/ assignment transactions carried out during a period of six months from November 29, 2018. On a review, it has now been decided to extend the dispensation provided till December 31, 2019.
Patents (Amendment) Rules, 2019
On May 31, 2019, the DPIIT issued the draft Patents (Amendment) Rules, 2019. In terms of the amendment rules, where priority document referred to in rule 21(1) of the Patents Rules, 2003, is required to be filed and is not in the English language, an English translation thereof duly verified by the applicant or the person duly authorized by him shall be filed within three (3) months from the date of inviting to file it by the Appropriate Office. Where the applicant does not comply with the requirements of rule 21(1) or rule 21(2) of the Patents Rules, 2003, the claim of the applicant for the priority shall be disregarded for the purposes of the Patents Act, 1970.
Further, the statements referred to in rule 131(1) shall be furnished once in respect of every calendar year, starting from the calendar year commencing immediately after the calendar year in which the patent was granted, and shall be furnished within three (3) months from the expiry of each such calendar year. Accordingly, Form 27 is proposed to be substituted with a new Form 27.
The draft Patents (Amendment) Rules, 2019 will be taken into consideration after the expiry of a period of thirty (30) days from the date on which copies of the Gazette of India, in which the notification is published, are made available to the public.
Reporting for Artificial Intelligence and Machine Learning applications and systems offered and used by Mutual Funds
On May 10, 2019, SEBI issued a circular on Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by Mutual Funds. As per the circular, SEBI is conducting a survey and creating an inventory of AI/ML landscape in the Indian financial markets to gain an in-depth understanding of the adoption of such technologies in the markets and to ensure preparedness for any AI/ML policies that may arise in future. All registered Mutual Funds offering or using applications or systems (as defined in Annexure B of the Circular) are required to participate in the reporting process by completing the AI / ML reporting form. With effect from quarter ending June 2019, registered Mutual Funds using AI / ML based application or system as defined in Annexure B to the Circular, are required to fill in the form (in Annexure A to the Circular) and make submissions on a quarterly basis within 15 calendar days of the expiry of the quarter to the Association of Mutual Funds in India.
Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019
On May 10, 2019, SEBI issued the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019, effective immediately. Pursuant to these amendment regulations, a fresh condition has been added to the investment conditions that shall apply to Category III Alternative Investment Funds stating that “Category III Alternative Investment Funds may deal in goods received in delivery against physical settlement of commodity derivatives”. In reference to this the definition of “Custodian” and “Goods” has been added to the definitions clause of the SEBI (Alternative Investment Funds) Regulations, 2012. Further, in terms of these amendment regulations, a similar obligation has also been added to the chapter on general obligations and responsibilities to the SEBI (Alternative Investment Funds) Regulations, 2012.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
