Updates on Companies Act, 2013
- Amendment on Investor Education And Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
The Ministry of Corporate Affairs released a notification dated 9th November, 2021 with respect to amendment of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
The major amendments include:
- The Principal Rules in Schedule II has been changed for the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2021.
- Substitution of Form No. IEPF-5.
The Ministry has released this 10th November 2021, can be accessed by clicking the link mentioned below:
Click here to access the Notification
RBI Updates
- Investment by Foreign Portfolio Investors (FPIs) in Debt Securities.
The RBI had granted its permission allowing Foreign Portfolio Investors (FPIs) to invest in debt securities issued by Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs). The necessary amendments were made to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 and made notified the changes on October 21, 2021.
Vide a circular issued on November 08. 2021 it is been announced that, FPIs can acquire debt securities issued by InvITs and REITs under the Medium-Term Framework (MTF) or the Voluntary Retention Route (VRR) and such investments shall be reckoned within the limits and shall be subject to the terms and conditions for investments by FPIs in debt securities under the respective regulations of MTF and VRR.
Click here to access the Circular.
2. Master Direction on Interest Rate on Deposits under Foreign Currency (Non-resident) Accounts (Banks) Scheme
Pursuant to the forthcoming discontinuance of LIBOR as a benchmark rate, it has been decided to permit banks to offer interest rates on FCNR (B) deposits using widely accepted ‘Overnight Alternative Reference Rate (ARR) for the respective currency’ with upward revision in the interest rates ceiling by 50 bps.
During the transition of the existing benchmark rate, FEDAI may publish the ARR till such time the widely accepted benchmark is established.
Click here to access the Circular.
3. Reserve Bank Of India (RBI) notifies on Auction of Government Securities
The RBI on November 12, 2021 has issued a notification regarding the auction of Government Securities of Non-Competitive Bidding Facility to retail investors With a view to encourage wider participation and retail holding of Government securities, retail investors are allowed participation on “non- competitive” basis in select auctions of dated Government of India (GoI) securities and Treasury Bills.
Eligibility for the Auction:
Participation on a non-competitive basis in the auctions will be open to a retail investor who:
- does not maintain current account (CA) or Subsidiary General Ledger (SGL) account with the Reserve Bank of India; and
- Submits the bid indirectly through an Aggregator/Facilitator permitted under the scheme; or
- maintains the ‘Retail Direct Gilt Account’ (RDG Account) with RBI
Click here to access the Circular
4. RBI clarifies prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances
The Reserve Bank of India (RBI) on November 12, 2021 has issued clarification on prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances.
- Specification of due date/repayment date:
The loan agreements shall not leave any scope for interpretations of due dates. The exact due dates for repayment of a loan, frequency of repayment, breakup between principal and interest, examples of SMA/NPA classification dates, etc. shall be clearly specified in the loan agreement and the borrower shall be apprised of the same at the time of loan sanction.
- Classification as Special Mention Account (SMA) and Non-Performing Asset (NPA):
The borrower accounts shall be flagged as overdue by the lending institutions as part of their day-end processes for the due date, irrespective of the time of running such processes. A schedule of internals is announced to classify the accounts as SMA in case of any non-payment of dues.
Further, the account shall be classified as NPA in case of interest payment is defaulted and are not paid within 90 days from the due date.
Click here to access the Circular
5. Reserve Bank of India (RBI) Withdraws 104 Redundant and Duplicate Circulars As Recommended by RRA
The RBI has decided to withdraw 104 regulatory instructions and circulars that have become redundant or were duplicated as per the Regulations Review Authority’s interim recommendation (RRA).
A comprehensive review of the circulars issued by the department of payment and settlement systems (DPSS) was undertaken as part of the rationalisation exercise under RRA 2.0, and as per recommendations of the RRA, the regulatory instructions and circulars stand withdrawn with immediate effect.
Click here to access the Circular.
SEBI Updates
- Common and Simplified Norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination
SEBI vide circular dated November 03, 2021 specified Common and Simplified Norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination. In order to enhance the ease of doing business for investors in the securities market few norms were prescribed in the said circular. The same can be accessed by clicking the link mentioned below:
Click here to access the Circular
2. Write-off of debt securities held by FPIs who intend to surrender their registration
SEBI vide circulars dated November 05, 2019 read with September 21, 2020 had permitted FPIs to surrender their registration to write-off all shares in their beneficiary account which they are unable to sell for any reason if they wish to.
In view of the requests received from various stake holders, it has now been decided to permit the FPIs to also write-off all debt securities in their beneficiary account which they are unable to sell for any reason. This shall be applicable only to such FPIs who wish to surrender their registration. The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular.
3. Scheme of Arrangement by Listed Entities
SEBI earlier had laid down the framework for Schemes of Arrangement by listed entities. To empower the stock exchanges, it has been decided to provide further clarifications on the processing of draft schemes filed with the stock exchanges, and make certain amendments to the aforesaid Circular dated December 22, 2020. These amendments are aimed at ensuring that the recognized stock exchanges refer draft schemes to SEBI only upon being fully convinced that the listed entity is in compliance with SEBI Act, Rules, Regulations and circulars issued thereunder. The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
4. Framework for Regulatory Sandbox
SEBI vide circular dated June 14, 2021 issued revised framework for regulatory sandbox. Para 6 of Annexure A to the aforementioned circular was modified vide SEBI circular dated November 16, 2021. This circular was issued to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
5. Addendum to SEBI Circular dated November 16, 2021 relating to Schemes of Arrangement by Listed Entities
SEBI vide circular dated November 18, 2021 notified changes to Schemes of arrangement by listed entities. In this regard, an addendum to the aforesaid Circular dated November 16, 2021 is placed at Annexure 1. The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
6. Clarifications regarding amendment to SEBI (Alternative Investment Funds) Regulations, 2012
SEBI vide circular dated November 22, 2021 issued a circular with respect to Clarifications regarding amendment to SEBI (Alternative Investment Funds) Regulations, 2012 which allowed Category III AIFs, including any large value funds for accredited investors of Category III AIFs, to calculate the concentration norm based on Net Asset Value (NAV) of the fund for investment in listed equity of an investee company. The clarifications with respect to the said circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
7. Disclosure obligations of listed entities in relation to Related Party Transactions
SEBI vide its notification dated November 9, 2021, Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (‘LODRRegulations’) wasamended, inter-alia, mandating listed entities thathave listed specified securities to submit to the stock exchanges disclosure of Related Party Transactions(RPTs)in the format specified by the Board from time to time . Further, it has been decided to prescribethe information to be placed before the audit committee and the shareholders for consideration of RPTs and accordingly SEBI vide circular dated November 22, 2021 prescribed provisions which shall apply to entities thathave listed specified securities on a Recognized Stock Exchange.
The details provisions with respect to this circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
8. Non-compliance with certain provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
SEBI issued a circular dated August 19, 2019, specifying the fines to be imposed by the Stock Exchanges for non-compliance with certain provisions of SEBI (ICDR) Regulations, 2018. In partial modification of the above circular, para 9A is inserted after para 9:
“9A. The Stock Exchanges may deviate from the provisions of the circular, wherever the interest of the investors are not adversely affected, if found necessary, only after recording reasons in writing.”
The detailed SEBI circular dated 23rd November, 2021 can be accessed by clicking the link mentioned below:
Click here to access the Circular
9. Publishing Investor Charter and Disclosure of Complaints by Merchant Bankers on their Websites
With a view to provide investors an idea about the various activities pertaining to primary market issuances as well as exit options like Takeovers, Buybacks or Delistings, an Investor Charter has been developed in consultation with the Merchant Bankers.
This charter is a brief document in an easy to understand language and containsdifferent services to the investors at one single place for ease of reference. SEBI vide circular dated November 23, 2021 advised the all the registered Merchant Banker to disclose investor charter on their website.
The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
10. Segregation and Monitoring of Collateral at Client Level – Extension of timeline
SEBI has issued a circular dated July 20, 2021 on the above subject matter . In this regard, on the basis of representations received from stakeholders, it has been decided that provisions of the said circular (apart from provisions of Paragraphs 4 and 5) shall come into force with effect from February 28, 2022 instead of December 01, 2021. The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
11. Disclosure of Complaints against the Stock Exchanges (excluding Commodity Derivatives Exchanges)/Depositories/Clearing Corporations
In order to bring about transparency in the Investor Grievance Redressal Mechanism, it has been decided that all the Stock Exchanges (excluding Commodity Derivatives Exchanges)/ Depositories/Clearing Corporations shall disclose on their websites, the data on complaints received against them and redressal thereof, latest by 7thof succeeding month, as per the format enclosed at Annexure-‘A’ to the SEBI circular dated November 23, 2021. The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
12. Norms for Silver Exchange Traded Funds (Silver ETFs) and Gold Exchange Traded Funds (Gold ETFs)
In order to have regulatory mechanism for Silver Exchange Traded Funds (Silver ETFs), amendments to SEBI (Mutual Funds) Regulations, 1996 (hereinafter called as “MF Regulations”) have been notified vide Gazette notification dated November 9, 2021.These amendments to MF Regulations shall come into force on 30th day from the date of their publication in the Official Gazette. The operating norms in this regard have been specified in the SEBI circular dated November 24, 2021 and can be accessed by clicking the link mentioned below:
Click here to access the Circular
13. Publishing Investor Charter and Disclosure of Complaints by Merchant Bankers on their Websites – Debt Market
SEBI with a view to provide investors relevant information about the various activities pertaining to primary market issuances in the debt market, an Investor Charter has been prepared by SEBI in consultation with Merchant Bankers. This Charter is a brief document containing details of services provided to investors, their rights, dos and don’ts, responsibilities, investor grievance handling mechanism and timelines thereof etc., at one single place in a lucid language, for ease of reference.
SEBI vide its circular dated November 26, 2021 has advised all the registered Merchant Banker to disclose the Investor charter on their website.
The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
14. Publishing Investor Charter and Disclosure of Complaints by Registrar and Share Transfer Agents (RTAs) on their Websites
SEBI In order to facilitate investor awareness about various activities where an investor has to deal with RTAs for availing Investor Service Requests, SEBI has developed an Investor Charter for RTAs, inter-alia, detailing the services provided to Investors, Rights of Investors, various activities of RTAs with timelines, Dos and Don’ts for Investors and Grievance Redressal Mechanism.
In this regard, all the registered RTAs shall take necessary steps to bring the Investor Charter’ to the notice of existing and new shareholders by way of disclosing either on their website or displaying at prominent places in offices.
The detailed SEBI circular dated November 26, 2021 can be accessed by clicking the link mentioned below:
Click here to access the Circular
15. Publishing investor charter and disclosure of investor complaints by Merchant Bankers on their websites for private placements of Municipal debt securities
With a view to provide investors relevant information about the primary market issuances of municipal debt securities, an Investor Charter has been prepared by SEBI in consultation with Merchant Bankers.
SEBI vide its circular dated November 26, 2021 has advised all the registered Merchant Banker to disclose the Investor charter on their website.
The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
16. Publishing Investor Charter and Disclosure of Investor Complaints by Merchant Bankers on their Websites for public offers by REITs and InvITs
With a view to provide investors relevant information about the primary market issuances by REITs and InvITs, an Investor Charter had to be prepared by it in consultation with Merchant Bankers. This charter is a brief document containing different services to investors at a single place for ease of reference.
SEBI vide its circular dated November 26, 2021 has advised all the registered Merchant Banker to disclose the Investor charter on their website.
The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
17. Publishing of Investor Charter and disclosure of complaints by Debenture Trustees (DTs) on their Websites
In order to facilitate investor awareness about various activities where an investor has to deal with DTs for availing various services, SEBI has developed an Investor Charter for DTs, inter-alia detailing the services provided to Investors, timelines for various DT services provided, Rights and Obligations of Investors and Grievance Redressal Mechanism. In this regard, all the registered DTs shall take necessary steps to bring the Investor Charter to the notice of investor in non-convertible debt securities by way of disclosing either on their website or displaying at prominent places in offices.
The detailed SEBI circular dated November 30, 2021can be accessed by clicking the link mentioned below:
Click here to access the Circular
18. Master Circular on Scheme of Arrangement
Master Circular on (i) Scheme of Arrangement by Listed Entities and (ii) Relaxation under Sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957 was issued by SEBI on November 23, 2021. SEBI from time to time has been issuing various circulars/directions which lay down the detailed requirements to be complied by listed entities while undertaking schemes of arrangements.
In order to enable the users to have access to the applicable circulars at one place, Master Circular in respect of schemes of arrangement has been prepared. The detailed Master Circular can be accessed by clicking the link mentioned below:
Click here to access the Master Circular
19. Master Circular for Real Estate Investment Trusts (REITs)
SEBI issued a Master Circular dated November 29, 2021 with respect to real estate investment trusts. For effective regulation of Real Estate Investment Trusts, Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Real Estate Investment Trusts has been prepared.
The detailed Master Circular can be accessed by clicking the link mentioned below:
Click here to access the Master Circular
20. Master Circular for Infrastructure Investment Trusts (InvITs)
SEBI issued a Master Circular dated November 29, 2021 with respect to Infrastructure Investment Trusts (InvITs). For effective regulation of Infrastructure Investment Trusts, Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Infrastructure Investment Trusts has been prepared.
The detailed Master Circular can be accessed by clicking the link mentioned below:
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