Updates on Companies Act, 2013
- Relaxation on levy of additional fees in filing e-forms AOC-4, AOC-4 (CFS), AOC-4 XBRL, AOC-4 NON XBRL AND MGT-7/MGT-7A for the financial year ended on 31.03.2021.
The Ministry of Corporate Affairs released a circular dated 29th December, 2021 with respect to relaxation of levy of additional fees for annual financial statement/return filings required to be done for the financial year ended on 31.03.2021. It has been decided that no additional fees shall be levied up to 15.02.2022 for the filing of e-forms AOC-4, AOC-4 (CFS), AOC-4 XBRL, and AOC-4 Non-XBRL and up to 28.02.2022 for filing of e-forms MGT-7 / MGT-7 A in respect of the financial year ended on 31.03.2021 respectively. During the said period, only normal fees shall be payable for the filing of the e-forms.
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2. Clarification on conducting Annual General Meeting through Video Conferencing or Other Audio Visual Means
The Ministry of Corporate Affairs released a circular dated 08th December, 2021 with respect to conducting Annual General Meetings (AGMs) through video conferencing or other audio visual means. Ministry has allowed those companies whose AGMs are due in the year 2021 to conduct their AGMs on or before 30th June 2022.
However, it should be noted that above mentioned circular does not imply any extension of time of holding AGMs by the companies under Companies Act, 2013 and those companies which have not adhered to the relevant timelines shall be liable to legal action under the appropriate provisions of the act.
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SEBI Updates
- Publishing Investor Charter and disclosure of Investor Complaints by Stock Brokers on their websites
SEBI vide circular dated December 02, 2021 published an Investor Charter and disclosure of Investor Complaints by Stock Brokers on their websites. In order to facilitate investor awareness about various activities which an investor deals with such as opening of account, KYC and in person verification, complaint resolution, issuance of contract notes and various statements, process for dematerialization/re-materialization etc., SEBI, in consultation with the market participants, has prepared an Investor Charter for Stock Brokers inter-alia detailing the services provided to Investors, Rights of Investors, various activities of Stock Brokers with timelines, DOs and DON’Ts for Investors and Grievance Redressal Mechanism which is placed at Annexure ‘A’ of the said circular. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
2. Transaction in Corporate Bonds through Request for Quote platform by Portfolio Management Services (PMS)
In order to enhance transparency pertaining to debt investments by Portfolio Management Services (PMS) in Corporate Bonds (CBs) and to increase liquidity on exchange platform, SEBI vide its circular dated December 09, 2021 has prescribed the certain norms for Portfolio Management Services (PMS). The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
3. Clarification regarding amendment to SEBI (Portfolio Managers) Regulations, 2020
SEBI vide circular dated December 10, 2021 issued a circular on Clarification regarding amendment to SEBI (Portfolio Managers) Regulations, 2020. The Securities and Exchange Board of India (Portfolio Managers)Regulations, 2021(PMS Regulations)were amended vide notification dated November 09, 2021,to facilitate co-investment by investors of Alternative Investment Funds (AIF) through the portfolio management route. In this regard, the following is specified:
Procedure for undertaking of Co-investment portfolio management services:
Periodic reporting by Portfolio Managers
Fees and charges
Direct on – boarding of clients by Portfolio Managers;
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
4. Circular on Mutual Funds
SEBI vide circular dated December 10, 2021 issued a circular on mutual funds. The circular laid down the Usage of pool accounts by Mutual Funds, Norms for investment in Bills Rediscounting Scheme (BRDS), Risk Management Framework (RMF) for Mutual Funds, Guiding Principles for bringing uniformity in Benchmarks of Mutual Fund Schemes, Applicability etc., The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the Circular
5. Publishing Investor Charter and Disclosure of complaints by AIFs
With a view to providing relevant information to investors about the various activities pertaining to AIFs, an Investor Charter has been prepared by SEBI. This Investor Charter is a brief document containing details of services provided to investors, details of grievance redressal mechanism, responsibilities of the investors etc., at one single place, in lucid language for ease of reference.
In this regard, SEBI vide circular dated December 10, 2021 advised all AIFs to take necessary steps to bring the Investor Charter to the notice of their investors in the manner as specified in the said circular. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
6. Circular on Investor Charter and disclosure of Investor Complaints by Mutual funds on their websites and AMFI website
SEBI vide Circular dated May 13, 2010 has advised AMCs to disclose details of investor complaints on annual basis in a prescribed format within 2 months of the close of the financial year. In partial modification to the aforesaid circular, SEBI vide its circular dated December 10, 2021 decided that all the Mutual Funds shall disclose the details of investor complaints on their respective websites as well as on AMFI website on a monthly basis, within 7thof succeeding month.
Further, in order to facilitate awareness of investors about various activities which an investor deals with, SEBI has prepared an Investor Charter for Mutual Funds which can be accessed at the link mentioned below:
Click here to access the Circular
7. Publishing of Investor Charter and disclosure of Investor Complaints by Portfolio Managers on their websites
With a view to enhancing awareness of investors about the various activities which an investor deals with while availing the services provided by portfolio managers, an investor charter has been prepared by SEBI, which is placed at Annexure-A of the SEBI circular dated December 10, 2021. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
8. Publishing of Investor Charter and disclosure of Investor Complaints by Research Analysts on their websites/mobile applications
In order to facilitate investor awareness about various activities which an investor deals with while availing the services provided by research analysts, SEBI has developed an Investor Charter for Research Analysts.
All registered Research Analysts are advised to bring to the notice of their clients the Investor Charter as provided at Annexure- A of the SEBI circular dated December 13, 2021 by prominently displaying on their websites and mobile applications. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
9. Publishing of Investor Charter and disclosure of Investor Complaints by Investment Advisers on their websites/mobile applications
In order to facilitate investor awareness about various activities which an investor deals with while availing the services provided by investment advisers, SEBI has developed an Investor Charter for Investment Advisers.
All registered Investment Advisers are advised to bring to the notice of their clients the Investor Charter as provided at Annexure- A of the SEBI circular dated December 13, 2021 by prominently displaying on their websites and mobile applications. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
10. Clarifications with respect to Circular dated November 03, 2021, on ‘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, 2021has laid down the common and simplified norms for processing investor’s service request by RTAs and norms for furnishing PAN KYC details and Nomination.
Based on the representations received from the Registrars Association of India(RAIN), it has been decided to provide clarity on certain provisions and on the applicability of the aforementioned circular. The said clarifications are given in Annexure to the SEBI circular dated December 14, 2021. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
11. Publishing Investor Charter and Disclosure of Investor Complaints by Merchant Bankers on their Websites for private placement of units by InvITs proposed to be listed
With a view to provide investors relevant information about the primary market issuances by InvITs, an Investor Charter has been prepared by SEBI in consultation with Merchant Bankers for private placement of units by InvITs propose to be listed.
This charter is a brief document containing different services to investors at a single place for ease of reference. The detailed SEBI circular dated December 16, 2021 can be accessed at the link mentioned below:
Click here to access the Circular
12. Cut-off Time for generation of last Risk Parameter File (RPF) for client’s margin collection purpose and modification in framework to enable verification of upfront collection of margins from clients in commodity derivatives segment
SEBI vide circular dated December 16, 2021 issued a cut off time for generation of last risk parameter file (RPF). Reserve Bank of India in its ‘Statement on Developmental and Regulatory Policies’ dated October 09, 2020had announced that the Real Time Gross Settlement System (RTGS)will be available round the clock on all days of the year from December 2020.The National Electronic Funds Transfer (NEFT)system is also made available round the clock since December 2019 by RBI.
SEBI vide circular dated November 29, 2019 had mandated that the cut off time for the purpose of determining minimum threshold of margins for client shall be 5:00 PM for commodity derivative contracts . As both RTGS and NEFT facilities are now functional round the clock on all days, SEBI Circular dated November 29, 2019 stands withdrawn.
Accordingly, in the framework prescribed for enabling verification of upfront collection of margins from clients vide SEBI Circular dated July 20, 2020,para 2 of clause (i) of Annexure to the circular is modified and the same can be accessed at the link mentioned below:
Click here to access the Circular
13. Revision to Operational Circular for issue and listing of Non-convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper
SEBI vide circular dated December 17, 2021 revised the Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper. SEBI consolidated existing procedures pertaining to issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper vide its circular dated August 10, 2021.
Based on feedback from market participants and recent regulatory changes, in order to bring about uniformity in requirements, certain amendments are being made to the said Circular. The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
14. Publishing of Investor Charter and Disclosure of Complaints by Custodians and DDPs on their websites
In order to facilitate awareness among investors about the details of activities carried and services provided by Custodians and Designated Depository Participants (DDPs), SEBI after due consultation has developed Investor Charters for Custodians and DDPs.
In this regard, all the registered Custodians and DDPs shall take necessary steps to bring the Investor Charter, as provided in “Annexure-A “of the SEBI circular dated December 17, 2021 to the notice of their clients and ensure that the Investor Charter is prominently displayed on their respective website for ease of accessibility of investors.
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
15. Revised Operational Circular for issue and listing of Non-convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper
SEBI revised Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper. This operational circular provides a chapter-wise framework for the issuance, listing and trading of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities or Commercial Paper.
This SEBI circular dated December 17,2021 covers instruments under the NCS Regulations, certain chapters contain provisions applicable to issue of securities under the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008 (hereinafter referred to as the SEBI SDI Regulations, 2008) and SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015(hereinafter referred to as the SEBI ILDM Regulations, 2015).This has been accordingly indicated in the chapters.
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
16. Portfolio Management Services for Accredited Investors
SEBI vide circular dated December 21, 2021 issued a circular on Portfolio Management Services for Accredited Investors. It is hereby clarified that “accredited investor” shall have the same meaning as assigned to it under clause (ab) of sub-regulation (1) of regulation 2 of the SEBI (Alternative Investment Funds) Regulations, 2012.
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
17. Investment Advisory Services for Accredited Investors
The amendment to SEBI (Investment Advisers) Regulations, 2013(“IA Regulations”) notified on August 03, 2021 read with the Circular dated August 26, 2021inter-alia introduced the concept/framework of “accredited investor “in IA Regulations.
Para 2(iii) of the SEBI Circular dated September 23, 2020(“Circular”) inter alia specifies the modes and limits of fees that can be charged by an Investment Adviser (IA) from a client. It has been decided vide SEBI circular dated December 21, 2021 that in case of accredited investors, the limits and modes of fees payable to the IA shall be governed through bilaterally negotiated contractual terms and the provisions of para 2(iii) of the Circular shall not be applicable. The other provisions of the Circular shall remain unchanged.
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
18. Extension of facility for conducting annual meeting and other meetings of unit holders of REITs and InvITs through Video Conferencing (VC) or through Other Audio-Visual means (OAVM)
SEBI permitted REITs/InvITs to conduct annual meetings of unit holders through VC/OAVM till December 31, 2021 and other meetings of unit holders through VC/OAVMtillJune30, 2021.
Representations have been received from REITs/InvITs to further extend the aforesaid facility to conduct annual meetings and other meetings of unit holders through VC/OAVM. Accordingly, it has been decided to extend the facility to conduct annual meetings of unit holders and meetings other than annual meeting, through VC or OAVM till June 30, 2022.
The detailed SEBI circular dated December 22, 2021 can be accessed at the link mentioned below:
Click here to access the Circular
19. Restoration of relaxed timelines w.r.t. validity of observation letter pertaining to Mutual Funds
SEBI vide its circular dated March 23, 2020 extended the validity period of observation letter issued by SEBI for launch of all New Fund Offers (NFOs) from six months to one year from the date of SEBI letter.
Based on consultation with stakeholders, it has been decided to restore the validity period of observation letter issued by SEBI to six months to launch NFOs.
The detailed SEBI circular dated December 22, 2021 can be accessed at the link mentioned below:
Click here to access the Circular
20. Non-compliance with provisions related to continuous disclosures
SEBI vide circular dated November 13, 2020 prescribed a uniform structure for levying fines and taking action for non-compliance with continuous disclosure requirements specified under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”), by the issuers of listed Non-Convertible Securities and/ or Commercial Papers.
Pursuant to there cent amendments to SEBI LODR Regulations, it has been decided to issue the present circular in supersession of the aforesaid circular and SEBI vide its circular dated December 29,2021has specified the revised levy of fine and action to be taken in case of non-compliances with continuous disclosure requirements by the issuers of listed Non-Convertible Securities and/ or Commercial Paper.
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
21. Extension of timeline for modified reporting requirements for AIFs
SEBI vide circular dated December 30, 2021 issued a circular on Extension of timeline for modified reporting requirements for AIFs. SEBI specified the revised reporting requirements for AIFs. It was also specified in para5of the Circular that the modified reporting requirements shall be applicable for quarter ending December 31, 2021 onwards. Based on the request received from AIF Industry the timeline has been extended and the modified reporting requirement shall be now applicable for quarter ending September30, 2022onwards.
The detailed circular can be accessed at the link mentioned below:
Click here to access the Circular
RBI Updates
- Changes in pricing of ECBS and TCS in light of the LIBOR transition:
In connection to the discontinuance of LIBOR as a benchmark rate, the RBI on 08th December, 2021 made the following changes to the External Commercial Borrowings (ECB) and Trade Credits (TC) Policy:
- Redefining ‘Benchmark Rate’ – The definition of ‘Benchmark Rate’ in case of FCY ECBs and TCs has been redefined to “any widely accepted interbank rate or alternative reference rate (ARR) of 6-month tenor, applicable to the currency of borrowing”.
- Change in all-in-cost for new contracts –Taking into account the differences in credit risk and term premia between LIBOR and the ARRs, the all-in-cost ceiling for new FCY ECBs and TCs has been increased by 50 basis points (“bps”) to 500 bps and 300 bps, respectively, over the benchmark rates.
- One Time Adjustment in all-in-cost ceiling for legacy contracts – To enable smooth transition of existing ECBs and TCs linked to LIBOR, the all-in-cost ceiling for existing FCY ECBs and TCs has been increased by 100 bps to 550 bps and 350 bps, respectively, over the benchmark rates.
Click here to access the Circular
2. Introduction of Legal Entity Identifier for Cross-border Transactions
The Legal Entity Identifier (LEI) is a 20-digit number used to uniquely identify parties to financial transactions worldwide to improve the quality and accuracy of financial data systems. The RBI had introduced the requirement of LEI for the remitter while making Large Value Transactions in Centralised Payment Systems (viz. RTGS or NEFT).
Now, the RBI on 10th December 2021 extended the LEI requirement to the resident entities (non-individuals) undertaking capital or current account transactions of ₹50 Crore and above (per transaction) under FEMA, 1999.
Click here to access the Circular
3. Restriction on storage of actual card data {i.e. Card on File (COF)}:
RBI on 23rd December, 2021 has announced an extension of the timeline to implement the restriction on storage of actual card data [Card on File (CoF)] of the users by the authorized non-bank payment aggregators and merchants on-boarded by them.
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4. Extension of Timeline for Periodic Updation of KYC:
Keeping in view the current COVID-19 related restrictions in various parts of the country, REs are advised that in respect of the customer accounts where periodic updation of KYC is due and pending as on date, no restrictions on operations of such account shall be imposed till 31stMarch, 2022.
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