UPDATES UNDER COMPANIES ACT, 2013
Relaxation of Minimum residency requirement for FY 2020-21:
The Ministry of Corporate Affairs vide General Circular dated 20th October,2020 has further relaxed the requirement of minimum residency in India for a period of at least 182 days in a year by at least one director in every company for FY 2020-21 also. Earlier, this relaxation was available for FY 2019-20. Considering the ongoing pandemic, the relaxation has been extended to FY 2020-21 as well.
Private placement norms for securities issued to Qualified Institutional Buyers relaxed:
The Ministry of Corporate Affairs vide its notification dated 16th October, 2020 has provided relaxation that the Companies need not pass special resolution every time the securities are being issued to Qualified Institutional Buyers. It would be sufficient if a company passes a special resolution only once in a year for all the allotments to such buyers during the year.
UPDATES UNDER FEMA
Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020:
The Reserve Bank of India vide its notification No. FEMA. 399/RB-2020 dated 23rd October 2020 has published Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020 to promote orderly development and maintenance of foreign exchange market in India.
According to these regulations, no person shall post or collect margin for derivative contracts and pay or receive interest on such margin without the prior permission of the Reserve Bank.
Subject to directions issued by the Reserve Bank in this regard, authorized dealers may Post and collect margin, in India and outside India, on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India, in the form and manner as specified by the Reserve Bank and may Receive and pay interest on margin posted and collected on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India.
UPDATES UNDER SEBI
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2020:
SEBI has amended the provisions of SEBI (LODR), 2015, relating to listed non-convertible debt securities. As per the amendment, the listed entity shall maintain hundred percent asset cover or asset cover as per the terms of offer document/ Information Memorandum and/or Debenture Trust Deed, sufficient to discharge the principal amount at all times for the non-convertible debt securities issued.
Further, amended regulations have inserted a new clause under Schedule III namely Forensic audit which provides the disclosures which shall be made to the stock exchange by listed entities in case of initiation of forensic audit.
Securities and Exchange Board Of India (Prohibition Of Insider Trading) (Second Amendment) Regulations, 2020:
SEBI has amended the Insider Trading Regulations regarding information to be given for Insider trading.
- Information about alleged violation of insider trading laws will be considered timely only if reported within 3 years of first violation.
- Information Disclosure submitted by the informant to now include the details of securities in which trading is alleged, UPSI involved and evidence based on which violation is alleged.