With a view to enhance the standards of corporate governance of listed entities in India, the Securities and Exchange Board of India (SEBI) constituted the Committee on Corporate Governance (Committee) in June 2017 under the chairmanship of Mr. Uday Kotak. The Committee submitted its report (Report) to SEBI on 05 October 2017 recommending various revisions to the existing corporate governance regime and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).

The Reserve Bank of India (RBI) on 22 September 2017 released 2 (two) circulars in relation to “Investment by Foreign Portfolio Investors in Corporate Debt Securities – Review” and “Issuance of Rupee Denominated Bonds (RDBs) Overseas” (collectively, “Circulars”), thereby: excluding the Masala Bonds (rupee denominated bonds issued by Indian corporates overseas) from the limit for investments by Foreign Portfolio Investors (FPIs) in corporate bonds with effect from 03 October 2017.

The Ministry of Corporate Affairs, Government of India notified the Companies (Restriction on number of layers) Rules, 2017 (Rules) on 20 September 2017. The Rules, from the date of their notification, prohibit a company, other than the classes of companies specified in paragraph (c) below, from having more than 2 (two) layers of subsidiaries (Restriction). The Rules assume importance in the backdrop of concerns around incorporating shell companies to channelize illicit funding activities and curbing black money.

The Government of Maharashtra (Government) has notified the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (New Act), through a notification dated 7 September 2017. The New Act would come into effect from the date to be appointed by the Government in the official gazette and would repeal the Bombay Shops and Establishments Act, 1948 (Old Act).

In a meeting chaired by the Minister of State for Corporate Affairs on 6 September 2017 (Meeting), the Government of India (GoI) has decided that in the event a director or authorised signatory of any struck off company (i.e. a company whose name has been struck off the registers of the registrar of companies in India) tries to siphon off money from its bank account without authorisation, such a person may be punished with imprisonment for a term ranging from 6 months to a maximum of 10 years. In the event the siphoning involves public interest, the minimum jail time for such a person upon conviction shall be a minimum term of 3 years along with fine amounting to three times the money siphoned off.

The Department of Industrial Policy and Promotion (DIPP) of the Government of India’s Ministry of Commerce and Industry released the consolidated foreign direct investment (FDI) policy circular of 2017 (New FDI Policy), on 28 August 2017 effective immediately. The New FDI Policy has been released in wake of the abolition of the Foreign Investment Promotion Board (FIPB) and puts in place a transparent, predictable, and easily comprehensible policy framework on FDI in India. The New FDI Policy consolidates, subsumes, and supersedes the press notes/ releases/ clarifications/ circulars issued by the DIPP in relation to the FDI, which were in force as on 27 August 2017.

The Securities and Exchange Board of India (SEBI) issued a circular dated 20 July 2017 (July 2017 Circular), temporarily suspending the issuance of rupee denominated bonds, i.e. ‘masala bonds’, by Indian corporates overseas until the limit utilisation of foreign portfolio investors (FPIs) falls below 92% (ninety two per cent).

The Securities and Exchange Board of India (SEBI) issued a circular on 24 July 2017 (Circular) which requires that all new applications for registration of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) be mandatorily and exclusively registered on the SEBI intermediary portal i.e. https://siportal.sebi.gov.in (Portal).

The Ministry of Corporate Affairs of the Government of India vide a notification on 5 July 2017 that was published in the Official Gazette of India on 6 July 2017 (Notification) amended Schedule IV of the Companies Act, 2013 which sets out the ‘Code for Independent Directors’ (Code). Pursuant to the Notification, inter-alia, the following key changes have been made to the Code

Less than a month after the Foreign Investment Promotion Board (FIPB) published an office memorandum setting out the roadmap for the post-FIPB abolishment period, the Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industry has on 29 June 2017 published a standard operating procedure (SOP) for processing foreign direct investment (FDI) proposals in India.