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.
The Ministry of Corporate Affairs of the Government of India by way of a notification in the Official Gazette on 29 June 2017 exempted every person or enterprise that is a party to a combination under section 5 of the Competition Act, 2002 (Act) from providing a mandatory notice to the Competition Commission of India (CCI) within 30 (thirty) days of either approval of the proposal relating to merger or amalgamation set out in section 5 (c) of the Act by the board of directors of the merging or amalgamating enterprise, or execution of any agreement or document for acquisition referred to in section 5 (a) of the Act or of acquiring control referred to in section 5 (b) of the same for a period of 5 years commencing from 29 June 2017 onwards (Exemption Notification).
The Government of India recently notified the Rights of Persons with Disabilities Rules, 2017 (Rules) in the Official Gazette. The Rules are issued under the Rights of Persons with Disabilities Act, 2016 (Act), and were enacted to give effect to the United Nations Convention on the Rights of Persons with Disabilities and for related matters.
The Act and the Rules are applicable to every establishment including Government establishments and private establishments.
The Foreign Investment Promotion Board (FIPB) Section of the Department of Economic Affairs (DoEA) of the Government of India’s (GoI) Union Ministry of Finance (MoF) published an office memorandum dated 5 June 2017 (OM) setting out the roadmap in relation to the post-FIPB abolishment period.
Continuing its stance of promoting ‘maximum governance and minimum government’, the Union Cabinet of the Government of India chaired by Prime Minister Narendra Modi on 24 May 2017 gave its approval for phasing out the Foreign Investment Promotion Board (FIPB) and empowered individual government ministries/ departments to process applications for foreign direct investment (FDI) requiring government approval. A press release was issued on 24 May 2017 itself by the Press Information Bureau of the Government of India (Press Release) in this regard.
The Government of India (GOI) amended the Banking Regulation Act, 1949 (Act) vide a notification in the Official Gazette on 4 May 2017 by means of a presidential ordinance (Amendment Ordinance). The Amendment Ordinance has given the Reserve Bank of India (RBI) powers to tackle bad loans by issuing directions to any banking company to initiate insolvency proceedings for any default in debts, and also for issuing directions to banking companies for resolution of stressed assets.
The Ministry of Housing and Urban Poverty Alleviation on 19 April 2017 notified in the Official Gazette of India, the remaining sections (i.e. 3-19, section 40, sections 59-70 and sections 79-80) of the Real Estate (Regulation and Development) Act, 2016 (Act) with effect from 1 May 2017 thereby protecting the interests of real estate buyers in India.
The Act aims to promote transparency and accountability in the real estate sector and provides for an adjudicating mechanism for speedy dispute redressal in the form of the Real Estate Regulatory Authority (RERA) (as adopted by various States), with appeals from decisions, directions or orders of the RERA and/ or the adjudicating officer being made to the appellate tribunal under the Act (Appellate Tribunal).
The Supreme Court of India (SC) on 20 April 2017 in the case of Mahendra Singh Dhoni v. Yerraguntla Shyamsundar and Anr. held that only malicious or deliberate acts, or attempts, undertaken with the intention of outraging the religious beliefs of a class of citizens would be penalized under Section 295A of the Indian Penal Code (IPC).
The Ministry of Corporate Affairs of the Government of India (MCA) on 13 April 2017 notified section 234 of the Companies Act, 2013 (Act) that provides for mergers or amalgamations of an Indian company with a foreign company and vice versa (Commencement Notification). The MCA vide a separate notification dated the same day also inserted a new rule, i.e. Rule 25A in the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (Rules) to regulate such mergers or amalgamations, which shall come into force from the date of its publication in the Official Gazette of India (Merger or Amalgamation Rule).
The Ministry of Corporate Affairs of the Government of India (MCA) has clarified on the exemptions provided to enterprises from application of section 5 that regulates combinations under the Competition Act, 2002 (Act) vide notification dated 27 March 2017 that was published in the official gazette on 29 March 2017 (Exemption Notification). The MCA also rescinded an earlier notification dated 4 March 2016 (Earlier Notification) that exempted an enterprise fulfilling certain criteria from the applicability of section 5 of the Act (Rescinding Notification).
In a bid to ensure that arbitration is the preferred means of dispute resolution for government entities, and in an effort to portray Mumbai as a proposed hub for international commercial arbitration, the Department of Law and Judiciary of the Government of Maharashtra (GoM) has vide circular dated 28 February 2017 certified the Mumbai Centre for International Arbitration (MCIA) as recognised arbitral institute for the purposes of its ‘Policy for Arbitration as a preferred mode of dispute resolution’ that was released by a government resolution dated 13 October 2016 (Resolution).
Pursuant to several ease of doing business initiatives of the Government of India, the Department of Industrial Policy and Promotion on 6 March 2017 notified the Trade Mark Rules, 2017 (Rules) thereby repealing the erstwhile Trade Mark Rules, 2002. While making the filing procedure for new trade marks simpler by, inter-alia, reducing the total number of forms, the Rules have also provided for a new procedure for determination of well-known trade marks in India.
The Reserve Bank of India (RBI) has on 9 March 2017 permitted 100% (one hundred per cent) foreign direct investment (FDI) in ‘market place model of e-commerce’ sector under automatic route and subject to certain conditions. However, the RBI has prohibited FDI in ‘inventory based model of e-commerce’. In this regard, the RBI issued the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2017 (Amendment Regulations).
The lower house of Indian Parliament (Lok Sabha) on 9 March 2017 passed the Maternity Benefit (Amendment) Act, 2016 (Amendment Act) which was already passed by the upper house (Rajya Sabha) in August 2016. The Amendment Act amends the Maternity Benefit Act, 1961 (Act) and now only requires the assent of the President of India before it is published in the Official Gazette, post which it shall become the law.
Keeping in line with the ease of doing business initiatives of the Government of India, the Department of Industrial Policy and Promotion on 6 March 2017 notified the Trade Mark Rules, 2017 (Rules) which repeal the erstwhile Trade Mark Rules, 2002 (Erstwhile Rules).
Some of the salient features of the Rules are as follows
Less than two days after the Securities and Exchange Board of India (SEBI) amended the SEBI (Foreign Portfolio Investors) Regulations, 2014 (Regulations) by way of an amendment notification dated 27 February 2017 (Amendment Notification), SEBI issued a fresh circular making further changes to the norms laid down for investments by foreign portfolio investors (FPIs) in unlisted corporate debt securities and securitised debt instruments vide a circular dated 28 February 2017 (Circular).
The Securities and Exchange Board of India (SEBI) amended the SEBI (Foreign Portfolio Investors) Regulations, 2014 by way of an amendment notification dated 27 February 2017 (Amendment Notification).
The Amendment Notification now defines ‘offshore derivative instrument’ as any instrument, by whatever name called, which is issued overseas by a foreign portfolio investor (FPI) against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, or unlisted debt securities or securitised debt instruments, as its underlying.
The Insolvency and Bankruptcy Board of India (IBBI) has through 3 (three) notifications dated 30 January 2017 issued following regulations under the Insolvency and Bankruptcy Code, 2016:
(i) IBBI (Advisory Committee) Regulations, 2017 (AC Regulations):
AC Regulations provide for IBBI’s power to constitute advisory committees to obtain expert advice for efficient discharge of its functions. IBBI may constitute advisory committees on service providers; corporate insolvency and liquidation; individual insolvency and bankruptcy; and such other subjects as IBBI may consider expedient. AC Regulations also provide for composition of such committees, rules of procedure for their meetings, fee payable to their members and so on.
The Department of Industrial Policy and Promotion of the Government of India (GoI) amended the Consolidated Foreign Direct Investment Policy Circular of 2016 (FDI Policy) and revised the guidelines in relation to investments made into infrastructure company in the securities market vide a notification dated 20 February 2017 (Revised Policy).
India’s Union Finance Minister Arun Jaitley presented the Union Budget for the financial year (FY) 2017-2018 (Budget) before the Lok Sabha today. The key highlights of the Budget are set-out below:
1. Abolition of the Foreign Investment Promotion Board (FIPB): The FIPB will be abolished in FY 2017-2018. A roadmap is likely to be introduced in relation to the same. Further liberalisation of the foreign direct investment policy is being considered by the Government of India.
The Ministry of Corporate Affairs, Government of India has vide 2 (two) notifications, both dated 4 January 2017, exempted the following companies from complying with certain provisions of the Companies Act, 2013:
(a) Specified IFSC public companies: Unlisted public companies which are licensed to operate bythe Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), or the Insurance Regulatory and Development Authority of India (IRDAI) from the International Financial Services Centre (IFSC) located in an approved multi services Special Economic Zone (SEZ) set-up under the Special Economic Zones Act, 2005 (SEZ Act); and
First & foremost, we wish all our readers a very happy, healthy & prosperous 2020! Below are certain key reforms & legal developments in India during 2019 which we thought would be of interest: On 16 January 2019, the Reserve Bank of India (RBI) through its circular, consolidated the existing framework and policy for External Commercial Borrowings (ECBs) and Rupee Denominated Bonds. The framework recategorizes the Track I, II and III ECBs along with masala bonds into ‘Foreign Currency denominated ECB’
The Ministry of Corporate Affairs has, vide a notification dated 7 December 2016 (Commencement Notification), notified certain provisions of the Companies Act, 2013 (Act) and has appointed 15 December 2016 as the effective date. Set out below is a summary of some of the provisions notified vide the Commencement Notification:
Compromises, Arrangements and Amalgamations
While most of the provisions under Chapter XV of the Act (Compromises, Arrangements and Amalgamations) have been notified vide the Commencement Notification, notably, section 234 which provides for merger or amalgamation of a company with a foreign company is yet to be notified. Key features of Chapter XV are as follows
The Ministry of Corporate Affairs, vide a notification dated 7 December 2016, has notified the Companies (Transfer of Pending Proceedings) Rules, 2016 (TPP Rules) which would become effective from 15 December 2016, except rule 4 (pertaining to pending voluntary winding up proceedings) which would come into effect from 1 April 2017.
The Union Cabinet on 7 December 2016 approved a set of reforms, including simplification of labour laws, and providing production incentives through technology upgradation for the ‘Made-ups’ manufacturing sector. The key reforms are:
Contribution to the Employees’ Provident Fund (EPF) has been made optional for employees earning less than INR 15,000 (Rupees fifteen thousand) per month.
Permissible overtime in the ‘Made-ups’ manufacturing sector has been increased to 100 hours per quarter.
In order to promote ease of doing business and the “Make In India” Campaign, the Government of Maharashtra on 28 November 2016 launched the e-land management system for the Aurangabad Industrial City (AURIC) which enables businesses and individuals to apply for land in AURIC and also provides for online review and processing of applications filed in this regard, by the Aurangabad Industrial Township Limited.
Pursuant to a notification dated 25 November 2016, the Ministry of Finance (MoF), Government of India has appointed 1 December 2016 as the date on which the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (SICA Repeal Act) would come into force.
The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (“Act”) was passed by the Indian Parliament on 9 August 2016 and was published in the Official Gazette on 16 August 2016 after receiving Presidential assent. The Act has amended 4 (four) legislations – the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”); the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (“RDDBFI Act”); the Indian Stamp Act, 1899 (“Stamp Act”); and the Depositories Act, 1996 (“Depositories Act”).
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