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.
A nine-judge bench of the Supreme Court of India (SC) on 24 August 2017 in K S Puttuswamy (Retd) and Anr. v. Union of India and Ors. (Privacy Case) unanimously held that privacy is a fundamental right, and that the ‘right to privacy is an integral part of both life and personal liberty under Article 21’ of the Constitution of India.
The SC also overruled several cases including M P Sharma v. Satish Chandra, District Magistrate, Delhi (1954) SCR 1077 and Kharak Singh v. State of Uttar Pradesh (1964) 1 SCR 332, where the right to privacy was not considered as a fundamental right.
On 15 November 2019, the Central Government notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (FSP Rules). The FSP Rules aim to provide a framework for insolvency and liquidation of systemically important financial service providers (FSPs) other than banks and are currently applicable to non-banking financial companies (NBFCs) with an asset size of INR 500 Crores (approx. USD 70 million) or more, as per a notification issued by the
The President of India on 3 May 2018 gave his assent to the ordinance (Ordinance) amending the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act). By way of background, the Act was enacted with an intention of faster resolution of matters in relation to commercial disputes thereby creating a positive outlook for foreign investors.
The Reserve Bank of India (RBI), through a circular dated 27 April 2018 (Circular) has further liberalized the External Commercial Borrowing (ECB) norms in light of requests received from corporates and other entities. The Circular simplifies ECB norms with a view to provide access of cheaper funds to corporate borrowers to meet their capital requirements.
The Reserve Bank of India (RBI), through a notification dated 20 March 2018, notified the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (Regulations). The Regulations are intended to facilitate ‘cross border mergers’ i.e., any merger, amalgamation or arrangement between an Indian company and a foreign company in accordance with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 (Companies Rules) issued under the Companies Act, 2013.
The Indian Ministry of Finance vide a press release issued on 16 April 2018, has finalised the minimum capital requirements for all such activities falling under ‘Other Financial Services’, and those that are unregulated by any financial sector regulator.
As per the extant Foreign Direct Investment Policy, 2017 (FDI Policy) 100% FDI under the ‘automatic’ route is allowed for financial services activities that are regulated by a financial sector regulator inter-alia the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDA).
The President of India on 28 March 2018 gave his assent to the Payment of Gratuity (Amendment) Act, 2018 (Amendment Act), thereby amending the Payment of Gratuity Act, 1972 (Act) and which was brought into effect on 29 March 2018 through a notification issued by the Ministry of Labour and Employment, Government of India (MoLE). Through the Amendment Act the Indian government aims to revise the gratuity limit for the employees engaged in private sector and public sector undertakings/ autonomous organizations under the government, to be at par with their counterparts employed in the government sector, thus ensuring harmony.
Securities and Exchange Board of India (SEBI), in its board meeting held on 28 March 2018 in Mumbai accepted several recommendations (with and without modifications) given by the Kotak Committee relating to corporate governance. By way of background, the Kotak Committee was constituted under the chairmanship of Mr. Uday Kotak with a view of enhancing standards of corporate governance of listed entities in India. The Kotak Committee had accordingly submitted its report to SEBI on 5 October 2017.
On 1 February 2018, the Indian Finance Minister presented the Union Budget for the financial year 2018 – 2019 (Budget 2018) in the Parliament and consequently the Finance Bill, 2018 has also been introduced in the Lower House for approval. The focus of Budget 2018 was to strengthen sectors such as agriculture, rural development, health, education, employment and infrastructure.
The Union Cabinet has approved amendments to the Foreign Direct Investment (FDI) Policy with an aim to further liberalise the FDI regime in India. The steps have been undertaken as a continuing efforts of Indian Government in ease of doing business and in order to stimulate a more investor-friendly environment for the foreign players which will boost economic growth and create jobs.
