Corporate and legal Alert- August 2022
In this edition we have tried to bring you notice the latest amendment that followed in the month of August, 2022 issued by MCA, RBI, SEBI, DIPP and others.
AMENDMENTS ISSUED BY MCA
MCA has published the Companies (Registration of Charges) Second Amendment Rules, 2022.
New Rule 13 has been notified providing that Form No. CHG-1, Form No. CHG-4, Form No. CHG-8 and Form No. CHG-9 shall be signed by an Insolvency resolution professional or resolution professional or resolution professional or liquidator for companies under resolution or liquidation as the case may be and filed with the registrar.
To read more- https://www.mca.gov.in/bin/dms/getdocument?mds=4o6aHVQPVnWMaUqWvlFEow%253D%253D&type=open
MCA has published the Companies (Acceptance of Deposits) Amendment Rules,2022
Businesses will now be required to file by 30 June every year a return of deposits as per audited figures. Businesses will also have to report loans or advances received by the company from directors, shareholders, promoters or banks and financial institutions, which are referred to as exempted deposits. Further, Statutory Auditors will be required to submit a declaration with respect to the exempted deposits and liquid assets. This move will help in ensuring greater transparency in reporting obligations.
To read more- https://www.mca.gov.in/bin/dms/getdocument?mds=99KwRbJSkMXjVLv09KTgJg%253D%253D&type=open
Keeping in mind the launch of MCA V3 for Companies Act Forms, MCA has released the amended version of the eForms DIR-3-KYC and web-form DIR-3-KYC-WEB. It is clarified that in the case of Indian nationals, Income-tax PAN is mandatory in all cases even if there is no change in Income-tax PAN. In case the details as per Income-tax PAN are incorrect, the director/designated partner is advised to first correct the details in Income-tax PAN.
To read more – https://www.mca.gov.in/bin/dms/getdocument?mds=slrNNMj6rSE43YrWxXorGw%253D%253D&type=open
Through this amendment, MCA has revised Form No. STK-1, Form No. STK-5 and Form No. STK-5A to capture the declaration that the company is not carrying on any business or operations, as revealed after the physical verification, as carried out by the Registrar of companies under the provisions of Section 12(9) of the Companies Act, 2013.
To read more – https://www.mca.gov.in/bin/dms/getdocument?mds=z76om3NiBGIHmWy4e0HtcA%253D%253D&type=open
AMENDMENTS ISSUED BY SEBI
SEBI has come out with a circular amending its Guidelines for the preferential issue and institutional placement of units by listed REITs and InvITS.
Under the new guidelines, the REIT/InvITS shall make an application for listing of the units to the stock exchange(s) and the units shall be listed within two working days from the date of allotment. Provided that where the REIT/InvIT fails to list the units within the specified time, the monies received shall be refunded through verifiable means within four working days from the date of the allotment, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REIT.
To read more- https://www.sebi.gov.in/legal/circulars/aug-2022/enhanced-disclosures-by-cras-and-norms-on-rating-withdrawal_62361.html
SEBI has notified the Securities and Exchange Board of India (Portfolio Managers) (Amendment) Regulations, 2022
The definition for the term “related party “under section 2(1)(PA) has been notified which means a director, partner, or his relative; key managerial personnel or his relative; a firm, in which a director, partner, manager or his relative is a partner; a private company in which a director, partner or manager or his relative is a member or director; a public company in which a director, partner or manager is a director or holds along with his relatives, more than two percent. of its paid-up share capital; anybody corporate whose board of directors, managing director or manager is accustomed to acting in accordance with the advice, directions or instructions of a director, partner or manager; a related party as defined under the applicable accounting standards; such other person as may be specified by the Board.
The enhanced norms shall be applicable to credit ratings of securities that are listed, or proposed to be listed, on a recognized stock exchange, and other credit ratings that are required under various SEBI Regulations or circulars thereunder. In order to standardize the methodology of computation and disclosure of a ‘sharp rating action’, it is clarified that CRAs shall compare two consecutive rating actions.
To read more- https://www.sebi.gov.in/legal/circulars/aug-2022/enhanced-disclosures-by-cras-and-norms-on-rating-withdrawal_62361.html
SEBI has issued a circular to notify a Framework for restricting insider trading by Designated Persons (“DPs”) by freezing PAN at the security level. In order to rationalize the compliance requirement under Clause 4 of Schedule B read with Regulation 9 of PIT Regulations, improve ease of doing business and prevent inadvertent non-compliance of provisions of PIT Regulations by DP, SEBI has now mandated that Stock Exchanges and Depositories shall develop a system to restrict trading by DPs of the listed company during trading window closure period.
AMENDMENTS ISSUED BY RBI
RBI has published the Foreign Exchange Management (Overseas Investment) Rules, 2022 in supersession to the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015.
The Rules shall apply to any investment made outside India by a financial institution in an IFSC or acquisition or transfer of any investment outside India made out of Resident Foreign Currency Account; or out of foreign currency resources held outside India by a person who is employed in India for a specific duration irrespective of length thereof or for a specific job or assignment, duration of which does not exceed three years; or in accordance with sub-section (4) of section 6 of the Act.
To read more- https://rbidocs.rbi.org.in/rdocs/content/pdfs/GazetteRules23082022.pdf
RBI has published the Foreign Exchange Management (Overseas Investment) Regulations, 2022 which shall come into force on the date of their publication in the Official Gazette i.e. 22-08-2022.
As per the amended Regulation, the Indian entity may lend or invest in any debt instrument issued by a foreign entity or extend the non-fund-based commitment to or on behalf of a foreign entity including overseas step-down subsidiaries of such Indian entity subject to the following conditions within the financial commitment limit as prescribed in the Foreign Exchange Management (Overseas Investment) Rules, 2022.
To read more – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12380&Mode=0
MISCALLANEOUS
AMENDMENTS ISSUED BY NSE
NSE has notified the steps taken by SEBI for the usage of Digital Signature Certification for authentication/certification of filings/submissions made to Stock Exchanges.
In accordance with Regulation 10 of SEBI (LODR), all listed companies are required to file the reports, statements, documents, filings and any other information with the recognized Stock Exchange(s) on the electronic platform as specified by the Board or the recognized Stock Exchange(s). Accordingly, NSE has provided an electronic platform viz. National Stock Exchange Electronic Application Processing System (NEAPS) and the Digital Portal for listed companies to file the above documents. Rating, etc…
To read more – https://static.nseindia.com//s3fs-public/inline-files/Circular%20on%20use%20of%20digital%20signature%20certificate.pdf