When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies, then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me, that it might be the mirror of my soul, as my soul is the mirror of the infinite God!
O my friend — but it is too much for my strength — I sink under the weight of the splendor of these visions! A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot, which was created for the bliss of souls like mine.
I am so happy, my dear friend, so absorbed in the exquisite sense of mere tranquil existence, that I neglect my talents. I should be incapable of drawing a single stroke at the present moment; and yet I feel that I never was a greater artist than now.
When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies, then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me.
The Ministry of Corporate Affairs (MCA) vide issuing important update dated August 01, 2023 has informed the stakeholders about the below mentioned matters: • The Ministry of Corporate Affairs is launching Refund form on V3 portal effective on 04th August 2023. Refund form on V2 portal will continue for availing refund for forms filed in V2. • Stakeholders are informed that Beta Version of View Public Documents [VPD] service in V3 shall be launched on 16th August 2023 for V3 documents (only for Testing purposes between 7:00 pm to 10:00 pm daily). Existing V2 VPD Service shall remain available for the stakeholders. • Approval for incorporation of 82,628 companies and LLPs has been given during April- July 2023 compared to 73,875 during April- July 2022.
The Companies (Incorporation) Second Amendment Rules, 2023
The Ministry of Corporate Affairs (MCA) vide its notification dated August 02, 2023 has notified “the Companies (Incorporation) Second Amendment Rules, 2023” which shall come into force on the date of its publication in the Official Gazette. According to the amendment Form RD-1 {Form for filling application to Central Government (Regional Director)} has been substituted.
1,086 requests of ICSI and 184 requests of ICAI for Merger/Deactivation of User ids have been executed in system. Professionals are requested to contact the respective Institutes for Merger/Deactivation/Degradation of their MCA User ids.
Stakeholders please note that VPD V3 Beta version is available under Document Services from 7pm to 10pm. It is for testing purposes only and forms prior to May 2023 are available for download.
Condonation of delay in filing of Form-3, Form-4 and Form-11 under section 67 of Limited Liability Partnership Act, 2008 read with section 460 of the Companies Act, 2013
The Ministry of Corporate Affairs (MCA) has issued general circular no. 8/2023 dated August 23, 2023 and granted one-time relaxation in additional fees to those LLPs who could not file the Form 3, Form 4 and Form 11 within due date and provided an opportunity to update their filings and details in Master-data for future compliances. Salient features are mentioned as below: 1. Form 3 and Form 4 will be processed under STP mode, except for cases involving changes in business activities. Further, stakeholders are advised to file these forms sequentially. 2. These forms will provide facility to edit the pre-filled master data which is available as the existing master database of the LLP. However, the onus of filing the correct data would be on the stakeholders. 3. The filing of Form 3 and Form 4 without additional fees shall be applicable for the event dates 01.01.2021 onwards. For the events prior to the aforesaid period, these forms can be filed with two times and four times of normal fees as additional fee for small LLPs and other than small LLPs respectively. 4. The filing of Form 11 without additional fee shall be applicable for the financial year 2021-22 onwards. 5. These forms shall be available for filing from 01.09.2023 onwards till 30.11.2023. 6. The LLPs availing the scheme shall not be liable for any action for the delayed filing of aforesaid forms.
Disputes between Investors/Clients and listed companies or any of the specified intermediaries / regulated entities in securities market arising out of latter’s activities in the securities market, will be resolved in accordance with this circular and by harnessing online conciliation and/or online arbitration as specified in this circular. It is provided that an investor/client shall first take up his/her/their grievance with the Market Participant by lodging a complaint directly with the concerned Market Participant. If the grievance is not redressed satisfactorily, the investor/client may, in accordance with the SCORES guidelines, escalate the same through the SCORES Portal in accordance with the process laid out therein. After exhausting all available options for resolution of the grievance, if the investor/client is still not satisfied with the outcome, he/she/they can initiate dispute resolution through the ODR Portal.
1,086 requests of ICSI and 184 requests of ICAI for Merger/Deactivation of User ids have been executed in system. Professionals are requested to contact the respective Institutes for Merger/Deactivation/Degradation of their MCA User ids.
Audit of firm-level performance data of Portfolio Managers
SEBI had prescribed that Portfolio Managers are required to audit firm-level performance data on an annual basis as per its Master Circular dated 20-Mar-2023. In order to have uniformity, it has been decided that Association of Portfolio Managers in India (‘APMI’), in consultation with SEBI, shall specify standardised Terms of Reference (‘ToR’) for aforesaid audit of firm-level performance data. The standard ToR specified by APMI shall be applicable with effect from October 01, 2023, and shall be mandatorily followed by all Portfolio Managers for the purpose of annual audit of firm-level performance data. Further provided that the Portfolio Managers shall submit the confirmation of compliance with the requirement of annual audit of firm-level performance data in line with the standard ToR specified by APMI, to SEBI within 60 days from the end of each financial year.
Offer for Sale framework for sale of units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
SEBI vide its Circular dated 10-Jan-2023 specified the comprehensive framework on Offer for Sale (OFS) of shares including units of REITs and InvITs through stock exchange mechanism. Vide this circular, SEBI has modified the aforesaid framework and prescribed that OFS for sale of units of REITs and InvITs by sponsor(s) or sponsor group entities, and other unit holders are permitted only in units of listed REITs and listed InvITs. However, in case of OFS for listed InvITs, the trading lot shall be same as the trading lot prescribed for such InvITs in the secondary market in terms of SEBI (Infrastructure Investment Trusts) Regulations, 2014.
Reduction of timeline for listing of shares in Public Issue from existing T+6 days to T+3 days
SEBI has reduced the time taken for listing of specified securities after the closure of public issue to 3 working days (T+3 days) as against the present requirement of 6 working days (T+6 days); ‘T’ being issue closing date. Accordingly, SEBI has specified the revised timelines for listing of specified securities and various activities involved in the public issue process. Further provided that the T+3 timeline for listing shall be appropriately disclosed in the Offer Documents of public issues. The provisions of this circular shall be applicable on voluntary basis for public issues opening on or after 1-Sept-2023 and mandatory for public issues opening on or after 1-Dec-2023.
SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2023
The SEBI has notified the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2023 which shall come into force on the date of their publication in the Official Gazette. Vide this notification a new Chapter VIA has been inserted which provides the framework for voluntary delisting of non-convertible debt securities or non-convertible redeemable preference shares and obligations of the listed entity on such delisting. The provisions of this Chapter VIA shall be applicable to voluntary delisting of all listed non-convertible debt securities or non-convertible redeemable preference shares from all or any of the stock exchanges where such non-convertible debt securities or non-convertible redeemable preference shares are listed except a few mentioned in the notification.
Modification in Cyber Security and Cyber Resilience framework of Stock Exchanges, Clearing Corporations and Depositories
SEBI has modified the framework for Cyber Security and Cyber Resilience for stock exchanges, clearing corporations and depositories. It is provided that MIIs are mandated to conduct comprehensive cyber audit at least 2 times in a financial year. Along with cyber audit reports, MIIs are directed to submit a declaration from the MD/CEO certifying that comprehensive measures and processes have been put in place and adequate resources have been hired. Further, MIIs, whose systems have been identified as Critical Information Infrastructure (CII) by National Critical Information Infrastructure Protection Centre (NCIIPC), are mandated to send regular updates/closure status of the vulnerabilities found in their respective “protected systems” to NCIIPC. MIIs are directed to communicate the status of the implementation of the provisions of this circular to SEBI within 30 days from the date of this Circular.
Guidelines for MIIs regarding Cyber security and Cyber resilience
SEBI vide this circular has issued guidelines for strengthening the existing cyber security and cyber resilience framework of MIIs. These guidelines should be read in conjunction with the applicable SEBI circulars and subsequent updates issued by SEBI from time to time and are placed at Annexure-A to this circular. The compliance of the guidelines shall be provided by the MIIs along with their cybersecurity audit report. The compliance shall be submitted as per the existing reporting mechanism.
Reserve Bank of India
Withdrawal of ₹2000 Denomination Banknotes – Status
The Reserve Bank of India had announced the withdrawal of ₹2000 banknotes from circulation on May 19, 2023. The total value of ₹2000 banknotes in circulation, which amounted to ₹3.62 lakh crore on March 31, 2023 had declined to ₹3.56 lakh crore as at the close of business on May 19, 2023. According to the data received from the banks, the total value of ₹2000 banknotes received back from circulation is ₹3.14 lakh crore up to July 31, 2023. Consequently, ₹2000 banknotes in circulation as at the close of business on July 31 stood at ₹0.42 lakh crore. Thus, 88% of the ₹2000 banknotes in circulation as on May 19, 2023, have since been returned.
RBI releases the results of Forward Looking Surveys
As part of the Statement on Developmental and Regulatory Policies released on August 10, 2023, Reserve Bank of India (RBI) has announced the development of a Public Tech Platform for Frictionless Credit. The Platform is being developed by Reserve Bank Innovation Hub (RBIH), a wholly owned subsidiary of RBI. The Public Tech Platform would enable delivery of frictionless credit by facilitating seamless flow of required digital information to lenders. The end-to-end digital platform will have an open architecture, open Application Programming Interfaces (APIs) and standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model. The Pilot of the Platform shall commence on August 17, 2023.
RBI launches उद्गम – UDGAM – Centralised Web Portal for searching Unclaimed Deposits
The Governor, Reserve Bank of India launched a Centralised Web Portal उद्गम UDGAM (Unclaimed Deposits – Gateway to Access inforMation). This portal has been developed by RBI for use by members of public to facilitate and make it easier for them to search their unclaimed deposits across multiple banks at one place. The Reserve Bank of India had announced the development of a centralised web portal for searching unclaimed deposits as part of the Statement on Developmental and Regulatory Policies dated April 06, 2023. The launch of the web portal will aid users to identify their unclaimed deposits/ accounts and enable them to either claim the deposit amount or make their deposit accounts operative at their respective banks. Reserve Bank Information Technology Pvt. Ltd. (ReBIT), Indian Financial Technology & Allied Services (IFTAS) and participating banks have collaborated on developing the portal.
Fair Lending Practice – Penal Charges in Loan Accounts
Reserve Bank has issued various guidelines to the Regulated Entities (REs) to ensure reasonableness and transparency in disclosure of penal interest. Under the extant guidelines, lending institutions have the operational autonomy to formulate Board approved policy for levy of penal rates of interest. It has been observed that many REs use penal rates of interest, over and above the applicable interest rates, in case of defaults / non-compliance by the borrower with the terms on which credit facilities were sanctioned. On a review of the practices followed by REs for charging penal interest/charges on loans, RBI has issued instructions for adoption by REs..
In order to enable Infrastructure Debt Fund-NBFCs (IDF-NBFCs) to play a greater role in the financing of the infrastructure sector and to harmonise the regulations governing financing of infrastructure sector by the NBFCs, a review of the guidelines applicable to IDF-NBFCs has been undertaken, in consultation with the Government of India. The revised regulatory framework for IDF-NBFCs shall come into effect from August 18, 2023.
Reset of Floating Interest Rate on Equated Monthly Instalments (EMI) based Personal Loans
At the time of sanction of EMI based floating rate personal loans, Regulated Entities (REs) are required to take into account the repayment capacity of borrowers to ensure that adequate headroom/ margin is available for elongation of tenor and/ or increase in EMI, in the scenario of possible increase in the external benchmark rate during the tenor of the loan. However, in respect of EMI based floating rate personal loans, in the wake of rising interest rates, several consumer grievances related to elongation of loan tenor and/or increase in EMI amount, without proper communication with and/or consent of the borrowers have been received. In order to address these concerns, the REs are advised to put in place an appropriate policy framework meeting the specified requirements for implementation and compliance.Enhancing transaction limits for Small Value Digital Payments in Offline ModeNotification No: 2023-24/57Date: 24-Aug-23Link for Notification:https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12531&Mode=0 The Reserve Bank of India had issued a circular on January 03, 2022 on “Framework for Facilitating Small Value Digital Payments in Offline Mode”. As announced in the Statement on Development and Regulatory Policies dated August 10, 2023, the upper limit of an offline payment transaction is increased to ₹500.
It has come to the notice of this Ministry that many members of the three institutes viz. Institute of Chartered Accountants of India, Institute of Cost Accountants of India and Institute of Company Secretaries of India have created multiple user IDs while transacting on existing MCA21 V2 portal. Further many members are not able to create user ID in the new MCA21 V3 portal due to an existing ID about which either they do not have any knowledge, or they do not remember that such an ID has been’or was created in existing V2 portal.
It has been decided that all such members may approach the respective institutes with their credentials and the institute shall make recommendations for merging multiple existing user IDs with the ID created in V3 portal or for deactivation of the old user IDs in V2, to enable desirous members to create a new ID in V3 portal. The necessary changes in the user ID in V3 portal in such cases shall be done based on recommendations forwarded by the President or Vice-president of the institute to ddegov@mca.gov.in
Master Circular for listing obligations and disclosure requirements for Nonconvertible Securities, Securitized Debt Instruments and/ or Commercial Paper
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), prescribes the continuous disclosure requirements for issuers of listed Non-convertible Securities, Securitized Debt Instruments and Commercial Paper. Multiple circulars have been issued, over the years, covering the operational and procedural aspects thereof.
For effective regulation of the corporate bond market and to enable the issuers and other market stakeholders to get access to all the applicable circulars at one place, SEBI has issued this Master Circular. This circular is updated till 30-Jun-2023. This circular shall come into force with effect from 1-Aug-2022.
Implementation of circular on upstreaming of clients’ funds by Stock Brokers (SBs) / Clearing Members (CMs) to Clearing Corporations (CCs)
The SEBI tweaked the framework pertaining to upstreaming of all client funds received by stock brokers and clearing members to clearing corporations.
Under the framework which was issued on June 08, 2023, no clients’ funds would be retained by stock brokers on an End of Day (EoD) basis. Further, clients’ funds will be upstreamed by stock brokers and clearing members to clearing corporations only in the form of either cash, lien on Fixed Deposit Receipt (FDR) or pledge of units of mutual fund overnight schemes.
As per the modified framework, stock brokers/ clearing members (SBs/CMs) may receive funds from clients beyond the prescribed cut-off time for upstreaming subject to the condition that there should not be any further movement of funds from that account (i.e. a debit freeze) till the opening of upstreaming window on the next day. Further, stock exchanges shall ensure that such funds remaining in bank accounts of SB/CM are minimal and are for legitimate purposes. Also, the tenor of FDRs shall not be more than one year and one day, and should also be pre-terminable on demand. Existing FDRs, created out of clients’ funds and having tenor or more than one year, created prior to issuance of the circular shall be allowed to be grandfathered till maturity.
SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023
SEBI has notified the SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide gazette notification dated 03-Jul-2023. The ‘Dispute Resolution Mechanism’ has been inserted in SEBI various Regulations viz. Merchant Bankers; Registrars to an Issue and Share Transfer Agents; Debenture Trustees; Mutual Funds; Custodian; Credit Rating Agencies; Collective Investment Schemes; KYC (Know Your Client) Registration Agency; Alternative Investment Funds; Investment Advisers; Research Analysts; Infrastructure Investment Trusts; Real Estate Investment Trusts; Listing Obligations and Disclosure Requirements; Foreign Portfolio Investors; Portfolio Managers; and Vault Managers. They shall come into force on the date of their publication in the Official Gazette.
Appointment of Director nominated by the Debenture Trustee on boards of issuers
SEBI vide this circular provided clarity on the requirements for appointment of directors by entities that have listed their debt securities. Under SEBI norms pertaining to listing of non-convertible securities, an entity registered under the Companies Act, 2013 has to ensure that a person nominated by the debenture trustee is appointed as a director. While this obligation exists for issuers that are companies under the Companies Act, 2013). Citing issues raised by the debenture trustees and the role of a nominee director, SEBI said that issuers coming under certain categories can submit an undertaking to the debenture trustees instead of nominating a director
SEBI vide gazette notification dated 03-Jul-2023 notified Securities and Exchange Board of India (Ombudsman) (Repeal) Regulations, 2023. On and from the commencement of these regulations, the Securities and Exchange Board of India (Ombudsman) Regulations, 2003 shall stand repealed. While the repeal brings significant changes, it does not nullify actions, rights, liabilities, or penalties acquired or incurred under the previous regulations. Any ongoing investigations, legal proceedings, or remedies can still be pursued as if the SEBI (Ombudsman) Regulations, 2003 had not been repealed.
SEBI (Credit Rating Agencies) Regulations, 1999, prescribes guidelines for registration of Credit Rating Agencies (CRAs), general obligations of CRAs, manner of inspection and investigation and code of conduct applicable on CRAs. Multiple circulars have been issued, over the years, covering the operational and procedural aspects thereof.
In order to enable the industry and other users to have access to all the applicable circulars/ directions at one place, Master Circular for CRAs has been prepared. This Master Circular is a compilation of the existing circulars as on 03-Jul-2023, with consequent changes.
Master circular for compliance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by listed entities
SEBI, from time to time, has been issuing circulars pertaining to the compliance requirements specified in the SEBI (LODR) Regulations, 2015. This Master Circular has been prepared in order to enable the users to have access to the provisions of the applicable circulars, issued till 30-Jun- 2023, at one place. The Master Circular provides a chapter-wise framework for compliance with various obligations under the SEBI (LODR) Regulations, 2015. The circulars issued by SEBI listed out in the Appendix shall stand rescinded with the issuance of this Master Circular.
Disclosure of material events / information by listed entities under Regulations 30 and 30A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
SEBI has issued this circular consists of four annexures with respect to disclosure requirements under regulations 30 and 30A of the SEBI (LODR) Regulations, 2015 which are given below:
i. Annexure I specifies the details that need to be provided while disclosing events given in Part A of Schedule III.
ii. Annexure II specifies the timeline for disclosing events given in Part A of Schedule III.
iii. Annexure III provides guidance on when an event / information can be said to have occurred.
iv. Annexure IV provides guidance on the criteria for determination of materiality of events / information.
This circular shall come into force from 15-Jul-2023.
Trading Window closure period under Clause 4 of Schedule B read with Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Extending framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level to all listed companies in a phased manner.
The framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level to all listed companies in a phased manner is extended to all the listed companies. To ensure smooth implementation of the framework, glide path has been prescribed by SEBI. It is provided that for top 1,000 companies in terms of BSE Market Capitalization as of 30-Jun-23 (excluding companies part of benchmark indices), the PAN freeze start date is 1-Oct-23. For next 1,000 companies in terms of BSE Market Capitalization as of 30-Jun-23 and remaining companies listed on BSE, NSE & MSEI, the PAN freeze start date is 01-Jan-24 and 01-Apr-24 simultaneously. Further, it is prescribed that for the companies getting listed on Stock Exchanges post issuance of this circular, the PAN freeze begins from 1st day of the second quarter from the quarter in which the company gets listed. The procedure for implementation of the system is enclosed at Annexure- A to this circular and the flowchart for the same is enclosed at Annexure- B to this circular.
SEBI at an early stage of considering simplification of the process of on-boarding of clients by adoption of risk based approach
This is with reference to some media articles speculating that SEBI is seeking to curb retail participation in derivative markets. In this regard, SEBI has clarified that there is no proposal to curb retail participation in derivative markets. Currently, for trading in the derivative segment, SEBI Circular dated December 03, 2009 (now incorporated under Master Circular for Stock Brokers dated May 17, 2023), inter alia, prescribes that the stock broker shall have documentary evidence of financial capability for all clients.
Framework for Corporate Debt Market Development Fund (CDMDF)
Chapter III-C has been inserted vide amendments to SEBI (Alternative Investment Funds) Regulations, 2012 vide Gazette notification no. SEBI/LADNRO/GN/2023/132 dated June 15, 2023 in order to facilitate constitution of an Alternative Investment Fund namely, Corporate Debt Market Development Fund (“CDMDF” or “the Fund”), to act as a Backstop Facility for purchase of investment grade corporate debt securities, to instil confidence amongst the participants in the Corporate Debt Market during times of stress and to generally enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress. CDMDF shall comply with the Guarantee Scheme for Corporate Debt (GSCD) as notified by Ministry of Finance vide notification no. G.S.R. 559(E) dated July 26, 2023, which includes the Framework for Corporate Debt Market Development Fund. The fund shall deal only in Low duration Government Securities, Treasury bills, Tri-party Repo on G-sec, guaranteed corporate bond repo with maturity not exceeding 7 days. Corporate debt securities to be bought by CDMDF during market dislocation include listed money market instruments.
Online Resolution of Disputes in the Indian Securities Market
Disputes between Investors/Clients and listed companies or any of the specified intermediaries / regulated entities in securities market arising out of latter’s activities in the securities market, will be resolved in accordance with this circular and by harnessing online conciliation and/or online arbitration as specified in this circular. It is provided that an investor/client shall first take up his/her/their grievance with the Market Participant by lodging a complaint directly with the concerned Market Participant. If the grievance is not redressed satisfactorily, the investor/client may, in accordance with the SCORES guidelines, escalate the same through the SCORES Portal in accordance with the process laid out therein. After exhausting all available options for resolution of the grievance, if the investor/client is still not satisfied with the outcome, he/she/they can initiate dispute resolution through the ODR Portal.
Master Circular for Alternative Investment Funds (AIFs)
With an objective to ensure an effective regulatory framework for AIFs, SEBI has been issuing various circulars from time to time. The provisions of the aforesaid circulars issued by SEBI up to March 31, 2023, which are operational as on date, have been incorporated in this Master Circular for AIFs. Circulars providing temporary relaxations with regard to certain compliance requirements for AIFs have not been included in the Master Circular.
To ease constraints faced by Micro, Small and Medium Enterprises (MSMEs) in converting their trade receivables to liquid funds, the Reserve Bank of India (RBI) had issued the ‘Guidelines for the Trade Receivables Discounting System (TReDS)’. The guidelines allow financing / discounting of MSME receivables on “without recourse” basis by permitted financiers. Currently, three entities operate TReDS platforms in the country; one more entity has also been given in-principle authorisation to operate such platform. Based on the experience gained, and as announced in the Statement on Developmental and Regulatory Policies dated 08-Feb-23, it has been decided to make the enhancements to the TReDS guidelines.
Guidelines on Default Loss Guarantee (DLG) in Digital Lending
Arrangements between Regulated Entities (REs) and Lending Service Providers (LSPs) or between two REs involving default loss guarantee (DLG), commonly known as FLDG, has since been examined by the Bank and it has been decided to permit such arrangements subject to the guidelines. DLG arrangements conforming to these guidelines shall not be treated as ‘synthetic securitisation’ and/or shall also not attract the provisions of ‘loan participation’.
Framework for Compromise Settlements and Technical Write-offs
The Reserve Bank of India has issued various instructions to Regulated Entities (REs) regarding compromise settlements in respect of stressed accounts from time to time, including the Prudential Framework for Resolution of Stressed Assets dated June 7, 2019 (“Prudential Framework”), which recognises compromise settlements as a valid resolution plan. With a view to provide further impetus to resolution of stressed assets in the system as well as to rationalise and harmonise the instructions across all REs, as announced in the Statement on Developmental and Regulatory Policies released on 08-Jun-23, it has been decided to issue a comprehensive regulatory framework governing compromise settlements and technical write-offs covering all the REs.
MCA amends Strike-off Rules to bring more clarity on filing of overdue financials before applying for Striking-off
MCA has notified Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023 on 10-May-23 by bringing in more clarity on the filing requirements of overdue financials before applying for strike-off.
As per the amended norms, the Company cannot file a strike-off application unless it has filed overdue financial statements under Section 137 and overdue annual returns under Section 92, up to the end of the financial year in which the company ceased to carry out its business operations.
Previously, the MCA, vide the amendment introducing the Centre for Processing Accelerated Corporate Exit on 17-Apr-23, had removed the requirement for filing up-to-date financial results and annual returns. However, this requirement has now been reintroduced vide this amended notification.
The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023
The Ministry of Corporate Affairs (MCA) vide its notification dated May 15, 2023 has notified “the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023” which shall come into force with effect from June 15, 2023. According to the amendment, rule 25(5) and (6) are substituted. As per the amendment, where no objection or suggestion is received within a period of 30 days of receipt of copy of scheme under section 233(2), from the RoC/official liquidator and the Central Government is of opinion that that the scheme is in public interest then, it may, within a period of 15 days after the expiry of 30 days, issue a confirmation order of such scheme in Form No. CAA-12. However, if Central Government not issue the confirmation order within a period of 60 days of receipt of the scheme under section 233(2), then, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly. Further, where objections and suggestions are received within a period of 30 days of receipt of order under section 233(2) from the RoC/Official Liquidator(OL) or both by Central Government(CG) and- a) such objections or suggestions of RoC/OL are not sustainable and CG is of opinion that scheme is in public interest/creditors’ interest, then, it may issue confirmation order in form No. CAA-12. b) the CG is of opinion that the scheme is not in public interest/creditors interest, then, it may, file an application before the Tribunal in Form No. CAA-13 by stating its objections/opinion and requesting Tribunal may consider the scheme. In case CG does not issue confirmation order or does not file any application to the Tribunal, then, it shall be deemed that it has no objection to the scheme and a conformation order shall be issued accordingly.
SEBI vide Circular No. SEBI/HO/ DDHS/DDHS_Div1/P/CIR/2023/64 dated 03-May-23. SEBI introduced Legal Entity Identifier (LEI) system for issuers that have listed or planning to list non-convertible securities, securitised debt instruments and security receipts. LEI, a unique global identifier for legal entities participating in financial transactions, is designed to create a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. It is a unique 20-character code to identify legally distinct entities that engage in financial transactions. Presently, Reserve Bank of India (RBI) mandates non-individual borrowers having aggregate exposure of above Rs 25 crore to obtain LEI code. In view of this, SEBI said that issuers having outstanding listed non-convertible securities as on 31-Aug-23 will have to obtain and report the LEI code in the centralised database of corporate bonds by 01-Sept-23 according to a circular.
This Circular shall come into force with immediate effect. It is available at: https://www.sebi.gov.in/legal/circulars/may-2023/introduction-of-legal-entity-identifier-lei-for-issuers-who-have-listed-and-or-propose-to-list-non-convertible-securities-securitised-debt-instruments-and-security-receipts_70875.html
As per Regulation 7(4) of the SEBI (Listing Obligations and Disclosure Requirements), 2015, whenever there is a change or appointment of a new share transfer agent, the listed entity shall enter into a tripartite agreement between the existing share transfer agent, the new share transfer agent, and the listed entity, in the manner as specified by the Board from time to time.
With reference to this provision, SEBI, vide Circular No. SEBI/HO/MIRSD/MIRSD-PoD- 1/P/CIR/2023/79 dated 25-May-23 has provided for a model Tripartite Agreement in consultation with Registrar Association of India (RAIN) and some other issuer companies.
RTAs and listed companies are advised to:
Publish the format of tripartite agreement on their respective websites Comply with the conditions laid down in the Circular Make necessary amendments to the relevant bye-laws, rules, and regulations, and operational instructions, as the case may be, for the implementation of the above Circular
The Circular and the format of the Agreement are available at the link provided below:
When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies, then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me, that it might be the mirror of my soul, as my soul is the mirror of the infinite God!
O my friend — but it is too much for my strength — I sink under the weight of the splendor of these visions! A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot, which was created for the bliss of souls like mine.
I am so happy, my dear friend, so absorbed in the exquisite sense of mere tranquil existence, that I neglect my talents. I should be incapable of drawing a single stroke at the present moment; and yet I feel that I never was a greater artist than now.
When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies, then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me.
