CORPORATE LAW UPDATES APRIL 2022
NOTIFICATION NO. G.S.R. 235(E), DATED 31-03-2022
MCA extends date of audit trail feature in accounting software to 01-04-2023, filing of CSR-2 extended to 31-05-2022
Editorial Note : MCA has notified the Companies (Accounts) Second Amendment Rules, 2022. As per the amendment notification, the MCA has extended the implementation of Audit Trail software to a financial year commencing on or after April 1, 2023 earlier such provision was applicable from April 01, 2022. Also, the timeline for filing web form CSR-2 has also been extended to May 31, 2022 earlier, such form was to be filed latest by March 31, 2022.
CIRCULAR NO. SEBI/HO/CFD/CMD1/CIR/P/2022/4 0, DATED 30-03-2022
No fresh shareholders’ approval is required for RPTs approved by Audit Committee and shareholders prior to Apr 01, 2022
Editorial Note :For the smooth implementation of the amended Regulation 23 of the LODR Regulations, SEBI has clarified that there shall be no requirement to seek fresh approval from the shareholders w.r.t. to Related Party Transactions (RPTs) approved by the audit committee and shareholders prior to April 1, 2022. SEBI further clarified that RPTs which become material as per the revised materiality threshold shall be placed before the shareholders in the first General Meeting held after 01.04.2022.
PRESS RELEASE NO. 9/2022, DATED 30-03-2022
SEBI launches “Manthan”- ideathon to promote innovation in the Securities Market
Editorial Note : Ms. Madhabi Puri Buch, Chairperson, SEBI launched “Manthan” – SEBI Ideathon, highlighting that adoption of Financial Technology (FinTech) in the securities market will promote significant opportunities for stakeholders. Manthan is a 6-week long Ideathon by SEBI in association with BSE, NSE, NSDL, CDSL, KFintech, CAMS, LinkInTime& MCX to promote innovation in the securities market. Manthan will facilitate the creation of a pool of ideas & innovative solutions revolving the securities market.
CIRCULAR NO. SEBI/HO/IMD/IMD-II DOF3/P/CIR/2022/39, DATED 30-03-2022
SEBI prescribes timelines for rebalancing of portfolios to bring uniformity across all Mutual Funds schemes
Editorial Note : In order to bring uniformity across Mutual Funds with respect to timelines for rebalancing of portfolio, the SEBI has prescribed that in the event of deviation from mandated asset allocation mentioned in the Scheme Information Document (SID) due to passive breaches, rebalancing period for Overnight Fund schemewill be NA, for all schemes other than Index Funds and Exchange Traded Funds mandated rebalance period be Thirty (30) business days.
PRESS RELEASE NO. 8/2022, DATED 29-03-2022
SEBI Board Meeting: SEBI proposes stringent norms for Collective Investment Scheme
Editorial Note : The SEBI, in its board meeting, has approved an amendment to the SEBI (LODR) Regulations, 2015 for simplification of procedure for transmission of securities. Approves amendment to SEBI (CIS) Regulations, 1999 to strength regulatory framework. Propose to hike net-worth criteria and track record in relevant field as an eligibility requirement for registration as a Collective Investment Management Company (CIMC). Caps CIMC and its group shareholding to 10% to avoid conflict of interest.
CIRCULAR NO. SEBI/HO/IMD/IMD-I/DOF6/P/CIR/2 022/0000000037, DATED 28-03-2022
SEBI specifies conditions for calculation of investment concentration norm for Category III AIFs
Editorial Note : The SEBI has laid down conditions for Calculation of investment concentration norm for Category III AIFs. Accordingly, SEBI clarified that existing Category III AIFs may opt for calculating investment concentration norm based on investable funds with the approval of their trustees or board of directors or designated partners, as the case may be, and inform the same to their investors within 30 days from the date of the issuance of circular. The circular shall be effective with immediate effect.
CIRCULAR NO. SEBI/HO/CDMRD/DMP/P/CIR/2022 /36, DATED 28-03-2022
SEBI issues product specifications with regard to Electronic Gold Receipts segment in India
Editorial Note : SEBI has issued product specifications pertaining to electronic gold receipts whereby it has specified that the stock exchanges may launch products subject to conditions that any person desirous of dealing in EGR on the stock exchange shall deposit the gold with the registered Vault Managers, in the ‘deposit unit’, which shall be specified by the stock exchanges.
The trading of EGR shall take place on stock exchanges, in the ‘trading unit’, which shall be specified by the stock exchanges.
Govt. introduces the Criminal Procedure (Identification) Bill, 2022
Editorial Note : The Criminal Procedure (Identification) Bill, 2022 provides for legal sanction for taking appropriate body measurements of persons who are required to give such measurements and will make investigation of crime more efficient and expeditious and will also help in increasing conviction rate. The Bill empowers Govts. to provide rules for manner of collection, storage, and preservation of measurements and sharing, dissemination, and disposal of record by National Crime Records Bureau.
CIRCULAR NO. SEBI/HO/DDHS/P/CIR/2021/031, DATED 22-03-2022
SEBI revises the industry classification framework to bring uniformity and harmonization in the classification
Editorial Note : SEBI vide its circular dated 22nd March, 2022 has amended Chapter – XIV (Centralized Database for corporate bonds/ debentures) of the Operational Circular no. SEBI/HO/DDHS/P/CIR/2021/613 dated Aug 10, 2021. The amendments include mandatory submission of listing data to the stock exchange within 30 days from the end of f.y. Further, the type of issuer based on nature of business is deleted and the type of issuer based on the sector is replaced with a more detailed format.
CIRCULAR NO. SEBI/HO/DDHS/P/CIR/2022/0028, DATED 08-03-2022
SEBI hikes UPI limits for investing in public issues of debt securities to Rs. 5 lakhs
Editorial Note : The SEBI, in its earlier Circular no. SEBI/HO/DDHS/P/CIR/2021/613 dated August 10, 2021
prescribed an option to investors to apply in public issues of debt securities with the facility to block funds through Unified Payments Interface (UPI) mechanism for application value upto Rs. 2 lakh which is now being revised to Rs. 5 lakh for UPI based Application Supported by Blocked Amount Initial Public Offer (IPO).
CIRCULAR NO. SEBI/HO/CFD/DCR-3/P/CIR/2022/2 7, DATED 07-03-2022
SEBI streamlines disclosure mechanisms to record all encumbrance under take over code
Editorial Note : In order to streamline the capture and dissemination of information related to “encumbrances” and bring in more transparency, SEBI, in consultation with stock exchanges and depositories, has decided that all types of encumbrances as defined u/s 28 (3) of Takeover Regulations shall necessarily be recorded in the depository system. The depositories shall capture details of the ultimate lender along with name of the trustee acting on behalf of such ultimate lender such as banks, NBFCs, etc
NOTIFICATION NO. F.NO. 1/3/2021-CL-V-PART IV, DATED 04-03-2022
Govt. issues the LLP (Second Amendment) Rules, 2022; lays down web-based process for LLP formation
Editorial Note : The Govt. has issued the LLP (Second Amendment) Rules, 2022. Major amendments are: a) Maximum 5 DIN can be applied in FiLLiP form, b) PAN & TAN will be allotted along with COI, c) LLP incorporation has become web-based like the SPICE+. d) Form 8 will also include disclosures w.r.t. Contingent Liability, e) all forms will be web-based including Form -9. f) Further, the provisions are added regarding signing of statements of accounts and solvency and Annual Return of LLPs under insolvency.
NOTIFICATION NO. G.S.R. 168(E), DATED 28-02-2022
IFSCA notifies norms for preparation of Financial Statements by authority
Editorial Note : IFSCA notifies International Financial Services Centres Authority (Form of Annual Statement of Accounts) Rules, 2022. The new rules specify the formats w.r.t preparation of financial statements. Under new norms, the authority shall have to forward financial statements to CAG for audit within a period of 3 months from the closure of the financial year. The rules further mandate the preservation of the financial statements for a minimum period of 5 years.
NOTIFICATION NO. G.S.R. 165(E), DATED 28-02-2022
MCA amends NFRA rules; modifies provisions w.r.t salary and various allowances for Chairperson and members of authority
Editorial Note : Government specifies National Financial Reporting Authority (Manner of Appointment and other Terms and Conditions of Service of Chairperson and Members) Amendment Rules, 2022. Accordingly, the Chairperson shall have the option to draw either a consolidated monthly salary of Rs. 450,000 without house and car which was earlier Rs. 250,000 (fixed) or the pay and allowances as are admissible to a Secretary to the Government of India.
NOTIFICATION NO. G.S.R. 167(E), DATED 28-02-2022
IFSCA specifies norms w.r.t preparation and submission of annual report, returns and other information
Editorial Note : IFSCA notifies International Financial Services Centres Authority (Form of Annual Statement of Accounts) Rules, 2022. The rules mandate the submission of the annual report to the Central Government within a period of 90 days after the end of every financial year in the format as prescribed in the notification. Further Authority shall also furnish the monthly updates on status of development of financial product, services etc. as mentioned in the rules.
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