MCA Updates
May 7, 2024 - MCA vide Circular No. 03/2024 has extended the due date for filing e-form LLP BEN-2 (Declaration under Section 90) and LLP Form 4D Q3 of FY 2023-24 | October 2023 (Declaration of Beneficial Interest) to July 1, 2024. This extension is attributed to the transition from version V-2 to V-3 of the MCA and the practical challenges encountered during this process.
RBI Updates
April 15, 2024 - RBI vide Notification No. RBI/2024-25/17 allows Indian resident entities to hedge gold price risk through over-the-counter (OTC) derivatives, alongside those traded on exchanges within the International Financial Services Centre (IFSC). This change is intended to provide more flexibility in managing gold price risk and aligns with the Master Direction on Hedging Commodity Price Risk and Freight Risk in Overseas Markets.
April 23, 2024 - RBI vide Notification No. FEMA. 395(2)/2024-RB has notified Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2024. These regulations include provisions for the mode of payment and remittance of sale proceeds for the purchase or subscription of equity shares of Indian companies by permissible holders under International Exchanges Scheme.
April 23, 2024 - RBI vide Notification No. FEMA. 10(R)(3)/2024-RB has stated that funds raised through External Commercial Borrowings (ECB), American Depository Receipts (ADRs), Global Depository Receipts (GDRs), or direct listing of equity shares of Indian companies on International Exchanges may be held in foreign currency accounts with a bank outside India, until they are utilised or repatriation to India, provided that all relevant conditions are met.
April 24, 2024 - RBI vide notification no. RBI/DOR/2024-25/116 has notified Master Direction – Reserve Bank of India (Asset Reconstruction Companies) Directions, 2024.
April 26, 2024 - RBI vide notification no. RBI/2024-25/27 A.P. (DIR Series) Circular No. 03 notifies investment limits for Foreign Portfolio Investors (FPIs) in Debt and Credit Default Swaps for the FY 2024-25. The limits for FPI investment in government securities, state government securities, and corporate bonds remain unchanged at 6%, 2%, and 15% respectively, of the outstanding stocks. Additionally, FPIs are limited to selling Credit Default Swaps up to 5% of the outstanding stock of corporate bonds.
May 06, 2024 - RBI vide notification no. FEMA 5(R)/(4)/2024-RB has notified that an authorised dealer in India can permit a person resident outside India to open, hold and maintain an interest bearing account in Indian Rupees and / or foreign currency for the purpose of posting and collecting margin in India, specifically for posting and collecting margins related to permitted derivative contracts as per the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020.
May 21, 2024 - RBI vide notification no. RBI/2024-25/36 amended the Foreign Exchange Management (Non debt Instruments) Rules, 2019, which allows AIFs to issue partly paid units to individuals outside India and regularize past issuances through compounding under FEMA. Banks must report these issuances via the FIRMS Portal before applying for compounding. (W.e.f March 14, 2024)
June 7, 2024 - RBI, vide notification no. RBI/2024-25/41, redefined investments in units or instruments issued by regulated overseas investment funds as Overseas Portfolio Investment (OPI). This amendment facilitates listed Indian companies and resident individuals to invest in such funds. Additionally, it permits unlisted Indian entities to invest within specified limits in IFSCs, significantly broadening the scope for international investment opportunities for Indian investors.
SEBI Updates
April 18, 2024 - SEBI vide Circular No. SEBI/HO/AFD/SEC-1/P/CIR/2024/22 has emphasized on Standardization of the Private Placement Memorandum (PPM) Audit Report by AIF. Further, it mandates the online submission of PPM Audit reports via SEBI Intermediary Portal (SI Portal) with effect from FY ending March 31, 2024.
April 26, 2024 - SEBI vide Circular No. SEBI/HO/AFD/PoD1/CIR/2024/027 has prescribed the framework for Category I and II AIFs to create encumbrances on the equity holdings of investee companies.
April 26, 2024 - SEBI vide Circular No. SEBI/HO/AFD/PoD1/CIR/2024/026 has enhanced flexibility for AIFs and their investors dealing with unliquidated investments of their schemes. This amendment allows AIFs to enter a Dissolution Period following the liquidation period, subject to investor consent and bid arrangements covering at least 25% of the unliquidated investments. The updated guidelines also include disclosure requirements and reporting obligations to ensure transparency and accountability throughout the process.
April 29, 2024 - SEBI vide Circular No. SEBI/HO/AFD/PoD/CIR/2024/028, has enabled direct reporting of changes in the Private Placement Memorandum by the AIFs themselves, eliminating the requirement of merchant bankers.
May 02, 2024 - SEBI vide Circular No. SEBI/HO/IMD/IMD-PoD1/P/CIR/2024/35, has facilitated ease in digital on boarding process enhanced for clients and transparency through disclosures.
May 02, 2024 - SEBI, vide Circular No. SEBI/HO/MIRSD/MIRSD-SEC 3/P/CIR/2024/34, has issued a framework for the administration and supervision of Research Analysts (RAs) and Investment Advisers (IAs), which will come into effect from July 25, 2024.
May 02, 2024 - SEBI vide Circular No. SEBI/HO/IMD/IMD-PoD 1/P/CIR/2024/32, has stated that in order to facilitate collective oversight of PMS distributors at the industry level, it has been decided that any person or entity involved in the distribution of portfolio management services shall obtain registration with Association of Portfolio Managers in India (APMI). Portfolio Managers shall ensure that any person or entity engaged in the distribution of its services has obtained registration with APMI, in accordance with the criteria laid down by APMI effective from January 01, 2025.
May 13, 2024 - SEBI vide Circular No. SEBI/HO/AFD-1/AFD-1 PoD/P/CIR/2024/42 mandates that, by May 9, 2025, at least one key investment team member of all AIFs must be certified by the National Institute of Securities Markets (NISM) through the Series-XIX-C: Alternative Investment Certification Fund Managers Examination. The requirement applies to all AIF registrations and scheme launches after May 10, 2024, including existing schemes and pending applications, and is essential for maintaining registration and launching new schemes.
SEBI Updates
June 05, 2024 - SEBI vide Circular No. SEBI/HO/AFD/AFD-PoD-2/P/CIR/2024/77 has modified the framework for providing flexibility to Foreign Portfolio Investors in dealing with their securities post expiry of their registration.
June 27, 2024 - SEBI vide notification no. SEBI/HO/AFD/AFD-POD 2/P/CIR/2024/89 enables 100% contribution by NRIs, OCIs, and Resident Indians in FPIs based in IFSCs in India, with clear documentation to ensure compliance and transparency. ROC and RD Rulings
ROC and RD Rulings
The Adjudication Officer, imposed penalties on the Company for violating Section 42 (7) of the Companies Act, 2013 (CA Act, 2013), which pertains to the usage of public advertisement for private placement of shares. The Company used its own platform to sell shares to the public, which constitutes public advertisement for selling private shares, resulting in violation of the above section. Consequently, penalty was imposed on the company and the Directors. Planify Capital Limited [ROC/D/ADJ/Section 42/ /1662-1667] Planify
The ROC Delhi and Haryana imposed penalties on the company, its directors, and key managerial personnel, including Microsoft CEO Satya Nadella and LinkedIn CEO Ryan Roslansky for non-compliance with Significant Beneficial Ownership (SBO) disclosure rules and violations of Sections 89 & 90 of the CA Act, 2013. Despite LinkedIn USA not holding shares in LinkedIn India, CEO Ryan Roslansky's control over the Indian board qualified him as an SBO, as per RoC findings. This development underscores the evolving regulatory landscape surrounding SBO identification in India, driven by FATF guidelines. LINKEDIN Technology Information Private [ROC/D/Adj/Order/Section 89&90/2246- 2256]
The Regional Director Guwahati, imposed penalties for the violation of Section 203 of the CA Act, 2013, for non- appointment of Whole Time Company Secretary. Penalty imposed by the Regional Director was reduced considering the effect of COVID on the business of the Company. Aura Hotels & Resorts Private Limited [RD(NER)/Appeal u/s 454(4)/04/23 24/36]
SEBI Rulings
SEBI has issued an ex-parte interim order cum show cause notice under various sections of the SEBI Act, 1992, and regulations, against Ravindra Bharti Education Institute Private Limited and related individuals. The inspection revealed potential violations related to the entity's activities in providing stock buy/sell recommendations without requisite SEBI registration. These finfluencers were directed to deposit an amount of INR 12,03,82,130.91 crore of 'unlawful gains' in an interest-bearing escrow account overseen by the regulator - Ravindra Bharti Education Institute (P.) Ltd. [WTM/KV/MIRSD/MIRSD-SEC 1/30265/2024-25]
ROC and RD Rulings
The Adjudication Officer, imposed penalties on the Company for violating Rule 173 of Companies (Adjudication of penalties) rules 2014 on part of the company's failure to provide the minutes of the Board meeting during an enquiry conducted by the Investigation Officer where the Financial Statements for the year 2019-2020 was approved. EUEB India Private Limited [No. 07/01/ADJ 173/EUEB INDIA]
Penalty has been levied on the Statutory Auditor of the Company for certifying the Financial Statements which does not provide a true and fair view of the state of Company's affair for the FY 2016-17 and 2017-18, thereby violating the provisions of Section 143(2) of the CA Act, 2013. Shinago International (India) Private Limited [F.No. ROC/CHN/SHINAGO/ADJ/S. 143(2)/2024]
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