Supreme Court: Mutual Intent To Arbitrate Is Crucial For A Valid Agreement

REGULATORY AND POLICY UPDATES

SEBI amends the SEBI (Mutual Funds) Regulations, 1996¹.

The Securities and Exchange Board of India ("SEBI") vide notification no. SEBI/LAD-NRO/GN/2025/272 dated 31.10.2025, has notified the SEBI (Mutual Funds) (Second Amendment) Regulations, 2025 ("MF Amendment Regulations") to further amend the SEBI (Mutual Funds) Regulations, 1996 ("Principal MF Regulations"), which shall come into force on the date of their publication in the Official Gazette, i.e., 01.11.2025.

The key amendments introduced by the MF Amendment Regulations are as follows:

i. The units of Real Estate Investment Trusts ("REITs") have been explicitly included within the definition of 'equity related instruments' under the Principal MF Regulations.

ii. The repurchase price of an open-ended scheme has been revised to not less than 97% of the Net Asset Value, increased from the earlier requirement of 95%, for the purpose of determining the minimum investment.

iii. The concentration limits of REITs have been revised as follows:

(a) SIFs shall not own more than 15% of units of REITs issued by a single issuer across all investment strategies.

(b) Where a mutual fund owns 10% or more of a company's voting capital or REIT units, SIFs shall be restricted to holding not more than 5% of such company's voting capital or REIT units.

iv. Mutual funds are now subject to a 10% ownership limit across all schemes for both voting capital of companies and units of REITs issued by a single issuer.

SEBI amends the ICDR Regulations².

SEBI vide notification no. SEBI/LAD-NRO/GN/2025/271 dated 31.10.2025, has issued the SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2025 ("ICDR Amendment Regulations"), amending the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("Principal ICDR Regulations") which shall come into force on the 30th day from the date of its publication in the Official Gazette, i.e., 01.11.2025.

The ICDR Amendment Regulations have revised the investor limits for anchor investor allocations as follows:

i. for allocations up to INR 250 crores, a minimum 2 and maximum 15 anchor investors shall be permitted, subject to minimum allotment of INR 5 crores per investor;

ii. for allocations above INR 250 crores, a minimum 5 and maximum 15 anchor investors for the first INR 250 crores, with an additional 15 investors permitted for every additional INR 250 crores (or part thereof), subject to minimum allotment of INR 5 crores per investor;

iii. 40% of the anchor investor portion shall be reserved as follows: (a) 33.33% for domestic mutual funds; and (b) 6.67% for life insurance companies and pension funds; and

iv. any under-subscription in the reserved category for life insurance companies and pension funds may be allocated to domestic mutual funds.

RBI notifies Reserve Bank of India (Trade Relief Measures) Directions, 2025³.

RBI through notification no. RBI/2025-26/96 dated 14.11.2025 notified the Reserve Bank of India (Trade Relief Measures) Directions, 2025 ("TRM Directions"). The TRM Directions have come into force with immediate effect from 14.11.2025. The salient features of the TRM Directions are as follows:

i. Applicability: These Directions shall be applicable to commercial banks, Primary (Urban) Cooperative Banks, State Cooperative Banks, Central Cooperative Banks, Non-Banking Financial Companies ("NBFCs") including housing finance companies, All-India Financial Institutions, and Credit Information Companies ("CICs").

ii. Eligibility Criteria:

(a) A borrower shall be eligible upon satisfying the following conditions: (i) The borrower is engaged in exports relating to sectors particularly specified; (ii) The borrower had an outstanding export credit facility from a RE as on 31.08.2025; and (iii) The borrower's account(s) with all REs was/were classified as 'Standard' as on 31.08.2025.

(b) REs, other than those which sanctioned the export credit facility, may rely on certification from the concerned RE(s) to verify eligibility of having outstanding export credit facility from a RE as on 31.08.2025.

iii. Moratorium/Deferment: In respect of term loans, a RE may grant a moratorium on payment of instalments (principal and/or interest) falling due between 01.09.2025 and 31.12.2025 ("Effective Period"). In respect of cash credit/ overdraft ("CC/OD") facilities, a RE may defer recovery of interest applied during the Effective Period. Interest shall continue to accrue during the moratorium/ deferment period and shall be applied on simple interest basis without compounding. The accumulated accrued interest may be converted into a funded interest term loan repayable in one or more instalments after 31.03.2026 but not later than 30.09.2026. In respect of working capital facilities, a RE may recalculate drawing power by reducing margins and/or reassessing limits during the Effective Period. Any review after the Effective Period shall be based on regular assessments.3

iv. Extension of Tenor for Export Credit: A RE eligible to undertake export financing may permit an enhanced credit period of up to 450 days for preshipment and post-shipment export credit disbursed till 31.03.2026. In respect of packing credit facilities availed on or before 31.08.2025 where dispatch of goods could not occur, liquidation may be permitted from legitimate alternate sources including domestic sale proceeds or substituted export orders.

v. Asset Classification: The moratorium/ deferment period shall be excluded while calculating days past due for asset classification under applicable IRACP norms. Grant of moratorium/ deferment and recalculation of drawing power under the TRM Directions shall not be treated as restructuring and shall not result in asset classification downgrade. Post expiry of the moratorium/ deferment period, asset classification shall follow extant IRACP norms. REs shall report to CICs as per extant instructions. CICs shall ensure that actions taken under the TRM Directions do not adversely impact a borrower's credit history

vi. Provisioning: In respect of eligible borrower accounts which were in default but classified as 'Standard' as on 31.08.2025, and where relief has been granted under the TRM Directions, a RE shall make a general provision of not less than 5 per cent of the total outstanding by 31.12.2025. The general provision may be adjusted against specific provisioning requirements for slippages from these accounts. Residual provisions at the end of FY 2025-26 shall be written back or adjusted against provisioning requirements for other borrower accounts by 30.06.2026. The general provisions shall not be reckoned for arriving at net NPAs and shall not be netted from gross advances until adjusted.

vii. Disclosure Requirements: A RE shall develop an MIS capturing borrower-wise and facility-wise details of the nature and amount of relief granted. The RE shall submit fortnightly reports in the format to be hosted by RBI on its DAKSH platform.

GOVERNMENT NOTIFICATIONS

MCA amends Companies (Meetings of Board and its Powers) Rules, 2014⁴.

The Ministry of Corporate Affairs ("MCA") has notified the Companies (Meetings of Board and its Powers) Amendment Rules, 2025 vide notification no. G.S.R. 811(E) dated 03.11.2025 ("Companies Amendment Rules"). The Companies Amendment Rules substitute Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, which deal with loan and investment by a company under Section 186 of the Companies Act, 2013 ("Act").

The key change relates to the scope of the expression "business of financing industrial enterprises" as used in 4 Companies (Meetings of Board and its Powers) Amendment Rules, 2025. Section 186(11)(a) of the Act, which determines when certain entities are exempt from the limits and approval requirements prescribed under Section 186.

Earlier, with regard to an NBFC registered with RBI, it meant "business of giving of any loan to a person or providing any guaranty or security for due repayment of any loan availed by any person in the ordinary course of its business."

The Companies Amendment Rules substitute the earlier provision and expand the scope of "business of financing industrial enterprises" as follows:

i. For NBFCs registered with RBI, the expression "business of financing industrial enterprises" includes the business of giving of any loan to a person or providing any guaranty or security for due repayment of any loan availed by any person in the ordinary course of its business; and

ii. For Finance Companies registered with International Financial Services Centres Authority ("IFSCA"), the expression will include the activities as provided in Regulation 5(1)(ii)(a) or Regulation 5(1)(ii)(e) of the IFSCA (Finance Company) Regulations, 2021 in the ordinary course of its business. Regulation 5 of IFSCA (Finance Company) Regulations, 2021 relate to "Permissible activities". Regulation 5(1)(ii)(a) deals with lending in the form of loans, commitments and guarantees, credit enhancement, securitisation, financial lease, and sale and purchase of portfolios. Regulation 5(1)(ii)(e) deals with Global/Regional Corporate Treasury Centres.

IBBI in consultation with ED issues standard undertaking by IPs for restitution of attached properties under PMLA⁵.

The Insolvency and Bankruptcy Board of India ("IBBI"), through circular no. IBBI/CIRP/87/2025 dated 04.11.2025, has issued a standard undertaking format for Insolvency Professionals ("IPs") to be submitted before Special Courts under the Prevention of Money Laundering Act, 2002 ("PMLA").

The circular is issued in view of the observations on assets of corporate debtors undergoing insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 ("IBC") that are frequently attached by the Enforcement Directorate ("ED") under the PMLA. Accordingly, IPs may file applications for restitution of assets attached by the ED before the Special Court under Sections 8(7) or 8(8) of PMLA.

Key provisions of the standard undertaking are as follows:

i. In case of eligibility of Promoter under Section 29A of IBC, restriction on sale, transfer, or disposal of the restituted assets to persons covered under Section 32A(2)(i) or (ii) of the IBC or involved in benefiting a person named as an accused in, or charge-sheeted in any proceedings initiated by ED or any relevant predicate agency.

ii. IPs to provide quarterly status reports to the Special Court on the restituted assets, including their status, use, beneficiaries and sale/ transfer.

iii. Mandatory disclosures of all attached properties in information memorandum and auction notices including any subsequent updates.

iv. Full cooperation with the ED, including sharing details of Preferential, Undervalued, Fraudulent, or Extortionate ("PUFE") transactions, Committee of Creditors ("CoC"), and Successful Resolution Applicant ("SRA").

v. Furnishing non-sensitive documents to the ED upon request and commercially sensitive documents to be furnished only upon written acknowledgment of sensitivity and confirmation of requirement by the ED.

vi. Continued effect of the undertaking until approval of resolution plan or dissolution order by the Adjudicating Authority

MeitY notifies DPDP Rules, enforcement timelines and formation of the Board.

The Ministry of Electronics and Information Technology ("MeitY") on 14.11.2025, published multiple notifications numbered G.S.R. 843(E)⁶ , G.S.R. 844(E)⁷, G.S.R. 845(E)⁸ and G.S.R. 846(E)⁹, to bring in force the provisions of the Digital Personal Data Protection Act, 2023 ("DPDPA"), publish and enforce Digital Personal Data Protection Rules, 2025 ("DPDP Rules"), establish the Data Protection Board of India ("DPB") and notify that the DPB shall consist of 4 members with the head office at National Capital Region of India.

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Footnotes

1 SEBI (Mutual Funds) (Second Amendment) Regulations, 2025.

2 SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2025.

3 Reserve Bank of India (Trade Relief Measures) Directions, 2025.

4 Companies (Meetings of Board and its Powers) Amendment Rules, 2025.

5 Undertaking by IPs before Special Courts under PMLA.

6 Enforcement Timeline for the DPDP Act.

7 Establishment of the Data Protection Board of India.

8 Decision Regarding Number of Members in the Data Protection Board of India.

9 Digital Personal Data Protection Rules, 2025.

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