Friday, 14 November 2014

MCA October 2014

Notification/Circular no.
Subject Amendment
G.S.R. 722(E) October 14, 2014 The Companies (Audit and Auditors) Amendment Rules, 2014.  The Central Government has made following rules to amend the Companies (Audit & Auditors) Rules, 2014.
G.S.R. 723(E) October 14, 2014 The Companies (Accounts) Amendment Rules, 2014.  The Central Government has made following rules to amend the Companies (Accounts) Rules, 2014.
General Circular lto. 38/2O14 October 14, 2014 Right of persons other than retiring directors to stand for directorship - Refund of deposit under section 160 of the Companies Act, 2013 in certain cases. Clarity had been sought by the companies registered under the 2013 Act, about the manner in which the amount of deposit of rupees one lakh received by them under sub-section (l) of section 160 of the Companies Act, 2013 (Act) is to be handled if the depositor fails to secure more than twenty five per cent of the total valid votes. It is clarified that in such cases, the Board of directors of a section 8 company is to decide as to whether the deposit made by or on behalf of the person failing to secure more than twenty-five percent of the valid votes is to be forfeited or refunded.
General Circular No. 39/2014 October 14, 2014 Clarification on matters relating to Consolidated Financial Statement. Government has received representations from stakeholders seeking clariflcations on the manner of presentation of notes in Consolidated Financial Statement (CFS) to be prepared under Schedule III to the Companies Act, 2013(Act). It is clarified that Schedule lll to the Act read with the applicable Accounting Standards does not envisage that a company while preparing its CFS merely repeats the disclosures made by it under stand-alone accounts being consolidated. In the CFS, the company would need to give all disclosures relevant for CFS only.
General Circular No. 37/2014 October 14, 2014 Clarification with regard to Trust/trustee as a partner in the Limited Liability Partnerships (LLPS). Clarifications have been sought on whether a trust or a trustee representing a trust in the case of "Real Estate Investment Trust" (REIT) or "lnfrastructure Investment Trust" (lnvlTs) or such other trusts set up under the regulations prescribed under the Securities & Exchange Board of India Act, 1992, can become a partner in an LLP.  It has been clarified that for the purposes of these trusts it is not barred for a trustee, being a body corporate, to hold partnership in an LLP in its name without the addition of the statement that it is a trustee.
General Circular 41/2014 October 15, 2014 Company Law Settlement Scheme, 2014 (CLSS-2014) - Clarification u/s 164(2) of the Companies Act, 2013 Clarification has been sought regarding immunity from disqualification of directors pursuant to Sec. 164 (2) (a) of the 2013 Act will be applicable to companies who have filed their balance sheets and annual returns on or after 01/04/2014, but beofre coming into force of CLSS 2014 with effect from 15/08/2014.  It has been clarified that in case of such companies the disqualification under Section 164 (2) (a) will be applicable only for prospective defaults, if any, by such companies. 
General Circular 40/2014 October 15, 2014 Company Law Settlement Scheme, 2014 (CLSS-2014) The Company Law Settlement Scheme , 2014 (CLSS) has been extended upto November 25, 2014 consdering the requests received from various stakeholders.
G.S.R. 741(E) October 24, 2014 Notification dated: 24.10.2014 - Amendment in Schedule VII of the Companies Act, 2013 The Central Government has made further amendments to Schedule VII of the Companies Act, 2013.

SEBI October 2014

Notification/Circular no. Date Subject Amendment
CIR/IMD/DF/18/2014 October 01, 2014 Master Circular for Mutual Funds In  order to enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Mutual Funds has been  prepared. 
No. LAD-NRO/GN/2014-15/15/1671 October 08, 2014 Securities and Exchange Board of India (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2014  SEBI has made the following regulations to amend SEBI (Stock Broker & Sub-Brokers Regulations, 1992.
CIR/IMD/FIIC/19/2014 October 09, 2014  Clarification on Government Debt Investment Limits  The Government debt investment limits have been clarified by the SEBi vide this circular.
CIR/ MIRSD/ 4/ 2014  October 13, 2014 Single registration for Stock Brokers & Clearing Members SEBI has issued guidelines for the purpse of implementing the revised registration requirements.
CIR/MRD/DP/29/2014 October 21, 2014 Modification of client codes of non-institutional trades executed on stock exchanges (All Segments) SEBI had issued circular CIR/DNPD/6/2011 dated July 05, 2011 pertaining to client code modifications of non-institutional trades on stock exchanges. SEBI has partially modified the said circular.
CIR/MRD/DP/30/2014 October 22, 2014 Revision of proprietary position limits of non-bank stock brokers for currency derivatives contracts SEBI has issued the clarification with regard to the proprietary positions limits of stock brokers in the exchange traded currency derivatives contracts.
No. LAD-NRO/GN/2014-15/16/1729 October 28, 2014 Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 Securities and Exchange Board of India hereby makes the following regulations  to provide for regulation of all schemes by companies for the benefit of their employees involving  dealing in shares, directly or indirectly, with a view to facilitate smooth operation of such  schemes while preventing any possible manipulation and matters connected therewith or  incidental thereto.  SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are thereby repealed.

RBI October 2014

Notification/Circular no. Date Subject Amendment
UBD.CO.LS (PCB) Cir.No.20/07.01.000/2014-15
October 13, 2014 Review of norms for classification of Urban Co-operative Banks (UCBs) as Financially Sound and Well Managed (FSWM) RBI has modified the norms for classification of UCBs as Financially Sound and Well Managed banks and has included additional criterion for the same. 
A.P. (DIR Series) Circular No.36
October 16, 2014 Foreign Exchange Management Act, 1999 (FEMA) Foreign Exchange (Compounding Proceedings) Rules, 2000 (the Rules) - Compounding of Contraventions under FEMA, 1999 The Foreign Exchange (Compounding Proceedings) Rules, 2000 notified by the Government of India vide G.S.R.No.383 (E) dated 3rd May 2000, as amended from time to time regarding delegation of powers to the Regional Offices of the Reserve Bank of India to compound the contraventions of FEMA has been further modified to delegate further powers to Regional Offices as detailed out in the notification.
October 21, 2014 Framework for Revitalising Distressed Assets in the Economy – Review of the Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP) The Reserve Bank has  reviewed the Framework based on the representations received from banks and the Indian Banks’ Association (IBA) on difficulties faced by them in its effective implementation and it has been decided to introduce certain changes in the Framework as given in the notification.
UBD.BPD. (PCB). Cir No.24/13.05.000/2014-15
October 29, 2014 Undertaking of Activity by UCBs as PAN Service Agents (PSA) Earlier RBI had permitted only Financially Sound and Well Managed UCBs to act as PAN Service Agent with prior approval of RBI. With a view to expanding the scope of fee-based services offered by UCBs, it has now been decided to permit all UCBs to act as PAN Service Agent (PSA) by entering into a tie-up with any agency authorised by Income Tax Department, Government of India.

IP October 2014

Press Release Date Subject Amendment
F.No10/22/2012-IPR-III October 22, 2014  IPR Think Tank  Department of Industrial Policy and Promotion has constituted an IPR Think Tank to draft the National Intellectual Property Rights Policy and to advice the Department of Industrial Policy and Promotion on IPR issues. The Press Release also contains the composition and terms of reference of the IPR Think Tank.

Tuesday, 11 November 2014

RBI September 2014

Notification/Circular no. Date Subject Amendment
DBOD.No.BP.BC. 35/21.04.048/2014-15
September 01, 2014 Timelines for Credit Decisions The Reserve Bank of India (RBI) on Monday asked banks to put in a place a timeline for credit decisions for all loans to eliminate “inordinate delays” by banks in convey their credit decisions to borrowers. The system must be put in place within 30 days.

September 01, 2014 Inoperative Accounts There may be instances where the customer has given a mandate for crediting dividend on shares to Savings Bank account and there are no other operations in the Savings Bank account. Some doubts have arisen whether such an account is to be treated as inoperative account after two years. In this regard clarificatio has been issued by RBI.
UBD. CO. BPD. PCB. Cir. No. 12 /09.19.900/2014-15
September 03, 2014 Guidelines for transfer of Assets and Liabilities of Urban Cooperative Banks to Commercial Banks- Modification With a view to ensuring that the process of consolidation by way of non-disruptive exit of weak entities by a scheme of transfer of assets and liabilities of UCBs to commercial banks is undertaken in a transparent manner without affecting the financial health of the acquiring entities and the banking system as a whole, it has been decided to modify the existing guidelines for transfer of assets and liabilities of UCBs to commercial banks by stipulating the certain conditions
DBOD. AML. No. 3356/14.01.001/2014-15
September 04, 2014 Simplification of KYC Norms - Creating Public Awareness The Reserve Bank of India, in the recent times, has been taking several measures to simplify KYC requirements to help the common man open bank accounts. It is, however, observed that despite such measures the general public is still facing problems in opening a bank account as these measures have not been given adequate publicity and the common man still lacks awareness on the basics of opening a bank account. In order to address these issues, create public awareness and give wide publicity to these KYC simplification measures, Reserve Bank has issued a Press Release together with a poster and a booklet comprising a few common questions relating to Know Your Customer (KYC) norms for opening bank accounts which are available in RBI's website
A.P. (DIR Series) Circular No.28

September 08, 2014 Risk Management and Inter Bank Dealings: Hedging Facilities for Foreign Portfolio Investors (FPIs) In order to enhance the hedging facilities for the FPIs holding securities under the Portfolio Investment Scheme (PIS) it has been decided to permit FPIs to hedge the coupon receipts arising out of their investments in debt securities in India falling due during the following twelve months subject to the condition that the hedge contracts shall not be eligible for rebooking on cancellation. The contracts can however be rolled over on maturity provided the relative coupon amount is yet to be received.
DBOD. APPT.BC.No. 40 /29.39.001/2014-15
September 09, 2014 Upper age limit for Whole Time Directors on the Boards of Banks the Companies Act, 2013 [Section 196(3)] which prescribe that ‘no company shall  appoint or continue the employment of any person as Managing Director, Whole Time Director or Manager who is below the age of 21 years or has attained the age of 70 years’.  In view of the above, it has been decided that the upper age limit for MD & CEO and other WTDs of banks in the private sector should be 70 years, i.e. beyond which nobody should continue in the post. Within the overall limit of 70 years, individual bank’s Boards are free to prescribe a lower retirement age for the WTDs, including the MD & CEO, as an internal policy.
DBOD.No.CID. 41/20.16.003/2014-15
September 09, 2014 Guidelines on Wilful Defaulters –
Clarification regarding Guarantor, Lender and Unit
Master Circular on Wilful Defaulters DBOD.No.CID.BC.3/20.16.003/2014-15 dated July 1, 2014 has been amended by RBI.
September 09, 2014 RRBs/StCBs/CCBs - KYC Norms / AML Standards / CFT / Obligation of banks under PMLA, 2002 – Client Due Diligence measures It is advised that while the requirements of client due diligence measures applied when establishing anaccount-based relationship and on-going due diligence would continue as indicated Master Circular, it has been decided to dispense with the requirement of‘positive confirmation’.
September 09, 2014 Need for Bank Branches / ATMs to be made accessible to persons with disabilities
It has been advised that State / Central Co-operative Banks(StCBs / DCCBs) have to take necessary steps to provide all existing ATMs/futureATMs with ramps so that wheel chair users / persons with disabilities can easily accessthem. Care may also be taken to make arrangements in such a way that the height of the ATMs do not create an impediment in their use by wheelchair users. Certain more guidelines have been stated in this regard.
RBI/2014-15/234              A.P. (DIR Series) Circular No.31 September 17, 2014 Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI Scheme against legitimate dues The extant guidelines for issue of shares/convertible debentures to non resident under the automatic route have been reviewed in consultation with the Government of India and, accordingly, it has been decided to permit issue of equity shares against any other funds payable by the investee company, remittance of which does not require prior permission of the Government of India or Reserve Bank of India under FEMA, 1999 or any rules/ regulations framed or directions issued thereunder provided two conditions as metioned in the circular is satisfied.
September 30, 2014 StCBs/CCBs - Instruments for Augmentation of Capital Funds - Modification Circular RPCD.RCB.BC.73/07.51.012/2013-14 dated January 7, 2014 has been modifed by the RBI.

September 30, 2014 Secondary market transactions in Government Securities - Short Selling Circular IDMD.No.03/11.01.01(B)/2005-06 dated February 28, 2006 guidelines relating to short selling has been reviewed .

MCA September 2014

Notification/Circular no. Date Subject Amendment
G.S.R. 644(E) September 12, 2014 Companies (Corporate Social Responsibility Policy) Amendment Rules, 2014 In the Companies (Corporate Social Responsibility Policy) Rules, 2014, in rule 4, in sub-rule (6), after the words “but such expenditure” the words and comma “including expenditure on administrative overheads,” shall be inserted. 
G.5.R. (E) September 18, 2014 Companies(Appointment and Qualification of Directors) Amendment Rules, 2014 The Central Government  makes the rules to amend the Companies (Appointment and Qualification of Directors) Rules, 2014.
S.O.(E) September 18, 2014 Notification for National Advisory Committee on Accounting Standards The Central Government constitutes an Advisory Committee to be called as National Advisory Committee on Accounting Standards, consisting of persons as mentioned in the Circular to advise the Central Government on the formulation  and laying down of accounting polocies and standards for adoption by companies or class of companies under the Act.

SEBI September 2014

Notification/Circular no. Date Subject Amendment
No. LAD-NRO/GN/2014-15/07/1414 September 01, 2014 SEBI(Research Analysts) Regulations, 2014 SEBI hereby makes the  research analyst regulations to put in place a framework to register and regulate research analysts. Foreign entities acting as research analysts for Indian markets or India-listed companies would need to tie-up with a registered entity in India, while domestic players would also be subjected to strict disclosures and scrutiny.
CIR/CFD/POLICYCELL/6/2014  September 11, 2014 Increasing the investment bucket for anchor investor and regulations concerning the preferential issue norms SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 have been amended vide SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2014 with effect from August 25, 2014. In order to remove any difficulties in the application or interpretation of Second Amendment Regulations, SEBI has issued certain clarification for the same.
No. LAD-NRO/GN/2014-15/08/1491 September  15, 2014 SEBI(Settlement of Administrative And Civil Proceedings (Amendment) Regulatons 2014 SEBI has made following amendment in Settlement of Administrative & Civil Proceedings Regulations 2014: In the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014, in Schedule I, in Part B, the word "five " shall be substituted with the word "ten".
CIR/MRD/DRMNP/26/2014  September 15, 2014 Position Limits for Mutual Funds in 10-year Interest Rate Futures (IRF) It is clarified that the following position limits in IRF shall be applicable for Mutual Fund level and scheme level:
a. Mutual Funds shall have position limits as applicable to trading members presently.
b. Schemes of Mutual Funds shall have position limits as applicable to clients presently. 
CIR/CFD/POLICY CELL/7/2014  September 15, 2014 Corporate Governance in listed entities - Amendments to Clause 49 of the Equity Listing Agreement In terms of the said circular,  Clause 49 of the Listing Agreement has been amended which  would be applicable to all listed companies with effect from October 01, 2014. 
CIR/MRD/DP/ 27 /2014 September 18, 2014 Establishment of Connectivity with both depositories NSDL and CDSL – Companies eligible for shifting from Trade for Trade Settlement (TFTS) to Normal Rolling Settlement At least 50% of other than promoter holdings as per clause 35 of Listing Agreement are in dematerialized mode before shifting the trading in the securities of the company from TFTS to normal Rolling Settlement. For this purpose, the listed companies shall obtain a certificate from its Registrar and Transfer Agent (RTA) and submit the same to the stock exchange/s. However, if an issuer-company does not have a separate RTA, it may obtain a certificate in this regard from a practicing company Secretary/Chartered Accountant and submit the same to the stock exchange/s.
No. LAD-NRO/GN/2014-15/11/1576  September 26, 2014 SEBI (Real Estate Investment Trusts) Regulations, 2014  SEBI has notified SEBI (Real Investment Trsuts) Regulations, 2014 for laying down a framework for Real Estate Investment Trusts and registration and
regulation thereof.
No. LAD-NRO/GN/2014-15/10/1577 September 26, 2014 SEBI (Infrastructure Investment Trusts) Regulations 2014 The SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”) have been notified by SEBI  laying a framework for Infrastructure Investment Trusts and registration and regulation thereof.
CIR/MRD/DP/28/2014 September 29, 2014 Modification to Investor Protection Fund (IPF) / Customer Protection Fund (CPF) Guidelines SEBI vide Circular No. MRD/DoP/SE/Cir-38/2004 dated October 28, 2004 had prescribed the Comprehensive Guidelines for Investor Protection Fund (IPF)/ Customer Protection Fund (CPF) at Stock Exchanges. Based on the representations received from the stock exchanges and recommendations of the Secondary Market Advisory Committee (SMAC), it has been decided to modify certain clauses in the aforesaid guidelines.

Tuesday, 4 November 2014

SEBI (Share Based Employee Benefits) Regulations, 2014

SEBI (Share Based Employee Benefits) Regulations, 2014

With the intent to keep a check on certain ongoing malpractices under the garb of ESOPs and the trusts to implement them, SEBI has mandated to bring all share based employee benefit schemes under the regulatory ambit and has therefore, notified new regulation namely SEBI (Share Based Employee Benefits) Regulations, 2014 (“Regulation”) via notification no. LAD-NRO/GN/2014-15/16/1729 dated October 28, 2014, thereby repealing the existing SEBI (ESOS & ESPS) Guidelines, 1999. The provisions of these regulations shall apply to companies whose shares are listed and where the schemes have been set up, funded or controlled by the listed entity or any of their group companies.

Earlier in an attempt to prohibit companies from buying/selling its own securities in the secondary market, SEBI had amended the erstwhile ESOP guidelines in January, 2013. The said Regulations have brought an end to the ongoing dilemma as to allowance/disallowance of secondary market purchases for ESOPs. SEBI has allowed secondary market acquisitions by the trusts subject to compliance of certain conditions.

In addition to Employee Stock Option Scheme (ESOS) and Employee Stock Purchase Scheme (ESPS), the Regulation covers the following new employee benefit schemes which deal in shares of the company:

a.    Stock Appreciation Rights Scheme (SARS);
b.   General Employee Benefit Scheme (GEBS);
c.    Retirement Benefit Scheme (RBS).

The companies shall constitute a Compensation Committee for administration and superintendence of the schemes. Where the scheme is being implemented through a trust the Compensation Committee shall delegate the administration of such scheme(s) to the trust. Furthermore, in order to provide adequate safeguard measures, SEBI has included the requirement of shareholders approval through special resolution for undertaking secondary market acquisitions.

The said move by SEBI seems to be instrumental in aligning the provisions of the Regulations with the Companies Act, 2013 thereby ensuring transparency in the operations on one hand and bringing all trusts together with the welfare schemes involving shares of the listed entities under the regulatory arena.