Brief Update On Sebi And Corporate Law
SEBI
- REGULATIONS
1. Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2021
[Issued by the Securities and Exchange Board of India vide NotificationNo. SEBI/LAD- NRO/GN/2021/12dated March 23, 2021]
Stock Exchanges shall now be liable to pay the following to SEBI:
- Annual Turnover Fees; and
- 10% of Listing fees collected by Stock Exchanges.
2. Securities And Exchange Board Of India (Merchant Bankers) (Amendment) Regula- tions, 2021
[Issued by the Securities and Exchange Board of India vide NotificationNo. SEBI/LAD- NRO/GN/2021/13dated March 30, 2021]
SEBI has amended the regulations to insert underwriting related provisions and agreements with clients in this regard.
3. Securities and Exchange Board of India (StockBrokers) Regulations, 1992 [Last amended on March 30, 2021]
[Issued by the Securities and Exchange Board of India vide NotificationNo. SEBI/LAD- NRO/GN/202114dated March 30, 2021]
SEBI has amended the regulations to insert underwriting related provisions and agreements with clients in this regard
4. Securities And Exchange Board Of India (Underwriters) (Repeal) Regulations, 2021
[Issued by the Securities and Exchange Board of India vide NotificationNo. SEBI/LAD- NRO/GN/2021/15dated March 30, 2021]
SEBI has repealed SEBI (Underwriters) Regulations, 1992 with effect from March 30, 2021 in light of the amendments carried out in SEBI (Merchant Bankers) Regulations, 1992 and SEBI (Stock Brokers) regulations, 1992.
- CIRCULARS
- Review of delivery default norms
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/CDMRD
/DRMP/CIR/P/2021/35dated March 23, 2021]
SEBI had received representations from market participants in the commodity derivatives segment for standardization of delivery default norms, strengthening the deterrent mechanism and ensuring adequate compensation to thenon- defaulting counterparty. In view of the same, SEBI has prescribed the extant delivery default norms to act as a deterrent.
2. Prior Approval for Change in control: Transfer of shareholdings among immediate relatives and transmission of shareholdings and their effect on change in control
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/MIRSD/ DOR/CIR/P/2021/42dated March 25, 2021]
SEBI has prescribed the procedure for change in control of intermediaries under various circumstances like Transfer/transmission of share holding in case of unlisted body corporate intermediary, Transfer / transmission of share holding in case of a proprietary firm type intermediary, etc.
3. Transfer of business by SEBI registered intermediaries to other legal entity
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO /MIRSD/ DOR/CIR/P/2021/46 dated March 26, 2021]
SEBI has been receiving various applications for change in control of businesses. In this regard, it laid down the procedure as to how the process for change in control will be taken up. Also, in some cases, the seller will have surrender the registration certificate and the buyer needs to re- apply for fresh registration.
4. Circular on Guidelines pertaining to Surrender of FPI Registration
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/IMD/ FPI&C/CIR/P/2021/045 dated March 30, 2021]
SEBI has laid down the procedure to be followed by Foreign Portfolio Investors (‘FPIs’) and Domestic Depository Participants (‘DDPs’). In case of surrender of FPI Registraton.
5. Reduction in unblocking/refund of applica- tion money
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/CFD/DIL1/ CIR/P/2021/47 dated March 31, 2021]
Based on various consultations with the market participants it has been decided to reduce the timelines for refund of the moneys to the investors in various occasions to “four days”.
6. Circular on Regulatory Reporting by AIFs
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/IMD/IMD- I/DOF6/CIR/2021/549 dated April 07, 2021]
Based on consultation with various stake holders and recommendation of Alternative Investment PolicyAdvisory Committee, SEBI has decided that all AIFs shall submit report on their activity as an AIFto SEBI on quarterly basis within 10 calendar daysfrom the end of each quarter in the revised formats prescribed.
Further, Category IIIAIFs are also required to submit reporton leverage undertaken, on quart- erly basis in the revised formats prescribed.
AIFs shall submit these reports online through SEBI intermediary Portal.
Further, changes in terms of private placement memorandum and in the documents of the fund/ scheme shall be intimated to investors and SEBI on a consolidated basis, within 1month of the end of each financial year.
Such intimation shall specifically mention the changes carried-out in the private placement memorandum and the documents of the fund/scheme, along with the relevant pages of revised sections/clauses.
CORPORATE LAW
- Rules
- Company (Accounts) amendment Rules, 2021
[Issued by Ministry of Corporate Affairs vide Notification No. G.S.R. 205(E) dated March 24, 2021& G.S.R. 247(E) dated April 01,
2021]
The Central Government directed all companies using accounting software for maintaining its books of accounts to use only such accounting softwares which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The impleme10 of these provisions have been made effect from April 01, 2022.
- Companies (Audit and Auditors) Amendment Rules, 2021
[Issued by Ministry of Corporate Affairs vide Notification No. G.S.R. 206(E) dated March 24, 2021 & G.S.R. 248(E) dated April 01, 2021]
With the amendment in Rule 11 ofCompanies (Audit and Auditors) Rules, 2021, auditors will now also have to comment on the following:
- Whether the Company under audit has, directly or indirectly given moneys whether by way of loans, investments or in any other form to another entity which will in turn lend or invest or provide and guarantee on behalf of the Company under audit;
- Whether the Company under audit has, directly or indirectly received moneys whether by way of loans, investments or in any other form to another entity which will in turn lend or invest or provide and guarantee on behalf of the Company under audit;
- That based on the audit procedures undertaken, nothing has come to their notice that has caused them to believe that the representations under sub-clause (a) and (b) contain any material mis- statementthe auditor has not come across any material;
- Whether the dividend declared or paid during the year by the company is in compliance with section 123 of the Companies Act, 2013; and
- Whether the audit trail requirements as mentioned in the clause have been undertaken. [This clause will now be effective for financial year commencing on or after April 01, 2022]
- NOTIFICATIONS
1. Amendment to Schedule III to the Companies Act, 2013
[Issued by Ministry of Corporate Affairs vide Notification No. 207(E) dated March 24, 2021]
The Central Government has amended Schedule III relating to preparation of Balance Sheet and Statement of Profit and loss Account. These amendments shall be effective from April 01, 2021.
2. Commencement notification dated 24.03.2021
[Issued by Ministry of Corporate Affairs vide Notification No. 1303(E) dated March 24, 2021] The Central Government has notified the penalty provisions in Section 124(7) of Comp- anies Act, 2013 relating to non-compliance with regard to unpaid dividend account and levy of fine provisions in section 247(3) of Companies Act, 2013 relating to valuation by registered valuers.