Via its notification dated May 4, 2017, the Ministry of Labour & Employment amended the Employees’ Provident Fund Scheme, 1952; the Employees’ Pension Scheme, 1995; and the Employees’ Deposit Linked Insurance Scheme, 1976; to enable payments to be made to the beneficiaries/pensioners/insurance claimants via an electronic or digital funds transfer system. This mode of funds transfer has been made mandatory, and is expected to benefit 4.5 crore EPF subscribers and around 54 lakh pensioners.
The Telecom Regulatory Authority of India (TRAI) via a letter dated May 16, 2017, has authorised the use of Aadhaar based e-KYC authentication by Internet Service Providers for the purposes of providing broadband and internet connections. This process had already been authorised and operationalised for new as well as existing subscribers of mobile connections (via letters dated September 16, 2016 and March 23, 2017 respectively). However, the TRAI is yet to come out with an appropriate format of the Customer Application Form, for the purpose of operationalising this process of ISPs.
The Department of Industrial Policy and Promotion (DIPP) (Industrial Promotion Body) and World Intellectual Property Organization (WIPO) have joined hands to establish Technology and Innovation Support Centres (TISC) in the country which is expected to boost generation and commercialisation of intellectual properties.
The agreement, signed between the DIPP and WIPO for setting up of TISCs, will provide an motivation to knowledge sharing, capacity building and sharing of best practices among the over TISCs operating worldwide by providing access to global network.
Services offered by TISCs may include:
- Access to online patent and non-patent (scientific and technical) resources and IP-related publications;
- Assistance in searching and retrieving technology information;
- Training in database search;
- On-demand searches (novelty, state-of-the-art and infringement);
- Monitoring technology and competitors;
- Basic information on industrial property laws, management and strategy, and technology commercialization and marketing.
The Cell for IPR Promotion and Management (CIPAM) is designated as the National Focal point for the TISC national network. As the national focal point, CIPAM shall identify potential host institutions, assess their capacities and support them in joining the TISC project. CIPAM will also act as the main intermediary between WIPO and TISC host institutions and coordinate all the activities of the national TISC network.
Ministry of Corporate Affairs vide its notification dated 11 May 2017 has amended the Companies (Acceptance of Deposits) Rules 2014 to include “Infrastructure Investment Trusts” in the exemption category and to defer “deposit insurance” for another one year (till 31 March 2018) in the absence of suitable deposit insurance product in the market.
Section 73(2) of the Companies Act 2013 read with Rule 5 of Companies (Acceptance of Deposits) Rules, 2014 mandates that every company inviting deposits shall enter into a contract for providing deposit insurance at least 30 days before the issue of circular or advertisement or renewal as the case may be. However, in view of non-availability of such deposit insurance products, companies are now allowed to raise deposits without any deposit insurance till 31st March, 2018, as per proviso to Rule 5(1) of the Companies (Acceptance of Deposits) (Amendment) Rules, 2017.
SEBI vide its circular no. SEBI/HO/IMD/DF2/CIR/P/2017/39 dated 8 May 2017 has issued guidelines for Instant Access Facility (IAF) in Mutual Funds and use of e-wallet for investment in Mutual Funds, with an objective to channelize households’ savings into capital market and to promote digitalization in mutual funds.
1) Monetary Limit: Mutual Funds (MFs) / Asset Management Companies (AMCs) can offer instant access facility (through online mode) upto INR 50,000 or 90% of folio value, whichever is lower, to resident individual investors in liquid schemes by applying lower of Previous Day Net Asset Value or Net Asset Value of Day on which application is received.
- Liquidity is to be provided out of the available funds from the scheme and MFs/AMCs to put in place a mechanism to meet the liquidity demands.
- For providing such facility MFs/AMCs would not be allowed to borrow.
3) MFs/AMCs can accept investment by an investor through e-wallets (Prepaid Payment Instruments (PPIs)) subject to the following:
- Investment of upto INR 50,000 per Mutual Fund per financial year can be made using e-wallets. However, redemptions of such investments can be made only to a bank account of the unit holder.
- MFs/AMCs must not offer any incentive such as cash back etc., directly or indirectly for investing in mutual fund scheme through them.
- E-wallet’s balance loaded through cash or debit card or net banking, can only be used for subscription to mutual funds schemes and balance loaded through credit card, cash back, promotional scheme etc. should not be allowed for subscription to MF schemes.
- Further, this limit of INR 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund per financial year.
4) The SEBI Circular shall be applicable with immediate effect.
- Clarification on “Relevant Date”: Scheme of Arrangement during Preferential Allotment for Listing Entities
- The Companies (Audit and Auditors) Amendment Rules, 2017
- The Companies (Meetings of Board and its Powers) Amendment Rules, 2017
- Amendment in Schedule III to the Companies Act 2013
- The Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017
Securities and Exchange Board of India (SEBI)
Clarification on “Relevant Date”: Scheme of Arrangement During Preferential Allotment for Listing Entities
SEBI has issued a notification clarifying on “Relevant Date” in case of any preferential issue of equity share of listed entities.
Earlier, the relevant date for the purpose of computing price per security for preferential issue was thirty days, prior to the date on which the meeting of shareholders is held to consider the preferential issue. With this notification, the “relevant date” shall be the date of Board meeting in which the scheme is approved.
Ministry of Corporate Affairs (MCA)
The Companies (Meetings of Board and it’s Powers) Amendment Rules, 2017
The Ministry of Corporate Affairs (MCA) vide its notification dated 30 March 2017 has notified the Companies (Meetings of Board and its Powers) Amendment Rules, 2017, applicable w.e.f 30 March 2017 and modified the Rule 15 (3) with respect to the provisions relating to Related Party Transactions under Sub Rule 3 of Rule 15 in pursuant to Sub section 1 of Section 188 of the Companies Act, 2013.
With this notification, a Company shall not enter into transactions without the previous approval of shareholders, where the transaction(s) to be entered into involves the following:
- Sale, purchase or supply of any goods or materials, whether directly or through any agents- amounting to ten per cent. or more of the turnover of the company or rupees one hundred crore, whichever is lower.
- Selling or otherwise disposing of or buying property of any kind, directly or through any agent- amounting to ten per cent. or more of net worth of the company or rupees one hundred crore, whichever is lower.
- Leasing of property of any kind – ten per cent. or more of turnover of the company or rupees one hundred crore, whichever is lower.
- Availing and rendering of any kind of services, directly or through appointment of agent – amounting to ten per cent. or more of the turnover of the company or rupees fifty crore, whichever is lower
Amendment in Schedule III to The Companies Act, 2013
The Ministry of Corporate Affairs (MCA) vide its notification dated 30 March 2017 has amended Schedule III of the Companies Act 2013 applicable w.e.f 30 March 2017, to include formats to disclose holding/ dealings of specified bank notes of Rs. 500/ Rs. 1000 by the Companies during the period of demonetization in India.
The Schedule III to the Companies Act, 2013 provides general instructions for preparation of the balance sheet and the statement of profit and loss of a company.
- It is applicable to every company to which Ind AS apply in preparation of its financial statements.
- The provisions of Schedule III also apply when a company is required to prepare consolidated financial statements, in addition to the disclosure requirements specified under Ind AS.
The Companies (Audit and Auditors) Amendment Rules, 2017
The Ministry of Corporate Affairs (MCA) has notified the Companies (Audit and Auditors) Amendment Rules, 2017, applicable w.e.f 30 March 2017, amending the requirements for reporting by the Company about the requisite disclosures of holding/ dealings of specified bank notes of Rs. 500/ Rs. 1000 during the period from 8 November 2016 to 30 December 2016, (the period of demonetization in India ) for assessing whether it is in accordance with the books of accounts maintained by the Company.
Insolvency and Bankruptcy Board of India
The Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017
The Insolvency and Bankruptcy Board of India (IBBI) vide its notification dated 31 March 2017 has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 applicable w.e.f 1st April, 2017. The gist of this regulation is as below:
- The regulation provides for complete procedure for voluntary liquidation of corporate persons (i.e. companies, limited liability partnership and any other person incorporated with limited liability till its dissolution) which has not committed any default.
- A corporate person may initiate a voluntary liquidation proceeding, if majority of the directors or designated partners of the corporate person shall make following declaration to the effect that:
- There is no debt on corporate person
- In case of debt, it has to be paid in full from the proceeds of the assets sold under proposed liquidation.
- The corporate person is not being liquidated to defraud any person
In case of non-fulfilment of the above conditions the liquidator has to write an application to the Adjudicating Authority and, hence, process of liquidation will be suspended
- The winding up process shall commence on the date on which a special resolution is passed by the members/partners of the corporate person to liquidate the corporate person and appoint an insolvency professional to act as the liquidator. On the appointment of a liquidator, the corporate person shall cease to carry on its business.
- A liquidator needs to be independent and impartial, therefore, an insolvency professional of a corporate person is prohibited from acting as a liquidator.
- Insolvency professional is also required to disclose any pecuniary or personal relationship with any of the stakeholders or the corporate person.
- The regulations specify the manner and content of public announcement, receipt and verification of claims of stakeholders, reports and registers to be maintained, preserved and submitted by the liquidator, realisation of assets and distribution of proceeds to stakeholders, distribution of residual assets, and finally dissolution of corporate person.
- The regulation requires a liquidator to preserve a physical or an electronic copy of the reports, registers and books of account for at least 8 years after the dissolution of the corporate person, either with himself or with an information utility. On the completion of the liquidation process, the liquidator shall prepare and submit the final report to the NCLT and after the affairs of the corporate person are wound up, he will make an application to NCLT for dissolution of the corporate person.
- It also provides for the manner and procedure for dealing with extortionate credit transactions, unclaimed proceeds of liquidation/undistributed assets, detection of fraud, etc.