CORPORATE UPDATES ON SEBI, DVAT, MCA, SEZ, DGFT
CORPORATE UPDATES ON SEBI, DVAT, MCA, SEZ, DGFT
A. Bombay Stock Exchange (BSE)
BSE has changed the head of Payment of SEBI Turnover Fees of Equity Segment/Equity Derivative/Currency Derivatives Segment/Interest Rate Derivatives/New Debt Segment. Trading members of the Exchange are hereby informed that the SEBI Turnover fee for the month ended will be debited to their respective settlement (valan) account by the 3rd working day of the next month. Members are requested to note that SEBI Turnover Fees will no longer be a part of the Settlement Obligation (Valan). It will be debited sepErately from the members settlement account with appropriate narration against the entry. In view of the above, the members are requested to ensure that sufficient funds are available in their settlement account (valan account) for the purpose of payment of SEBI Turnover Fees.
B. SEBI
SEBI has issued Guidance Note on SEBI (Prohibition of Insider Trading) Regulations, 2015. As the new Insider Trading Regulations came into effect from May 15th, 2015. Subsequently SEBI received certain queries from the market participants seeking guidance on the interpretation of some provisions of the Regulations. Based on the queries received SEBI has clarified that Exercise of ESOPs shall not be considered to be “trading” except for the purposes of Chapter III of the Regulations. However, other provisions of the Regulations shall apply to the sale of shares so acquired. Further, any derivative contract that is cash settled on expiry shall be considered to be a contra trade. Trading in index futures or such other derivatives where the scrip is part of such derivatives need not be reported. Buy back offers, open offers, rights issues, FPOs, bonus, etc. of a listed company are available to designated persons also, and restriction of ‘contra-trade’ shall not apply in respect of such matters.
The SEBI Board met in Mumbai yesterday and took the some important decisions in the interest of the stakeholders. Some of the major decision taken in the meeting of the SEBI Board are provided hereunder. The Board approved the merger of Forward Market Commission established under the Forward Contracts Regulation Act, 1952 (FCRA) with SEBI. A Major relief is provided to the promoters and employees of the company, as exercise of Shares under ESOPs will not be considered as trading. The Board also considered the proposal to provide general exemption from the open offer obligations under SEBI (SAST) Regulations, 2011 in the cases of increase in voting rights as a result of expiry of call notice period and forfeiture of shares. Further, the Listed Companies with employee benefit Trusts existing as on the date of notification of the SBEB Regulations shall have to re-classify the shareholding of Trust as ‘non-promoter and non-public’ category and ensure compliance with the requirement of minimum public shareholding within 3 years (as against 5 years presently) from the date of notification of the SBEB Regulations.
SEBI notifies norms for listing of start-ups on Institutional Trading Platform through the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2015. The provisions shall apply to entities which seek listing of their specified securities exclusively on the institutional trading platform either pursuant to a public issue or otherwise. Further, in respect of the matters not specifically dealt or excluded under this Chapter, shall apply MUTATIS MUTANDIS to any listing of specified securities under this Chapter. The institutional trading platform shall be accessible to institutional investors and non-institutional investors.
SEBI has amended the regulations relating to Alternate Investment Fund and the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2015 which shall come into force on the date of their publication in the Official Gazette. A new Regulation 15(1)(h) has been inserted through which the investments made by Category I and Category II Alternative Investment Funds in the shares of entities listed on the institutional trading platform have been deemed to be investment in “Unlisted Securities” for the purpose of these regulations.
SEBI has amended SEBI (ICDR) Regulations, 2009 and notified SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations,2015.
The new norms, will provide all listed companies a ‘fast-track’ route for share sales, accordingly firms in which public shareholders own stocks worth Rs 1,000 crore will now be able to access this route through a follow-on public offer (FPO) against the old requirement of minimum Rs 3,000 crore. Under the ‘fast-track’ route, a listed company would not be required to file any draft offer document for its FPO or rights issue and they can proceed with fund-raising program without necessarily getting ‘observations’ from SEBI. Further, for rights issues, promoters will not renounce their rights, except to the extent of renunciations within the promoter group, or for the purposes of complying with minimum public shareholding norms. This new mode would be allowed only for those firms in which the promoter group and directors of the issuer have not settled any alleged violation of securities laws through the consent mechanism with SEBI in the past three years.
SEBI has amended the delisting guidelines and released the Securities and Exchange Board of India (Delisting of Equity Shares) (Second Amendment) Regulations,2015, which shall come into force on the date of their publication in the Official Gazette. Regulation 3(1) has been substituted by the new clause through which companies listed on the institutional trading platform have been excluded from the applicability of the delisting guidelines. Now these regulations shall not apply to securities listed without making a public issue, on the institutional trading platform of a recognised stock exchange.
C. MCA
MCA has initiated the process of the constitution of the NCLT & NCLAT and in this regard notified the vacancies for the post of Technical Member & Judicial Member in the National Company Law Tribunal to be constituted under the provisions of Section 410 of the Companies Act, 2013. The selected candidates will be required to serve at NCLT / NCLAT Benches to be established anywhere in the country and the appointment carries All India Transfer liability. The required qualification for the post shall be as per the provisions of the Sec 411(3) of the Companies Act, 2013 read with the Judgment dated 14-05-2013 of Hon’ble Supreme Court of India. Further the initial appointment shall be for 5 years with an option to renew it for another period of 5 years till the age of 67 years.
MCA has released the amendments to the Companies (Management and Administration) Rules, 2014, which may be called the Companies (Management and Administration) Amendment Rules, 2015 and shall come into force on the date of their publication in the Official Gazette. For the purpose of Special Notice under the provisions of Section 115 of the Companies Act, 2013, the eligibility criteria has been changed and accordingly in Rule 23(1) for the words “not more than five lakh rupees”, the words not less than five lakh rupees’ shall be substituted. Further, the contents of Form No. MGT-7, has been revised and substituting in place of the earlier released Form. E-version of Form MGT – 7 is yet to be released for the purpose of filing Annual Return under the provisions of Section 92 of the Companies Act, 2013.
MCA has notified new versions of e-Form MR – 2 (Form of application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to managing director or whole time director or manager and commission or remuneration to directors) w.e.f 14-08-2015. Only new version of the eForm will be acceptable. Stakeholders are requested to plan accordingly and ensure that you have downloaded the latest version for filing and uploading the latest version only. Form-wise date of last version change is available at on the website of MCA.
MCA has released the contents of much awaited forms AOC – 4 for filing of Financial Statements and AOC – 4 CFS for Consolidated Financial Statements and Practising Company Secretaries are now authorised to pre-certify Form AOC – 4 & AOC – 4 CFS through Amendments to the Companies (Accounts) Rules, 2014 which will be called as the Companies (Accounts) Second Amendment Rules, 2015 and shall be applicable from the date of the notification. The term “Indian Accounting Standards” will have the same meaning as prescribed in the Companies (Indian Accounting Standards) Rules, 2015. Further Financial Statement shall be prepared in the form specified in Schedule III and also required to comply with the Accounting Standards or the Indian Accounting Standards.
MCA has notified new versions of e-Form CHG-1 (Application for registration of creation, modification of charge (other than those related to debentures)), GNL-1 (Applications made to Registrar of Companies), GNL-3 (Details of persons/directors/charged/specified), INC-1 (Application for reservation of name), INC-6 (One Person Company- Application for Conversion), RD-2 (Form for filing Application to Central Government (Regional Director)), Form FTE (Application for striking off the name of company under the Fast Track Exit(FTE) Mode), Form 22 (Statutory Report under Companies Act, 1956), Form 2 LLP (Incorporation document and subscriber’s statement) andForm 2A LLP (Details in respect of designated partners and partners of Limited Liability Partnership) are modified w.e.f 4th Sep 2015.Only new version of the eForm will be acceptable. Stakeholders are requested to plan accordingly and ensure that you have downloaded the latest version for filing and uploading the latest version only. Form-wise date of last version change is available at on the website of MCA.
D. CBDT – Income Tax
CBDT has issued Circular Clarifying another Set of 27 Queries Relating to Tax Compliance Provision Under Chapter VI of the Black Money Act. Earlier the Board had issued a Circular on 6th July, 2015 clarifying 32 queries regarding tax compliance provision under the said Act. The Black Money Act has introduced a tax compliance provision under Chapter-VI of the Act. Subsequently, further queries have been received from the public about the tax compliance provisions under Chapter VI of the Act. The Board has considered the same and the clarifications are issued.
E. DVAT
DVAT Authorities have cancelled registration certificate of some dealers who were showing NIL Gross Turn Over or not filing the returns in the past years. It has now come to the notice that some genuine dealers have also been affected though they were still functioning and due to some reasons could not file their returns. The department had taken the cognizance of such cases and decided to individually deal with each case on merit for the purpose of Restoration of Registration Certificate. It has been further decided that the practice of submission of individual files for restoration should be dispensed with and every zone would submit the cases for the approval of the Commissioner (VAT) on weekly basis along with requisite reports & certificates including the prescribed conditions. The Zonal Officer shall also submit a certificate that he has gone through the report of VATI and also examined the report of the Ward VATO and is satisfied that the applicant dealer is fit for restoration.
DVAT Authorities have again extended the last date of filing of online / hard copy of return for first quarter ended on 30-06-2015 for the financial year 2015-16, in Form DVAT-16, DVAT-17 and DVAT-48 along with required annexure / enclosures from 07/08/2015 to 17/08/2015. However, the tax due shall continue to be paid in the usual manner as per the provisions of section 3(4) of the Delhi Value Added Tax Act, 2004. Further, the dealers filing the returns through digital signature need not be required to file hard copy of the return / Form DVAT-56.
DVAT Authorities have notified the Delhi Value Added Tax (Amendment) Rules, 2015 which shall come into force on the date of their publication in the Delhi Gazette. An attempt has been made to clarify the provisions relating to the proportionate reduction of tax credit on purchases of goods sold at a price lower than the purchase price shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss or where the dealer receives a ‘discount or incentive through a credit note issued by the selling dealer after issuance of tax invoice.
DVAT Authorities have again extended the last date of filing of online / hard copy of return for first quarter ended on 30-06-2015 for the financial year 2015-16, in Form DVAT-16, DVAT-17 and DVAT-48 along with required annexure / enclosures from 17/08/2015 to 25/08/2015. The last has been extended for the fourth time, to provide an opportunity to all stakeholders to file their returns. However, the tax due shall continue to be paid in the usual manner as per the provisions of section 3(4) of the Delhi Value Added Tax Act, 2004. Further, the dealers filing the returns through digital signature need not be required to file hard copy of the return / Form DVAT-56.
DGFT has made Amendments to Foreign Trade Policy 2015-2020 which shall be effective from 1st July, 2015: Amendment has been made with respect to the Transitional Arrangement through which facility has been provided for exporters to continue to file applications for benefits under Chapter 3 schemes of the earlier Foreign Trade Policy (ies), as per procedures prescribed in the corresponding Hand Book of Procedures, v1 2009-2014. Further, the Applicants shall continue to file applications in respect of FPS/ MLFPS/FMS/VKGUY/SFIS/ SHIS/IEIS and Agri Infrastructure Incentive Scheme Scrip in the application form and manner prescribed in the corresponding Hand Book of Procedures.
F. Bar Council of India
The Bar Council of India (BCI), has introduced an exhaustive mechanism/ procedure for ascertaining the number and identify of fake or non-practicing lawyers and with that purpose it has framed Bar Council of India Certificate and Place of Practice (Verification) Rules, 2015. The BCI has framed these Rules in order to check and stop the occurrence of the use of such fake degrees or to stop the non-practicing persons enrolled with the State Bar Council from getting benefit or any welfare schemes of all the State Bar Councils/ Government or any other institutions. BCI through these Rules has formed the Committees through State Bar Councils in order to implement the verification rules. Further, within a period of 6-7 months, the entire verification process will be completed and fake lawyers will be identified.
G. Special Economic Zones (SEZs)
The Board of Approval (BoA) on Special Economic Zones (SEZs) in its meeting held on 19th May, 2015, has approved for cancellation / de-notification of 22 SEZs as the progress made by the Developers of said SEZs are not satisfactory. The approval is subject to the concerned Development Commissioner of SEZ furnishing a certificate in the prescribed format that the developer has not availed any tax/duty benefits including Service Tax Exemptions, if any, under the SEZs Act and Rules, or has refunded any such benefits availed by it and no objection certificate from concerned State Government.
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