Archive for month: October, 2022
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Open in new tab Samagrata – September 2022
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Guidelines on Information and Cyber Security extended to Insurance Intermediary
– Kaushal Shah, Executive | kaushal@vinodkothari.com
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IRDA relaxes stringent norms for Common Directors among insurance intermediaries
– Kaushal Shah, Executive | kaushal@vinodkothari.com
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Our related write-up:
IRDA rolls out conditions for common directorship in insurance company and intermediary – https://vinodkothari.com/2022/09/irda-rolls-out-conditions-for-common-directorship-in-insurance-company-and-intermediary/
Write ups on Corporate Laws – https://vinodkothari.com/category/corporate-laws/
The essence of mens rea in insider trading
Supreme Court contradicts its previous ruling while considering the ‘intent’ in insider trading
– CS Aisha Begum Ansari | aisha@vinodkothari.com
Insider trading means dealing in the securities of the listed company on the basis of unpublished price sensitive information (‘UPSI’), thereby gaining an unfair advantage over the market. A person guilty of insider trading is punishable with a monetary penalty[1] under section 15G of the SEBI Act, 1992 (the ‘Act’). Further, under section 24 of the Act, SEBI can punish a person with imprisonment of upto Rs. 10 years or with a fine of upto Rs. 35 crores or both for violation of the Act and its regulations.
Read more →Workshop on RPT compliance by Subsidiaries of Listed Entities
Expanding the ambit of IT Act in a bid for increased digitalisation
– Neha Sinha, Assistant Legal Advisor | finserv@vinodkothari.com
Introduction
The Information Technology Act, 2000 (‘IT Act’) allows digital execution of documents by way of electronic and digital signatures. While the reach of IT Act is wide, certain contracts and transactions were excluded from its ambit. The First Schedule of IT Act enumerates the documents or transactions to which IT Act is not applicable and such documents or transactions cannot be signed digitally. Recently, the Ministry of Electronics and Information Technology has released a notification amending the First Schedule of the IT Act. The amendments are as follows:
- Entry No. 5 of the said Schedule included “any contract for sale or conveyance of immovable property or any interest in such property”. Contracts for sale of immovable property fell outside the scope of the IT Act and hence, could not be signed digitally. The Amendment has omitted the Entry No. 5, thus, bringing contracts for sale or conveyance of immovable property within the ambit of the IT Act. This amendment allows a contract for sale of immovable property to be executed digitally.
- Entry No. 2 of the said Schedule contained power-of-attorney, thus, excluding it from the purview of the IT Act. The amendment allows the application of the IT Act to those power-of-attorney that empower an entity regulated by the RBI, National Housing Bank, SEBI, IRDAI and PFRDA to act for the person executing it. Hence, a power-of-attorney in favour of entities regulated by these bodies can now be executed digitally.
- Entry No. 1 of the said Schedule, excluded the application of the IT Act to negotiable instruments other than a cheque. Hence, negotiable instruments could not be signed digitally, but cheques were exempt from this provision and they could be signed digitally. The amendment has included other negotiable instruments and brought them within the purview of the IT Act. Now, a cheque, a demand promissory note or a bill of exchange issued in favour of or endorsed by an entity regulated by the Reserve Bank of India, National Housing Bank, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India and Pension Fund Regulatory and Development Authority, can be signed digitally.
RBI introduces corporate governance norms for Asset Reconstruction Companies
Timothy Lopes | Manager | finserv@vinodkothari.com
The RBI has, on October 11, 2022, issued a circular[1], amending the extant regulatory framework for Asset Reconstruction Companies (‘ARCs’) and introducing corporate governance norms and other aspects through this circular.
Considering the importance of ARCs, a need was felt to review the extant regulatory framework. Through the Statement on Developmental and Regulatory Policies released along with the Monetary Policy Statement on April 7, 2021, the RBI had set up a committee to “undertake a comprehensive review of the working of ARCs in the financial sector ecosystem and recommend suitable measures for enabling such entities to meet the growing requirements of the financial sector.” The committee, constituted on April 19, 2021[2], had submitted its report to RBI and the same was placed on the website of RBI on November 02, 2021[3] and many recommendations have been implemented since. The circular comes pursuant to the recommendations of the said committee.
This circular is in addition to the extant regulatory framework governing ARCs and come into effect immediately or as otherwise indicated specifically therein.
Read more →Group NBFCs’ assets to be aggregated for middle layer classification: RBI clarification
– Aanchal Kaur Nagpal, Manager | aanchal@vinodkothari.com
RBI vide notification dated October 11, 2022, has clarified that the assets of NBFCs forming part of a group will be aggregated for determination of the “middle layer” status of NBFCs. This clarification dates back to the 1st of October and therefore, as on the effective date of the SBR framework, NBFCs which, on a consolidated basis, have assets of Rs 1000 crores or above, will have to start adhering to the SBR framework as applicable to NBFC-ML.
Effective date
The Circular will be effective retrospectively from the date of applicability of the SBR Framework i.e. October 01, 2022.
Read more →SEBI rationalizes issuances on Electronic Book Platform – Limits | Bidding Process | Anchor Investor | Basis of Allotment
– Kaushal Shah, Executive & Lovish Jain, Executive | corplaw@vinodkothari.com
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