THE NEW FDI POLICY – MIX OF RELIEF AND BURDEN OF ADDITIONAL COMPLIANCES AND LIMITATIONS
– Soma Bagaria & Nidhi Ladha
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Open in new tab Implementation of Compliance Function by NBFC-ML
Eliza Bahrainwala, Executive| eliza@vinodkothari.com
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Cyber security incidents to be reported quarterly to stock exchanges
Circular differs from the discussion in SEBI Board meeting
– Aisha Begum Ansari | corplaw@vinodkothari.com
Brief background
With business operations going digital, the threat of cyber attacks have increased considerably. Effective from April 2019, the Risk Management Committee of a listed entity was mandated by SEBI to discharge the function for laying down a framework for identifying the cyber security risks. In case of financial sector entities, the requirements laid down by the sectoral regulators are stricter and elaborate[1].
Additionally, the companies are required to report the cyber security incidents to an agency called Indian Computer Emergency Response Team (‘CERT-In’) which is established in terms of section 70B of the Information Technology Act, 2000 and comes under the Ministry of Electronics and Information Technology (‘MEITY’).
Present Circular
Since, the cyber security incidents are material in nature and may be relevant for the investors, SEBI vide its notification dated June 14, 2023 inserted reg. 27(2)(ba) in the Listing Regulations mandating the listed entities to disclose the details of cyber security incidents or breaches or loss of data or documents in its quarterly Corporate Governance (CG) report filed in terms of Reg. 27 (2) effective from July 13, 2023. Pursuant to the same, the stock exchanges, on September 29, 2023, released a format for disclosure of cyber security incidents in the quarterly CG report commencing from quarter ended September 30, 2023 , which covers the following:
- Confirmation on any instance of cyber security incident or breach or loss of data or documents during the quarter;
- Date of the event;
- Brief details of the event.
This article analyzes the above requirement in light of the proposal made in the consultation paper, discussion in SEBI Board meeting agenda and the gaps arising therefrom .
Read more →Operation of Pre-sanctioned credit lines at Banks through UPI
Eliza Bahrainwala, Executive | eliza@vinodkothari.com
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Amendment in Rule 11UA
– Nitu Poddar and Ankit Singh Mehar | corplaw@vinodkothari.com
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Delegation of the power to invest – absolute or conditional?
– Nitu Poddar | corplaw@vinodkothari.com
As per section 186(5), any investment has to be approved by the board in its meeting by all the directors present in the meeting. First proviso to section 179(3) allows delegation of power of the board with respect to investing the funds of the company. This power can be delegated to a committee of directors / MD / manager or any principal officer. Are these two provisions contradictory? No, delegation allowed in section 179 is to remove bottlenecks in terms of activities being carried out by the company in its day-to-day operations. There are several investment opportunities which are available only at opportune times. If these opportunities have to wait for the board meeting to happen, the very opportunity may be lost. Also, companies need to ensure that they do not sit with idle funds. For this, they are often required to make investment decisions – investments which are non-strategic, short term and have to be reinvested soon enough.
Read more →Stock options entail multi-stage disclosure to stock exchanges
Requirement under SEBI Listing Regulations and SBEB Regulations
– Aisha Begum Ansari | corplaw@vinodkothari.com
Employee share benefit schemes in the form of ESOP, ESPS, etc. (‘stock options’) facilitate the employees to participate in the growth of the companies. Since, the issue of shares pursuant to exercise of stock options leads to dilution of the share capital of the company, the same may be relevant or material event or information for the investors. Therefore, right from the board meeting in which the decision relating to ESOP scheme is undertaken till the time of allotment of shares, disclosure is required to be made at different stages either in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) or SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘SBEB Regulations’). This article deals with the requirements and the stages when the disclosure is required to be made by a company.
Read more →Display of information on repossession under SARFAESI
– Eliza Bahrainwala, Executive, finserv@vinodkothari.com
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Defaulters at will, and defaulters of size: RBI proposes new Directions
Middle and Upper Layer NBFCs also part of the system
Team Finserv, finserv@vinodkothari.com (updated as on March 30,2024)
Introduction
The Reserve Bank of India on September 21, 2023 has issued the Draft Master Directions on Treatment of Wilful Defaulters and Large Defaulters (‘Proposed Directions’). The Directions, when finalized, will replace the existing Master circulars (referred below). The draft Directions are largely consolidating in nature, with some significant differences. Importantly, NBFCs of middle and upper layer have been brought into the framework, and additionally, as was clear from the recent circular on compromise/settlements, the tag of willful defaulter may be removed if the borrower does a compromise settlement with the lender. However, a mere sale of the loan will not cause removal of the tag, as the tag will pass on to the buyer. The draft Directions also assimilate the provisions about large defaulters, which was earlier a CIC filing requirement, and make it a part of these Directions.
Read more →CIRP (Second Amendment Regulations), 2023 – A snapshot
– Team Resolution | resolution@vinodkothari.com
The Insolvency and Bankruptcy Board of India (IBBI), has, vide notification dated 18th September, 2023 introduced the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (‘CIRP Amendment Regulations’/ ‘Amendment Regulations’) effective from 18th September, 2023, so as to further streamline the insolvency resolution process.
The amendments (discussed below) provide some relaxation to the stakeholders thereby extending the timeline for submitting claims. Further, an attempt has also been made to provide assistance to NCLT Benches for dealing with applications u/s 7 or 9 for admission/rejection of claim. However, the obligation of the Resolution professionals (RPs) have also been increased as the amendment now requires the RPs to not just take handover of the assets of the Corporate Debtor (CD) but also verify asset by asset list of the CD, tally the same with the financials of the CD, and to report the same while making application u/s 19(2), if not found in conformity with the assets shown in the financials of the CD. Also, for condonation of delay of claims filed by the stakeholders, the amendment now requires the RP to file application before AA.
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