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P. K. PANDYA & CO. Practising Company Secretary
www.pkpandya.com BUZZ ON CORPORATE LAWS
November 2014
Page 1 of 8
Contents RESERVE BANK OF INDIA ................................................................................................................ 2
Review of FDI policy – Sector Specific Conditions ........................................................................ 2
Review of FDI policy – Sector Specific conditions- Railway Infrastructure .................................. 2
Review of FDI policy – Sector Specific conditions- Defence ........................................................ 3
SEBI ......................................................................................................................................................... 4
Single Registration for Depository Participants for more than one Depository ........................... 4
Redressal of investor grievances through SEBI Complaints Redress System (SCORES)
platform .............................................................................................................................................. 4
SEBI (Foreign Venture Capital Investors) Amendment Regulations, 2014 ................................. 4
Discussion Paper on Re-classification of Promoters as Public .................................................... 5
Concept paper on proposed regulatory framework for issuance of debt securities by
Municipalities and the Draft SEBI (Issue and Listing of Debt Securities by Municipality)
Regulations, 2015 ............................................................................................................................. 6
Department of Industrial Policy and Promotion (DIPP):............................................................................ 6
Draft National IPR Policy: ..................................................................................................................... 6
Steps by DIPP to improve Doing Business in India: ............................................................................... 6
Law Commission of India: ........................................................................................................................ 8
Commercial Courts: ............................................................................................................................. 8
Disclaimer: The contents are general information and should not be treated as legal
advice or legal opinion by P. K. Pandya & Co. Readers are advised to seek legal advice,
refer the applicable law and sole reliance on the content of this write-up is not
recommended. If this write-up is circulated, content of this disclaimer and credit to P. K.
Pandya & Co. shall be retained. Views expressed herein may differ from the position
adopted by P. K. Pandya & Co. while advising clients. © P. K. Pandya & Co. 2014.
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Buzz on Corporate Laws: December 2014
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RESERVE BANK OF INDIA
Review of FDI policy – Sector Specific Conditions
In order to bring uniformity in the sectoral classification/conditionalities for
FDI/foreign investment as per Consolidated FDI Policy Circular of 2014 with
the FDI regulations by DIPP, RBI has amended the Notification no. FEMA.
20/2000-RB dated 3rd May 2000 relating to specific sectors such as
Agriculture, Defence and Services Sector.
For copy of notification, click here
Review of FDI policy – Sector Specific conditions- Railway Infrastructure
Earlier, FDI was prohibited in Railway Transport (other than Mass Rapid
Transport Systems). Department of Industrial Policy & Promotion (DIPP)
vide Press Note 8 of 2014 dated 27 August 2014 has permitted 100% FDI in
railway infrastructure sector under automatic route subject to specific
conditions in Railway Transport Sector activities such as construction,
operation and maintenance of (i) suburban corridor projects through PPP, (ii)
High speed train projects (iii) Dedicated freight lines, (iv) Rolling stock
including train sets, and locomotives/coaches manufacturing and
maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii)
Freight terminals (viii) Passenger terminals, (ix) Infrastructure in industrial
park pertaining to railway line/sidings including electrified railway lines and
connectivities to main railway line and (x) Mass Rapid Transport Systems..
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Buzz on Corporate Laws: December 2014
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Further, FDI beyond 49% of the equity of the investee company in sensitive
areas from security point of view will be brought before the Cabinet
Committee on Security (CCS) on case to case basis.
In view of the above, RBI has amended notification no. FEMA 20/2000 dated
03.05.2000.
For copy of notification, click here
Review of FDI policy – Sector Specific conditions- Defence
Prior to the notification, FDI up to 26% was permitted under Government
route in Defence industry subject to license under the Industries
(Development & Regulation) Act, 1951 and proposals for FDI above 26%
would be subject to approval of Cabinet Committee on Security on case to
case basis.
DIPP vide Press note 7 of 2014 dated 26 August 2014 has permitted FDI
from 26% to 49% under government route in defence sector by FIIs, RFPIs,
NRIs, FVCIs and QFIs. DIPP has also provided a list of defence items and
further clarified that the item not present in the list would not require Industrial
License for defence purpose.
In view of the above, RBI has amended the relevant notification.
For copy of notification, click here
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SEBI
Single Registration for Depository Participants for more than one Depository
SEBI has clarified that only one single registration to act as depository
participant would be required, even if DP is acting for more than one
depository without obtaining separate certificate of registration subject to
approval by such other depository and on compliance of all relevant eligibility
requirements.
For copy of circular, click here
Redressal of investor grievances through SEBI Complaints Redress System
(SCORES) platform
SEBI vide this circular has advised that all listed entities and SEBI registered
intermediaries are mandatorily required to obtain SCORES registration by
submitting the required details in Form A and Form B by way of email
followed by hard copy and also comply with other provisions of the circular.
For copy of circular, click here.
SEBI (Foreign Venture Capital Investors) Amendment Regulations, 2014
SEBI has amended the definition of venture capital undertaking. As per the
definition, “venture capital undertaking" means a domestic company:
(i) which is not listed on a recognised stock exchange in India at the time of
making investment; and
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(ii) which is engaged in the business for providing services, production or
manufacture of article or things and does not include following activities or
sectors:
(1) non-banking financial companies, other than Core Investment
Companies (CICs) in the infrastructure sector, Asset Finance Companies
(AFCs), and Infrastructure Finance Companies (IFCs) registered with
Reserve Bank of India;
(2) gold financing;
(3) activities not permitted under industrial policy of Government of India;
(4) any other activity which may be specified by the Board in consultation
with Government of India from time to time.
These new norms will allow Foreign Venture Capital Investors (FVCIs) in
CICs for infrastructure sector to help attract overseas funds in this space.
It may be noted that CICs are essentially holding companies and do not
engage in financing activity similar to other NBFCs.
Therefore, these new norms do not go against the intent of the FVCI
Regulations of not allowing FVCI investment in non-banking financial
services.
For copy of regulation, click here
Discussion Paper on Re-classification of Promoters as Public
SEBI invites comments on the discussion paper on “Re-classification of
Promoters as Public”. To download, discussion paper, click here.
Comments in the given format were invited by SEBI on or before January
16, 2015 either by email to [email protected] or sent, by post, to:-
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Concept paper on proposed regulatory framework for issuance of debt
securities by Municipalities and the Draft SEBI (Issue and Listing of Debt
Securities by Municipality) Regulations, 2015
Concept paper can be accessed from SEBI website. Click here.
Comments in the given format were invited by email to Mr. Sandeep Kriplani,
Assistant General Manager ([email protected]) or Ms. Vandana
Agarwal, Assistant Manager ([email protected]) latest by January 30,
2015
Department of Industrial Policy and Promotion (DIPP): Draft National IPR Policy:
The IPR Think Tank set up by the Government of India submitted its first
Draft of the National IPR Policy on 19th December, 2014.
It can be accessed from here.
All stakeholders were requested to send their comments and suggestions to
the first Draft of the National IPR Policy to [email protected] on or before 30th
January, 2015. In a press release, it was stated that the document will be
updated and further modified by the IPR Think Tank on the basis of
comments received from the stakeholders.
Steps by DIPP to improve Doing Business in India:
DIPP has taken several steps for ease in Doing Business in India.
DIPP is currently implementing eBiz project [https://www.ebiz.gov.in/]. It will
establish a single platform to avail business and investment related services.
It will provide services by single form and single payment, which will be
appropriated amongst concerned Central and State Government's
Departments. Integration with three services is completed; viz., Registration
with ESIC, Name availability and Director Identification of Ministry of
Corporate Affairs.
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DIPP has requested all Secretaries of Government of India and Chief
Secretaries of the States/UT to simplify and rationalize the regulatory
environment. In order to improve the regulatory business environment they
have been requested to take the following measures on priority:
a. All returns should be filed on-line through a unified form;
b. A check-list of required compliances should be placed on Department’s
web portal;
c. All registers required to be maintained by the business should be replaced
with a single electronic register;
d. No inspection should be undertaken without the approval of the Head of
the Department; and
e. For all non-risk, non-hazardous businesses a system of self-certification
should be introduced.
Application forms for Industrial Licence (IL) and Industrial Entrepreneur
Memorandum (IEL) have been simplified.
Process of applying for Industrial License (IL) and Industrial Entrepreneur
Memorandum (IEM) has been made online and this service is now available
to entrepreneurs on 24x7 basis at the eBiz website. This had lead to ease of
filing applications and online payment of service charges.
MHA has stipulated that it will grant security clearance on Industrial Licence
Applications within 12 weeks. In matters other than Explosives and FIPB
cases, security clearances are valid for three years unless there is a change
in composition of management or shareholding.
The issue of time taken in registration with Employees Provident Fund
Organization (EPFO) and Employees State Insurance Corporation (ESIC)
was taken up with the Ministry of Labour and Employment, Director General,
ESIC and Central Provident Fund Commissioner. Both the processes have
been automated and ESIC registration number is being provided on a real-
time basis.
The process of Registration with ESIC has been integrated with eBiz and
launched for public on 12thDecember, 2014.
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Buzz on Corporate Laws: December 2014
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A unified portal for Registration of Units for Labour Identification Number
(LIN), Reporting of Inspection, Submission of returns & Grievance Redressal
has been launched by Ministry of Labour and Employment.
Details can be accessed from here.
Law Commission of India: Commercial Courts:
253rd Report on Commercial Division and Commercial Appellate Division of
High Courts and Commercial Courts Bill, 2015. Summary can be read from
here.
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