Regulatory Updates: March 2024 – Company, SEBI, RBI & Insolvency Law
Introduction: In the realm of corporate regulations, recent updates in Competition Law and Securities Law have brought significant changes. The Competition Commission of India (CCI) has revised threshold limits for mergers and acquisitions, while the Securities and Exchange Board of India (SEBI) has introduced amendments impacting IPOs and ongoing compliance for listed companies.
Competition Law:
1. MCA has raised the threshold limits for mergers and amalgamation requiring approval from the Competition Commission of India (CCI).
If the acquisition target possesses an asset value below Rs 450 crore or turnover less than Rs 1,250 crore, then such a merger or acquisition would be exempt from approval by the Competition Commission of India (CCI). This exemption is applicable for a duration of two years from the date of publication in the official gazette.
MCA revises assets & turnover value for section 5 of Competition Act 2002
SECURITIES LAW
1. SEBI 204th Board Meeting: Key Decision & Amendments.
1A. SEBI approved following amendments to ICDR, 2018 for IPOs/fund raising :
Mandate of 1% Security deposit in public/rights issue of equity shares is removed. Promoter group entities and non-individual shareholders holding more than 5% of the post-offer equity share capital can now contribute to the minimum promoters’ contribution (“MPC”) without being designated as promoters themselves. Equity shares derived from compulsorily convertible securities held for one year before the submission of DRHP will be considered for MPC requirement.
1B. Amendments to on-going compliance requirements for listed companies:
The timeline for filling vacancies of Key Managerial Personnel, which requires approval from Statutory authorities, will be extended from 3 to 6 months. Maximum permissible gap between two consecutive meetings of the Risk Management Committee extended from 180 days to 210 days. Listed entities will need to do rumour verification within 24 hours from the trigger of material price movement of equity shares. Unverified event or information reported in print or electronic media not to be considered as ‘generally available information’ under SEBI (PIT) Regulations, 2015. Timeline for mandatory applicability of listing norms (i.e. Regulation 16 to 27 of SEBI (LODR) Regulations, 2015) and compliance thereof for High Value Debt Listed Entities extended till March 31, 2025 SEBI Board Meeting Decisions: March 2024
2. SEBI proposes audiovisual details of IPO disclosures.
Companies who plan to raise capital through a public issue are required to make disclosures in the DRHP and RHP in Audio-visual (AV) format desiring to list on the main board. Disclosure in Audio-Visual format shall be in bilingual language i.e English & Hindi.
SEBI Draft Circular: Audiovisual Disclosures in Public Offer Documents
OTHER UPDATES
1. Reserve Bank of India modifies AIF norms
In December 2023, the RBI had restricted banks, NBFCs & home financiers from investing in AIFs that have directly or indirectly invested in companies that have borrowed money from the lenders (hereinafter referred to as debtor company). RBI said that its regulated entities (REs) will now be required to make provisioning only to the extent of the amount invested by the AIF scheme in the debtor company and not the entire investment. RBI has also excluded investments made through intermediaries like fund of funds and mutual funds. RBI Circular on Investments in Alternative Investment Funds (AIFs) Guidelines
2. Master Direction – Reserve Bank of India (Filing of Supervisory Returns) Directions – 2024
DNBS 13- Return for Overseas Investment details revised timeline within 21 days from quarter end. DNBS 02- Important Financial Parameter- instead of annual frequency now quarterly within 21 days of quarter. New requirement for selected AIFIs/NBFCs/ARCs to submit return on Financial Soundness Indicators (FSI) quarterly within 21 days.
RBI (Filing of Supervisory Returns) Directions, 2024
COMPLIANCE CALENDAR FOR FY 2024-25
30th April 2024
MSME Form I-Half Yearly forms for outstanding payment to MSME 30th May 2024 Form 11-Annual Return of Limited Liability Partnership (LLP). Form PAS-6- Reconciliation of Share Capital Audit Report- Half-yearly for unlisted public company (for the period of October 2023 – March 2024). 30th June 2024 Form DPT-3- Return of deposits.
Quarter- July to September 2024
15th July /15th September 2024 Annual Return on Foreign Liabilities and Assets (FLA)/ Revised FLA return based on audited financials 8th September 2024 Last date to hold BM for approval of financial and convening of AGM within 21 clear days. 27th September 2024 Form AOC-4 (OPC)- Form for filing financial statement.
30th September 2024
Form DIR-3-KYC/ Web KYC- Directors/Partners Convening of Annual General Meeting (“AGM”) or filing of form GNL 1 for extension of AGM date. Mandatory demat of shares (Every company other than small company) Form CRA 2- Form of intimation of appointment of cost auditor by the company to Central Government.
Quarter- October to December 2024
7th October 2024
Form MGT-14- Approval of Financials & Directors Report (For Public, deemed public co.and listed company),if BM held on 8th Sept. 14th October 2024 Form ADT 1- Notice to registrar for the Appointment of Statutory Auditor (if AGM date is 30th September).
29th October 2024
Form AOC 4/AOC 4 XBRL/ AOC 4 CFS-Form for filing Financial Statements. Form CRA-4- Form for filing Cost Audit Report with the Central Government (Last date of providing cost audit report is 180 days from end of FY). Form MGT 15- Report on AGM by listed company. 30th October 2024 Form LLP 8- Statements of account and solvency of LLP. 31st October 2024 Form MSME Form I-Half Yearly forms for outstanding payment to MSME. 28th November 2024 Form MGT 7/MGT 7A -Form for filing annual return by a company. Form MGT 8- Compliance certificate by PCS.(For Listed Co. or Cos. having PSC ≥ 10 Cr or turnover ≥ 50 Cr). 29th November 2024 Form PAS 6- Reconciliation of Share Capital Audit Report- Half- yearly for unlisted public company. (for the period of April 2024 – September 2024). 31st December 2024 Convening of first AGM of the company, Annual performance report (APR) with RBI for Overseas Direct Investment.
Quarter- January to March 2025
14th January 2025
Form ADT 1- Notice to registrar for the Appointment of Statutory Auditor (if AGM date is 31st December). 29th January 2025 Form AOC 4 -Form for filing Financial Statements by newly incorporate company (if AGM held on 31st December) 31st January 2025 PoSH Annual Report. 28th February 2025 Form MGT 7/7A- Form for filing annual return by a company by newly incorporate company (if AGM held on 31st December)
31st March 2025
Form CSR 2- Report on Corporate Social Responsibility for FY 23-24. CSR Spend for FY 2024-25 as per section 135 of Companies Act,2013.
Conclusion: The regulatory landscape governing corporate activities in India continues to evolve, with recent updates focusing on enhancing transparency, streamlining processes, and ensuring regulatory compliance. Businesses operating in these sectors must stay abreast of these changes to navigate the regulatory environment effectively and maintain compliance standards while pursuing their strategic objectives.
Disclaimer: This newsletter is a compilation of updates prepared and circulated from the academic point of view only and are not intended to constitute professional advice on any matter. The views and opinions expressed in this newsletter are those of the author of this document and are based on the internal research done by the Author.
