global regulatory update, january 2014

RegulatoryGLOBAL

UPDATE

January 2014, Volume 4, Issue 1

Confederation of Indian Industry

InsideARTICLES AND UPDATES CII'S RECENT INITIATIVESlIndian Companies - Moving closer to a US Listing

lInfrastructure Projects - Capitalization challenges

lWith infra, banking needing trillions, regulatory innovation critical

lCorporate bond markets in India – Challenges and Opportunities

lCorporate debt market – future prospects

lDomestic and International Updates

lNew Appointments

lCII's 9th International Corporate Governance Summit

lInteraction with SEBI Chairman

lCII Recommendations on Draft Rules under Companies Act, 2013

lCII Representation on Prohibitions and Restrictions Regarding Political Contributions

lComments on the Justice Sodhi Committee Report on Insider Trading Regulations

lCII Representation on Need for Exemptions for Private Companies

DISCLAIMER This Regulatory Update has been compiled with a view to update readers and CII membership of international as well as the domestic changes relevant to the domain of Corporate Governance & Regulatory Affairs. The compilation must not be taken as an exhaustive coverage of announcements and news nor should it be used as professional advice. Although, every endeavour has been made to provide exhaustive information, no claim would be entertained in the event any information/data/details/text is found to be inaccurate, incomplete, at variance with official data/information/details released through other sources prior or subsequent to release of the issue. CII does not necessarily subscribe to the views expressed in the items. These reflect the author's personal views and in the event of any violation of IPR by the subscribers, CII would not be held responsible in any manner. Further, no part of this Update may be reproduced, copied or used without the prior permission of CII.

Contents

Expert Speak

Ms. Roopa Kudva, Managing Director & CEO, . . . . . . . . . . . 19CRISIL Ltd on “With Infra, Banking NeedingTrillions, Regulatory Innovation Critical"

Mr Nirmal Jain, Chairman, India Infoline Limited on. . . . . . . 22 “Corporate Bond Markets in India – Challenges and Opportunities”

Mr Mohan Shenoi, President, Group Treasury and . . . . . . . . 25Global Markets Kotak Mahindra Bank on “Corporate Debt Market – Future Prospects”

NATIONAL UPDATES . . . . . 2

APPOINTMENTS . . . . . . . . . 9

GLOBAL UPDATES . . . . . . 10

lIndian Companies - . . . . 14

Moving Closer to a

US Listing

lInfrastructure . . . . . . . . 16

Projects -

Capitalization

Challenges

CII's Recent Initiatives

Events:

CII's 9th International Corporate Governance Summit . . . . 27

Interaction with SEBI Chairman . . . . . . . . . . . . . . . . . . . . 29

Representations:

CII Recommendations on Draft Rules under . . . . . . . . . . . . 30Companies Act, 2013

Prohibitions and . . . . . . . . . . . . . . . 32Political Contributions

Justice Sodhi Committee . . . . . . . . . . . . . . . . . . 34Insider Trading Regulations

Need for Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 for Private Companies

Restrictions Regarding

Report on

A host of developments are scheduled to take place in 2014.Here is a list of some of

the most important ones.

General Elections

India will have general elections for the 16th Lok Sabha. The current Lok Sabha will

complete its constitutional term on 31 May 2014.

Assembly Elections

The tenure of the assemblies of Andhra Pradesh, Arunachal Pradesh, Haryana,

Maharashtra, Odisha and Sikkim is due to expire during the year. These states

would have elections between May and December 2014.

Elections would also take place in the following countries:

February- Thailand

March- Colombia

April-Afghanistan, Iraq, South Africa

August -Turkey

October-Brazil

December-New Zealand

Appointments

Ms Janet Louise Yellen would be the Chairman of the Board of Governors of the

Federal Reserve System. The first woman to run the central bank of the United

States, she will assume office on 1 February 2014.

G-20 Summit

9th meeting of the G-20 heads of governments will be held in Brisbane, the capital

city of Queensland, Australia, on 15 and 16 November 2014. The hosting venue will be

the Brisbane Convention & Exhibition Centre.

Indonesia,

In The Coming Months…

DISCLAIMER This Regulatory Update has been compiled with a view to update readers and CII membership of international as well as the domestic changes relevant to the domain of Corporate Governance & Regulatory Affairs. The compilation must not be taken as an exhaustive coverage of announcements and news nor should it be used as professional advice. Although, every endeavour has been made to provide exhaustive information, no claim would be entertained in the event any information/data/details/text is found to be inaccurate, incomplete, at variance with official data/information/details released through other sources prior or subsequent to release of the issue. CII does not necessarily subscribe to the views expressed in the items. These reflect the author's personal views and in the event of any violation of IPR by the subscribers, CII would not be held responsible in any manner. Further, no part of this Update may be reproduced, copied or used without the prior permission of CII.

Contents

Expert Speak

Ms. Roopa Kudva, Managing Director & CEO, . . . . . . . . . . . 19CRISIL Ltd on “With Infra, Banking NeedingTrillions, Regulatory Innovation Critical"

Mr Nirmal Jain, Chairman, India Infoline Limited on. . . . . . . 22 “Corporate Bond Markets in India – Challenges and Opportunities”

Mr Mohan Shenoi, President, Group Treasury and . . . . . . . . 25Global Markets Kotak Mahindra Bank on “Corporate Debt Market – Future Prospects”

NATIONAL UPDATES . . . . . 2

APPOINTMENTS . . . . . . . . . 9

GLOBAL UPDATES . . . . . . 10

lIndian Companies - . . . . 14

Moving Closer to a

US Listing

lInfrastructure . . . . . . . . 16

Projects -

Capitalization

Challenges

CII's Recent Initiatives

Events:

CII's 9th International Corporate Governance Summit . . . . 27

Interaction with SEBI Chairman . . . . . . . . . . . . . . . . . . . . 29

Representations:

CII Recommendations on Draft Rules under . . . . . . . . . . . . 30Companies Act, 2013

Prohibitions and . . . . . . . . . . . . . . . 32Political Contributions

Justice Sodhi Committee . . . . . . . . . . . . . . . . . . 34Insider Trading Regulations

Need for Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 for Private Companies

Restrictions Regarding

Report on

A host of developments are scheduled to take place in 2014.Here is a list of some of

the most important ones.

General Elections

India will have general elections for the 16th Lok Sabha. The current Lok Sabha will

complete its constitutional term on 31 May 2014.

Assembly Elections

The tenure of the assemblies of Andhra Pradesh, Arunachal Pradesh, Haryana,

Maharashtra, Odisha and Sikkim is due to expire during the year. These states

would have elections between May and December 2014.

Elections would also take place in the following countries:

February- Thailand

March- Colombia

April-Afghanistan, Iraq, South Africa

August -Turkey

October-Brazil

December-New Zealand

Appointments

Ms Janet Louise Yellen would be the Chairman of the Board of Governors of the

Federal Reserve System. The first woman to run the central bank of the United

States, she will assume office on 1 February 2014.

G-20 Summit

9th meeting of the G-20 heads of governments will be held in Brisbane, the capital

city of Queensland, Australia, on 15 and 16 November 2014. The hosting venue will be

the Brisbane Convention & Exhibition Centre.

Indonesia,

In The Coming Months…

GLOBAL REGULATORY UPDATE

F u r t h e r t h e a m o u n t

corresponding to the Mark to

Market value of the Contract as on

the transfer date should be

e x c h a n g e d b e t w e e n t h e

Transferor and the Transferee,

with no cash flow being given to

the Remaining Party.

iv. Other Conditions:

The Transferor will be able to

novate the Contract subject to the

said contract being held by it for a

period of 6 months in case of the

original maturity date being for 1

year and for at least 9 months in

case the original maturity date is

beyond 1 year. The said condition

not being applicable in case the

Transferor is winding up its

business or is under liquidation.

The MCA has accorded statutory

s t a t u s t o t h e S e r i o u s F r a u d

Investigative Office ("SFIO") vide its

Press Release dated December 06,

As per the release the ministry would

also be taking steps to improve the

functioning of the SFIO by inducting

n e w t e c h n o l o g y a n d s k i l l e d

manpower. The government had

approved the establishment of the

SFIO in 2003 based on the Naresh

C h a n d r a c o m m i t t e e

recommendations. The SFIO is a multi-

disciplinary organization consisting of

experts from various fields including

the capital markets, financial sector,

tax, forensic audit, law, customs and

investigation.

By according the statutory status the

ministry hopes that the SFIO would be

empowered in taking the necessary

and effective action in ensuring

greater regulatory compliance and

protecting investor rights.

3. SFIO ACCORDED

STATUTORY STATUS

4. CLARIFICATION WITH

REGARD TO DISCLOSURES

TO BE MADE FOR POLITICAL

CONTRIBUTIONS MADE BY

COMPANIES

5. TRANSFER OF SHARES IN

FINANCIAL SECTOR-

RELAXATION OF

REGULATION

The Ministry of Corporate Affairs by its

circular dated 10 December 2013 has

issued a clarification with respect to

the companies that need to make

d i s c l o s u r e s o f t h e p o l i t i c a l

contributions made by them under

Section 182 (3) of the Companies Act

2013 ("Disclosure Section").

As per the circular, the companies

contributing amounts to the 'Electoral

Trust Company' who in turn make

contributions to political parties need

not make disclosures under the

Diclosure Section which they would

have to in the event of them making

the contributions directly to the

political parties. Further, alongside

companies making disclosures, the

clarification states that the Electoral

Trust Company would also be required

to make disclosures in their books of

accounts as regards the amounts

received from the companies for

political contribution along with

details of the amounts contributed by

them to the political parties.

The Reserve Bank of India ("RBI") by

its notification dated November 11,

2 0 1 3 h a s m o d i f i e d t h e f i l i n g

requirements in respect of the

transfer of shares from Residents to

Non - Residents where the investee

company is in the Financial Sector.

Earlier, for any such transfer to occur

between the parties there has to be a

No Objection Certificate (NOC) to be

obtained from the respective financial

sector regulator of the investee

company as well as transferor and

t r a n s f e r e e e n t i t i e s , w h i c h

requirement has now been dispensed

with i.e. to say that NOC's need not be

filed while submitting the form FC-TRS

to the AD bank.

However, any 'fit and proper/ due

diligence' requirement as regards the

non-resident investor as stipulated by

the respective financial sector

regulator shall have to be complied

In light of the Ministry of Corporate

Affairs notifying 98 sections of the

new Companies Act, 2013 vide its

circular dated November 19, 2013 it has

brought about a clarification with

regard to the applicability of provision

of Section 372A of the Companies Act,

1956 which deals with inter-corporate

loans and investments, which inter

a l i a e x e m p t s g r a n t o f

l o a n / i n v e s t m e n t s b y h o l d i n g

companies to their wholly owned

subsidiaries.

This circular now clearly clarifies that

the old section of the Companies Act,

6. APPLICABILITY OF SECTION

372A PERTAINING LOANS

AND INVESTMENTS MADE

BY COMPANIES

NATIONAL

1. Extension of ESOP

compliance deadline again

2. NOVATION OF OTC

DERIVATIVE CONTRACTS

SEBI has decided to extend the time

l ine for al ignment of existing

employee benefit schemes with the

SEBI (ESOS and ESPS) Guidelines,

1999, to June 30, 2014. SEBI had earlier

e x t e n d e d t h e d e a d l i n e t o 3 1

December 2013 from the 30 June 2013

mandate.

Accordingly, in Clause 35C (ii) of the

Equity Listing Agreement, the words

"December 31, 2013" shall be replaced

with "June 30, 2014".

The RBI has by its circular dated

December 9, 2013 permitted novation

o f O T C d e r i v a t i v e c o n t r a c t s

("Contract").

Highlights of the circular include:

i. N o v a t i o n : N o v a t i o n i . e .

replacement of one of the existing

parties ("Transferor") to the

Contract is possible subject to the

prior consent of the other party to

the Contract ("Remaining Party").

T h e n o v a t i o n p e r m i t s t h e

Transferor to transfer all his rights,

liabilities, duties and obligations to

a third party ("Transferee").

ii. Purpose of Novation: Novation

may be used for management of

counter-party exposure and

counter-party credit risk; and to

deal with events such as winding-

up of business by banks and in

cases of mergers/acquisitions.

iii. Mechanism for Novation: For

executing the novation the 3

parties namely the Transferor, the

Transferee and the Remaining

Party are to enter into a Tri Partite

Agreement by which the Contract

will stand extinguished and a new

contract having identical terms

and conditions as the Contract

including the terms pertaining to

notional amount and maturity

date shall hold good as between

the Transferee and the Remaining

Party.

The execution of the new contract

will release the Transferor from its

obligations and liabilities under the

Contract which would now be

reinstated in the new contract

executed between the Transferee

and the Remaining Party and

assumed by the Transferee under

the said contract.

F u r t h e r t h e a m o u n t

corresponding to the Mark to

Market value of the Contract as on

the transfer date should be

e x c h a n g e d b e t w e e n t h e

Transferor and the Transferee,

with no cash flow being given to

the Remaining Party.

iv. Other Conditions:

The Transferor will be able to

novate the Contract subject to the

said contract being held by it for a

period of 6 months in case of the

original maturity date being for 1

year and for at least 9 months in

case the original maturity date is

beyond 1 year. The said condition

not being applicable in case the

Transferor is winding up its

business or is under liquidation.

The MCA has accorded statutory

s t a t u s t o t h e S e r i o u s F r a u d

Investigative Office ("SFIO") vide its

Press Release dated December 06,

As per the release the ministry would

also be taking steps to improve the

functioning of the SFIO by inducting

n e w t e c h n o l o g y a n d s k i l l e d

manpower. The government had

approved the establishment of the

SFIO in 2003 based on the Naresh

C h a n d r a c o m m i t t e e

recommendations. The SFIO is a multi-

disciplinary organization consisting of

experts from various fields including

the capital markets, financial sector,

tax, forensic audit, law, customs and

investigation.

By according the statutory status the

ministry hopes that the SFIO would be

empowered in taking the necessary

and effective action in ensuring

greater regulatory compliance and

protecting investor rights.

3. SFIO ACCORDED

STATUTORY STATUS

4. CLARIFICATION WITH

REGARD TO DISCLOSURES

TO BE MADE FOR POLITICAL

CONTRIBUTIONS MADE BY

COMPANIES

5. TRANSFER OF SHARES IN

FINANCIAL SECTOR-

RELAXATION OF

REGULATION

The Ministry of Corporate Affairs by its

circular dated 10 December 2013 has

issued a clarification with respect to

the companies that need to make

d i s c l o s u r e s o f t h e p o l i t i c a l

contributions made by them under

Section 182 (3) of the Companies Act

2013 ("Disclosure Section").

As per the circular, the companies

contributing amounts to the 'Electoral

Trust Company' who in turn make

contributions to political parties need

not make disclosures under the

Diclosure Section which they would

have to in the event of them making

the contributions directly to the

political parties. Further, alongside

companies making disclosures, the

clarification states that the Electoral

Trust Company would also be required

to make disclosures in their books of

accounts as regards the amounts

received from the companies for

political contribution along with

details of the amounts contributed by

them to the political parties.

The Reserve Bank of India ("RBI") by

its notification dated November 11,

2 0 1 3 h a s m o d i f i e d t h e f i l i n g

requirements in respect of the

transfer of shares from Residents to

Non - Residents where the investee

company is in the Financial Sector.

Earlier, for any such transfer to occur

between the parties there has to be a

No Objection Certificate (NOC) to be

obtained from the respective financial

sector regulator of the investee

company as well as transferor and

t r a n s f e r e e e n t i t i e s , w h i c h

requirement has now been dispensed

with i.e. to say that NOC's need not be

filed while submitting the form FC-TRS

to the AD bank.

However, any 'fit and proper/ due

diligence' requirement as regards the

non-resident investor as stipulated by

the respective financial sector

regulator shall have to be complied

In light of the Ministry of Corporate

Affairs notifying 98 sections of the

new Companies Act, 2013 vide its

circular dated November 19, 2013 it has

brought about a clarification with

regard to the applicability of provision

of Section 372A of the Companies Act,

1956 which deals with inter-corporate

loans and investments, which inter

a l i a e x e m p t s g r a n t o f

l o a n / i n v e s t m e n t s b y h o l d i n g

companies to their wholly owned

subsidiaries.

This circular now clearly clarifies that

the old section of the Companies Act,

6. APPLICABILITY OF SECTION

372A PERTAINING LOANS

AND INVESTMENTS MADE

BY COMPANIES

NATIONAL

1. Extension of ESOP

compliance deadline again

2. NOVATION OF OTC

DERIVATIVE CONTRACTS

SEBI has decided to extend the time

l ine for al ignment of existing

employee benefit schemes with the

SEBI (ESOS and ESPS) Guidelines,

1999, to June 30, 2014. SEBI had earlier

e x t e n d e d t h e d e a d l i n e t o 3 1

December 2013 from the 30 June 2013

mandate.

Accordingly, in Clause 35C (ii) of the

Equity Listing Agreement, the words

"December 31, 2013" shall be replaced

with "June 30, 2014".

The RBI has by its circular dated

December 9, 2013 permitted novation

o f O T C d e r i v a t i v e c o n t r a c t s

("Contract").

Highlights of the circular include:

i. N o v a t i o n : N o v a t i o n i . e .

replacement of one of the existing

parties ("Transferor") to the

Contract is possible subject to the

prior consent of the other party to

the Contract ("Remaining Party").

T h e n o v a t i o n p e r m i t s t h e

Transferor to transfer all his rights,

liabilities, duties and obligations to

a third party ("Transferee").

ii. Purpose of Novation: Novation

may be used for management of

counter-party exposure and

counter-party credit risk; and to

deal with events such as winding-

up of business by banks and in

cases of mergers/acquisitions.

iii. Mechanism for Novation: For

executing the novation the 3

parties namely the Transferor, the

Transferee and the Remaining

Party are to enter into a Tri Partite

Agreement by which the Contract

will stand extinguished and a new

contract having identical terms

and conditions as the Contract

including the terms pertaining to

notional amount and maturity

date shall hold good as between

the Transferee and the Remaining

Party.

The execution of the new contract

will release the Transferor from its

obligations and liabilities under the

Contract which would now be

reinstated in the new contract

executed between the Transferee

and the Remaining Party and

assumed by the Transferee under

the said contract.

Key features of the ITP Regulations:

I. Eligibility criteria:

lNo past action by Authority:

The promoters, directors or

group company of the SME and

the SME itself should not be in

the list of wilful defaulters of

RBI. No winding up petition

against the SME should have

been admitted by a competent

court. The group companies or

subsidiaries of the SME and the

SME itself should not have been

referred to the Board for

I n d u s t r i a l a n d F i n a n c i a l

Reconstruction within a period

of five years prior to the date of

application. Also, no regulatory

action should have been taken

against the SME, its promoter

or director, by the prescribed

regulatory authority within a

period of five years prior to the

date of application;

lAudited Statements: The SME

should have at least one full

y e a r ' s a u d i t e d f i n a n c i a l

statements for the immediately

preceding financial year and

should not have completed a

period of more than ten years

since incorporation;

lRevenue of SME: The revenue

of the SME should not exceed

Rs. 1,000,000,000 (Rupees One

Billion Only) in any of the

previous financial years and the

paid-up capital of the SME

s h o u l d n o t e x c e e d I N R

250,000,000 (Rupees Two

Hundred Fifty Million Only) in

any of the previous financial

years; and

lMinimum Investments: SME is

required to meet any one of the

following criteria - (i) at least

one alternative investment

fund, venture capital fund or

o t h e r c a t e g o r y o f

8. SELF-REGULATORY

ORGANIZATION

REGULATIONS, 2013

INTRODUCED AND

ENACTED

9. FINANCING OF

"INFRASTRUCTURE

LENDING" SCOPE EXTENDED

SEBI by its circulars dated 7 January

2013 and 8 January 2013 have

introduced and enacted the Securities

and Exchange Board Of India (Self

R e g u l a t o r y O r g a n i z a t i o n s )

(Amendment) Regulations, 2013

("Regulations") which shall be

applicable to distributors engaged by

asset management companies of

mutual funds and distributors

engaged by portfolio managers from

8 January 2013.

The highlights of the Regulations

include the following:

i. New Definitions: New definitions

of "distributor" and "issuer" have

been introduced.

ii. I n t e r m e d i a r y : T h e e x i s t i n g

definition of "Intermediary" has

been substituted with a new

definition wherein an intermediary

will be as defined under the SEBI

(Intermediaries) Regulations,

2008 to now include asset

management companies within

the scope of the definition and will

exclude foreign institutional

investors, foreign venture capital

investors and mutual funds.

iii. D i s t r i b u t o r d e e m e d t o b e

Intermediary: For the purposes of

registration as a self regulatory

organization, a distributor is also

deemed to be an intermediary.

The RBI by its notification dated

November 29, 2013 has widened

the ambit of the Infrastructure

sub- sectors to include the

following:

1956 will rather apply then Section 186

of the New Companies Act, 2013

("New Act") until the section of the

New Act is notified. This query had

arisen in light of the fact that of the 98

notified sections Section 185 was one

of them but Section 186 was not and

whether it was the old act or the

corresponding provision in the new

one which had to be complied with.

MCA has clarified that the shares held

by a company or power exercisable by

it in another company in a 'fiduciary

capacity' shall not be counted for the

purpose of determining the holding-

subsidiary relationship in terms of the

provision of section 2(87) of the

Companies Act, 2013.

For the purpose of simplifying the

process of opening an account for

trading as well as a demat account, the

RBI by its circular dated December

2013 replaced the existing Beneficial

O w ne r - De p os i t ory Part i c i p ant

A g r e e m e n t s w i t h a c o m m o n

document namely the "Rights and

Obligations of the Beneficial Owner

a n d D e p o s i t o r y P a r t i c i p a n t "

("Document"). This will not only

harmonize the account opening

process but also rationalize the

number of signatures that the

investor is required to affix.

The DP has to provide a copy of the

Document to the beneficial owner and

has to ensure that any other voluntary

document executed is not conflicting

with the regulations and guidelines

prescribed by SEBI or such other

regulator.

CLARIFICATION WITH REGARD

TO HOLDING OF SHARES OR

EXERCISING POWER IN A

FIDUCIARY CAPACITY

7. SIMPLIFICATION OF DEMAT

ACCOUNT OPENING

PROCESS

i. Hotels with project cost of more

than Rs.200 crores each in any

place in India and of any star

rating; and

ii. Convention Centres with project

cost of more than Rs.300 crores

1. Mutual Funds permitted to hold

Gold Certificates in physical form

The SEBI by its circular dated

October 18, 2013 has now allowed

mutual funds to hold Gold

certificates issued by banks in

respect of investments made by

Gold ETFs in Gold Deposit Scheme

in physical form as well. Earlier,

they were allowed to be held in

only dematerialised form.

2. SEBI allows direct listing of SME

on ITP

The SEBI has by its circular dated

October 24, 2013 allowed small

and medium enterprises to list

their securities without an Initial

Public Offering (IPO). It has

notified the SEBI (Listing of

Specified Securities on

Institutional Trading Platform)

Regulations, 2013 (ITP

Regulations) as a new Chapter to

the SEBI (Issue of Capital and

Disclosure Requirements)

Regulations, 2009 (ICDR

Regulations).

public financial institution as

defined under section 4A of the

Companies Act, 1956 must have

invested in its equity capital.

II. Process of Listing:

lInformation document: An

application to a recognised

stock exchange along with an

i n f o r m a t i o n d o c u m e n t

containing certain specific

disclosures relating to, inter

alia, description of business,

specified financial information,

r i s k f a c t o r s , a s s e t s a n d

properties, ownership of

beneficial owners, details of

directors, executive officers,

p r o m o t e r s a n d l e g a l

proceedings.

lRestriction on further issue of

securities: Listing of specified

securities on the ITP cannot be

accompanied by any issue of

securities to the public in any

manner. Further, the SME

cannot undertake an IPO while

its specified securities are listed

on the ITP.

III. Capital raising

The SME listed on ITP may raise

capital through private placement

or rights issue without an option

for renunciation of rights. Before

raising money through private

placement, SME should procure an

in-principle approval from the

investors/lenders approved by

SEBI should have invested a

minimum amount of INR

5,000,000 (Rupees Five Million

Only) in its equity shares; (ii) at

least one angel investor who is a

member of an association or

group of angel investors should

have invested a minimum

amount of INR 5,000,000

(Rupee s Five Million Only) in its

equity shares; (iii) the SME

should have received finance

from a scheduled bank for its

project financing or working

capital requirements and a

period of three years should

have passed from the date of

such financing and the funds so

received have been ful ly

util ized; (iv) a registered

merchant banker should have

exercised due diligence and has

invested not less than Rs.

Only) in its equity shares which

shall be locked in for a period of

three years from the date of

l i s t i n g ; ( v ) a q u a l i f i e d

institutional buyer should have

invested not less than INR

listing; or (vi) a specialized

internat ional mult i lateral

agency or domestic agency or a

Key features of the ITP Regulations:

I. Eligibility criteria:

lNo past action by Authority:

The promoters, directors or

group company of the SME and

the SME itself should not be in

the list of wilful defaulters of

RBI. No winding up petition

against the SME should have

been admitted by a competent

court. The group companies or

subsidiaries of the SME and the

SME itself should not have been

referred to the Board for

I n d u s t r i a l a n d F i n a n c i a l

Reconstruction within a period

of five years prior to the date of

application. Also, no regulatory

action should have been taken

against the SME, its promoter

or director, by the prescribed

regulatory authority within a

period of five years prior to the

date of application;

lAudited Statements: The SME

should have at least one full

y e a r ' s a u d i t e d f i n a n c i a l

statements for the immediately

preceding financial year and

should not have completed a

period of more than ten years

since incorporation;

lRevenue of SME: The revenue

of the SME should not exceed

Rs. 1,000,000,000 (Rupees One

Billion Only) in any of the

previous financial years and the

paid-up capital of the SME

s h o u l d n o t e x c e e d I N R

250,000,000 (Rupees Two

Hundred Fifty Million Only) in

any of the previous financial

years; and

lMinimum Investments: SME is

required to meet any one of the

following criteria - (i) at least

one alternative investment

fund, venture capital fund or

o t h e r c a t e g o r y o f

8. SELF-REGULATORY

ORGANIZATION

REGULATIONS, 2013

INTRODUCED AND

ENACTED

9. FINANCING OF

"INFRASTRUCTURE

LENDING" SCOPE EXTENDED

SEBI by its circulars dated 7 January

2013 and 8 January 2013 have

introduced and enacted the Securities

and Exchange Board Of India (Self

R e g u l a t o r y O r g a n i z a t i o n s )

(Amendment) Regulations, 2013

("Regulations") which shall be

applicable to distributors engaged by

asset management companies of

mutual funds and distributors

engaged by portfolio managers from

8 January 2013.

The highlights of the Regulations

include the following:

i. New Definitions: New definitions

of "distributor" and "issuer" have

been introduced.

ii. I n t e r m e d i a r y : T h e e x i s t i n g

definition of "Intermediary" has

been substituted with a new

definition wherein an intermediary

will be as defined under the SEBI

(Intermediaries) Regulations,

2008 to now include asset

management companies within

the scope of the definition and will

exclude foreign institutional

investors, foreign venture capital

investors and mutual funds.

iii. D i s t r i b u t o r d e e m e d t o b e

Intermediary: For the purposes of

registration as a self regulatory

organization, a distributor is also

deemed to be an intermediary.

The RBI by its notification dated

November 29, 2013 has widened

the ambit of the Infrastructure

sub- sectors to include the

following:

1956 will rather apply then Section 186

of the New Companies Act, 2013

("New Act") until the section of the

New Act is notified. This query had

arisen in light of the fact that of the 98

notified sections Section 185 was one

of them but Section 186 was not and

whether it was the old act or the

corresponding provision in the new

one which had to be complied with.

MCA has clarified that the shares held

by a company or power exercisable by

it in another company in a 'fiduciary

capacity' shall not be counted for the

purpose of determining the holding-

subsidiary relationship in terms of the

provision of section 2(87) of the

Companies Act, 2013.

For the purpose of simplifying the

process of opening an account for

trading as well as a demat account, the

RBI by its circular dated December

2013 replaced the existing Beneficial

O w ne r - De pos i t ory Part i c i pant

A g r e e m e n t s w i t h a c o m m o n

document namely the "Rights and

Obligations of the Beneficial Owner

a n d D e p o s i t o r y P a r t i c i p a n t "

("Document"). This will not only

harmonize the account opening

process but also rationalize the

number of signatures that the

investor is required to affix.

The DP has to provide a copy of the

Document to the beneficial owner and

has to ensure that any other voluntary

document executed is not conflicting

with the regulations and guidelines

prescribed by SEBI or such other

regulator.

CLARIFICATION WITH REGARD

TO HOLDING OF SHARES OR

EXERCISING POWER IN A

FIDUCIARY CAPACITY

7. SIMPLIFICATION OF DEMAT

ACCOUNT OPENING

PROCESS

i. Hotels with project cost of more

than Rs.200 crores each in any

place in India and of any star

rating; and

ii. Convention Centres with project

cost of more than Rs.300 crores

1. Mutual Funds permitted to hold

Gold Certificates in physical form

October 18, 2013 has now allowed

mutual funds to hold Gold

certificates issued by banks in

respect of investments made by

Gold ETFs in Gold Deposit Scheme

in physical form as well. Earlier,

they were allowed to be held in

only dematerialised form.

2. SEBI allows direct listing of SME

on ITP

The SEBI has by its circular dated

October 24, 2013 allowed small

and medium enterprises to list

their securities without an Initial

Public Offering (IPO). It has

notified the SEBI (Listing of

Specified Securities on

Institutional Trading Platform)

Regulations, 2013 (ITP

Regulations) as a new Chapter to

the SEBI (Issue of Capital and

Disclosure Requirements)

Regulations, 2009 (ICDR

Regulations).

public financial institution as

defined under section 4A of the

Companies Act, 1956 must have

invested in its equity capital.

II. Process of Listing:

lInformation document: An

application to a recognised

stock exchange along with an

i n f o r m a t i o n d o c u m e n t

containing certain specific

disclosures relating to, inter

alia, description of business,

specified financial information,

r i s k f a c t o r s , a s s e t s a n d

properties, ownership of

beneficial owners, details of

directors, executive officers,

p r o m o t e r s a n d l e g a l

proceedings.

lRestriction on further issue of

securities: Listing of specified

securities on the ITP cannot be

accompanied by any issue of

securities to the public in any

manner. Further, the SME

cannot undertake an IPO while

its specified securities are listed

on the ITP.

III. Capital raising

The SME listed on ITP may raise

capital through private placement

or rights issue without an option

for renunciation of rights. Before

raising money through private

placement, SME should procure an

in-principle approval from the

investors/lenders approved by

SEBI should have invested a

minimum amount of INR

Only) in its equity shares; (ii) at

least one angel investor who is a

member of an association or

group of angel investors should

have invested a minimum

amount of INR 5,000,000

(Rupee s Five Million Only) in its

equity shares; (iii) the SME

should have received finance

from a scheduled bank for its

project financing or working

capital requirements and a

period of three years should

have passed from the date of

such financing and the funds so

received have been ful ly

util ized; (iv) a registered

merchant banker should have

exercised due diligence and has

invested not less than Rs.

l i s t i n g ; ( v ) a q u a l i f i e d

institutional buyer should have

invested not less than INR

listing; or (vi) a specialized

internat ional mult i lateral

agency or domestic agency or a

II. Withdrawal of requirement

to upload bids on date-time

priority effective from

November 1, 2013 : In light of

the operational difficulties

being faced for making

allotment on date-time

priority basis, it has been

decided that the allotment in

the public issue of debt

securities should be made on

the basis of date of upload of

each application into the

electronic book of the stock

exchange. However, on the

date of oversubscription, the

allotments should be made

t o t h e a p p l i c a n t s o n

proportionate basis.

III. Disclosure of unaudited

financials with l imited

review report effective from

November 1, 2013: To avoid

hardships to frequent debt

issuers, listed issuers who are

in compliance with the listing

agreement, may disclose

unaudited financials with

limited review report in the

offer document, as filed with

the stock exchanges in

accordance with the listing

agreement, instead of

audited financials, for the

stub period, subject to

m a k i n g n e c e s s a r y

disclosures in this regard in

offer document including

risk factors.

IV. Disclosure of contact details

of Debenture Trustees in

Annual Report effective

from December 1, 2013: To

enable investors to forward

their grievances to the

debenture trustee, the

Listing Agreement for Debt

Securities has been amended

by inserting a clause which

requires that the companies,

which have listed their debt

securities, have to disclose

the name of the debenture

trustees with contact details

in their annual report and on

an ongoing basis, on their

website.

RBI UPDATES

1. RBI releases framework for setting

up of Wholly Owned Subsidiaries

by Foreign Banks in India

On the principles of reciprocity and

single mode of presence, the RBI on

November 6, 2013 released a policy

framework for setting up of Wholly

Owned Subsidiaries (WOS) by

foreign banks in India.

Overview of the Policy: The policy

gives the WOS's a treatment almost

at par with the national banks along

with providing incentives to those

which contribute to the Indian

economy. Measures have been

incorporated to contain the

expansion of the foreign banks

along with ensuring corporate

governance compliance.

Main Features of the Framework:

lInitial minimum paid-up capital or

minimum net worth for a WOS:

Initial minimum paid up voting

equity capital to be Rs. 5 billion for

new entrants. a minimum net worth

of Rs.5 billion in case of existing

foreign banks desiring to convert

into WOS.

m o d e : B a n k s w i t h c o m p l e x

structures, which do not provide

adequate disclosure in their home

jurisdiction, which are not widely

held, banks giving a preferential

claim to depositors of home country

in a winding up proceedings would

be permitted entry in India only

through the WOS mode.

lContinue as branches: Foreign

banks having commenced banking

business in India before August 2010

shall have the option to continue

their banking business through the

branch mode. However the nearly

national bank treatment incentive

would be given in case of the branch

converting into a WOS.

lR e s t r i c t i o n s o n f u r t h e r

entry/capital infusion: Setting up of

additional WOSs will be restricted

when the capital and reserves of the

WOSs and foreign bank branches in

India exceed 20% of the capital and

reserves of the banking system.

Banks allowed entry only in WOS

letter of comfort to be issued by the

parent to the RBI stating that it

would meet the liabilities of its

lBoard Composition - (i) not less

than 2/3rd of the directors should be

non-executive directors; (ii) a

minimum of 1/3rd of the directors

should be independent of the

management of the subsidiary in

India, its parent or associates; (iii)

not less than 50% of the directors

s h o u l d b e I n d i a n n a t i o n a l s

/NRIs/PIOs.

lParental guarantee/ credit rating:

On arm's length basis the WOS

would be permitted to use parental

guarantee/ credit rating, for the

purpose of providing custodial

services and for their international

operations. However, the WOS

should not provide counter

guarantee to its parent for such

support.

lDiluting stake to 74% or less: WOSs

may, at their option, dilute their

stake to 74 per cent or less in

Parent to meet liability of WOS: A

time to the SME to delist from the

platform on occurrence of the

e v e n t s s p e c i f i e d i n t h i s

paragraph.

VI. Non-applicability of the Takeover

C o d e a n d t h e D e l i s t i n g

R e g u l a t i o n s : T h e S E B I

(Substantial Acquisition of Shares

and Takeovers) Regulations, 2011

(Takeover Code) shall not apply

to direct and indirect acquisition

of shares or voting rights in, or

control over, a company listed on

the ITP of a recognised stock

exchange. Similarly, the SEBI

(Delisting of Equity Shares)

Regulations, 2009 (Delisting

Regulations) shall not apply to

securities listed on the ITP of a

recognised stock exchange.

The ITP Regulations will enable

angel investors and venture

capital ists to explore this

opportunity and thereby seek an

easy and efficient exit and will

encourage a number of start-ups

and SMEs to explore the option of

getting their specified securities

listed on the ITP.

3. P R O C E D U R E F O R

TRANSMISSION OF SECURITIES

SIMPLIFIED

SEBI has by its circular dated

O c t o b e r 2 8 , 2 0 1 3 i s s u e d

guidelines for Share Transfer

Agents (STAs)/issuer companies

and depositories to make the

process for transmission of

securities efficient and investor

friendly.

lHighlights of the Guidelines:

vSecurities held in demat

form: In case of transmission

of securities held in demat

form and not having a

n o m i n e e t h e e x i s t i n g

threshold limit for such

account has been revised

from Rs. 1,00,000 (Rupees

One lakh only) to Rs.

5,00,000 (Rupees Five lakh

only).

vSecurities held in physical

of securities held in a single

name with a nominee or

without a nominee for a

threshold l imit of Rs .

2,00,000 (Rupees Two lakh

only) per issuer company,

the company is transmit the

securities in accordance with

the rules as prescribed with

the guidelines. The issuer

c o m p a n y m a y i n i t s

discretion enhance the value

of the securities.

lRight of Nomination: STAs and

R e g i s t r a r s t o p u b l i c i z e

nomination as an additional

right available to investors.

4. I S S U E S P E R T A I N I N G T O

PRIMARY ISSUANCE OF DEBT

SECURITIES RESOLVED

October 29, 2013 has addressed

several issues relating to issuance

of debt securities which are as

follows:

I. D i s c l o s u r e a n d

standardization of Cash

F l o w s e f f e c t i v e f r o m

December 1, 2013: The cash

flows emanating from the

debt securities shall be

m e n t i o n e d i n t h e

P r o s p e c t u s / D i s c l o s u r e

Document, by way of an

illustration. Further, it has

also been decided that if the

coupon payment date and

redemption date of the debt

securities, is falling on a

Sunday or a holiday, it shall

be made on the next working

day or on the previous

working day respectively.

recognised stock exchange and

also a shareholders approval by

s p e c i a l r e s o l u t i o n a n d

subsequently the allotment of

securities has to be completed

within two months of obtaining

such approval. Such an in-principle

approval from the recognised

stock exchange is also required

prior to a rights issue.

IV. Lock-in of promoter shareholding

At least 20% of the post listing

capital is required to be held by the

promoters of the SME which shall

be locked-in for a period of three

years from the date of listing on the

Ticket size: The minimum trading lot

on the ITP has been set at INR

1,000,000 (Rupees One Million

Only).

V. Exit from the ITP

lSME listed on the ITP may exit

from it if: (i) its shareholders

approve such exit through a

special resolution with 90% of

total votes and the majority of

non-promoter votes in favour of

such proposal; (ii) the recognised

stock exchange where its shares

are listed approves such exit.

lFurther, an SME listed on the ITP

shall exit from it if: (i) the

specified securities have been

listed on ITP for a period of ten

years; (ii) the SME has paid-up

capita l of more than INR

250,000,000 (Rupees Two

Hundred Fifty Million Only); (iii)

the SME has revenue of more

than INR 3,000,000,000 (Rupees

Three Billion Only) as per the last

audited financial statement; or

( i v ) t h e S M E h a s m a r k e t

capitalization of more than INR

5,000,000,000 (Rupees Five

Billion Only). However, the stock

exchange may grant 18 months'

II. Withdrawal of requirement

to upload bids on date-time

priority effective from

November 1, 2013 : In light of

the operational difficulties

being faced for making

allotment on date-time

priority basis, it has been

decided that the allotment in

the public issue of debt

securities should be made on

the basis of date of upload of

each application into the

electronic book of the stock

exchange. However, on the

date of oversubscription, the

allotments should be made

t o t h e a p p l i c a n t s o n

proportionate basis.

III. Disclosure of unaudited

financials with l imited

review report effective from

November 1, 2013: To avoid

hardships to frequent debt

issuers, listed issuers who are

in compliance with the listing

agreement, may disclose

unaudited financials with

limited review report in the

offer document, as filed with

the stock exchanges in

accordance with the listing

agreement, instead of

audited financials, for the

stub period, subject to

m a k i n g n e c e s s a r y

disclosures in this regard in

offer document including

risk factors.

IV. Disclosure of contact details

of Debenture Trustees in

Annual Report effective

from December 1, 2013: To

enable investors to forward

their grievances to the

debenture trustee, the

Listing Agreement for Debt

Securities has been amended

by inserting a clause which

requires that the companies,

which have listed their debt

securities, have to disclose

the name of the debenture

trustees with contact details

in their annual report and on

an ongoing basis, on their

website.

RBI UPDATES

1. RBI releases framework for setting

up of Wholly Owned Subsidiaries

by Foreign Banks in India

On the principles of reciprocity and

single mode of presence, the RBI on

November 6, 2013 released a policy

framework for setting up of Wholly

Owned Subsidiaries (WOS) by

foreign banks in India.

Overview of the Policy: The policy

gives the WOS's a treatment almost

at par with the national banks along

with providing incentives to those

which contribute to the Indian

economy. Measures have been

incorporated to contain the

expansion of the foreign banks

along with ensuring corporate

governance compliance.

Main Features of the Framework:

lInitial minimum paid-up capital or

minimum net worth for a WOS:

Initial minimum paid up voting

equity capital to be Rs. 5 billion for

new entrants. a minimum net worth

of Rs.5 billion in case of existing

foreign banks desiring to convert

into WOS.

m o d e : B a n k s w i t h c o m p l e x

structures, which do not provide

adequate disclosure in their home

jurisdiction, which are not widely

held, banks giving a preferential

claim to depositors of home country

in a winding up proceedings would

be permitted entry in India only

through the WOS mode.

lContinue as branches: Foreign

banks having commenced banking

business in India before August 2010

shall have the option to continue

their banking business through the

branch mode. However the nearly

national bank treatment incentive

would be given in case of the branch

converting into a WOS.

lR e s t r i c t i o n s o n f u r t h e r

entry/capital infusion: Setting up of

additional WOSs will be restricted

when the capital and reserves of the

WOSs and foreign bank branches in

India exceed 20% of the capital and

reserves of the banking system.

Banks allowed entry only in WOS

letter of comfort to be issued by the

parent to the RBI stating that it

would meet the liabilities of its

lBoard Composition - (i) not less

than 2/3rd of the directors should be

non-executive directors; (ii) a

minimum of 1/3rd of the directors

should be independent of the

management of the subsidiary in

India, its parent or associates; (iii)

not less than 50% of the directors

s h o u l d b e I n d i a n n a t i o n a l s

/NRIs/PIOs.

lParental guarantee/ credit rating:

On arm's length basis the WOS

would be permitted to use parental

guarantee/ credit rating, for the

purpose of providing custodial

services and for their international

operations. However, the WOS

should not provide counter

guarantee to its parent for such

support.

lDiluting stake to 74% or less: WOSs

may, at their option, dilute their

stake to 74 per cent or less in

Parent to meet liability of WOS: A

time to the SME to delist from the

platform on occurrence of the

e v e n t s s p e c i f i e d i n t h i s

paragraph.

VI. Non-applicability of the Takeover

C o d e a n d t h e D e l i s t i n g

R e g u l a t i o n s : T h e S E B I

(Substantial Acquisition of Shares

and Takeovers) Regulations, 2011

(Takeover Code) shall not apply

to direct and indirect acquisition

of shares or voting rights in, or

control over, a company listed on

the ITP of a recognised stock

exchange. Similarly, the SEBI

(Delisting of Equity Shares)

Regulations, 2009 (Delisting

Regulations) shall not apply to

securities listed on the ITP of a

recognised stock exchange.

The ITP Regulations will enable

angel investors and venture

capital ists to explore this

opportunity and thereby seek an

easy and efficient exit and will

encourage a number of start-ups

and SMEs to explore the option of

getting their specified securities

listed on the ITP.

3. P R O C E D U R E F O R

TRANSMISSION OF SECURITIES

SIMPLIFIED

SEBI has by its circular dated

O c t o b e r 2 8 , 2 0 1 3 i s s u e d

guidelines for Share Transfer

Agents (STAs)/issuer companies

and depositories to make the

process for transmission of

securities efficient and investor

friendly.

lHighlights of the Guidelines:

vSecurities held in demat

of securities held in demat

form and not having a

n o m i n e e t h e e x i s t i n g

threshold limit for such

account has been revised

from Rs. 1,00,000 (Rupees

One lakh only) to Rs.

5,00,000 (Rupees Five lakh

only).

vSecurities held in physical

of securities held in a single

name with a nominee or

without a nominee for a

threshold l imit of Rs .

2,00,000 (Rupees Two lakh

only) per issuer company,

the company is transmit the

securities in accordance with

the rules as prescribed with

the guidelines. The issuer

c o m p a n y m a y i n i t s

discretion enhance the value

of the securities.

lRight of Nomination: STAs and

R e g i s t r a r s t o p u b l i c i z e

nomination as an additional

right available to investors.

4. I S S U E S P E R T A I N I N G T O

PRIMARY ISSUANCE OF DEBT

SECURITIES RESOLVED

October 29, 2013 has addressed

several issues relating to issuance

of debt securities which are as

follows:

I. D i s c l o s u r e a n d

standardization of Cash

F l o w s e f f e c t i v e f r o m

December 1, 2013: The cash

flows emanating from the

debt securities shall be

m e n t i o n e d i n t h e

P r o s p e c t u s / D i s c l o s u r e

Document, by way of an

illustration. Further, it has

also been decided that if the

coupon payment date and

redemption date of the debt

securities, is falling on a

Sunday or a holiday, it shall

be made on the next working

day or on the previous

working day respectively.

recognised stock exchange and

also a shareholders approval by

s p e c i a l r e s o l u t i o n a n d

subsequently the allotment of

securities has to be completed

within two months of obtaining

such approval. Such an in-principle

approval from the recognised

stock exchange is also required

prior to a rights issue.

IV. Lock-in of promoter shareholding

At least 20% of the post listing

capital is required to be held by the

promoters of the SME which shall

be locked-in for a period of three

years from the date of listing on the

Ticket size: The minimum trading lot

on the ITP has been set at INR

1,000,000 (Rupees One Million

Only).

V. Exit from the ITP

lSME listed on the ITP may exit

from it if: (i) its shareholders

approve such exit through a

special resolution with 90% of

total votes and the majority of

non-promoter votes in favour of

such proposal; (ii) the recognised

stock exchange where its shares

are listed approves such exit.

lFurther, an SME listed on the ITP

shall exit from it if: (i) the

specified securities have been

listed on ITP for a period of ten

years; (ii) the SME has paid-up

capita l of more than INR

250,000,000 (Rupees Two

Hundred Fifty Million Only); (iii)

the SME has revenue of more

than INR 3,000,000,000 (Rupees

Three Billion Only) as per the last

audited financial statement; or

( i v ) t h e S M E h a s m a r k e t

capitalization of more than INR

5,000,000,000 (Rupees Five

Billion Only). However, the stock

exchange may grant 18 months'

available information" (essentially,

i n f o r m a t i o n t o w h i c h n o n -

discriminatory public access would

be available). A list of types of

information that may ordinarily be

regarded as pr ice sens i t ive

information has also been provided.

4 Trading in listed securities when in

possession of UPSI would be

prohibited except in certain

s i t u a t i o n s p r o v i d e d i n t h e

regulations.

5 Insiders who are liable to possess

UPSI all round the year would have

the option to formulate pre-

scheduled trading plans. In such

cases, the new UPSI that may come

into their possession without

having been with them when

formulating the plan would not

impede their ability to trade.

Trading plans would, however, be

required to be disclosed to the stock

exchanges and have to be strictly

adhered to.

6 Conducting due diligence on listed

companies would be permissible for

purposes of transactions entailing

an obligation to make an open offer

under the Takeover Regulations. In

all other cases, due diligence would

be permissible subject to making

t h e d i l i g e n c e f i n d i n g s t h a t

constitute UPSI generally available

prior to the proposed trading. In all

cases, the board of directors would

need to opine that permitting the

conduct of due diligence is in the

best interests of the company, and

would a lso have to ensure

execution of non-disclosure and

non-dealing agreements.

7 Trades by promoters, employees,

directors and their immediate

relatives would need to be disclosed

internally to the company. Trades

within a calendar quarter of a value

beyond Rs. 10 lakhs or such other

amount as SEBI may specify, would

be required to be disclosed to the

stock exchanges.

8 Every entity that has issued

securities which are listed on a stock

exchange or which are intended to

be so listed would be required to

formulate and publish a Code of Fair

Disclosure governing disclosure of

events and circumstances that

would impact price discovery of its

securities.

9 Every listed company and market

intermediary i s required to

formulate a Code of Conduct to

regulate, monitor and report

t rad ing in secur i t ies by i ts

employees and other connected

persons. All other persons such as

auditors, law firms, accountancy

firms, analysts, consultants etc.

who handle UPSI in the course of

business operations may formulate

a code of conduct and the existence

of such a code would evidence the

ser iousness with which the

organization treats compliance

requirements.

10Companies would be entitled to

require third-party connected

persons who are not employees to

disclose their trading and holdings

in securities of the company.

APPOINTMENTS

Ms Usha Ananthasubramanian has been appointed as CMD of Bharatiya Mahila Bank

Mr Deepak Kapoor has been appointed as India Chairman, PwC

Mr Ajit Prakash Shah has been appointed as Chairman of Law Commission of India

Mr Nitish Kapoor has been appointed as Managing Director, Reckitt Benckiser India

M r N e e r a j S a h a i h a s b e e n appointed as President, Standard & Poor's Ratings Services

Ms Arundhati Bhattacharya has been appointed as Managing Director, SBI

M r M i k e Ye a g e r h a s b e e n appointed as Chairman, Cairn India

Mr P Madhusudan appointed as CMD, Rashtriya Ispat Nigam

Ms Sushma Singh has been appointed as Chief Information Commissioner (CIC), India

Mr Sumit Bose has been appointed as Finance Secretary, Finance Ministry, GOI

Mr D Shivakumar has been appointed as CEO, PepsiCo India

Mr Shaktikanta Das has been appointed as Special Secretary, Department of Economic Affairs, GOI

Mr C V R Rajendran has been appointed as Chairman and Managing Director, Andhra Bank

Ms Usha Sangwan has been appointed as Managing Director, LIC

Mr P. K. Malhotra has been appointed as Secretary (Additional Charge), Department of Legal Affairs, Ministry of Law and Justice, GOI

Mr Pradeep Kumar has been appointed as Managing Director (Corporate Banking), SBI

Mr P Madhusudan has been appointed as Chairman and Managing Director, Rashtriya Ispat Nigam Limited (RINL)

Ms Sunita Sharma has been appointed as MD & CEO of LIC Housing Finance Ltd

ADRs/GDRs shall be as prescribed by Government of India;

lThe capital raised abroad could be utilised for retiring outstanding overseas debt or for bona fide operations abroad including for acquisitions;

lIn case the funds raised are not utilised as stipulated, the company shall repatriate the funds to India within 15 days and such money shall be deposited only with AD Category-I banks and will be used for eligible purposes;

3. Waiver of NOC requirement under Foreign Direct Investment in Financial Sector - Transfer of Shares

The RBI by its Circular dated November 11, 2013 has decided to waive the requirement of NoC(s) to be filed along with form FC-TRS in case of transfer of shares from Residents to Non-Residents where the investee company is in the financial services sector. However, any 'fit and proper/ due diligence' requirement as regards the non-resident investor as stipulated by the respective financial sector regulator shall have to be complied with.

4. Foreign investment in India - participation by SEBI registered FIIs, QFIs and SEBI registered long term investors in credit enhanced bonds

The RBI by its circular dated November 11, 2013 has now permitted Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs) and long term investors registered with SEBI, Multilateral Agencies, Pension/ Insurance/ Endowment Funds, foreign Central Banks to invest in the credit enhanced bonds up to a limit of USD 5 billion within the overall limit of USD 51 billion earmarked for corporate debt.

Justice Sodhi Committee on Insider Trading Regulations submits report to SEBI

The High Level Committee to Review the SEBI (Prohibition of Insider T r a d i n g ) R e g u l a t i o n s , 1 9 9 2 constituted under the Chairmanship of Justice (Shri.) N.K. Sodhi, former chief justice of Karnataka and Kerala High Courts and former presiding officer of the Securities Appellate Tribunal, submitted its report to SEBI Chairman, Shri U.K. Sinha, on December 7, 2013 at Chandigarh.

The Committee has made a range of recommendations to the legal framework for prohibition of insider trading in India and has focused on making this area of regulation more predictable, precise and clear by s u g g e s t i n g a c o m b i n a t i o n o f principles-based regulations and rules that are backed by principles. The Committee has also suggested that each regulatory provision may be backed by a note on legislative intent.

Some of the salient features of the proposed regulations are set out below:-

1 While enlarging the definition of "insider", the term "connected person" has been defined more clearly and immediate relatives are presumed to be connected persons, w i t h a r i g h t t o r e b u t t h e presumption. The term "immediate relative" would cover close relatives w h o a r e e i t h e r f i n a n c i a l l y dependent or consult an insider in c o n n e c t i o n w i t h t r a d i n g i n securities.

2 Insiders would be prohibited from communicating, providing or allowing access to UPSI unless required for discharge of duties or for compliance with law.

3 The regulations would bring greater

c lar i ty on what const i tutes

"unpublished price sensit ive

information" ("UPSI") by defining

what const itutes "general ly

accordance with the existing FDI

policy. In the event of dilution, they

would have to list themselves.

l The issue of permitting WOSs to enter into M&A transactions with any private sector bank in India would be considered after a review of the extent of foreign investment in Indian banks and functioning of foreign banks in India.

2. Amendment to the existing policy for issue of shares by unlisted Indian companies

The RBI by its Circular dated November 8, 2013 has allowed unlisted Indian companies to raise capital abroad by accessing the Global Depository Receipts/ Foreign Currency Convertible Bonds route for a period of 2 years subject to the conditions stated in the said circular.

Conditions for Investment:

lUnlisted Indian companies are required to list abroad only on e x c h a n g e s i n I O S C O / F A T F compliant jurisdictions or those jurisdictions with which SEBI has signed bilateral agreements;

lThe issuing of ADRs/ GDRs shall be subject to the sectoral cap, entry route, minimum capitalisation norms, pricing norms, etc. as per the notified FDI regulations;

lThe number of underlying equity shares offered for issuance of ADRs/GDRs to be kept with the local custodian shall be determined upfront and ratio of ADRs/GDRs to equity shares shall be decided upfront based on applicable FDI pricing norms of equity shares of unlisted company;

lThe unlisted Indian company is required to comply with the instructions on downstream investment;

lThe criteria of eligibility of unlisted company raising funds through

M&A by WOS: