The weekly messenger | Edition 04.22

Regulatory news

GN on Division I, II and III of Schedule III to the Companies Act, 2013 (Revised January 2022 Edition) – 24 January 2021

In order to provide guidance on the amendments being made in the Schedule III to the Companies Act, 2013 by the Ministry of Corporate Affairs vide its notification dated 24 March 2021, the ICAI has issued the final versions of the Guidance Notes (GN) on Division I, II and III of Schedule III to the Companies Act, 2013.

For GN on Division I, click here.

For GN on Division II, click here.

For GN on Division III, click here.

SEBI (LODR) (Amendment) Regulations, 2022 – 24 January 2022

The Securities and Exchange Board of India (SEBI) has issued the SEBI (Listing Obligations and Disclosure Requirements (LODR)) (Amendment) Regulations, 2022, wherein certain amendments have been made in the principal Regulations, which inter-alia includes:

• Earlier, as per Regulation 17(1C), the listed entities were required to ensure that the appointment of a person on the Board of Directors shall be approved by the shareholders. Now, similar approval is also required in case of appointment of a manager.

• Further, in Regulation 17(1C), a new proviso has been inserted which states that the appointment or a re-appointment of a person, including as a managing director or a whole-time director or a manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of the shareholders.

• Previously, as per Regulation 32(7), if the listed entities had appointed a monitoring agency to monitor the utilisation of proceeds of a public or rights issue, the monitoring report of such agency was required to be placed before the audit committee on an annual basis, promptly upon its receipt. Now this requirement is to be complied on quarterly basis.

These Regulations shall come into force w.e.f 24 January 2022.

For more information, click here.

RBI issues regulations under the amended Factoring Regulation Act, 2011 ‒ 20 January 2022

The Government of India has amended the Factoring Regulation Act, 2011, thereby widening the scope of companies that can undertake factoring business.

Pursuant to the aforesaid amendments, the Reserve Bank of India (RBI) has issued the following Regulations:

• Registration of Factors (Reserve Bank) Regulations, 2022

• Registration of Assignment of Receivables (Reserve Bank) Regulations, 2022

These Regulations will allow all the existing non-deposit taking NBFC-Investment and Credit Companies (NBFC-ICCs) with asset size of ₹1,000 crore and above to undertake factoring business subject to satisfaction of certain conditions.

For more information, click here.

MSMEs (Amendment) Rules, 2022 ‒ 19 January 2022

The Central Government has issued the Micro, Small and Medium Enterprises (MSMEs) (Amendment) Rules, 2022, wherein a new sub-rule (5) has been inserted in Rule 6 ‘Approval and release of money from Fund’ of the MSME Fund Rules, 2016, which specifies the criteria based on which sums may be released under sub-section (3) of section 14 ‘Administration and utilisation of Fund or Funds’ of the MSME Act, 2006.

These Rules shall come into force w.e.f 19 January 2022.

For more information, click here.