The weekly messenger | Edition 07.16

Regulatory News

Maintenance and preservation of Records - 30 August 2016

The Securities Exchange Board of India (SEBI) in order to protect the interests of investors, to promote the development and to regulate the securities market has issued circular regarding the maintenance and preservation of records by all the commodity derivative exchanges and their members subsequent to its merger with Forwards Market Commission (FMC) , which inter-alia includes:

• Maintenance and preservation of specified books of account and documents by every recognized stock exchange and its members for a period ranging from two years to five years.
• Preservation of the specified books of account and other records for a minimum period of five years by every stock broker.
• Applicability of provisions of ‘Preservation of Records’ issued by SEBI vide circular no.MRD/DoP/SE/Cir-21/2009 dated 9 December 2009.

The provisions of the circular will become effective from 29 September 2016.

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Simplification and liberalization of FDI Policy, 2016 in various sectors - 31 August 2016

The Union Cabinet has given its approval for the amendments in Foreign Direct Investment (FDI) policy in various sectors. These amendments are basically meant to liberalise and simplify the FDI policy in order to provide ease of doing business in the country leading to larger inflow of FDI which will ultimately contribute to the growth of investment, incomes and employment.

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Extension of due date for quarterly furnishing of 15G/15H declaration - 31 August 2016

The Central Board of Direct Taxes (CBDT) has issued a notification for extending the due date for uploading of form 15G/H (forms for non-deduction of TDS) which are as under:

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Streamlining the Process of NOC & PCC in case of FSCs - 31 August 2016

CBDT in order to improve the ease of doing business in India has streamlined the process of issue of No Objection Certificate (NOC), Port Clearance Certificate (PCC), Voyage Return and Voyage Assessment in case of Foreign Shipping Companies (FSCs).For this purpose it has issued certain guidelines for assessing officers who issues such NOCs.

Further, it has also eliminated the administrative requirement of obtaining a voyage NOC for FSCs if such FSC is entitled to 100% relief from payment of taxes in India on account of Double Taxation Avoidance Agreement (DTAA) between India and the country to which the foreign shipping company belongs.

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FAQs on ODI - 1 September 2016

SEBI has issued Frequently Asked Questions (FAQs) on Circular dated 10 June 2016 regarding Offshore Derivative Instruments (ODI). The FAQs, inter alia, includes clarifications on:

• Know your client (KYC) norms for ODIs subscribers
• Transferability of ODIs
• Reporting of suspicious transactions
• Periodic review of systems
• Modified ODI reporting format

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Guidelines on Sale of Stressed Assets by Banks - 1 September 2016

The Reserve Bank of India (RBI) has amended certain guidelines relating to sale of non performing assets(NPAs) by banks to Securitization Companies(SCs)/Reconstruction Companies in order to strengthen bank’s ability to resolve their stressed assets effectively. These guidelines, inter alia, includes the following aspects:

• Financial assets to be sold
• Norms and procedure for sale of such financial assets;
• Valuation procedure to be followed to ensure that the realisable value of financial assets is reasonably estimated;
• Delegation of powers of various functionaries for taking decision on the sale of the financial assets; etc

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NBFC Systemically and Non-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions - 1 September 2016

RBI has issued Non-Banking Financial Company- Systemically Important Non-Deposit taking Company (NBFC-ND-SI) and Deposit taking Company (NBFC-D) (Reserve Bank) Directions, 2016 (for Non-Deposit taking & Deposit  taking Companies) and Non-Banking Financial Company(NBFC)- Non- systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 (for Non-Deposit taking Companies)  in order to enable the Bank to regulate the financial system to the advantage of the country and to prevent the affairs of such companies from being conducted in a manner detrimental to the interest of investors and depositors or in any other manner prejudicial to the interest of such NBFC. The directions, inter alia, includes:

• Prudential issues
• Governance issues
• Miscellaneous issues
• Annex stating schedule to the Balance Sheet, norms and guidelines on several matters etc.

These directions shall come into force with immediate effect.

For Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, click here

For Non-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, click here

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