The weekly messenger | Edition 14.20

Regulatory News

MCA extends AGM date for companies whose FY ended on 31 December 2019 – 21 April 2020

Due to COVID-19, Companies whose financial year ended on 31 December 2019, were finding it difficult to hold their Annual General Meeting (AGM) within the prescribed timelines i.e. within a period of 6 months from the closure of the financial year (nine months in case of first AGM).
 
Therefore, the Ministry of Corporate Affairs (MCA) has issued a clarification, wherein it has clarified that such Companies may hold their AGM within a period of nine months from the closure of the financial year i.e. up to 30 September 2020.
 
For more information, click here.

MCA extends timelines for names reservation and resubmission of forms – 22 April 2020

Considering the difficulties being faced by the Companies due to COVID-19, the MCA has provided the details of ‘Period/Days of Extension for Names Reserved and Re-Submission of Forms’ on its website.
 
For more information, click here.

One-time relaxation with respect to validity of SEBI Observations – 21 April 2020

In view of the impact of the COVID-19 pandemic, the Securities and Exchange Board of India (SEBI) pursuant to the various representations received from various industry bodies, has decided to grant the following one-time relaxations:

• As per the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations), public issue/rights issue may be opened within twelve months from the date of issuance of observations by SEBI.
  The validity of the SEBI Observations where the same have expired or will expire between 1 March 2020 and 30 September 2020 has been extended by 6 months, subject to an undertaking from lead manager of the issue confirming compliance with Schedule XVI of the ICDR Regulations while submitting the updated offer document to the Board.

• Further, issuers have also been permitted to increase or decrease the fresh issue size by up to 50% of the estimated issue size as against the existing limit of 20% without requiring to file fresh draft offer document with the Board subject to certain conditions 

For more information, click here.

Relaxations from certain provisions of the ICDR Regulations in respect of Rights Issue – 21 April 2020

Due to COVID-19 pandemic, the SEBI has decided to provide certain temporary relaxations in the provisions related to Rights Issues as contained in the ICDR Regulations such as:

• Relaxations with respect to the eligibility conditions related to Fast Track Rights Issues;
• Relaxation with respect to Minimum Subscription;
• Relaxation with respect to the minimum threshold required for not filing draft letter of offer with SEBI.

These temporary relaxations are applicable for Right Issues that open on or before 31 March 2021.
 
Further, the relaxations mentioned in the Circular are not applicable for issuance of warrants.
 
For more information, click here.

Relaxation in relation to Regulation 44(5) of SEBI (LODR) Regulations, 2015 on holding of AGM by 100 listed entities by market capitalization, due to COVID-19 pandemic – 23 April 2020

The SEBI, vide its Circular dated 26 March 2020, had provided a relaxation to the top 100 listed entities to hold their AGM within in period of six months from the closure of the financial year as against the earlier requirement of holding the same within five months from closure of the financial year.
 
Now, since the MCA has given a relaxation to the Companies whose financial year ended on 31 December 2019 to hold their AGM within a period of nine months from the closure of the financial year.
 
Accordingly, on the similar grounds, the SEBI has also granted further relaxation to the top 100 listed entities whose financial year ended on 31 December 2019 to hold their AGM within a period of nine months from the closure of the financial year i.e. up to 30 September 2020.
 
For more information, click here.

Relaxation in Regulation 24(i)(f) of the SEBI (Buy-back of Securities) Regulations, 2018 due to COVID-19 pandemic – 23 April 2020

Presently, Regulation 24(i)(f) of SEBI (Buy-back of Securities) Regulations, 2018 provides a restriction that the companies shall not raise further capital for a period of one year from the expiry of buyback period, except in discharge of their subsisting obligations.
 
Now, considering the current situation due to COVID-19, the SEBI has decided to temporarily relax the period of restriction provided in the aforesaid Regulation, by reducing the period within which the companies cannot raise further capital from ‘one year’ to ‘six months’.
 
This Relaxation would be applicable till 31 December 2020.
 
For more information, click here.

Prudent management of financial resources of insurers in the context of Covid-19 pandemic – 24 April 2020

In view of the emerging market conditions, and to conserve capital with the insurance companies in the interests of the policyholders and of the economy at larger, the Insurance Regulatory and Development Authority of India has urged the insurers to take a conscious call to refrain from dividend pay-outs from profits pertaining to the financial year ending 31 March 2020, till further instructions. The Authority will reassess this position based on the financial results of the insurers for the quarter ending 30 September 2020.
 
For more information, click here.