18 - Legal & Regulation Updates - India

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SEBI (Issue and Listing of Debt Securities by Municipalities) (Amendment) Regulations, 2017

SEBI via Notification dated February 15, 2017 has amended the Regulation 4 of the Regulations, with the following changes: Regulation 4 classifies Eligible Municipalities. Municipalities who can issue Debt securities to public after complying with the stated conditions in clauses (a) to (f) are considered as Eligible Municipalities. Clause (c) of these conditions is now substituted, and accordingly Municipalities are now required to have surplus income, for any of the immediately preceding three financial years or any other financial criteria as may be specified by the Board to be classified as Eligible Municipalities.

Securities and Exchange Board Of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2017

SEBI by notification dated February 15, 2017 has made an amendment to Regulation 37 of the LODR Regulations which deals with Draft Scheme of Arrangement and Scheme of Arrangement.

SEBI (Mutual Funds) Regulations, 1996

The amendments are as follows: In Regulation 2, following new definitions has been inserted: Infrastructure Investment Trust (“InvIT”) has been defined as a trust registered as such under SEBI (InvIT) Regulations, 2014. Real Estate Investment Trust (“REIT”) has been defined as a trust registered as such under SEBI (REIT) Regulations, 2014

SEBI: Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2017

SEBI by Notification dated February 15, 2017 has amended the Regulations. The proviso to Regulation 7(eb) has been omitted.

SEBI: Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Second Amendment) Regulations, 2017

SEBI by Notification dated February 15, 2017 has amended the Regulations. The proviso to Regulation 18(4) now stands omitted.

Securities and Exchange Board Of India (Listing Obligations And Disclosure Requirements) (Amendment) Regulations, 2017

SEBI by notification dated February 15, 2017 has made an amendment to Regulation 37 of the LODR Regulations which deals with Draft Scheme of Arrangement and Scheme of Arrangement. Securities and Exchange Board Of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2017 SEBI by Notification dated February 15, 2017 has made amendments in the ICDR Regulations. The key highlights are as follows:

Securities and Exchange Board Of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2017

SEBI by Notification dated February 15, 2017 has made amendments in the ICDR Regulations. The key highlights are as follows:

SEBI Consultative Paper on the proposed amendments to SEBI (Debenture Trustee) Regulations, 1993

SEBI has issued a Consultation Paper dated February 16, 2017 for proposed amendments in the Regulations in light of the changes in the Companies Act 2013, Companies (Share Capital and Debentures) Rules 2014 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations) 2011. The key highlights of the Consultation Paper are stated as follows:

RBI: Multilateral and Regional Financial Institutions to invest in Rupee Denominated Bonds

The abovementioned Circular and Paragraph 3.3.3 of the Master Directions state the eligibility for issuing and investing in “Rupee Denominated Bonds.” As per the above mentioned circular and Master Directions, the Rupee denominated bonds can only be issued in a country and can only be subscribed by a resident of a country:

RBI: Forward Rate Agreement (FRA) and Interest Rate Swap (IRS) - Withdrawal of Fortnightly return

As per the above mentioned circular, scheduled commercial banks (excluding Regional Rural Banks), primary dealers and all-India financial institutions were advised to submit a fortnightly return on Forward Rate Agreement (“FRA”) and Interest Rate Swaps (“IRS”) to Monetary Policy Department with a copy to various RBI departments in “Annexure 5” annexed to the above circular. RBI has instructed to withdraw the said return. Hence, RBI has advised the banks to stop sending the hardcopy of this return to RBI.

RBI: Regional Rural Banks can now grant gold loans up to Rs2 lakh.

As per the above mentioned circular, Regional Rural Banks (“RRBs”) were permitted to grant gold loans up to Rs.1,00,000/- with bullet repayment option. RBI has now increased the quantum of this gold loan that can be granted by RRBs, from Rs.1,00,000/- to Rs.2,00,000/-. However, RRBs can grant a gold loan up to Rs.2,00,000/- subject to the following conditions:

RBI: Reimbursement of Merchant Discount Rate

Merchant Discount Rate (“MDR”) is the rate charged to a merchant by a bank for providing debit and credit card services. RBI has announced that it will reimburse the MDR charges incurred while making payments relating to tax or non tax dues to Government Of India (“GOI”) for all payments made from 1st of January, 2017 onwards. Further, RBI has instructed agency banks to forward their claims for reimbursement along with auditor’s certificate on a quarterly basis to RBI’s central account section in Nagpur. The first quarter for such a claim will be from January 1, 2017 to March 31, 2017 and the claim for this quarter shall be submitted by April 30,2017.

CBEC: Clarification on the applicability of service tax in certain cases

CBEC has issued a clarification on applicability of service tax on the services provided by the Customs Stations in India for goods which are transported to these Custom Stations by a vessel from a place outside India intended for transshipment to any country outside India. Simply put, these are goods landing at Indian ports from a place outside India and further destined for any other country. These goods landing at Indian ports which are destined for any other country are allowed to be transshipped through Indian territory without payment of Customs duty in India. However, this is subject to Section 54(2) of the Customs Act, 1962 which states that such goods imported into a customs station should be mentioned in the import manifest or the import report as for transshipment to any place outside India.

Pre Legislation Alert- The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2017

Under Rule 5 of the Industrial Employment (Standing Orders) Central Rules, 1946 an application for certification of standing order is to be submitted with a statement giving particulars of workmen employed. The amendment proposes to include in this statement given under Rules, the “number of fixed term employment workmen in the made up sector”. Further, “fixed term employment workmen in the made up sector” has been proposed to be added in the classification of the workers in Schedule I as well.

Drugs (Prices Control) Order, 2013

The Ministry of Chemicals and fertilizers, National Pharmaceutical Pricing Authority (“NPPA”), has issued an Order dated February, 14, 2017 to fix the ceiling price of the scheduled formulations of drugs. Such ceiling prices fixed are exclusive of any applicable local tax. The ceiling prices are enumerated in Column 5 of the Table given below:

National Pharmaceutical Pricing Authority: Draft of Proposed Price Calculation Sheets for 7 proposed revised/notified ceiling price/retail price

The draft of Seven calculation sheets of proposed ceiling prices/retail prices based on Pharma Trac data are uploaded on the website of NPPA. The companies who are aggrieved by NPPA’s proposed price fixation, can make representation, against the same by submitting information of Price to Retailer (“PTR”) and Moving Annual Turnover (“MAT”) data, along with supporting documents such as:

National Pharmaceutical Pricing Authority has fixed/revised ceiling prices of 34 scheduled formulations of Schedule-I and Retail Price of 6 formulations

National Pharmaceutical Pricing Authority has fixed/revised ceiling prices of 34 scheduled formulations of Schedule-I and Retail price of 6 formulations under DPCO, 2013.

CPCB- Draft of Guidelines for Maintaining Buffer around waste processing and disposal facilities

CPCB has issued guidelines for maintaining buffer zones around waste processing and disposal facilities. These guidelines are issued in furtherance of the duties specified to CPCB under “The Solid Waste Management Rules, 2016” notified on 8th April, 2016. The duties specified and entrusted to CPCB in this regard included:

Fertiliser (Control) Amendment Order, 2017

The Fertiliser (Control) Order, 1985 has been amended as per the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985.