Updates from the SEBI
CIRCULAR ON EXTENSION OF TIMELINE FOR ENTERING THE DETAILS OF THE EXISTING OUTSTANDING NON-CONVERTIBLE SECURITIES IN THE ‘SECURITY AND COVENANT MONITORING’ SYSTEM HOSTED BY DEPOSITORIES
SEBI vide Circular dated August 13, 2021, specified the manner of recording of charges by Issuers and manner of monitoring and other responsibilities of Debenture Trustees (DTs), Credit Rating Agencies, etc. for ‘Security and Covenant Monitoring’ using Distributed Ledger Technology (DLT).
Referring to the above circular,
SEBI vide its circular dated October 03, 2022, decided to provide an extension of one month. Issuers shall ensure that they enter their details into the DLT system on or before October 31, 2022; DTs shall verify the same by December 31 2022. The detailed circular can be accessed by clicking the link mentioned below:
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REVIEW OF PROVISIONS PERTAINING TO THE ELECTRONIC BOOK PROVIDER PLATFORM
(Revision in Chapter VI of the Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper)
Chapter VI of the Operational Circular dated August 10, 2021, issued by SEBI, prescribes provisions pertaining to the Electronic Book Provider (EBP) platform. The said circular stipulates the issuances which must be made through EBP, the eligible participants, obligations/ responsibilities of various entities, provision to the issuer to withdraw offers, the process of bidding and allotment, etc.
SEBI observed that in order to address the concern of ‘fastest finger first’, it is essential to modify the book-building process to ensure allocations based on the ‘best bid’ rather than the bidder with the best technology for placing the fastest bid.
Accordingly, SEBI vides it’s circular dated October 10, 2022, proposed to replace the extant Chapter VI (Electronic Book Provider platform) of the aforementioned Operational Circular with a revised Chapter, as enclosed as Annex –A in the circular.
The detailed circular can be accessed by clicking the link mentioned below:
Click here to access the circular and above-mentioned Annex-A
REVIEW OF PROVISIONS PERTAINING TO SPECIFICATIONS RELATED TO INTERNATIONAL SECURITIES IDENTIFICATION NUMBER (ISIN) FOR DEBT SECURITIES ISSUED ON PRIVATE PLACEMENT BASIS – MODIFICATION TO CHAPTER VIII OF OPERATIONAL CIRCULAR DATED AUGUST 10, 2021
Chapter VIII of the SEBI Operational Circular dated August 10, 2021 deals with specifications related to ISIN for debt securities
In continuation to the measures taken to deepen and boost the liquidity in the corporate bond market and based on the trends observed in the market pursuant to the issuance of circulars dated June 30, 2017 and March 28, 2018 capping of ISINs has reduced fragmentation in the primary market and enhanced liquidity in the secondary market.
This Circular aims at further capping the number of ISINs maturing in a financial year for debt securities issued on private placement basis by modifying the Paragraphs (1), (2) and (3) of Chapter VIII of the Operational Circular dated 10th August, 2021.
Other provisions of Chapter VIII (Specifications related to ISIN for debt securities) of the aforementioned Operational Circular shall remain unchanged.
The detailed Circular can be accessed in the below mentioned link:
Click here to access the circular and above-mentioned Annex-A
REDUCTION IN DENOMINATION FOR DEBT SECURITIES AND NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES (REVISION IN CHAPTER V OF THE OPERATIONAL CIRCULAR FOR ISSUE AND LISTING OF NON-CONVERTIBLE SECURITIES, SECURITISED DEBT INSTRUMENTS, SECURITY RECEIPTS, MUNICIPAL DEBT SECURITIES AND COMMERCIAL PAPER)
Chapter V of the Operational Circular dated August 10, 2021, issued by SEBI, prescribes provisions pertaining to denomination of issuance and trading of Non-convertible Securities
The said circular, inter alia, mandates that the face value of each debt security or non-convertible redeemable preference share issued on private placement basis shall be Rs. 10 lakh and the trading lot shall be equal to the face value.
Further the amendments are being made to the Chapter V (Denomination of issuance and trading of Non-convertible Securities) of the Operational Circular vide SEBI circular dated October 28, 2022.
The detailed amendments can be access in below mentioned link:
Click here to access the circular and above-mentioned Annex-A
Updates from the RBI
NOTIFICATION ON MULTIPLE NBFC’S IN A GROUP, CLASSIFICATION IN MIDDLE LAYER
The Reserve Bank of India (RBI) issued a notification on October 11, 2022, referring to the four layered regulatory structure for NBFC’s that applicable NBFC’s that are a part of a common group or floated by common set of promoters shall not be viewed on standalone Basis, instead the total assets of all NBFC’s in a group shall be consolidated to determine the threshold for their classification in the Middle Layer.
The total assets of all NBFCs in the Group must be consolidated in accordance with the current policy on NBFC asset consolidation in order to establish the cut-off point for their classification in the Middle Layer.
Each of the following type of company shall be classified as an NBFC in the Middle Layer and regulations applicable to Middle layer shall be applicable to them in cases where the consolidated asset size of the group is more than 1000 Crores and above:
- Investment and Credit Company (NBFC- ICC) lying in the group
- Micro Finance Institution (NBFC-MFI) lying in the group
- NBFC Factor and Mortgage Guarantee Company (NBFC MGC) lying in the group.
These guidelines shall be effective from October 01, 2022.
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Income Tax Updates
CBDT NOTIFIES THE FOLLOWING AS SPECIFIED PENSION FUNDS FOR EXEMPTION UNDER CLAUSE (23FE) OF SECTION 10 OF THE INCOME TAX ACT, 1961
- Ontario Limited ;
- Teacher Retirement System of Texas; and
- Norges Bank Pension Fund
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KERALA STATE ELECTRICITY REGULATORY COMMISSION EXEMPTED IN RESPECT OF THE FOLLOWING SPECIFIED INCOME VIDE AMENDMENT TO CLAUSE 46 OF SECTION 10 OF THE INCOME TAX ACT, 1961
(a) Amount received in the form of grants and loans received from State Government of Kerala;
(b) License fees under Electricity Act, 2003;
(c) Petition fees under Electricity Act, 2003; and
(d) Interest earned on investments made out of (a), (b) & (c) above
The provisions of this notification shall be effective subject to the satisfaction for the following conditions by Kerala State Electricity Regulatory Commission:
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income remain unchanged throughout the financial
years; and
(c) shall file returns of income in accordance with the provision of clause (g) of sub-section (4C) section 139 of the Income-tax Act, 1961.
This notification shall be applicable for the financial years 2022-23, 2023-2024, 2024-2025, 2025-2026 and 2026-27
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CENTRAL GOVERNMENT APPROVES ‘KREA UNIVERSITY, SRICITY, CHITTOOR, ANDHRA PRADESH FOR RESEARCH IN ‘SOCIAL SCIENCE OR STATISTICAL RESEARCH’ UNDER SECTION 35
This is applicable for Assessment Years 2023-2024 to 2027-2028.
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CBDT EXTENDS THE DUE DATE FOR FILING OF THE QUARTERLY RETURN
CBDT extends the due date for filing of the Quarterly return for non-salary from 31 ” of October, 2022 to 30th of November, 2022, on account of revision of its format and consequent updation required for its filing.
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GST Updates
DUE DATE FOR FILING GSTR-3B FOR THE MONTH OF SEPTEMBER 2022 WAS EXTENDED TILL 21ST OCTOBER 2022
As per Section 39 of the Central Goods and Services Tax Act (CGST Act), 2017, the commissioner on the recommendation of the Council, extended the due date for furnishing the GSTR-3B return for the registered person as per section 39 of CGST Act 2017 for the month of September 2022 to 21st October 2022.
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