Notice for Appointment as Director

This is a notice to be submitted under Section 160 of Companies Act, 2013 by a person who wants to be appointed as Director in a Company.

RBI Updates: AIFs now can be "qualified buyers" under SARFAESI Act

Reserve Bank of India (RBI) allowed Category II and Category III Alternative Investment Funds (AIFs) who are registered with SEBI to act as "Qualified Buyers" under SARFAESI Act.

By issuing a notification dated 05th July, 2018, RBI has allowed AIFs registered with SEBI to act as "Qualified buyers" under clause (u) of sub-section (1) of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. However, they should follow comply with following conditions:

1. The AIF which has invested in an asset reconstruction company (ARC) shall not invest in the security receipts issued by that ARC.

2. The AIF shall not invest in the security receipts issued on the underlying loans of any of its associate or group company.

3. The AIF shall not invest in the security receipts backed by non-performing assets of banks which hold equity of more than 10% in that AIF

Copy of such notification can be accessed below.

SEBI Updates: SEBI reviews mechanism of dividend adjustment for stock option

SEBI on 05^th July, 2018, issued a Circularfor reviewing the mechanism of dividend adjustment for stock options and allowed alteration in strike price.

According to the SEBI, adjustment in strike price will be carried out in case dividend declared by a company is above 5 per cent of the underlying stocks. Besides, adjustment in strike price will be done in all other cases of dividend, wherein listed company has sought exemption from the timeline prescribed under listing and disclosure regulations, SEBI said in a circular.

According to the SEBI, adjustment in strike price will be carried out in case dividend declared by a company is above 5 per cent of the underlying stocks. Besides, adjustment in strike price will be done in all other cases of dividend, wherein listed company has sought exemption from the timeline prescribed under listing and disclosure regulations, SEBI said in a circular.

Strike price, in market parlance, is the price at which a derivative contract can be exercised. It is mainly used to describe stock and index options. For call options, the strike price is where the security can be purchased by the option buyer up till the expiration date. For put options, the strike price is the price at which shares can be sold by the option buyer.

Copy of Circular can be accessed below.

SEBI Updates: SEBI raises overseas investment limit of AIFs and VCFs

SEBI by issuing a Circular dated 03rd July, 2018 enhanced the overseas investment limit of Alternative Investment Fund (AIFs) and Venture Capital Fund (VCFs) to USD 750 million from the current USD 500 million

The decision has been taken in consultation with the Reserve Bank of India, the Securities and Exchange Board of India (SEBI) said in a circular. In order to monitor the utilisation of overseas investment limits, SEBI has asked AIFs and VCFs to mandatorily disclose the utilisation of the such limits within 5 working days of such usage on the regulator's intermediary portal. 

In case an alternative investment fund (AIF) or venture capital fund (VCF) has not utilised the overseas limit granted them within 6 months from SEBI's approval, the same will have to be reported within 2 working days after expiry of the validity period. 

"In case an AIF or VCF has not utilized a part of the overseas limit within the validity period, the same shall be reported within 2 working days after expiry of the validity period," the regulator noted.

Further, if an AIF or VCF wishes to surrender the overseas limit at any point of time within the validity period, the same will have to be reported within two working days from the date of decision to surrender the limit, it added. The regulator said it has decided to enhance the overseas investment limit of AIFs and VCFs to USD 750 million. 

Earlier in October 2015, the regulator had allowed overseas investment by AIFs and VCFs to the extent of USD 500 million.

AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy, while VCFs are investment funds that manage the money of investors who seek private equity stakes in startups.

Copy of Circular can be accessed below:

Source: Economic Times

MCA Updates: Directors to submit their KYC to MCA

MCA would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC to be notified and deployed shortly.

Update 25/07/2018: Click here for more detailed information on DIN KYC

Following points to be kept in mind in this regard by every director.

1. Every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file Form DIR-3 KYC on or before 31st August, 2018.

2. While filing the form, the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password (OTP). 

3. The form should be filed by every Director using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA). 

4. Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.

5. After expiry of the due date by which the KYC form is to be filed, the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with reason as ‘Non-filing of DIR-3 KYC’. 

6. After the due date, filing of Form DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a INR 5,000 only, without prejudice to any other action that may be taken.

7. While filing form, a person is required to use PAN based DSC in case of Indian national, whereas in case of foreign national, applicant's name in DSC should be matched with name mentioned in Passport.

You can find below copy of notification.

SEBI Updates: Filing of Term Sheet by Angel Funds

Angel funds will have to disclose details related to investment as well as venture capital undertakings and "material changes", within 10 days of launching a scheme, markets regulator SEBI said.

Releasing the format of the term sheet, the regulator said that angel fund can launch new schemes, subject to the filing of the term sheet, it needs to contain material information and have to be filed with SEBI within 10 days of launching the scheme. The term sheet has three categories — information related to investment and investee company; compliance with SEBI’s AIF regulation; and “material change”, the regulator said in a circular.

Angel Funds, a sub-category Alternative Investment Funds (AIFs), encourage entrepreneurship by financing small startups at a stage when they find it difficult to obtain capital from traditional sources of finance such as banks and financial institutions. The markets regulator, last month, had replaced the requirement of filing of scheme memorandum to SEBI by angel funds with the requirement of filing term sheet containing material information.

Now, the Securities and Exchange Board of India (SEBI) has released the format of the term sheet. With regard to investment and investee firm, information pertaining to name of the angel fund as well as scheme, name of the investee company, services offered by it, its business details, present investment size, investment highlight, total capital commitment by investors, capital drawn by the fund, price per share, details of lock in for share and exit strategy for angel fund among others need to be divulged.

Further, the term sheet will also have information pertaining to list of investors in the scheme and compliance with the AIF rules, whether the fund has corpus of Rs 5 crore and whether the funds have been raised through private placement among others. Besides, angel fund will have to submit details of material changes, rationale for such change and date of approval from SEBI in this regard.

Besides, the regulator has raised the maximum period of accepting funds from an angel investor to five years, from three years. The move will provide angel funds more time to identify opportunities and invest in venture capital firms. Earlier, SEBI had formed a working group comprising various angel networks, consultants and start-ups in a bid to provide ease of doing business for angel funds.

Copy of Circular can be accessed below:

Source: Financial Express

GST Updates: Reverse Charge Mechanism is deferred till 30 September

The Central Board of Indirect Taxes and Customs issued a notification on 29th June, 2018, postponing the roll-out of the reverse charge mechanism by three more months.

The government has further deferred the reverse charge mechanism under goods and services tax to September 30. Under this mechanism, GST is levied on goods or services procured from unregistered dealers by the buyer and deposited with the government.

This is an anti-tax-evasion measure to ensure that transactions by unregistered people don’t escape tax. In a normal transaction, the supplier of goods or service charges the tax and pays to the government, but in this case, the responsibility reverses and falls on the buyer. 

The mechanism was to kick in from July 1 this year after it had been deferred earlier. The industry had voiced concern that this would increase their compliance burden.

Source: Economic Times

The notification copy can be found below.