October 29, 2020
RBI announces Open Market Operations (OMO) Purchase of State Government Securities
The Reserve Bank of India (“RBI”) has decided to conduct purchase of State Developments Loans (“SDL”) through a multi-security auction using the multiple price method, under Open Market Operations (OMOs) for an aggregate amount of ₹10,000 crores on November 05, 2020. There is no security-wise notified amount.
In this regard, the RBI has the authority to:
- decide on the quantum of purchase of individual securities.
- accept bids for less than the aggregate amount.
- purchase marginally higher/lower than the aggregate amount due to rounding-off.
- accept or reject any or all the bids either wholly or partially without assigning any reasons.
Eligible participants are required to submit their bids in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on November 05, 2020.
Securities and Exchange Board of India (Prohibition of Insider Trading) (Second Amendment) Regulations, 2020
Pursuant to the amendment in the SEBI (Prohibition of Insider Trading) Regulations, 2015 –
- Information will be considered timely, only if as on the date of receipt of the duly completed Voluntary Information Disclosure Form (VIDF) by the Securities and Exchange Board of India, not more than 3 (three) years have elapsed since the date on which the first alleged trade constituting violation of insider trading laws was executed.
- For submission of information through a legal representative, the redacted copy of the VIDF expunging information that may identify the Informant shall be submitted by the legal representative without expunging any information relating to the legal representative and the details relating to the violation of insider trading laws.
- In the VIDF detailed description on how the information submitted constitutes a violation of insider trading laws is required to be submitted (under clause 9 of Part 3 of Schedule D). These details must include specific information with respect to:
- details of the securities in which insider trading is alleged;
- the unpublished price sensitive information based on which insider trading is alleged;
- date on which the unpublished price sensitive information was made public;
- details of circumstances/evidence leading to possession of unpublished price sensitive information by the alleged violator(s); and
- details of insiders/suspects and their trades (i.e. purchase/sale and quantity purchased/sold) along with dates/period of trades.
Relaxation in time limits for furnishing of returns under the Income Tax Act, 1961
In exercise of the powers vested by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the Central Government has further extended the tax compliance for the assessment year commencing on April 1, 2020. Accordingly –
- Time limit for furnishing of return has been extended to January 31, 2021 for assesses covered under clauses (a) and (aa) of Explanation 2 to Section 139 (1).
- Time limit for furnishing of return has been extended to December 31, 2021 for all other assesses.
- Time limit for furnishing of report of audit under any provision of Income Tax Act, 1961 shall stand extended to the 31st day of December, 2020.
Consolidated Foreign Direct Investment (FDI) Policy of 2020
From time to time, the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India makes policy pronouncements on FDI through various Circulars/Press Notes/Press Releases which are notified by the Department of Economic Affairs (DEA), Ministry of Finance, Government of India as amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 under the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA).
To capture and keep pace with the regulatory changes effected from time to time, the Government has updated and put in place a revised and updated policy framework on FDI as the consolidated FDI Policy of 2020. This FDI Policy, 2020 takes effect from October 15, 2020. Accordingly, the present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/Circulars issued by the DPIIT, which were in force as on October 15, 2020. Certain key changes notified by the DPIIT which have been consolidated in the FDI Policy, 2020 are as follows –
- Applications involving investments from an entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, will need approval from the government.
- E-commerce marketplace entities with FDI to obtain and maintain a report of statutory auditor by September 30 every year for the preceding financial year confirming compliance of the e-commerce guidelines.
- Permission of FDI up to 74% under automatic route in companies seeking new industrial licenses.
Draft Industrial Relation (Central) Rules, 2020
The draft Industrial Relation (Central) Rules, 2020 (“Draft Rules”) have been made public by the Ministry of Labour and Employment for objections/ comments from stakeholders. The Draft Rules have been made in suppression of (i) the Industrial Tribunal (Procedure) Rules, 1949; (ii) the Industrial Tribunal (Central Procedure) Rules, 1954; (iii) the Industrial Disputes (Central) Rules, 1957; and (iv) the Industrial Employment (Standing Orders) Central Rules,1946.
Comments/ objections to the Draft Rules are to be addressed to Shri Sanjeev Nanda, Under Secretary to the Government of India, Ministry of Labour and Employment, Room No. 17, Shram Shakti Bhawan, Rafi Marg, New Delhi-110001 or by email – firstname.lastname@example.org. Any person/ stakeholder may send objections/ comments on the Draft Rules prior to the expiry of 30 (thirty) days from the date on which the Draft Rules have been published, i.e., November 28, 2020.
October 28, 2020
Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020
The Financial Markets Regulation Department of the Reserve Bank of India notified the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020 (“Regulations”). The Regulations restrict persons from posting or collecting margin for derivative contracts and paying or receiving any interest on such margin without the prior permission of the RBI. Some notable features of the Regulations are as follows –
- Reserve Bank has the authority to issue directions from time to time in regards to posting or collecting margin for derivative contracts and paying or receiving any interest on such margin.
- Subject to the directions issued by the RBI, authorised dealers may –
(1) Post and collect margin, in India and outside India, on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India.
(2) Receive and pay interest on margin posted and collected on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India.
October 27, 2020
Notification under Direct Tax Vivad se Vishwas Act, 2020
Pursuant to the notification released by the Ministry of Finance –
- December 31, 2020 will be the date, on or before which a declaration shall be filed to the designated authority, by the declarant, in respect of any tax arrears under Section 4 of the Direct Tax Vivad se Vishwas Act, 2020 (“Act”).
- March 31, 2021 shall be the date on or before which the amount payable (applicable as per third column of the Table to section 3 of the Act) shall be paid by the declarant.
- April 1, 2021 shall be the date on or after which the amount payable (applicable as per fourth column of the Table to section 3 of the Act) shall be paid by the declarant.
October 26, 2020
Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts
The Government of India has announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest (“Scheme”). The Scheme mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions. A few key features of the Scheme include –
- The Scheme is applicable on all lending institutions which must be either a banking company or a public sector bank or a cooperative bank or a regional rural bank or all India financial Institution or a non-banking financial company or a housing finance company registered with the RBI or National Housing Bank.
- Borrowers in certain classes of loans (like MSME loans, education loans, credit card dues, etc.) who have loan accounts having sanctioned limits and outstanding amount of not exceeding INR 2 Crore (aggregate of all facilities with lending institutions) as on February 2, 2020 shall be eligible for the benefits under the Scheme.
- The benchmarks and modalities for ex-gratia payment of difference between compound interest and simple interest under the scheme would be as detailed in the attached operational guidelines.
- Claims are to be submitted to designated officers at the state bank of India (SBI). Issues and concerns relating to the claims submitted by the lending institutions are required to be handled through the designated cell at SBI in consultation with the Government of India.