Regulatory Updates

MoEFCC publishes the draft notification to seek comments on Construction and Demolition Waste Management Rules, 2024

MoEFCC published a draft notification for seeking public comments on the proposed Construction and Demolition Waste Management Rules, 2024. The rules are proposed to come into force from April 1, 2025. 'Producer' under the proposed rules is defined as a waste generator registered on a portal for a building and building complex project having built-up area of 20,000 (twenty thousand) square meters and above. The proposed rules define a 'waste generator' as an occupier of the project having full control over the construction or reconstruction or demolition activity resulting in generation of waste. The proposed rules prescribe separate obligation on producer and waste generator. The waste generator is required to collect and segregate waste to facilitate reuse and recycling of materials while taking measures for recycling, prevention of air pollution, littering etc. In respect of waste generators which are categorised as producers, the proposed rules provide that in addition to the obligation of a waste generator, such producers will register on the portal developed by CPCB. The rules propose to have Extended Producer Responsibility ("EPR") on a producer to manage Construction and Demolition Waste ("C&D Waste"). The proposed rules prescribe the recycling targets to be fulfilled by the producer for compliance of its EPR.

The Securities and Exchange Board of India ("SEBI") issues consultation paper on proposed amendments to the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("Insider Trading Norms") inviting comments

SEBI, vide notification dated July 29, 2024, has issued a consultation paper on the proposed amendments to the Insider Trading Norms. The key goals are to refine the definition of "connected person" to align with the Companies Act, 2013 and harmonise the definition of "relative" to match the Income Tax Act, 1961, while retaining the term "immediate relative" but removing its explanatory note. SEBI also proposes including new categories of "deemed connected persons" who may have access to Unpublished Price Sensitive Information due to their proximity with the connected person.

The public consultation seeks comments on these changes to expand the regulatory scope without increasing compliance burdens.

The G20 Labour and Employment Ministers congregate in Fortaleza, under the Brazil presidency and endorse the Labour and Employment Ministerial declaration

The G20 Labour and Employment Ministers assembled in Fortaleza, Brazil approved the Labour and Employment Ministerial declaration on July 26, 2024. The declaration calls for governments to implement active inclusion policies to promote sustainable and balanced economic growth. It highlights the importance of creating formal jobs and decent work as key tools for equitable income distribution. Additionally, it advocates for measures to formalise jobs, address platform work, ensure adequate wage floors, provide social protection and encourage social dialogue and collective bargaining.

Leading the India delegation was Minister of State for Labour and Employment Smt. Karandlaje. In her remarks, she stressed the importance of skilling and reskilling for a just transition to greener alternatives, noting the need for robust social protection and retraining programs. She highlighted India's achievements in job creation over the years, with an increased youth participation in the labour force and welfare initiatives such as 'One Nation, One Ration Card' and 'Ayushman Bharat'. Smt. Karandlaje also emphasised the need for G20 countries to address ethical issues in technology, such as data privacy and artificial intelligence, through robust regulations and international collaboration.

MoEFCC circulates drafts proposing amendments to certain environmental laws

MoEFCC has released:

1. draft notifications dated July 19, 2024, for the amendment of the Water (Prevention and Control of Pollution) Rules, 1975, Air (Prevention and Control of Pollution) Rules, 1982, Environment (Protection) Rules, 1986, Public Liability Insurance Rules, 1991 and Environment Relief Fund Scheme, 2008; and
2. draft guidelines dated July 19, 2024, for devising a uniform mechanism for the grant of consent along with the regulations for exempting certain categories of industries have also been notified.

These amendments have been proposed for public consultation granting time for submission of comments. The changes are in consonance with the recent amendments to various environmental statutes.For a detailed analysis, please refer to the JSA Prism of July 31, 2024.

SEBI issues a circular enabling Environmental, Social and Governance ("ESG") Rating Providers ("ERPs") to undertake ESG rating activities under IFSCA

Under the SEBI (Credit Rating Agencies) Regulations, 1999 and the Master circular of ERPs, an ERP may undertake or offer ESG rating of any product or issuer, as may be required by another financial sector regulator or authority, under the guidelines of such regulator or authority. In furtherance of the same, the capital markets regulator added the International Financial Services Centres Authority ("IFSCA") which will now enable ERPs to undertake ESG rating activities in the International Financial Services Centre, Gujarat International Finance Tech-city. The SEBI circular, however, categorically mentions that the ESG ratings undertaken by an ERP under the guidelines of IFSCA will be under the purview of IFSCA only. Therefore, IFSCA has been empowered to oversee ERPs operating within the IFSC-GIFT City.

The Ministry of Corporate Affairs ("MCA") notifies the Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2024

MCA has introduced amendments to the Companies (Appointment and Qualification of Directors) Rules, 2014, which have come into effect on August 1, 2024. These changes aim to enhance transparency and simplify the procedures for appointing directors. Notably, the amendment to rule 12A now mandates that updates made to personal information of directors must be done in specified form by September 30^th of each financial year. Additionally, a new provision has been introduced allowing directors to update their mobile numbers and email addresses in real time, replacing the previous annual update process. Previously, directors had to file their KYC annually, with contact information updates only possible in the following April, often leading to outdated details during organisational changes or restructuring.

This new approach ensures continuous and accurate communication, facilitating seamless transitions and reducing disruptions.

MCA notifies the Companies (Significant Beneficial Owners) Amendment Rules, 2024

The Companies (Significant Beneficial Owners) Rules, 2018 is a framework established for identifying persons holding beneficial ownership of a company i.e. persons holding a significant stake in the company either directly or indirectly, to ensure transparency and prevent fraudulent activities.

A company is required to report information pertaining to its Significant Beneficial Owners ("SBOs") in Form BEN-2. The amended rules have revised the existing format of Form BEN-2 and replaced it with a newer form which highlights the importance of thorough documentation and requires digital signatures from authorised personnel. This form ensures that the information provided is accurate and verified by a professional such as a chartered accountant, cost accountant or company secretary.

SEBI notifies amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

SEBI, vide notification dated July 10, 2024, notified the SEBI (Listing Obligations and Disclosure Regulations) (Second Amendment) Regulations, 2024. Regulation 52(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates listed entities to publish its financial results in at least 1 (one) English national daily newspaper circulating in the whole or substantially whole of India, within 2 (two) working days of the meeting of the board of directors. The amendment adds a new proviso to this requirement which will now allow listed entities to publish only a window advertisement in the newspaper that refers to a Quick Response Code and the link of the website of the listed entity and stock exchange(s), where such financial results are available and capable of being accessed by the investors subject to the following conditions:

1. for non-convertible securities outstanding as on the date of notification of this proviso, the listed entity has obtained the prior approval from the debenture trustee; and
2. in case of any issuances after the date of notification of this proviso, the listed entity will either make a disclosure in the offer document regarding the window advertisement in the newspapers or obtain prior approval from the debenture trustee.

Centre releases scheme guidelines for funding testing facilities, infrastructure and institutional support as part of the National Green Hydrogen Mission

On July 4, 2024, the Ministry of New and Renewable Energy ("MNRE") issued guidelines for funding under the National Green Hydrogen Mission. The scheme aims to address gaps in testing facilities and infrastructure for green hydrogen and its derivatives, supporting both the creation of new facilities and the upgradation of existing ones. With a total budget of INR 200,00,00,000 (Indian Rupees two hundred crore) until FY 2025-26, the National Institute of Solar Energy ("NISE") will implement the scheme. This initiative will enhance quality, safety, and sustainability in green hydrogen production and trade. Launched on January 4, 2023, with a budget of INR 19,744 crore (Indian Rupees nineteen thousand seven hundred and forty-four crore) until FY 2029-30, the National Green Hydrogen Mission seeks to boost India's self-reliance in clean energy, reduce fossil fuel dependence and position India as a leader in green hydrogen technology.

Bureau of Energy Efficiency ("BEE") releases compliance mechanism for the Indian Carbon Market ("ICM")

BEE has released a detailed procedure for the Compliance Mechanism of the ICM , aiming to implement the Carbon Credit Trading Scheme, 2023 ("CCTS"). It aims to assist in achieving India's Nationally Determined Contributions ("NDC") targets by pricing Greenhouse Gas ("GHG") emissions through Carbon Credit Certificates ("CCCs"). Obligated entities will be required to achieve GHG emission intensity targets as notified by MoEFCC. If reductions are more than the target levels the entity will earn CCCs and if it fails in achieving targeted reductions, it will be required to either surrender its CCCs or purchase new CCCs. The Central Government, based on recommendations from the National Steering Committee, will identify obligated entities and set out sector-specific GHG emission intensity trajectories in collaboration with BEE. Emissions will be calculated from all energy sources used, monitored within a fixed boundary, and reported to BEE.

Within 4 (four) months after the compliance year ends, each obligated entity will be required to submit a performance assessment document, detailing their adherence to GHG emission intensity targets, to the BEE and State Designated Agency. The entity should also appoint an accredited carbon verification agency to verify this performance according to the defined accreditation criteria and procedures.

CCCs will be issued following verification and committee recommendations. Further, trading of CCCs will require registration of the entities on the ICM Registry as per the Central Electricity Regulatory Commission procedures. Non-obligated entities can also register on ICM to trade CCCs. The CCCs remaining at the end of a compliance year can be banked for future use or sold within the ICM.

The Finance Minister of India presented the Union Budget of 2024 – 25

The Union Budget 2024-25 was presented in the Parliament on July 23, 2024 which focused on promoting clean energy, employment and skill development, securing critical mineral supply chains and creation of clean energy finance taxonomy among other changes. Following are some of the highlights:

1. the budget highlighted 5 (five) key schemes for employment and upskilling:
   • first timers scheme: under this subsidy scheme 1 (one) month wage will be provided to all persons newly entering the workforce in all formal sectors. First-time employees registered with the Employees' Provident Fund Organisation ("EPFO") will receive up to INR 15,000 (Indian Rupees fifteen thousand) through direct benefit transfer in 3 (three) instalments;
   • job creation in manufacturing: this scheme is aimed at incentivising additional employment in manufacturing sector, linked to employment of first timers. Incentive will be given to both employee and employer for EPFO contributions in the specified scales for the first 4 (four) years;
   • support to employers: employers who increase employment as per the threshold prescribed will be eligible for reimbursement up to INR 3,000 (Indian Rupees three thousand) per month for 2 (two) years towards EPFO contribution of employers, for each additional employee hired in the previous year;
   • skilling programme: a centrally sponsored initiative in collaboration with state governments and industry for skilling 20,00,000 (twenty lakh) youth over 5 (five) years. This programme includes upgrading existing industrial training institutes and establishing additional ones; and
   • internship in top companies: the Government plans to launch a comprehensive scheme for providing internship opportunities in top companies to 1,00,00,000 (one crore) youth over 5 (five) years;
2. in a consistent effort to tackle climate change, the PM Surya Ghar Muft Bijli Yojana, which aims to install rooftop solar panels in 1,00,00,000 (one crore) homes and provide up to 300 (three hundred) units of free electricity per month, stands out as a significant initiative. This initiative is instrumental in the significant increase of allocation for the solar energy sector which has translated to a 110% rise from the previous year's budget;
3. the Government will also develop a 'taxonomy for climate finance' to improve access to capital for climate adaptation and mitigation, supporting India's climate goals and green transition. To boost climate action, funding from public, private and international sources is necessary and a home-grown taxonomy will ensure that only genuine climate finance is categorised as such;
4. a total of 109 (one hundred and nine) new high-yield and climate-resilient varieties of 32 (thirty-two) field and horticulture crops will soon be available for farmers to cultivate. Over the next 2 (two) years, 10,000,000 (ten million) farmers will be introduced to natural farming, with support including certification and branding. These government initiatives represent a broad strategy to revolutionise agriculture by emphasising climate resilience, increasing productivity and improving efficiency;
5. to bolster domestic manufacturing and decrease dependence on imports, the budget removes basic customs duties on 25 (twenty-five) essential minerals crucial for renewable energy, nuclear energy, and high-tech industries. This measure aims to strengthen the domestic supply chain and expand manufacturing capabilities;
6. the budget envisages to provide financial support to help micro and small industries transition to cleaner energy and improve their energy efficiency. The government will also conduct investment-grade energy audits for these industries in 60 (sixty) clusters, including brass and ceramic. The scheme will expand to 100 (hundred) more clusters in the next phase; and
7. to enhance electricity storage and facilitate seamless integration of increasing share of renewable energy in the overall energy mix, a pumped storage policy will be introduced. Highlighting the importance of energy transition in combating climate change, the budget also expanded the list of exempted capital goods for manufacturing solar panels and cells. However, the budget proposed ending customs duty exemptions for solar glass and tinted copper interconnects, citing adequate domestic manufacturing capability.