INDEX
SEBI UPDATES
- Boost to enhance participation in the corporate bond market – SEBI reduces denomination of debt securities and non-convertible preference shares
- SEBI introduces unit-based employee benefit schemes for InvITs and REITs
- SEBI introduces criteria and governance of migrated venture capital funds
- Filing requirements for schemes of AIFs availing dissolution period/additional liquidation period & conditions for in-specie distribution of assets AIFS
RBI UPDATES
- Prevention of Money-laundering (Maintenance of Records) Rules, 2005 – Amended
- RBI eases LRS norms for remittances to IFSCs
- RBI (Cyber Resilience and Digital Payment Security Controls for Non-Bank PSOs) Master Directions, 2024 – Notified
- Master Directions on Treatment of Wilful Defaulters and Large Defaulters - Notified
LABOUR UPDATES
- Amendments to the Tamil Nadu Shops and Establishments Act, 1947 – Notified
- Inclusion of insurance certificates made mandatory for establishments in Maharashtra
- Amendments to the Tamil Nadu Shops and Establishments Rules, 1948 – Notified
OTHER UPDATES
- KYC rules for directors tweaked
- Provisioning of satellite capacity on non – Indian satellites
- Self-declaration certificate limited for ADs of food and health sectors
- The Maharashtra Stamp Act – Amended
- Certain provisions of intellectual property legislations decriminalised
- Scheme for funding of testing facilities, infrastructure, and institutional support under national green hydrogen mission – Issued
SEBI UPDATES
BOOST TO ENHANCE PARTICIPATION IN THE CORPORATE BOND MARKET – SEBI REDUCES DENOMINATION OF DEBT SECURITIES AND NON-CONVERTIBLE PREFERENCE SHARES
Securities Exchange Board of India ("SEBI"), vide its circular dated July 3, 2024 ("Effective Date"), has, inter alia, made amendments in Chapter V (Denomination of issuance and trading of non-convertible securities) of the Master Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated May 22, 2024 ("Master Circular on Securities"). This amendment is brought in since the market participants expressed that lower ticket size of debt securities may encourage more non-institutional investors to participate in the corporate bond market which in turn may also enhance liquidity.
The following amendments have been made in Chapter V of the Master Circular on Securities:
(a) Reduction in denomination of securities - The issuer may issue debt security or non-convertible redeemable preference shares ("Debt Securities") on private placement basis at a face value of INR 10,000 (instead of INR 1,00,000 earlier), subject to the following conditions: (i) issuer shall appoint at least 1 merchant banker; and (ii) Debt Securities shall be interest/dividend bearing security paying coupon/dividend at regular intervals with a fixed maturity without any structured obligations; (b) credit enhancement - a list of 7 credit enhancements such as guaranteed bonds, partially guaranteed bonds, standby letter of credit backed securities, etc., are provided which will be permitted in Debt Securities. The documentation for the credit enhancements shall be verified by the credit rating agencies to ensure that (i) the support is unconditional, irrevocable, and legally enforceable till all the obligations of the security has been paid to the investors; and (ii) the support provider has a lower probability of default on a continuous basis, compared with the issuer, till the time such instruments are outstanding; (c) raising funds through tranche placement memorandum - With respect to a shelf placement memorandum or general information document which is valid as on the Effective Date of the circular, the issuer may raise funds through tranche placement memorandum or key information document at a face value at INR 10,000, provided at least 1 merchant banker is appointed to carry out due diligence in respect of such issuances. Necessary addendum shall be issued by such issuer to the shelf placement memorandum or general information document, as applicable.
The provisions of the circular shall be applicable to all issues of Debt Securities on private placement basis that are proposed to be listed from the Effective Date.
To read the circular click here
SEBI INTRODUCES UNIT-BASED EMPLOYEE BENEFIT SCHEMES FOR INVITs AND REITs
SEBI, vide its notification dated July 9, 2024, has notified the SEBI (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2024 ("InvITs Amendment Regulations") and the SEBI (Real Estate Investment Trusts) (Second Amendment) Regulations, 2024 ("REITs Amendment Regulations") (collectively referred to as "UBEB Amendment Regulations"), thereby amending the SEBI (Infrastructure Investment Trusts) Regulations, 2014 ("InvITs Regulations") and the SEBI (Real Estate Investment Trusts) Regulations, 2014 ("REITs Regulations"), respectively.
Through the UBEB Amendment Regulations, SEBI has introduced a framework for unit-based employee benefit scheme ("UBEB Scheme"). A UBEB Scheme means a scheme under which the investment manager grants unit options to its employees through an employee benefit trust. The employees of the investment manager shall include all directors of the investment manager except independent director. The UBEB Scheme shall be in the nature of unit option scheme and shall be implemented through a separate employee benefit trust to be created by an investment manager. An offer of UBEB Scheme shall not result in any additional cost to the Infrastructure Investment Trusts ("InvITs") / Real Estate Investment Trusts ("REITs"), their holding company or special purpose vehicle. The UBEB Amendment Regulations lay down the manner of receiving units by the employee benefit trust, manner of allotment of the units to the employee benefit trust by InvITs/REITs, limits to the secondary acquisition, role of nomination and renumeration committee, procedure to amend the terms of the UBEB Scheme, etc.
The UBEB Amendment Regulations specify that in case a new issue of unit is made under any UBEB Scheme, units so issued shall be listed immediately on all recognised stock exchange where the existing units are listed subject to certain terms and conditions. A trustee should be appointed for the employee benefit trust, who shall be registered with SEBI and shall be different from the trustees of the InvITs/REITs. There shall be a minimum vesting period of 1 year for the UBEB Scheme.
The UBEB Amendment Regulations also lay down other terms and conditions relating to procedures at the time of change of investment manager, compliance for insider trading norms, minimum provision of the trust deed, undertakings to be given, disclosures to be made, etc.
These provisions of the UBEB Amendment Regulations shall be applicable for all UBEB Schemes introduced on or after the date of the UBEB Amendment Regulations. The provisions regarding disclosure requirements shall also apply to any UBEB Schemes introduced prior and subsisting as on the date of the UBEB Amendment Regulations.
To read the InvITs Amendment Regulations click here & to read the REITs Amendment Regulations click here
To view the full article, click here.
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