Regulatory Updates

As the government introduces further measures to ensure continuity of business in the midst of the ongoing country wide lock-down pursuant to the COVID – 19 outbreak, we have set out below an overview of the key corporate and commercial regulatory updates for the period between 28 March 2020 and 3 April 2020:

1. RESERVE BANK OF INDIA (RBI)

1. Extension of realisation period of export value of goods and services:
   1. On 31 March 2020, RBI amended the Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations 2020 to extend the time period for realise and repatriate the full export value of goods, software or services, from the currently prescribed period of 9 (nine) months (generally applicable for all exports, including those undertaken by units in SEZS, EOUs, EHTPs, STPs and BTPs) to 15 (fifteen) months from the date of the exports made upto or on 31 July 2020.

1. 2. However, the prescribed time period for the same as applicable to goods exported to warehouses established outside India, remains unchanged.
2. SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

1. Relaxations for Portfolio Managers: On 30 March 2020, existing timelines for (a) monthly reporting by Portfolio Managers and (b) applicability of the SEBI circular dated 13 February 2020 on ‘Guidelines for Portfolio Managers’ (which was otherwise to be effective from 1 May 2020), were extended by 2 (two) months.
2. Relaxations for AIFs and VCFs: On 30 March 2020, SEBI has extended due dates for regulatory filings by Alternative Investment Funds (“AIFs”) and Venture Capital Funds (“VCFs”), each for periods ending 31 March 2020 and 30 April 2020, by 2 (two) months from the prescribed timelines under the SEBI (AIF) Regulations 2012 and circulars issued thereunder.   
3. Temporary relaxation in processing of documents pertaining to FPIs:

1. On 30 March 2020, SEBI allowed depository participants (“DPs”) and custodians to process requests for registration / continuance / KYC / KYC review and any other material change, on the basis of: (i) scanned versions of signed documents; and (ii) copies of documents which are not certified (instead of originals and certified documents as otherwise mandated under the Operational Guidelines for Foreign Portfolio Investors (“FPIs”) and DPs), subject to fulfilment of certain conditions.
2. This relaxation shall be applicable only until 30 June 2020 and custodians and DPs are mandated to obtain the original / certified copies of such documents within 30 (thirty) days from 30 June 2020, failing receipt of which, the accounts of the concerned FPIs shall be blocked for any fresh purpose. If documents are still not received within 3 (three) months of the said deadline, DDPs and custodians will be required to report these cases to SEBI for appropriate action.

3. MINISTRY OF CORPORATE AFFAIRS (MCA)

1. Eligibility of contribution to PM CARES FUND as a CSR activity: Further to previous relaxations in this respect (see our Regulatory Update- Volume I), on 28 March 2020, a clarification was issued to the effect that contribution from corporate social responsibility (“CSR”) funds towards the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (“PM CARES Fund”) is also an eligible CSR activity.

For a detailed analysis of the abovementioned regulatory updates relating to Covid-19, please visit https://www.khaitanco.com/covid-19. We look forward to receiving your valuable feedback at editors@khaitanco.com and we would be happy to respond to your queries concerning this information.