Introduction

Edition 3/20-21

Week – August 3rd to 7th

We welcome you to our weekly newsletter for this week!

As part of our knowledge sharing and growth, we had launched the ‘Swift e-Bulletin’ - weekly newsletter, which is specifically designed to cover all regulatory updates and critical judgement passed during the week. We hope that you liked our first and second edition and found it to be of great value in its content. We want this newsletter to be valuable for you so, please share your feedback and suggestions to help us improve.

In the wake of COVID-19, we all are witnessing many relaxations, exemptions and amendments to the various legislations by regulatory authorities to ease out the operations during this time of crisis.

Further, the Reserve Bank of India (“RBI”), the Ministry of Corporate Affairs (“MCA”), the Securities and Exchange Board of India (“SEBI”) and the Ministry of Finance (“MOF”) have been at the front foot in bringing significant regulatory changes in recent times. With a constant endeavor to cover all regulatory updates at one place, we have prepared a comprehensive summary for quick reference of such updates issued during the week of August 3, 2020 to August 7, 2020.

Thank you,

Swift Team

Table of Contents

REGULATORY UPDATES

MCA UPDATES

1. MCA grants further relaxation for dispatch of notice u/s 62(2) of the Companies Act 2013 for Rights Issue opening up to 31st December 2020 via General Circular dated August 3, 2020:

The Ministry came up with general circular No 21/2020 dated May 11th 2020 regarding clarification in dispatch of notice under section 62(2) of the companies act 2013 by listed companies for Rights issue opening up to July 31, 2020. Many representations were received for extending the deadline for such dispatch due to the prevailing Pandemic and in the view of this the ministry has decided that clarification given in para 2 of general circular No 21/2020 would continue to be applicable  for  rights issue, in case of listed companies, opening up to December 31, 2020 and accordingly inability  to dispatch the relevant notice to shareholders through registered post, speed post or courier would not be viewed as violation of section 62(2) of the act for rights issues opening up to December 31, 2020. To read more please click on the link below:

Link:-  http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.25_03082020.pdf

SEBI UPDATES

1. SEBI introduces Procedural Guidelines for Proxy advisors vide circular dated August 3, 2020:

Regulation 24(2) read with 23(1) of SEBI (Research Analyst) Regulations, 2014 mandates proxy advisors to abide by Code of Conduct specified therein. It is decided that proxy advisors shall also comply with the following procedural guidelines:

• • Proxy Advisors shall formulate the voting recommendation policies and disclose the updated voting recommendation policies to its clients and shall ensure that the policies should be reviewed at least once annually. The voting recommendation policies shall also disclose the circumstances when not to provide a voting recommendation.
  • Proxy Advisors shall disclose the methodologies and processes followed in the development of their research and corresponding recommendations to its clients.
  • Proxy Advisors shall alert clients, within 24 hours of receipt of information, about any factual errors or material revisions to the report.
  • Proxy Advisors shall have a stated process to communicate with its clients and the company.
  • Proxy Advisors shall share their report with its clients and the company at the same time. This sharing policy should be disclosed by proxy advisors on their website.
  • Proxy Advisors shall clearly disclose in their recommendations the legal requirement vis-a-vis higher standard they are suggesting if any, and the rationale behind the recommendation of higher standards.
  • Proxy Advisors shall disclose conflict of interest on every specific document where they are giving their advice.
  • Proxy Advisors shall establish clear procedures to disclose, manage and/or mitigate any potential conflicts of interest resulting from other business activities including consulting services, if any, undertaken by them and disclose the same to client.

To read the circular, click on the link below:

Link:- https://www.sebi.gov.in/legal/circulars/aug-2020/procedural-guidelines-for-proxy-advisors_47250.html

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