Introduction

Edition 4/20-21

Week – August 10th to 14th

We welcome you to our weekly newsletter for this week and we wish you all a very happy 74th Independence Day!

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 judgements passed during the week. We hope that you liked our previous editions 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”), Insolvency and Bankruptcy Board of India (“IBBI”) and the Ministry of Finance (“MOF”) have been at the front foot in bringing significant regulatory changes in recent times. The newsletter also covers critical Judgements and orders passed by National Company Law Tribunal (“NCLT”), National Company Law Appellate Tribunal (“NCLAT”), SEBI, RBI, Supreme Court and High Court. With a constant endeavor to cover all regulatory updates at one place, we have prepared a comprehensive summary for quick reference of such updates/Judgements and orders issued during the week of August 10, 2020 to August 14, 2020.

Thank you,

Swift Team

Table of Contents

REGULATORY UPDATES

MCA UPDATES

1. MCA released the report of Committee on Business Responsibility Reporting

The Ministry of Corporate Affairs (MCA) released on its website, its long-awaited committee report on Business Responsibility Reporting for Indian corporates. This Report has been constituted for preparing Business Responsibility Reporting formats for listed and unlisted companies. The Ministry of Corporate Affairs (MCA) is working closely with capital markets regulator SEBI for implementation of the ‘Business Responsibility and Sustainability Report (BRSR)’ framework in the country. In its report, the MCA Committee recommended a new reporting framework called as the ‘Business Responsibility and Sustainability Report (BRSR)’ to reflect better intent and scope of reporting on non-financial parameters. The committee recommended two formats for disclosures: one ‘comprehensive format’ and the second a ‘Lite version’. The committee further recommended that the implementation of the reporting requirements should be done in a gradual and phased manner. The committee also recommended that the BRSR be integrated with the MCA21 portal. As a long-term measure, the committee envisions that the information captured through BRSR filings be used to develop a Business Responsibility-Sustainability Index for companies. To read the report in detail, please click on the link below:

Link: http://www.mca.gov.in/Ministry/pdf/BRR_11082020.pdf

SEBI UPDATES  

1. SEBI introduces guidelines relating to resources for Trustees of Mutual Funds vide circular dated August 10, 2020

Regulation 18 (25) (B) (i) of SEBI (Mutual Funds) Regulations, 1996 deals with internal audit of Trustees by independent auditors appointed by the Trustees. Further, SEBI vide Circular No. MFD/CIR/09/014/2000 dated January 05, 2000 has dealt with the issue of providing administrative support including appointment of independent auditors for the Trustees to effectively discharge various responsibilities as cast upon them in the SEBI (Mutual Funds) Regulations, 1996. However, SEBI, in its interactions with the Trustees had received feedback for providing administrative assistance to Trustees in monitoring various activities of the AMCs. In view of the above, in addition to the above-mentioned provisions, it has been decided that:

• Trustees shall appoint a dedicated officer having professional qualification and minimum 5 years of experience in finance and financial services related field;
• The officer so appointed, shall be employee of the Trustees and directly report to the Trustees;
•  The scope of work for the said officer shall be specified by Trustees from time to time to support the role and responsibilities of the Trustees. The officer shall accordingly assist the Trustees and discharge the activities assigned to him;  and
• The said officer shall be treated as access person in terms of SEBI Circular No. MFD/CIR No.4/216/2001 dated May 08, 2001

Further, Trustees shall have standing arrangements with independent firms for special purpose audit and/or to seek legal advice in case of any requirement as identified and whenever considered necessary and the expenditure incurred for the above shall be charged under the clause 52(b)(iv) “fees and expenses of trustees” of SEBI (Mutual Funds) Regulations, 1996. Notwithstanding the above, the Trustees shall however continue to be liable for discharge of various fiduciary responsibilities as cast upon them in the SEBI (Mutual Funds) Regulations, 1996. To read more in detail, please click on the link below:

Link: https://www.sebi.gov.in/legal/circulars/aug-2020/resources-for-trustees-of-mutual-funds_47291.html

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