Introduction

Edition 7/20-21

Week – August 31st to September 4th

Quote for the week:

"Success is the ability to go from failure to failure without losing your enthusiasm."

- Sir Winston Churchill

We welcome you to our weekly newsletter for this week!

The ‘Swift e-Bulletin’ - weekly newsletter, covers 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, various regulatory authorities have been proactive in bringing significant regulatory changes in recent challenging times. This week’s newsletter covers various circulars/notifications issued by certain regulatory authorities such as the Securities and Exchange Board of India (“SEBI”), the Ministry of Finance (“MOF”) and the Insolvency and Bankruptcy Board of India (“IBBI”) and critical judgements and orders passed by National Company Law Tribunal (“NCLT”), National Company Law Appellate Tribunal (“NCLAT”), SEBI, Reserve Bank of India (“RBI”), Supreme Court and High Court. With a constant endeavor to cover all regulatory updates and judgements/orders at one place, we have prepared a comprehensive summary for quick reference of such updates and Judgements orders issued during the week of August 31, 2020 to September 4, 2020.

Thank you,

Swift Team

Table of Contents

REGULATORY UPDATES

SEBI UPDATES

1. SEBI introduces temporary relaxation in processing of documents pertaining to Foreign Portfolio Investors (“FPIs”) due to COVID-19 vide circular dated August 31, 2020

• SEBI had issued circular No. SEBI/HO/FPI&C/CIR/P/2020/056 dated March 30, 2020, wherein it had prescribed temporary relaxation in processing of documents pertaining to FPIs due to COVID-19. Further, vide circular No. SEBI/HO/FPI&C/CIR/P/2020/104 dated June 23, 2020, the temporary relaxations were extended till August 31, 2020.
• In view of the representations received from various stakeholders, it has been decided that for the entities from jurisdictions which are still under lockdown, the temporary relaxations shall be extended to the entities from such jurisdictions till the time lockdown is lifted from such jurisdictions.
•  However, in-transit applications shall be processed on the basis of provisions of aforesaid circular dated March 30, 2020. It has further been stated that for the entities from jurisdictions where lockdown has already been lifted, the relaxation provided under the aforesaid circular dated March 30, 2020 shall not be applicable. All other terms and conditions specified in the aforesaid circular dated March 30, 2020 shall remain unchanged.

To read the circular in detail, please click here.

2. SEBI introduces relaxation from default recognition due to restructuring of debt. vide circular dated August 31, 2020:

• Credit Rating Agencies (“CRAs”) recognize default based on the guidance issued vide SEBI circulars dated May 3, 2010 and November 1, 2016. Further, SEBI vide circular dated March 30, 2020 had provided for relaxation from recognition of default owing to moratorium permitted by RBI and lockdown due to COVID-19 pandemic.
• SEBI has extended the relaxation given for default recognition on account of restructuring of debt. SEBI, in this regard, has directed that “based on its assessment, if the CRA is of the view that the restructuring by the lenders/ investors is solely due to COVID-19 related stress or under the RBI resolution framework, CRAs may not consider the same as a default event and/or recognize default till December 31, 2020”. However, appropriate disclosures in this regard shall be made in the Press Release.

To read the circular in detail, please click here.