Corporate and Commercial

With a view to curbing inadvertent trades in the securities of a listed entity during the trading window closure period (Blackout Period), the Securities and Exchange Board of India (SEBI) has introduced a circular dated 5 August 2022 (SEBI Circular) through which it intends to freeze the permanent account number (PAN) of designated persons (DP(s)), thereby restricting them from trading during the Blackout Period.

The Reserve Bank of India (RBI), on 6 July 2022, issued a press release on liberalisation of forex flows and announced a slew of measures to increase foreign exchange inflows into India. Following such press release, the RBI on 1 August 2022 issued a circular (A.P (DIR Series) Circular No. 11) (2022 ECB Circular), under which it has made certain temporary modifications to the existing regime on external commercial borrowings (ECBs) and such regulatory relaxations would be available for ECBs availed till 31 December 2022.

Overseas Investments by Indian party(ies) were hitherto governed by the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (Foreign Security Regulations) and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015 (Property Regulations) (collectively Erstwhile Regulations).

Digital lending has the potential to make financial products and services accessible to public in a more fair and efficient manner. However, there are certain inherent risks associated with digital lending (like any other lending activity) such as unbridled engagement of third parties, mis-selling, breach of data privacy, unfair business conduct, charging of exorbitant interest rates, and unethical recovery practices, which if not addressed may erode the confidence of the public in the digital lending.

As on 30 April 2022, the assets under management of the mutual fund (MF) industry in India stands at INR 38.04 lakh crore, with 45% of the total assets being routed through direct plans. With increasing focus on financial literacy, digitization, online banking, smartphones, and awareness about MFs, investors can leverage technology and directly invest in MFs, thereby necessitating the need to regulate the domain, especially the digital / technology platforms through which the execution of MF investments is undertaken for a direct plan.

The Securities Exchange Board of India (SEBI) released a consultation paper on 8 July 2022 proposing applicability of SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) to ‘units of a mutual fund’ (hereinafter “the Consultation Paper”). The PIT Regulations currently apply to dealings in ‘securities’ of listed / to be listed entities.

An infrastructure Investment Trust (InvIT) is a pooled investment vehicle like a mutual fund, that comprises of portfolio of infrastructure assets like, inter alia power transmission, road, pipelines and highways, and are becoming popular for monetising of infrastructure assets. Units of an InvIT may be issued by way of public issue, private issue and rights issue.