The Ministry of Corporate Affairs recently brought much-awaited relief to purely debt-listed public and private companies by exempting them from the purview of 'listed companies' (and associated compliances) under the Companies Act 2013 and the rules thereunder. This amendment comes into effect on 1 April 2021. The rationale for the amended definition is to reduce the compliance burden and facilitate business for Indian companies.
The recent downfall of a prominent group helmed by a highly rated core investment company (CIC) brought the relatively lighter-touch regulatory regime for CICs into focus and demonstrated the need to strengthen the same. In this context, the Reserve Bank of India formed a working group to review the regulatory and supervisory framework for CICs and subsequently modified the regulatory regime based on the working group's recommendations.
In June 2020 the Ministry of Corporate Affairs issued the Companies (Share Capital and Debentures) Amendment Rules 2020, doing away with the non-convertible debentures (NCD) deposit requirement for all listed companies (including non-banking financial companies and home finance companies) in the context of their issuance of privately placed debentures. This article examines the genesis of the NCD deposit requirement and whether there is a case for further relaxations, among other things.
With the enactment of the Factoring Regulation Act 2011, for the first time a consolidated legal framework governing all aspects of and codifying the law applicable to factoring transactions was introduced in India. While the act's introduction was important, its Achilles heel has always been the limitations that it places on the types of entity which can engage in the factoring business – in particular, its peculiar treatment of non-banking financial companies, an important class of lenders in India.