Updates of MCA, SEBI, & RBI for the month of October 2021

Updates of the Ministry of Corporate Affairs (MCA)

Circulars

♦ Relaxation in payment of Additional Fees in case of delay in filing Form 8 (LLP): General Circular No. 16/2021 dated 26^th October, 2021

• The Ministry of Corporate Affairs (MCA) vide its General Circular No. 16/2021 dated 26^th October, 2021 has provided relaxation in paying Additional Fees in case of delay in filing Form 8 (LLP) [Statement of Account & Solvency].

• It shall be noted that the Limited Liability Partnerships (LLPs) can file Form 8 [Statement of Account & Solvency] for the Financial Year 2020-21 without paying additional fees up to 30^th December, 2021.
• However, it is important to note that if LLP fails to file Form 8 [Statement of Account & Solvency] within extended due date i.e. 30^th December, 2021 then additional fees of Rs.100/- per day will be levied from the original due date i.e. 30^th October, 2021.

♦ Relaxation in payment of additional fees in case of Annual Filing Forms required to be filed under the Companies Act, 2013 | General Circular No. 17/2021 dated 29^th October, 2021

• The Ministry of Corporate Affairs (MCA) vide its General Circular No. 17/2021 dated 29^th October, 2021 has provided relaxation on levy of additional fees for Annual Filing Forms required to be filed under the Companies Act, 2013.

• It shall be noted that no additional fees will be imposed up to 31^st December, 2021 for filing following e-forms for the Financial Year 2020-21;

♦ Extension of last date of filing Cost Audit Report to Board of Directors: 

Extension of last date of filing of Cost Audit Report to the Board of Directors under Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014 |  General Circular No. 18/2021 dated 29^th October, 2021

• It shall be noted that as per Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014, every Cost Auditor shall forward his duly signed report to the Board of Directors of the company within a period of 180 days from the closure of the financial year to which the report relates and the Board of Directors shall consider and examine such report, particularly any reservation or qualification contained therein.
• Further, the Ministry of Corporate Affairs (MCA) vide its General Circular No. 15/2021 dated 27^th September, 2021 has extended the last date of filing of Cost Audit Report to the Board of Directors by one month i.e. till 31^st October, 2021.
• It shall be noted that the Ministry of Corporate Affairs (MCA) has once again extended the due date of filing Cost Audit Report to the Board of Directors.
• The Ministry of Corporate Affairs (MCA) vide it General Circular No. 18/2021 dated 29^th October, 2021 has again extended the due date of filing Cost Audit Report to the Board of Directors by another one month i.e. till 30th November, 2021.

Updates of the Securities Exchange Board of India (SEBI) Rules or Regulations

Circulars

♦ Disclosure of Complaints against the Stock Exchange (s) and the Clearing Corporation(s):

• Circular [No. SEBI/HO/CDMRD/DoC/P/CIR/2021/636] Dated: 4th October, 2021 on Disclosure of Complaints against the Stock Exchange (s) and the Clearing Corporation(s) With effect from 1^st January, 2022
• SEBI vide its circular dated 4th October, 2021 has directed Stock Exchanges and Clearing Corporation to disclose on their websites, the data on complaints received against them and redressal thereof, latest by 7th of succeeding month as per the format prescribed by the SEBI.
• Further, the SEBI has advised the Stock Exchanges and Clearing Corporations to make necessary amendments to the relevant bye-laws, rules and regulations and further communicate to SEBI, the status of the implementation of the provisions of this circular through the Monthly Development Report (MDR).

♦ Revised Formats for filing financial information under the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015:

• SEBI has vide notification dated 7th September, 2021 amended Regulation 52 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 where it was being mandated that entities that have listed non-convertible securities to disclose financial results on a quarterly basis, including assets & liabilities and cash flows as well as requiring certain changes in the line items in the financial results.
• Circular No. SEBI/HO/DDHS/CIR/2021/0000000637 dated : October 5, 2021 on revised Formats for filing financial information under the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015

• By keeping in view the above notification, SEBI has provided following revised formats for filing financial information through Circular No. SEBI/HO/DDHS/CIR/2021/0000000637 dated : October 5, 2021.

♦ Revised Formats for Limited Review/ Audit Report for issuers of non-convertible securities| Circular [No. SEBI/HO/DDHS/CIR/2021/0000000638] Dated: October 14, 2021 on revised Formats for Limited Review/ Audit Report for issuers of non-convertible securities

• SEBI has vide notification dated 7^th September, 2021 amended Regulation 52 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 where it was being mandated that the entities that have listed nonconvertible securities shall disclose financial results on a quarterly basis, including assets & liabilities and cash flows as well as requiring certain changes in the line items in the financial results.

• By keeping in view the above mentioned circular, SEBI has provided following formats of Limited Review/ Audit Reports to be adopted by listed entities (whose non-convertible securities are listed) other than insurance companies through Circular [No. SEBI/HO/DDHS/CIR/2021/0000000638] Dated: October 14, 2021.

♦ Streamlining issuance of SCORES Authentication for companies intending to list their securities on SEBI recognized stock exchanges:

• SEBI had vide its Circular No. CIR/OIAE/1/2014 dated 18th December, 2014 directed all listed companies and SEBI registered intermediaries (excluding Stock Brokers and Depository Participants) to send their details as per Form-A and Form-B respectively, annexed to the said Circular, to SEBI in hard copy and by email to scores@sebi.gov.in in order to obtain SCORES user id and password for redressing investor grievances on SCORES.
• Further, SEBI had automated the generation of SCORES credentials for all new SEBI registered intermediaries (except brokers and depositories) and thereby dispensing with the requirement of sending Form-B to SEBI.
• Now, SEBI vide its Circular No. SEBI/HO/OIAE/IGRD/CIR/P/2021/642 dated 14th October, 2021 has introduced an online mechanism for obtaining SCORES credentials for all “companies intending to list their securities on SEBI recognized stock exchanges”. The online form can be accessed on the SCORES website scores.gov.in. This has been done as part of SEBI’s green initiative and to streamline the redressal of investor grievances against companies before listing.

Circular No. SEBI/HO/OIAE/IGRD/CIR/P/2021/642 Dated: October 14, 2021 on Streamlining issuance of SCORES Authentication for companies intending to list their securities on SEBI recognized stock exchanges:

• Companies shall attach a declaration, with the online form, on the letter head of the company signed by the Compliance Officer, as under;

√ Companies intending to list on Main Board: A Declaration that the DRHP has been submitted with SEBI.

√ Companies intending to list on SME/Debt Platform of stock exchange: A Declaration that an application to list its securities has been submitted with the stock exchange/in-principal approval to list its securities has been obtained from the stock exchange.

• The SCORES credentials shall be sent to the e-mail id of the Compliance Officer/Dealing Officer as provided in the online form.

Updates of the Reserve Bank of India (RBI)

Notification

♦ Opening of Current Accounts by Banks – Need for Discipline:

Notification on opening of Current Accounts by Banks – Need for Discipline dated 29^th October, 2021

RBI vide its notification No. RBI/2021-22/116 DOR.CRE.REC.63/21.04.048/2021-22 Dated: October 29, 2021 has decided that banks may open current accounts for borrowers who have availed credit facilities in the form of cash credit (CC)/ overdraft (OD) from the banking system as per the provisions below:

√ For borrowers, where the exposure of the banking system is less than ₹5 crore, there is no restriction on opening of current accounts or on provision of CC/OD facility by banks, subject to obtaining an undertaking from such borrowers that they shall inform the bank(s), as and when the credit facilities availed by them from the banking system reaches ₹5 crore or more.

√ In respect of borrowers where exposure of the banking system is ₹5 crore or more, such borrower can maintain current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the exposure of the banking system to that borrower.

• Further, other lending banks may open only collection accounts subject to the condition that funds deposited in such collection accounts will be remitted within two working days of receiving such funds, to the CC/OD account maintained with the above-mentioned bank maintaining current accounts for the borrower. In case none of the lenders has at least 10% exposure of the banking system to the borrower, the bank having the highest exposure may open current accounts. Non-lending banks are not permitted to open current accounts.

Recent Corporate News

*****

Disclaimer: The entire contents of this newsletter have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer the relevant existing provisions of applicable laws. The user of this information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. Further, in no event shall I be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.