REGULATORY UPDATES– 12TH JULY, 2018

BSE POSTPONES SME START-UP LAUNCH:

The awaited launch for start-up platforms was supposed to be released on 9th July, 2018 which has been postponed by BSE for listing start-ups. The platform was aimed at facilitating the listing of companies in the sectors such as IT, ITES, bio-technology and life sciences, 3D printing, space technology and e-commerce. It was targeted to aid the listing of companies from hi-tech defence, drones, nano technologies, artificial intelligence, big data, virtual reality, e-gaming, robotics, genetic engineering, among other sectors.

In a circular dated 21st June, 2018, the exchange had announced BSE start-up platform in its SME (small and medium enterprise) segment to provide further incentive to start-ups. As per the criteria for the listing on the platform, the company was required to have a pre-issue paid up equity share capital of a minimum of Rs 1 crore. This circular was to be updated by 9th July which has now been postponed.

RBI REPORTING:

Foreign Assets and Liabilities Return (FLA)

Annual Return on FLA has been notified under FEMA 1999 and it is required to be submitted by all the India resident Companies which have received Foreign Direct Investment (FDI) or made any overseas investment in any of the previous years, including current year to the RBI. Non-filing of the return before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.

It is to be submitted by15th July every year and if the Company’s accounts are not audited before the due date of submission, then the FLA Return should be submitted based on unaudited (provisional) account.

The penalty under FEMA Act for contravention of law or submission of misleading fact, the amount of penalty may be 300% of the sum involved in contravention or Rs. 2 lakhs if the offense is non-quantifiable and if the contravention is continuing every day, then Rs. 5,000 for every day after the first day during which the contravention continues and the powers to compound the contraventions have been delegated to all Regional Offices of RBI without any limit on the amount of contravention.

 Entity Master Form

This form has to be filled by the Indian Companies and LLPs that have existing foreign investment including indirect foreign investments, to provide data input on total foreign investment received till date by them. The said form is to be duly filled from 28th June 2018 to 12th July 2018, which has now been extended by RBI till 20th July, 2018.

 Single Master Form

This form will be an event-based form aiding in reporting the total foreign investment in India made by a person residing outside India. The RBI is yet to notify the form on the website which has to be duly filled after EMF.

CCI DISMISSES COMPLAINT AGAINST IOCL, BPCL, HPCL

On 5th July, the Competition Commission has dismissed a complaint alleging unfair business practices against oil marketing companies – Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL).  The compliant was about terms and conditions in the tenders for transportation of liquefied petroleum gas through tank trucks.The commission decided on the complaint filed for the unfair trade practises being followed by IOCL, BCL and HPCL which was then concluded by the CCI to be not in violation of abuse of market position and neither to anti-competitive agreements under Section 3 or Section 4 of the Competition Act.

CCI PENALISES SOUTH ASIA LPG COMPANY FOR UNFAIR BUSINESS PRACTICES

In another order, Competition Commission of India (CCI) has slapped a fine of Rs 19.07 crore on South Asia LPG Company Pvt Ltd (SALPG) for abusing its dominant position with respect to providing terminalling services at Visakhapatnam port as on July 11, 2018.

The case pertains to access to upstream LPG terminalling infrastructure at Vishakhapatnam port and the infrastructure, being operated by SALPG, used for handling imports of propane and butane and their blending into LPG.

SEBI HAS ISSUED MASTER CIRCULAR FOR MUTUAL FUNDS:

For effective regulation of the Mutual Fund Industry, the Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Mutual Funds has been issued by SEBI on 10th July, 2018.

SEBI PENALISES 2 BROKER FIRMS FOR STOCK MARKET TRADING FRAUD, SLAPS RS 1.6 CRORE FINE

Markets regulator SEBI as on July 3,2018 has slapped penalties totalling Rs 1.6 crore on two entities for indulging in fraudulent trading in shares of Kavveri Telecom Products Ltd (KTP). SEBI in an order said it has levied a fine of Rs 90 lakh on Antala Real Broking & Impex Private Ltd and a penalty of Rs 70 lakh on Vishu Enterprises.  The probe found that these entities along with other connected entities had created false or misleading appearance of increased trading in the securities market and artificially raised the volume in KTP shares by way of synchronised trading; and had indulged into price manipulation of the scrip by way of placing orders beyond last trading price, placing first order beyond LTP, creating ‘new high price’ in the scrip.

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