The B&B Regulatory Updates #8: SEBI on exit offers, Copyright office under DIPP & more

Bar & Bench will bring you the latest regulatory and policy updates from different ministries and regulatory authorities. In this edition of the Bar & Bench Regulatory Updates, we analyse the latest circulars issued by the SEBI, CBEC and more..Exit offers exempt from contra trade restrictions.The SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) were notified on 15 January 2015. Following the enforcement, certain queries were raised by the market with respect to interpretation of some provisions of the PIT Regulations..As a result, on 24 August 2015, SEBI, while exercising its power under regulation 11 of the PIT Regulations, issued a guidance note inter alia stating that buy back offers, open offers, rights issues, FPOs, bonus, etc. would be exempted from contra trade restrictions. .Subsequently, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 were amended with effect from 17 February 2016 to provide for exit opportunity to dissenting shareholders in terms of sections 13 and 27 of the Companies Act, 2013. .In order to align this amendment with the provisions of the PIT Regulations, SEBI issued a circular dated 12 April 2016. SEBI has said that exit offers that give dissenting shareholders an opportunity to sell their shares in a listed company would also be exempted from contra trade restrictions. This provision is to take effect retrospectively from 17 February 2016..Govt eases norms for setting up Liaison Office by foreign entities.Until now, the Reserve Bank of India (RBI) had the power to grant approvals to foreign entities for establishment of Branch Office/Liaison Office/ Project Office in India. .The Ministry of Finance issued a statement on 12 April 2016 informing that, barring a few sectors viz. defence, telecom, private security, information and broadcasting and non government organisations, the power to grant approvals has now been delegated to designated banks..“Further, anyone who has been awarded a contract for a project by a Government authority/PSU would be automatically given approval to open a bank account”, the statement added.The establishment of such offices in India by foreign entities is regulated under the Foreign Exchange Management Act, 1999. Necessary amendments have been made through a notification dated 31 March 2016 by the RBI..Simplification of procedure to deal with audit objections.In an effort to make the indirect tax administration assessee friendly and avoid unnecessary litigation, Central Board of Excise and Customs issued a circular simplifying the procedure of dealing with audit objections raised in indirect taxes by the office of Comptroller and Auditor General (CAG). With this circular coming into effect, all past instructions and circulars have been rescinded..Taking note of the fact that revenue and audit have agreement on large proportion of the audit objections, the circular provides that demand notice in such cases should be issued immediately without transferring the case to the Call-Book. In fact, transfer of any show cause notice to the Call-Book has been discontinued henceforth..However, where revenue does not agree with the objections raise by the audit, demand notice would not be issued. In such cases, a statement of facts is to be issued to the jurisdictional Commissioner/ Additional Commissioner..The Circular also acknowledges the adjudicating authority as a quasi-judicial authority, which must adjudicate cases independently and judiciously taking into the account views from both the sides..Furthermore, regular coordination between the Revenue and the CAG officer has also been prescribed for faster resolution..DIPP now in-charge of Copyright Office.The Government of India recently announced that that it will finally be shifting the Copyright Office from the Ministry of Human Resources Department to the Department of Industrial Promotion and Policy (DIPP), which functions under the Ministry of Commerce and Industry (MCI). The move appears to be an attempt to consolidate all Intellectual Property related functions under one Ministry. The DIPP already administers the Patents Act, 1970, The Trade Marks Act, 1999, The Designs Act, 2000 and the Geographical Indication of Goods (Registration and Protection) Act, 1999..The announcement was made at a programme, conducted by Federation of Indian Chambers of Commerce and Industry along with participation by the DIPP, MCI and the World Intellectual Property Organization. The programme was aimed at highlighting the key issues of piracy and counterfeit in publishing.