#FEMA (Transfer or Issue of Security by a Person Resident outside India) 9th Amendment Regulations,2015

RESERVE BANK OF INDIA

(Foreign Exchange Department)

(CENTRAL OFFICE)

NOTIFICATION

Mumbai, the 6th October, 2015

No. FEMA. 353 /2015-RB

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Ninth Amendment) Regulations, 2015

G.S.R. 759 (E).—In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No. FEMA.20/2000-RB dated 3rd May, 2000), namely:-

1. Short Title & Commencement

(i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Ninth Amendment) Regulations, 2015. (ii) They shall come into force from the date of their publication in the Official Gazette.

2. Amendment to Schedule 5:-

In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No. FEMA 20/2000-RB dated 3rd May 2000), in Schedule 5,

(A) in paragraph 2,

(i) the existing sub-paragraph (3) shall be re-numbered as Paragraph 2C

(ii) after the existing sub-paragraph (2), the following shall be added namely:-

“(3) A Non- Resident Indian may subscribe to National Pension System governed and administered by Pension Fund Regulatory and Development Authority (PFRDA), provided such subscriptions are made through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act. The annuity/ accumulated saving will be repatriable.”

(iii) after adding sub-paragraph (3) in paragraph 2, the existing paragraph 2C shall be re-numbered as sub-paragraph (4) in Paragraph 2.

(B) In paragraph 3, after the existing sub-paragraph (2), the following shall be inserted namely:-

“(2A) A non-resident Indian who subscribes to the National Pension System, under sub-paragraph (3) of paragraph (2) of this Schedule shall make payment either by inward remittance through normal banking channels or out of funds held in his NRE/FCNR/NRO account.”

[ F. No. 1/26/EM/2015]

B.P. KANUNGO, Principal Chief General Manager

Supreme Court Verdict on Amendment to Overrule a Judgement is not Valid

Honourable Supreme Court in ACIT (Agr. IT) vs. Netley ‘B’ Estate has held that while an amendment to overrule a judgement is not valid, it is permissible to retrospectively alter the character of the levy so as to save it from illegality – (2015-ITRV-SC-163)

#GST to be implemented w.e.f April 1, 2016

GST constitutional amendment may be passed in Winter Session of Parliament

The GST, a much-awaited reform to replace multiple indirect taxes with one levy shall be implemented with effect from April 1, 2016 as all preparations including rules, legislation and others have been duly undertaken.

GST will be a very efficient system of tax collection as there will be no scope for tax evasion and tax base would be widened and collection would be much higher under the GST regime for both the Centre and the states.

GST will promote ease of doing business and would boost the GDP by about two per cent.

Safety and security measures shall be taken care of as GST net has already offered the states to come up on information technology at par.

With almost 90 per cent of villages without electricity in India the issue of rural electrification is being addressed to ensure smooth implementation of the GST.

There is consensus to impose purchase tax on agriculture produce and therefore it will come under the purview of the GST.

GST is necessary for India’s economic development. Consumers are paying about 29 per cent both visible and invisible tax, hopefully GST will be on a lower side.”

Rate of service tax will go up from the existing 16 per cent but the exact percentage could be known only after the declaration is made.

#SEBI directs #Mutual Funds to Improve Monthly Disclosure Transparency

The Securities and Exchange Board of India (SEBI) has directed mutual fund houses to standardize their fact sheets or the monthly information documents sent to unit holders. The move is aimed at bringing about more transparency and uniformity and helping investors take more informed investment decisions.

Asset management companies (AMCs) will have to provide information such as dividend history and total monthly expenses in a format prescribed by the Association of Mutual Funds of India (Amfi). Also, fund houses will have to present certain data in a graphical and easy-to-read manner. The move follows Sebi citing lack of uniformity in the fact sheets presented by various fund houses.

Further, AMCs should filter information that was non-standardised and define parameters for information that differed in content, formula and presentation across different fund houses, it added.

Though publishing fact sheets isn’t mandatory under Sebi’s mutual fund regulations, AMCs have been doing so for several years.

The use of technologies and systems varies across fund houses — if a particular fund house highlights an additional parameter based on its investment philosophy, it is considered a requirement for other fund houses.

Hence, SEBI wants a better and improvised disclosure standard for the mutual funds to have an effective monitoring system.

#SEBI Seeks Greater #NBFC #Disclosure

The Securities and Exchange Board of India (Sebi) has asked non-banking financial companies (NBFCs) to issue detailed disclosures while launching a public offer of debt securities to raise funds.

The norms, which will be applicable to draft offer documents to be filed on or after November 1, have been finalised on the basis of feedback from market entities. Sebi seeks to align the norms in line with the stipulations required by the Reserve Bank of India (RBI).

The NBFCs would now need to disclose “aggregated exposure to the top 20 borrowers with respect to the concentration of advances”, against the current requirement for top 10 borrowers. They would also need to disclose the details of loans, which are overdue and classified as non-performing according to RBI guidelines.

If any of the borrowers of the NBFCs form part of the ‘group’ as defined by RBI, appropriate disclosures would need to be made in a prescribed format. They will need to mention the name of all such borrowers, the amount of advances, and the percentage of total assets under management.

Further, in order to allow investors to better assess the NBFC issue, it has been decided that some additional disclosures would need to be made in the offer documents.

These disclosures would include a portfolio summary on the sectors to which the NBFCs have lent. The quantum and percentage of secured and unsecured borrowings would also need to be mentioned.

The other details that need to be disclosed include any change in promoters’ holdings in NBFCs during the last financial year beyond a particular threshold. At present, RBI has prescribed such a threshold level at 26 per cent. The same threshold would be applicable or as may be prescribed by RBI from time to time.

Sebi said the NBFCs would also need to state a lending policy, containing overview of origination, risk management, monitoring and collections. Besides, the classification of loans or advances given to associates, entities or persons related to the board, senior management, or promoters etc, would need to be disclosed.