Corporate Updates – 03-12-2015


RBI has reviewed the framework of External Commercial Borrowings (ECB) Policy and has issued the revised framework for the same. The guidelines for the revised ECB framework specifying the parameters and other terms and conditions and these parameters will apply in totality and not on a standalone basis. Criteria for raising ECB under both the routes, viz., the automatic route where entities do not require the prior approval of the Reserve Bank for raising ECB and the approval route where entities can raise ECB only with the prior approval of the Reserve Bank. The primary responsibility for ensuring that the ECB is in compliance with the applicable guidelines is that of the borrower concerned. Any contravention of the applicable provisions of ECB guidelines will invite penal action under the Foreign Exchange Management Act 1999 (FEMA). The new ECB framework will come into force from the date of publication, in the Official Gazette, of the relative Regulations issued under FEMA.


SEBI Board has decide on a number of crucial issues, including those related to listing of stock exchanges, regulating algorithmic trading and incentivizing green bonds. The regulator is also expected to discuss easier norms for trading in corporate bonds, in their recently held meeting. Other issues which were discussed include increase in limit of foreign portfolio investment in stocks from the existing 10 per cent, allowing retail investors to dial into earnings calls of companies, making business responsibility reporting mandatory for top 500 companies, exempting open offers triggered due to passive incidents such as increase in the voting rights of a shareholder due to the expiry of call notice period. Further, Unlisted companies raising funds through securities without having a public offer document will be exempt from penal action if they provide a refund option along with 15 per cent interest rate at the time of issuance of shares.

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