The Central Government has introduced the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024, effective September 17, 2024. This amendment aims to simplify cross-border mergers and amalgamations involving Indian and foreign companies.
This update, effective September 17, 2024, was made under sections 233, 234 and 469 of the Companies Act, 2013.
Key Provisions
Prior Approval Requirement: Both the transferor foreign company and the transferee Indian company must obtain Reserve Bank of India approval before proceeding with the merger or amalgamation.
Compliance with Section 233: The transferee Indian company must adhere to Section 233 provisions, ensuring alignment with Indian company law.
Application Procedure: The transferee company will submit an application to the Central Government under Section 233, following Rule 25 guidelines.
Declaration: A declaration, as referenced in sub-rule (4), must accompany the application under Section 233.
In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with sections 233 and 234 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, namely :-
- (a) These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024.
(b) They shall come into force from the 17th day of September, 2024.
- In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, in rule 25A, after sub-rule (4), the following sub-rule shall be inserted, namely: –
“(5) Where the transferor foreign company incorporated outside India being a holding company and the transferee Indian company being a wholly owned subsidiary company incorporated in India, enter into merger or amalgamation, –
(i) both the companies shall obtain the prior approval of the Reserve Bank of India;
(ii) the transferee Indian company shall comply with the provisions of section 233;
(iii) the application shall be made by the transferee Indian company to the Central Government under section 233 of the Act and provisions of rule 25 shall apply to such application; and
(iv) the declaration referred to in sub-rule (4) shall be made at the stage of making application under section 233 of the Act.”.
Administrative Revisions in Maharashtra Shops and Establishment Act
The Maharashtra government has updated the Maharashtra Shops and Establishment (Regulation of Employment and Conditions of Service) Act, 2017. Specifically, they’ve amended notification No. MSA-07/2016/C.R.218/Labour-10, dated April 18, 2018.
BACKGROUND:
The Maharashtra Shops and Establishment Act of 2017 regulates employment and working conditions in Maharashtra’s commercial sector. It ensures fair labor practices, streamlines administrative processes and protects employees’ rights.
Key Amendments made by September 2024 Notification
1. Column (2) shall replace “Deputy Municipal Commissioner (Special), Municipal Corporation of Greater Mumbai” with “Assistant Commissioner, Municipal Corporation of Greater Mumbai.”
This amendment updates the designation responsible for overseeing shop and establishment regulations within Mumbai’s municipal corporation.
2. Column (3) shall replace “Mumbai City and Greater Mumbai Suburban Districts” with “For their respective jurisdiction.”
This amendment broadens the geographic scope from specific Mumbai areas to a more general, flexible designation.
These amendments aims to enhance administrative efficiency, regulatory oversight and compliance and demonstrate the government’s commitment to enhancing regulatory practices and ensuring fair working conditions statewide. By refining municipal roles and jurisdictional boundaries, the goal is to create a responsive system for managing employment regulations.
IFSCA clarification regarding Listing of Debt Securities on the recognised stock exchanges in the IFSCA
The International Financial Services Centres Authority (IFSCA) has introduced comprehensive regulations governing debt securities listings on recognized stock exchanges within International Financial Services Centres (IFSC). These regulations, known as the IFSCA (Listing) Regulations, 2024, provide clarity on listing requirements.
Credit Rating Mandate
Regulation 72 stipulates issuers must obtain credit ratings from reputable agencies registered with IFSCA or recognized foreign regulators. This ensures transparent risk assessment, bolstering investor confidence.
Addressing Market Concerns
Market participants highlighted challenges in securing timely credit ratings, particularly for issuers nearing listing completion. In response, IFSCA has implemented a phased introduction.
Implementation Timeline
- Credit ratings become mandatory for debt securities listed on recognized IFSC stock exchanges starting October 1, 2024.
- This directive takes immediate effect.
Regulatory Authority
This circular is issued under Sections 12 and 13 of the IFSCA Act, 2019, in conjunction with Regulation 130 of the Listing Regulations. This framework reinforces IFSCA’s commitment to robust governance, transparency and investor protection.
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