Legal Milestones | Trilegal Quarterly Roundup: Jan-Mar 2023

Corporate

Rules on Offer-for-Sale modified to allow non-promoter shareholders to sell a significant stake on-market
Changes to the regulatory framework for Infrastructure Investment Trusts and Real Estate Investment Trusts
Changes to the insurance regulatory landscape
Scope of 'angel tax' extended to premium received in investments from non-residents
Proposed enhancement of corporate governance standards and ESG disclosures for listed companies

Delhi High Court pierces the corporate veil to make non-parties to an arbitration liable for the arbitral award
Delhi High Court relies on assurances in letters of comfort to compel non-parties to join arbitration proceedings
National Company Law Appellate Tribunal clarifies that financial creditors need to actively participate in the insolvency process to be able to raise a challenge against it

Employees’ Provident Fund Organisation extends the deadline to apply for higher pension
Delhi High Court observes that sexual harassment complaints and proceedings cannot be quashed only due to the internal committee’s failure to complete inquiry within 90 days
Haryana government revises conditions for employing women in night shifts
Karnataka government increases the salary limit for exemption from professional tax

SEBI-regulated entities availing cloud services are now subject to a new principle-based regulatory framework
Supreme Court potentially opens the scope for implementing the right to privacy against private persons, and separately observes that children have the right to privacy in paternity suits
Consumer machine-to-machine/internet of things devices must now be updateable and not have universal default passwords

Over-the-top platforms merely hosting the digital feed of a TV news channel are no longer subject to the 26% foreign direct investment cap
Intermediary Rules amended to regulate online real money games and clamp down on fake news
Bombay High Court finds online gaming platform to be compliant with foreign direct investment norms as its games did not involve a reward

Crypto and virtual asset service providers formally brought within the prevention of money laundering framework and must follow anti-money laundering compliances
RBI further restricts fintech companies’ involvement in digital lending payment flows and provides clarification on the use of payment aggregators
Unified Payments Interface facility allowed for certain non-resident account holders
Foreign nationals/non-resident Indians from G20 countries can now use Unified Payments Interface/Unified Payments Interface-linked prepaid payment instruments on their India visits for merchant payments

Reporting entities are required to conduct increased due diligence of prospective clients due to the revised beneficial ownership threshold of 10% for companies and trusts
Foreign portfolio investors are mandated to report material changes in already furnished information in seven days instead of six months
Stockbroker and clearing member funds to be upstreamed on end-of-day basis
SEBI-regulated entities to follow new cybersecurity practices
Foreign nationals and non-resident Indians from G20 countries can now use Unified Payments Interface/Unified Payments Interface-linked prepaid payment instruments on their India visits for merchant payments

SEBI prescribes new disclosure requirements and dos and don’ts for the issue of green debt securities
Process of onboarding and granting registration to foreign portfolio investors streamlined
Alternative investment funds can now participate in credit default swaps
National Company Law Tribunal, Kolkata Bench, rules that a shortfall undertaking is classified as financial debt under the Insolvency and Bankruptcy Code, 2016

Concept of 'Senior Management' introduced in offer documents
Submission of issue summary document by companies to stock exchanges and dissemination of issue-related advertisements by lead managers
Listed companies provided with two additional methods to facilitate compliance with minimum public shareholding requirement
Framework for Offer for Sale through the stock exchange mechanism modified to remove the minimum shareholding requirement for non-promoter shareholders
Separate corporate governance norms notified for Infrastructure Investment Trusts and Real Estate Investment Trusts

Finance Act, 2023 enacted - over 60 amendments made to original draft
Increased tax rate for royalty and fees for technical services income earned by non-residents likely to result in significant compliance burden
Debt mutual funds to be taxed as short-term capital gains irrespective of holding period

Finance Act, 2023 enacted - over 60 amendments made to original draft
Finance Act, 2023 amendments to the Central Goods and Services Act, 2017 clear the way for the constitution of the Goods and Services Tax Appellate Tribunal
New Foreign Trade Policy notified with emphasis on tax remissions and greater facilitation of trade through technology and automation
Supreme Court holds that the burden to prove the admissibility of the input tax credit availed is on the taxpayer and suitable documentary evidence is required to satisfy this burden