Foreign Investment in Other Financial Services Sector

In the Notification of Reserve Bank of India, Foreign Exchange Department Notification No.FEMA.375/2016-RB, dated 9 September 2016, there is amendment to 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 1, in Annex B, Paragraph F.8 relating to Non-Banking Finance Companies (NBFC) in following manner:

1. Financial Services activities regulated by financial sector regulators, viz., RBI, SEBI, IRDA, PFRDA, NHB or any other financial sector regulator as may be notified by the Government of India are allowed under 100% Automatic Route.
2. The other financial services sectors are subject to some conditions, which are laid down by the concerned financial regulators.
3. Any activity which is specifically regulated by an Act, the foreign investment limits will be restricted to those levels/limit that may be specified in that Act, if so mentioned.
4. The financial services which are not regulated by any of the regulators as mentioned above may be allowed up to 100% under government approval route.
5. Downstream investments by any of the entities in Other Financial Services will be subject to extant sectoral regulations and notification as amended from time to time.

         i

Actio Personalis Moritur Cum Persona means a personal action dies with the person

In the matter of Sakthi Finance Limited (hereinafter referred as 'SFL') SEBI was evaluating

alleged violation done by the promoters and Person Acting in Concert ('PAC') of SFL. In

adjudication process it was brought to the notice of adjudication ofcer that one of the PAC

(late Mr. N Mahalingam) had passed away.

Question was arisen whether in such cases right to sue will survive against the

representative of the deceased person?

Adjudication ofcer noted that in the case of Girijandini vs. Bijendra Narain (AIR 1967

SC 2110), the Hon'ble Supreme Court, inter-alia observed that in case of personal action,

i.e. the actions where the relief sought is personal to the deceased, the right to sue will not

survive to or against the representatives, and in such cases, the maxim actio personalis

moritur cum persona (personal action dies with the death of the person) would apply.

By taking note of the above referred judgement, since the proceedings were initiated

against the personal acts and omission of a person who is not alive to face the penalty, the

matter in respect of Mr. N. Mahalingam disposed off without going into merits of the case.

Publication of Details on Website

Pursuant to amendment in Companies (Incorporation) Rules, 2014, every Company should publish/dislcose the following details on Landing/Home page of website, if any:

1. Name and address of its registered office;
2. Corporate Identity Number(CIN);
3. Telephone number;
4. Fax number, if any;
5. Email id and the name of the person who may be contacted in case of any queries or grievances

Implications of Trademark under recent Companies (Incorporation) Third Amendment Rules, 2016- Part I

Ministry of Corporate Affairs (MCA) on July 27, 2016 has notified Companies (Incorporation) Third Amendment Rules, 2016 wherein a few changes have been brought in.

One minor change that can be easily overlooked is regarding application for name availability, for a name that is registered as or applied for Trade Mark. With regards to the same, the Amendment Rule states as follows:

In the principal rules, in rule 8,- (a) in sub-rule (2)for clause(ii), the following shall be substituted namely:-

The name shall be considered undesirable, if-

“(ii) it includes the name of a trade mark registered or a trade mark which is subject of an application for registration under the Trade Marks Act, 1999 and the rules framed thereunder unless the consent of the owner or applicant for registration, of the trade mark, as the case may be, has been obtained and produced by the promoters.”

In the Principle Rules, the words “registration under the Trade Marks Act, 1999 and the rules framed thereunder” did not appear.

In the above context, in this article, let us understand the concept of registered Trade Mark.

• What is meant by the term “Registered Trade Mark”?

Trade Marks Act, 1999 (The Act) defines Registered Trade Mark as a trade mark which is actually on the register and remaining in force.

Explanation:

A Trade Mark that is recorded in the Register of Trade Mark, which is maintained by the Trade Marks Registry (Trade marks Registry established under the Trade and Merchandise Marks Act, 1958 shall be the Trade Marks Registry under this Act) which is kept at the head office of the Trade Marks Registry and continues to be in existence shall be a registered Trade Mark. 

  

• Is registration of trade mark mandatory under the Trade Marks Act, 1999?

         No, the registration of trade mark is not mandatory under the Act.

Explanation:

A logo or a word mark or any design, device, symbol which is capable of distinguishing the goods or services of one person from those of others can be used by any person without registration. However, such Trade mark is not recognized under the Trademarks Act, 1999 and accordingly, the protection under the said act is not available.

• Whether Trade Marks registered under Trade and Merchandise Marks Act, 1958 (erstwhile Act) will be covered in the term “Registered Trade Mark”?

As per the Act, existing registered Trade Mark means a trade mark registered under the Trade and Merchandise Act, 1958 immediately before the commencement of this Act.

Explanation:

A Trade Mark that was registered under the erstwhile Act shall be covered under the term “Registered Trade Mark” under this Act.

However, since the Act has been in existence for seventeen years and the validity period of the registration under erstwhile Act was only seven years, the Trade Marks registered under the erstwhile Act, post renewal on the expiration of term under the provisions of the Act, shall be covered under the term “Registered Trade Mark”.

Insolvency and Bankruptcy Code, 2016

Ministry of Corporate Affairs has given effect to few sections giving certain authority to Central Government and Insolvency and Bankruptcy Board to make rule, regulations, to delegate, to appoint members, officers and to fix salary and terms and conditions. The list of sections effective from 19th August, 2016 are as follows:

(1) Section 3 – Definitions of following terms:

(i) clause (1) – Board 

(ii) clause (5) - Chairperson

(iii) clause (22) – Notification

(iv) clause (26) –Prescribed

(v) clause (28) – regulations

(vi) clause (37) – Words and expressions not defined in code 

(2) Section 221 – Grants by the Central Governments 

(3) Section 222 – Board’s Fund 

(4) Section 225 – Power of central government to issue directions 

(5) Section 226 – Power of central government to supersede Board 

(6) Section 230 - Delegation 

(7) Section 232 - Members, officers and employees of Board to the public servants 

(8) Section 233 – Protection of action taken in good faith 

(9) Sub-section (1) and clause (zd) of sub-section (2) of section 239 – Power of central government to make rules and the to make rules w.r.t salaries and allowances payable to and other terms and conditions of service of the chairperson and members of the board 

(10) Sub-section (1) and clause (zt) of sub-section (2) of section 240 – Power of Board to make regulations and the power to appoint other officers and employees 

(11) Section 241- Rules and regulations to be laid before parliament 

(12) Section 242 – Power to Central government to remove difficulties.

Insolvency and Bankruptcy Board of India

In India, the legal and institutional machinery for dealing with debt default has not been in line with global standards. The existing laws either don’t have desired outcomes or are almost century old. This has hampered the confidence of the lender.  Therefore the need was felt to consolidate and amend law relating to insolvency and consequently the Parliament passed Insolvency and Bankruptcy Code, 2016 

The Code aims to promote entrepreneurship, availability of credit and balance the interest of all the stakeholders and to establish Insolvency and Bankruptcy Board of India and for matters connected therewith.

Ministry of Corporate Affairs vide notification dated 5 August, 2016 has made section 188 to 194 of Insolvency and Bankruptcy Code, 2016 (both inclusive, provisions relate to Establishment/ incorporation/  constitution of Insolvency and Bankruptcy Board, Powers of Chairman, Meetings of Board, Vacancies) effective from 5 August, 2016

Amendment under Accounts Rules – Highlights

The Ministry of Corporate Affairs (MCA) amended the Companies (Accounts) Rules, 2014 vide notification dated 27^th July, 2016 by the Companies (Accounts) Rules, 2016. The summary of same is as under:

1.   Intermediate subsidiary is not required to consolidate accounts of its subsidiary if the following conditions are fulfilled:

a.   The shareholders  i.e, equity and preferences shareholders of subsidiary company has been informed in writing and the proof of delivery of such intimation is maintained by the Company;

b.   The subsidiary company is neither listed nor intends to be listed either in India or abroad and

c.   The ultimate or any intermediate holding company files consolidated financial statements with the Registrar

2.   The Board report to contain the highlights of performance of subsidiaries associates and joint venture companies and their contribution to the overall performance of the company during the period under report

3.    An individual or a partnership firm or a body corporate of ‘Chartered Accountant" or "Cost Accountant' can be appointed as the internal auditor.

The said notification can be downloaded from the following link:

http://www.mca.gov.in/Ministry/pdf/CompaniesAccountsAmendmentRules_28072016.pdf