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CAM Corporate Team

The CAM Corporate Team can be reached at cam.mumbai@cyrilshroff.com

2017 is upon us, but many readers seem to have missed some very important and progressive changes to the Maharashtra Tenancy and Agricultural Lands Act, 1948 (Act) made last year on 1 January 2016! Two sections (63, and 63-1A) of the Act govern the ability to sell and buy agricultural lands (AL) for non-agricultural (NA) use.

Here is a comparative note on the pre-amendment and post-amendment law under Section 63-1A affecting AL bought for NA bona fide industrial use.
Continue Reading Using Agricultural Lands for Non-Agricultural Purposes in Maharashtra – Important 2016 Amendments

“Raindrops on roses and whiskers on kittens
Bright copper kettles and warm woollen mittens
Brown paper packages tied up with strings
These are a few of my favourite things…”

Hearing my niece practice this iconic song made me introspect on the year gone by. So, here are select highlights of 2016 from the Alternative Investment Funds (AIFs) industry perspective.

  1. Regulatory developments
  • 2016 started with Report 1 of the Alternative Investment Policy Advisory Committee (AIPAC), and drew to a close with Report 2 of the AIPAC in December 2016. SEBI amended the AIF regulations in November 2016 to implement recommendations relating to Angel Funds. Our last post covers key recommendations made by AIPAC in Report 2. AIPAC has rightly focussed on structural and evolutionary changes needed for the AIF industry and thus 2017 will be the year to implement or build on these recommendations.
  • In February 2016, subject to certain conditions, RBI permitted NRIs to invest in AIFs on a non-repatriation basis and for investments to be treated at par with investments by residents.
  • In April 2016, the Pension Fund Regulatory and Development Authority permitted pension funds to invest in Category I and Category II AIFs subject to various conditions. However, these conditions have effectively stymied pension fund investing in Category II AIFs. AIPAC reports recommend the liberalisation of regulations to allow investments in AIFs by pension funds, insurance companies, banks and others.
  • In April 2016, RBI amended the Foreign Venture Capital Investor (FVCI) regime under FEMA 20 to provide, inter alia, that FVCIs registered under the SEBI (FVCI) Regulations will not require RBI approval for investments as per amended Schedule 6. The RBI notification also stipulated that FVCIs can receive the proceeds on liquidation of venture capital funds (VCFs) or Category I AIFs. However, RBI’s October 2016 circular was a sting in the tail. That circular stated that downstream investment by VCFs / Category I AIFs that have been invested into by FVCIs will need to comply with Schedule 11 of FEMA 20 i.e. such downstream investments shall be subject to the sectoral caps and conditions under the foreign direct investment (FDI) policy.
  • In September 2016, RBI amended FEMA 20 to permit 100% FDI in ‘other financial services’ industry subject to conditions prescribed by the relevant regulator and FDI in entities conducting unregulated or partially regulated financial services (FS) activities with the prior approval of the Foreign Investment Promotion Board (FIPB). While this liberalisation was eagerly awaited, the language of the notification stirred up concerns surrounding the interpretation of ‘regulated FS activities’. For example, would FDI in an AIF manager which is exempt from registration under SEBI (Investment Advisers) Regulations require FIPB approval? Or would FDI in an Indian advisor to an offshore PE fund or Foreign Portfolio Investment (FPI) manager qualify for the automatic route?

Continue Reading 2016, The AIF Industry In Retrospect

In March 2015, the Securities and Exchange Board of India (SEBI) constituted a standing Alternative Investment Policy Advisory Committee (AIPAC) under the chairmanship of Shri. N. R. Narayana Murthy. AIPAC submitted its first report in January 2016 and its second report was released by SEBI on December 1, 2016 (Report 2) for public comments.

The Alternative Investment Fund (AIF) industry has been growing exponentially. The cumulative funds raised increasing from Rs 3,841 crores (approximately, USD 568 million) in September 2013 to Rs 29,016 crores (approximately, USD 4292 million) in September 2016[1]. In approximately four years since the introduction of SEBI (Alternative Investment Funds) Regulations, 2012 (Regulations), the number of AIFs registered has reached 268[2]. The AIF industry is thus poised to make its next leap of growth. Guided by this, Report 2 makes several recommendations to unshackle the AIF industry and lead the way into Phase II of its evolution. Some of the key recommendations that will facilitate growth are highlighted below.
Continue Reading AIPAC Report 2: Bag Of Goodies and Festive Cheer for the AIF Industry

On August 11, 2016, the Government of India (GoI) introduced the Maternity Benefit (Amendment) Bill, 2016 (Bill) in the Parliament. The Bill was introduced to amend the Maternity Benefit Act, 1961 (Act) – the Act, as many may be aware, is the legislation to provide certain benefits to women in the context of pregnancy. The Act is applicable to factories, mines and plantations as well as to every ‘shop and establishment’ (a statutory term that would ordinarily cover various organizations in the private sector with an office/place of business in India) in which ten or more persons, are/ were, employed, on any day over the preceding twelve months.

On September 11, 2008, the GoI introduced the recommendations of the Sixth Central Pay Commission relating to enhancement of the amount of maternity leave and introduced child care leave in respect of central government employees. Effectively this resulted in increase in maternity leave and child care leave. Separately, several companies in the private sector introduced more beneficial provisions for female employees including better maternity leave than the Act provided. However, the Act did not introduce any changes in line with the changing needs of working women /mothers which the Bill intends to address.Continue Reading Maternity Benefit Law : Key Developments

A Brief Background

Sexual harassment at the workplace was first recognized as a violation of basic human rights by India’s apex court, the Supreme Court (SC) in Vishaka v. State of Rajasthan (Vishaka Judgment) in 1997. In its judgement, the SC opined that sexual harassment was violative of the fundamental rights of women guaranteed under the Constitution of India, 1950 including the constitutionally guaranteed rights to life, equality, dignity and to practice any profession/carry on any occupation, trade or business. Accordingly, and in the absence of specific legislation at that time, the SC had enunciated guidelines for the prevention of sexual harassment at the workplace.Continue Reading Challenges Faced by Employers in Addressing Sexual Harassment Complaints

From time to time, concerns have been raised by entrepreneurs and various Indian and international surveys about the challenges faced by start-ups and other companies doing business in India. India has also been rated very low on charts concerning ease of doing business.

India is a vast country with several states and union territories, which presents differences in culture, language, faith and food habits. But doing business in India also means complying with a long list of Central (Federal) and State statutes and their varied interpretations. In addition, judicial pronouncements of concerned High Courts and the Hon’ble Supreme Court of India must be taken into consideration.

Regulatory compliance with several laws is time consuming and complicated, adding to the financial and intellectual burden on start-ups. This, in turn, shifts their focus from development and growth of the core business to ensuring compliance with laws.

As a result, laws, rather than acting as a catapult and augmenting the growth of businesses, force several start-ups to reconsider their plans/strategies concerning doing business in India.Continue Reading Employment Issues Faced by Start-Ups in India