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Utkarsh Bhatnagar

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Principal Associate in the corporate and financial regulatory practice at the Mumbai office of Cyril Amarchand Mangaldas. Utkarsh has represented various Indian and multinational fintech, information/ emerging technology companies, and also pharmaceutical, and healthcare companies on transactional, enforcement and regulatory matters. His transactional practice focus is on public & private M&A, commercial agreements and regulatory matters. He can be reached at utkarsh.bhatnagar@cyrilshroff.com

FIG Paper (No. 25 – Series 2): Shedding Light on Dark Patterns in FinTech: Impact of DPDP Act

Introduction:

The new draft guidelines titled ‘Guidelines for Prevention and Regulation of Dark Patterns, 2023’[1] (“Draft Dark Pattern Guidelines”), released by the Department of Consumer Affairs in September 2023, define dark patterns as “any practices or deceptive design patterns using UI/UX (user interface/user experience) interactions on any platform; designed to mislead or trick users to do something they originally did not intend or want to do; by subverting or impairing the consumer autonomy, decision making or choice; amounting to misleading advertisement or unfair trade practice or violation of consumer rights”.…

Continue Reading FIG Paper (No. 25 – Series 2): Shedding Light on Dark Patterns in FinTech: Impact of DPDP Act

FIG Paper (No. 24 – Series 1): New Data Law – Financial Services Implications

(Indian) Digital Personal Data Protection Act, 2023 (“DPDP Act”) received Presidential assent on August 11, 2023, and is awaiting notification by the Indian Government, which is expected soon. This FIG Paper examines: (i) the existing data protection/ privacy framework for the Indian financial services space; (ii) overlays DPDP Act considerations; and (iii) preferred approach to “gap” analysis, basis global learnings.…

Continue Reading FIG Paper (No. 24 – Series 1): New Data Law – Financial Services Implications

FIG Paper

Pursuant to the Report of the Reserve Bank of India (“RBI”) Working Group on Digital Lending, issued on November 18, 2021, and the RBI Press Release on ‘Recommendations of the Working Group on Digital Lending – Implementation’, dated August 10, 2022 (“August Press Release”), the RBI released the Guidelines on Digital Lending on September 2, 2022 (“Guidelines”). Our Alert examines the key changes introduced and industry implications.…

Continue Reading FIG Paper (No. 17 – Series 2) – New Digital Lending Guidelines – Industry Implications

Payment System Operators New M&A Implications

Background:

On July 4, 2022, the Reserve Bank of India (“RBI”) clarified to all banks and non-bank payment system operators (“PSOs”) that its prior approval would be required for any (a) takeover/ acquisition of control, which may or may not result in change of management; and (b) sale/ transfer of payment activity to an entity not authorised for undertaking similar activity (“Circular”).…

Continue Reading FIG Paper (No. 15 – Series 1) – Payment System Operators (PSOs) – New M&A Implications

FIG PAPER (NO. 14) – RBI’s Vision for Payment Systems till 2025

The Reserve Bank of India (RBI) has published the latest of the payments vision documents titled ‘Payments Vision 2025’ with a view to build on the recent success in the digital payments space in India and the successful implementation of Payments Vision 2021. We will discuss the key developments in payments which the RBI envisages till 2025.

The RBI in its Payments Vision 2025 has set out a core theme on its vision on payments. The theme is E-payments for everyone, everywhere, everytime (4 Es). The vision set forth by the RBI in Payments Solution 2025 is to provide every user with six attributes with respect to E-payments. These are Safe, Secure, Fast, Convenient, Accessible and Affordable E-payment options. The RBI has published Payments Vision 2025 across five anchor goalposts of Integrity, Inclusion, Innovation, Institutionalisation and Internationalisation, with specific directions for each of the goalposts.
Continue Reading FIG PAPER (NO. 14) – RBI’s Vision for Payment Systems till 2025

RBI guidance on loading of PPIs through credit lines

On June 20, 2022, the Reserve Bank of India (RBI) clarified to authorised non-bank prepaid payment instrument (PPI) issuers that PPIs may not be loaded from credit lines, and any such practice should be stopped immediately.…

Continue Reading FIG Paper (No. 13) – RBI guidance on loading of PPIs through credit lines

Fintech Department

In recent years, in line with global trends, India’s growth has been fuelled by technology and platform economy, with physical moving towards digital and ‘phygital’.…

Continue Reading FIG Paper (No. 10: Series -1) RBI’s New FinTech Department: Industry Implications & Future

FIG Paper 8

Introduction:

With the pandemic acting as a tailwind for the digital payments industry in India, the fintech industry represents a key opportunity for the Reserve Bank of India (“RBI”) for its financial inclusion push in the country. A key driver in this regard is the burgeoning prepaid payment instruments (“PPI”) industry. PPIs have been widely used in the country for many years, but have seen significant commercial changes in recent times to reach a wider consumer base, given the high market penetration of mobile internet in India.…

Continue Reading FIG Paper (No. 8) – New Master Directions for PPI – A Fresh Look at Prepaid Payment Instruments!

Indian Mutual Funds – New M&A Rules! Anu Tiwari (Partner), Ritu Sajnani (Senior Associate), Utkarsh Bhatnagar (Senior Associate) and Karthik Koragal (Associate) The Securities Exchange Board of India (“SEBI”) carried out a regulatory revamp exercise of SEBI (Mutual Funds) Regulations, 1996 (“MF Regulations”) and various circulars issued under it by way of a circular on mutual fund(s) (“MF”) issued on March 4, 2021 (“MF Circular”), effective from March 5, 2021, thereby streamlining a robust regime governing the reporting, compliance and disclosure requirements applicable to asset management company(ies) (“AMC”) and the trustee(s) of such AMCs. Reporting requirements strengthened Currently, the MF Circular requires an AMC to furnish the complete details of any indirect change in its control/ promoters of the sponsor(s) to SEBI and also notify details of a proposed change in control (whether direct or indirect) to the unitholders, by way of an email (in addition to publishing the same in newspapers. Similarly, in case of any proposed change to the fundamental attributes of a MF scheme, trustees are now mandated to obtain comments from SEBI, prior to effectuating such change. With an intent to ensure better compliance, SEBI has also expanded the scope of ‘key personnel’ of an AMC to include chief investment officer, chief risk officer, chief information security officer, chief operation officer, compliance officer, sales head, investor relation officer(s), etc. in addition to the erstwhile list of key personnel, which included the chief executive officer, fund manager(s), dealer(s) and head of other departments of the AMC. Hence, inter alia these new key personnel who are also now prohibited from carrying on self-dealing or front running activities, in addition to meeting the prescribed eligibility criteria. The revised reporting requirements extends SEBI’s regulatory prowess to monitor and bring more transparency in relation to the indirect change in control of the AMCs’ process. Relaxations and scrutiny go hand-in-hand In order to facilitate innovation in the MF space, SEBI has introduced certain relaxations like permitting employees of AMCs to participate in private placement of equity by any company, has allowed trustees to delegate its function(s) to declare/ fix a record date and decide the quantum of dividend, etc. to AMC officials. Further, trustees are now mandated to report to SEBI the MF securities dealt by them, only if a transaction exceeds INR 5 lakhs (vis-a-vis the previous threshold of INR 1 lakh). The regulator has also classified investment in non-convertible preference shares (“NCPSs”) as a ‘debt instrument’ and accordingly, limitation of a MF scheme to invest not more than 10% of its net asset value in debt instruments will also include NCPSs. The trustees now being required to obtain SEBI comments before effecting a ‘change in in the fundamental attributes of a MF scheme’ seems burden-some, as the regulator’s role, and oversight, already guarantees for the requisite checks and balances to govern the MF scheme, including for MF scheme transfers, through separate regulations and circulars in this behalf. Above is likely to add another layer to M&A deal-making, with already many layers involved, impacting deal costs and timelines, especially if a ‘new sponsor’ application may be involved, from a process, governance and unit holders’ standpoint. Albeit above ties into SEBI’s increasing focus on MF trustee’s accountability, which has hitherto been an overlooked area, given the nature and composition of MF trustee boards. Though, done with noble regulatory intent, one would have to see whether the above changes, including expansion of key personnel, further ‘spook’ trustee directors, especially independents - already an onerous position, with few upsides, especially after Calcutta High Court’s Order in the ITC / JPMorgan MF Trustees case, and SEBI’s approach qua Franklin Templeton trustees in 2020, expand the scope of potential SEBI show-cause ‘noticees’ from the current list of 7 (!), and shoot MF M&A in the knees, which was given a new lease of life recently via SEBI dropping the ‘3/ 5’ profitability criterion in Regulation 7, MF Regulations.

The Securities Exchange Board of India (“SEBI”) carried out a regulatory revamp exercise of SEBI (Mutual Funds) Regulations, 1996 (“MF Regulations”) and various circulars issued under it by way of a circular on mutual fund(s) (“MF”) issued on March 4, 2021 (“MF Circular”), effective from March 5, 2021, thereby streamlining a robust regime governing the reporting, compliance and disclosure requirements applicable to asset management company(ies) (“AMC”) and the trustee(s) of such AMCs.
Continue Reading FIG Papers (No.4 : Series – 2): Indian Mutual Funds – New M&A Rules!

In Search of a Vaccine for Covid-19 - A Race to The Finish

The Covid-19 pandemic has wreaked havoc on mankind, infecting well over 13 million, and claiming over half a million lives. It has also severely impacted economies across the world. Our healthcare infrastructure has been pushed to its limits and our frontline healthcare professionals are working to the brink of exhaustion, risking their own lives to save others. We bow to them.

In the midst of all this, scientists across the world are working feverishly to find a vaccine for this disease. The hopes of billions rest on this. The World Health Organization (“WHO”) has (as of July 15, 2020) declared that there are about 23 potential vaccine candidates that are currently in various stages of clinical trials[1]. Out of these 23 vaccines, vaccines being developed by: (a) Sinovac (inactivated +alum); and (b) University of Oxford / AstraZeneca has entered into the Phase-III of its clinical trials[2]. In addition, as of July 15, 2020, there are around 140 vaccine candidates in preclinical evaluation (trials not commenced).
Continue Reading In Search of a Vaccine for Covid-19: A Race to The Finish