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We've summarised some important measures the regulatory authorities are taking during the Covid-19 outbreak.
The Covid-19 situation is unprecedented. Unprecedented events call for innovative thinking and rationalisation of expectations keeping in mind the broader good. Here is an attempt to aggregate the relaxations announced by various regulatory authorities. Please use this as a tool to comply better rather than not complying.
Ministry of Company Affairs (MCA):
Relaxation for requirement of holding board meetings with physical presence of directors until 30th June 2020:
MCA in principle has relaxed the requirements of holding board meetings with physical presence of directors as required under section 173 (2) r/w rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 to overcome the outbreak of Coronavirus. Board meetings can now be held through video conferencing or other audio visual means till June 30, 2020. Matters that can now be taken up at a board meeting without the requirement of physical quorum will include a) Approval of annual financial statements b) Approval of Board’s report.
Work from home as a temporary policy measure until 30th March 2020 and filing of Form CAR 2020:
MCA is encouraging companies to adopt temporary work from home measures to contain the spread of Covid-19 and use technology, audio-visual conferences to work. Essential staff are encouraged to follow staggered timings. Companies will be required to file a simple web based form called "CAR" ( Company Affirmation of Readiness towards Covid) which would be made available by March 23 2020 by the MCA.
Securities Exchange Board of India (SEBI):
Temporary relaxations from certain compliance stipulations specified under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR’) to listed entities for the quarter / financial year ending March 31, 2020. Press release dated 19th March 2020, PR No.: 17/2020 outlines the same. Relaxations of up to 3 weeks to 1 month granted for compliances such as half yearly compliance certificate on share transfer facility, quarterly statement of investor complaints, filing of quarterly shareholding pattern, filing of corporate governance report etc.
A copy of the Circular issued is available on the SEBI website
SEBI has also provided certain operational exemptions to offshore funds, FPI's from submitting physical forms as a result of the Corona outbreak.
Income Tax Act , 1962 (IT Ac) and Goods and Services Tax ( GST):
There is a possibility that the Income tax authorities are offering a relaxation on various tax compliances, addressing demands from taxpayers for easing up on regulations. Further details awaited.
Labour laws and Compliances (Labour Laws):
Official notifications and circulars from the Ministry of Health and Family Welfare and World health Organisation (WHO) are great resources to educate staff and generate awareness towards the pandemic. Some points to consider are:
- Special leave entitlement
- Insurance protection remains
- Covid-19 infection reporting and information protocol with staff members
- Concession for work from home
- Boosting employee morale and retention
- Facilitating technical and digital support to work from home
- Stagger shifts for essential work force
Courts, Litigation, Prisoners (Court Procedures)
The Supreme Court of India (SC) has announced that from March 16, 2020, the SC will be hearing only urgent matters and has reserved the right to require thermal-screening at all entrants, and to deny entry to persons found to have high body temperature. Only the lawyers acting on the matter and the litigant shall be permitted in court premises.
A Petition has been filed for ensuring safety of prisoners and convicts (very welcome!). According to the National Crime Records Bureau, the occupancy rate of Indian prisons is at 117.6%, and in states such as Uttar Pradesh and Sikkim, the occupancy rate is as high as 176.5% and 157.3% respectively. There are 1339 prisons in this country, and approximately 4,66,084 inmates inhabit such prisons. Like most other viral diseases, the susceptibility of Covid-19 is greater in over-crowded places, mass gatherings, etc. The hearing awaited for 23rd March 2020 by the Supreme court.
While the above list was just to outline the possible compliances getting affected, the overall impact is very far and wide; transcending across the globe and across sectors. The regulators are only trying to make it easier to comply and the onus and duty of care to comply still remains on us
Stay Calm and Stay Compliant!
Uber, the popular Bangalore based cap operator was asked to change its payment mechanism by the Reserve Bank of India. Popular ecommerce sites like Myntra, Urban Ladder, Flipkart, and many other have been under the scanner for various regulatory matters like FDI violation, VAT related issues, Enforcement Directorate probes for maters before April 2013, Payment mechanism violations etc. With each passing day new violations or potential violations seem to be added.
I respect the government’s desire to increase the tax net, curb black money, money laundering and build transparency in our tax system. What I don’t understand is why they make us a part of a guessing game with unheard of potential levies from time to time?
The DIPP recently told the Delhi High Court that the marketplace model used by ecommerce companies is “not recognised” in the country’s foreign direct investment (FDI) policy and that the financial watchdogs are to investigate any violation.
Can the government come up with a policy that ensures national security, creates a level playing field for brick and mortar retail and new age e-Commerce requirements, not spook the FDI sentiment and yet regulate the e-economy?
Being the last critical budget before the next general assembly elections, we all probably had some sense of what the budget would lay down. Here's a quick summary of what appealed and didn’t appeal from the "Funds/Venture Industry" perspective.