Regulatory updates February 2023

What You Need to Know About Regulatory Changes in February 2023

Regulatory updates are when laws, rules, and policies that govern different parts of a business are changed or updated. Changes like these are made to make sure that businesses run in a way that is safe, fair, and in the best interests of customers, workers, and society as a whole.

There are several types of rules that businesses must follow. Regulatory updates include finance and taxes, secretarial, industry-specific, commercial, labour, and environmental health and safety (EHS).

In February 2023, new rules were put into place for a number of compliance categories. Here are the most important changes in each area:

THE FINANCES AND TAXES:

In February 2023, there were 112 changes to regulations Regulatory updates in the Finance and Taxation category, some of which are shown below:

The Ministry of Finance (MoF) has taken back two notifications (No. 13/2021-Customs and No. 34/2022-Customs) that said Agriculture Infrastructure and Gold Imports were exempt from the Social Welfare Surcharge tariff.

The Insurance Regulatory Development Authority of India (IRDAI) has set the cession of the sum insured on each general insurance policy reinsured with Indian Re-insurers at 4% for FY24, with no limit on the sum insured for cessions.

The Central Board of Indirect Taxes and Customs (CBIC) made a change to the Project Imports Regulations, 1986, which went into effect on February 2, 2023.

All Fund Management Entities (FMEs) have been told by the International Financial Services Centres Authority (IFSCA) to send their registration applications for their scheme or fund to the IFSC using the format in their notification.

After registering with UIDAI, the Securities and Exchange Board of India (SEBI) has given permission to 39 more entities to use Aadhaar authentication services as sub-KUAs in the securities market.

The Central Board of Direct Taxes (CBDT) has released the Centralised Processing of Equalisation Levy Statement Scheme, 2023. This scheme explains how equalisation levy statements should be filled out, how long they are valid for, and how they should be processed.

Through the first change in 2023, the CBDT has changed several forms in the appendix-II of the Income Tax Rules, 1962.

The Union Cabinet has given INR 4,800 crore to the "Vibrant Villages Programme" until FY26. This money will be used to build basic infrastructure and provide jobs in 19 districts and 46 border blocks to keep people living there.

Under the IFSCA (Fund Management) Regulations of 2022, the IFSCA has put out a consultation paper on how to handle client funds for portfolio management services.

Through a notification, the Reserve Bank of India (RBI) has added a transaction code related to the Foreign Contribution (Regulation) Act to the NEFT and RTGS systems.

The Income Tax department has released the Form for individual/HUF/AOP/BOI/artificial juridical person (AJP) as per section 115BAC, which was proposed by the Finance Bill, 2023.

The CBIC has changed the Form of application for a licence under the Public Warehousing Licensing Regulations, 2016/Private Warehousing Regulations, 2016/Special Warehousing Regulations, 2016 so that antecedent verification HMV must be done within 45 days of receiving the application.

The Goods and Services Tax Network (GSTN) has given advice on the geocoding of the address of the principal place of business. This information can now be found on the GST portal under the services/registration tab in the FO portal.

Secretarial Regulatory updates:

In February 2023, there were 145 changes to regulations in the Secretarial category, some of which are shown below:

SEBI put out a consultation paper about how REITs and InvITs should be regulated when they issue depository receipts. Stakeholders were asked to give suggestions and comments by February 21, 2023.

BSE sent out a notice about the standard operating procedure under SEBI (PTI) Regulations, 2015, to make sure that Structured Digital Database regulations are followed (SDD). In their annual secretarial audit report, listed entities must show that they are meeting the SDD requirement.

NSE sent out a notice about when vendors who provide co-location as a facility need to send in their system audit reports (CaaS). CaaS providers who are on the exchange's list of approved vendors must submit a system audit report every six months on time. Reports for the period from April 1 to September 30 should be turned in by November 30, and reports for the period from October 1 to March 31 should be turned in by May 31.

NSE sent out a notice about how membership certificates can be made through the ENIT portal. The module/process for making membership certificates has been moved from the digital portal to the ENIT portal.

SEBI sent out a circular about the increased duties and responsibilities of qualified stock brokers (QSBs). This has made it more important for stock brokers to follow the rules and be monitored. The circular also explains how a stock broker can be designated as a QSB, how QSBs can be found, and what their duties and responsibilities are.

The SEBI (Buy-Back of Securities) Regulations, 2018, were changed for the year 2023. Among other things, the change changes the definition of "frequently traded shares" and "secretarial auditor."

NSE sent out a notice about the registration and regulatory framework for online bond platform providers. The deadline for applying for a certificate of registration as a stock broker has been moved to March 1, 2023.

NSE sent out a notice about the portal for uploading daily margin trading files, and the module for reporting daily margin trading files has been moved from the digital portal to the ENIT portal.

The SEBI (Real Estate Investment Trusts) Regulations, 2014, were changed in 2023. One of the changes was the addition of a clause defining "independent director."

RBI put out a list of Frequently Asked Questions (FAQs) about digital lending guidelines. These answer questions like which lending transactions will be considered digital lending and whether all LSPs need to hire grievance redressal officers.

SEBI sent out a notice about the creation of an issue summary document (ISD) and the distribution of issue advertisements. The ISD will be used for the sale of certain securities to the public and the buyback of equity shares in the XBRL format.

SEBI sent out a circular on August 16, 2023, about how stock breakers and depository participants should maintain their websites.

SEBI put out a consultation paper about making it easier for listed entities to disclose information and making it easier for them to follow the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which say that newly-listed entities must submit their first financial results.

RBI put out a circular about the implementation of Indian accounting standards (Ind AS), which says that all ARCs must make their financial statements according to Ind AS and subtract certain amounts from their net owned funds when figuring out their capital adequacy ratio.

NSE sent out a notice about the acceptance of an electronic bank guarantee, and NSE Clearing Ltd. and National e-Governance Service Limited have started the facility for accepting electronic bank guarantees (E-BG) (NeSL).

Commercial:

In February 2023, there were 48 changes to regulations in the Commercial category. Here are some of the most important ones:

The Ministry of Consumer Affairs, Food, and Public Distribution (MoCAFPD) made a change to the 2011 Legal Metrology (Packaged Commodities) Rules that will go into effect on April 1, 2023.

The Ministry of Chemicals and Fertilizers made a change to the Sodium Tripolyphosphate (Quality Control) Order, 2020.

The Ministry of Heavy Industries (MoHI) has sent out a notice about the start of two production linked incentive (PLI) schemes: the PLI scheme for the Automobile and Auto-Component Industry and the PLI scheme for the National Programme on Advanced Chemistry Cell (ACC) Battery Storage. Overlays of INR 25,938 crores over 5 years and INR 18,100 crores over 7 years will be added to these schemes.

The Ministry of Commerce and Industry (MoC&I) has sent out a notice aligning the RoDTEP schedule for chapters 28, 29, 30, and 73 with the first schedule of the Customs Tariff Act, 1975.

The Ministry of Consumer Affairs, Food, and Public Distribution (MoCAFPD) has sent out a notice about the "Conformity Assessment Scheme." This scheme is meant to make it easier for startups and MSMEs to adopt the standard IS 19000:2022. This will increase the confidence of both industry and consumers. The plan is meant to make sure that online customer reviews are real and not fake or misleading.

The Directorate General of Foreign Trade changed the import policy and policy conditions of ITC (HS) code 080280 of chapter 8 and ITC (HS) code 21069030 of chapter 21 of ITC (HS), 2022 schedule-I (import policy) (DGFT).

Specific to a Industry:

In February 2023, there were 213 changes to regulations in the Industry Specific category. Here are some of the most important ones:

The Central Electricity Authority (CEA) put out the CEA (Flexible Operation of Coal-based Thermal Power Generating Units) Regulations, 2023. These regulations list the requirements for flexible operation of coal-based thermal power plants, such as minimum power level and ramp rate capabilities.

SEBI made rules about how Alternative Investment Funds (AIF) can trade corporate bonds through the Request for Quote (RFQ) platform. AIF must post quotes on the RFQ platform and do at least 10% of the total secondary market trades in corporate bonds by value each month.

The Ministry of Law and Justice (MOL&J) passed the Maritime Anti-Piracy Act, 2022, to protect actions taken in good faith and make bail rules.

Under the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, the Ministry of Electronics and IT (MeitY) put out rules for online gaming. Those who offer online games must follow these rules.

The Ministry of Finance (MoF) put out an RBI framework for billing and paying for international trade in Indian rupees. This was done to help trade grow around the world, especially India's exports.

ENVIRONMENT, HEALTH, AND SAFETY:

In February 2023, there were 21 changes to regulations in the area of ENVIRONMENT, HEALTH, AND SAFETY. Here are some of the most important ones:

The Ministry of Environment, Forest, and Climate Change (MoEF&CC) made a change to the E-Waste (Management) Rules, 2022, which will take effect on April 1, 2023.

The Government of Punjab put out the Punjab Ground Water Extraction and Conservation Directions, 2023, to encourage water conservation and improve the water balance.

The Ministry of Environment, Forest, and Climate Change (MoEF&CC) sent out a notice about how important it is to educate the public and run campaigns to manage plastic waste and get rid of single-use plastics in both urban and rural areas.

The Ministry of Labour and Employment (MoL&E) sent out a notice to make sure that all organised and unorganised workers had decent working conditions and social security.

The Ministry of Environment, Forests, and Climate Change (MoEF&CC) has released guidelines for extended producer responsibility (EPR) for plastic packaging. Mandatory targets have been set for EPR, recycling of plastic packaging waste, reuse of rigid plastic packaging, and use of recycled plastic content.

Labour Regulatory updates:

In February 2023, there were 58 changes to regulations in the Labour category, some of which are shown below:

The Ministry of Labour and Employment told EPFO to start a programme called "Nidhi Aapke Nikat" to reach out to people in their districts (MoL&E). The programme makes it easier for employers and employees, as well as district authorities and state/central authorities, to talk about problems and share information.

The Employees' State Insurance Corporation (ESIC) sent out a notice about how the HIS for insurance-ERP will now include registration for newborn babies. This will make it easier to add new IPs or IWs born at ESI hospitals to their families' information in the insurance module.

The Employees Provident Fund Organization put out a notice about whether or not beneficiaries of the EDLI scheme could get insurance benefits (EPFO). All regional offices have been told to make sure that all people who are eligible for EDLI benefits get them as soon as possible.

The Employees' State Insurance Corporation (ESIC) sent out a notice stressing the importance of making, completing, and keeping annual performance evaluation reports on time (APARs). It is a public duty to file the APAR on time, and any delays or failures must be reported to the appropriate authority.

The Pension Fund Regulatory and Development Authority (PFRDA) announced the Minimum Timelines for Maximum Subscribers' Benefits - Reduction in Turn Around Time to do different things from T+4 to T+2. With T+2 timelines, more services have been added to the bouquet.