Centre Notifies Companies (Amendment) Act & Bilateral Netting of Qualified Financial Contracts Act [Read Notifications]

• Companies (Amendment) Act, 2020
• Bilateral Netting of Qualified Financial Contracts Act, 2020

The former was passed by the Parliament on September 22, 2020 to decriminalize minor procedural or technical lapses under the Companies Act, 2013, into civil wrong.

It proposes to amend 64 provisions of the Act to make overall 75 changes, including:

• Decriminalisation of offences in case of defaults which can be determined objectively and which otherwise lack any element of fraud or do not involve larger public interest;
• Empowerment of Central Government to de-list certain class of companies, in consultation with SEBI, primarily for listing of debt securities;
• Incorporation of a new Chapter XXIA in the 2013 Act to govern Producer Companies (earlier governed by the 1956 Act);
• Setting up of new NCLAT Benches.

To Read more about the Companies (Amendment) Act and the Parliamentary Debate upon it, Click Here.

The latter Act was also passed by the Parliament on September 22, 2020, with an aim to ensure financial stability and promote competitiveness in Indian financial markets.

It provides a legal framework to enable two counterparties in a bilateral financial contract to offset claims against each other to determine a single net payment obligation due from one counterparty to other in the event of default.

The provisions of the Act will apply to Qualified Financial Contracts between two qualified financial market participants, where at least one party is an entity regulated by the specified authorities (RBI, SEBI, IRDAI, PFRDA or the IFSCA).

To Read more about the Bilateral Netting of Qualified Financial Contracts Act, 2020, Click Here.

Click Here To Download Notification [Companies Amendment]

Click Here To Download Notification [Bilateral Netting]