The document summarizes various announcements made by the Reserve Bank of India, Ministry of Corporate Affairs, tax authorities and Ministry of Finance between June 5-9, 2017 regarding the introduction of a Legal Entity Identifier system for OTC derivatives, revisions to rules for issuing rupee denominated bonds overseas, recording Pension Payment Order numbers in pensioner passbooks, new information technology regulations for non-banking financial companies, clarification on shares transferred to IEPF Authority, transactions not subject to securities transaction tax, extension of deadline for furnishing Form 16 to employees, and status of States passing the State GST Act.

1. June 5-9, 2017
CORPORATE
RBI
Introduction of Legal Entity Identifier for
OTC derivatives markets
Reserve Bank of India (RBI) vide Notification
No. RBI/2016-17/314 FMRD.FMID
No.14/11.01.007/2016-17 dated 5th June,
2017 has introduced the legal Entity
Identifier (LEI) for the OTC derivatives
markets. The Legal Entity Identifier (LEI)
code has been conceived of as a key measure
to improve the quality and accuracy of
financial data systems for better risk
management post the Global Financial Crisis.
The LEI is a 20-character unique identity
code assigned to entities who are parties to
a financial transaction.
It has been decided to implement the LEI
system for all participants in the Over-the-
Counter (OTC) markets for Rupee Interest
Rate derivatives, foreign currency
derivatives and credit derivatives in India, in
a phased manner. Accordingly, all current
and future participants would be required to
obtain the unique LEI code as per time lines
indicated in the schedule. Entities without an
LEI code would not be eligible to participate
in the OTC derivative markets, after the date
specified in the schedule.
https://www.rbi.org.in/Scripts/Notificatio
nUser.aspx?Id=10988&Mode=0
Issuance of Rupee denominated bonds
overseas
Reserve Bank of India (RBI) vide Circular No.
47 dated 7th June, 2017 has revised the
provisions in respect of maturity period, all-
in-cost ceiling and recognized lenders
(investors) of Masala Bonds. Further, On a
review of the laid down framework for
issuance of Rupee denominated bonds
overseas (Masala Bonds) and with a view to
harmonize the various elements of the ECB
framework, it has been decided that any
proposal of borrowing by eligible Indian
entities by issuance of these bonds will be
examined at the Foreign Exchange
Department, Central Office, Mumbai.
It has been decided to revise the provisions
in respect of maturity period, all-in-cost
ceiling and recognized lenders (investors) of
Masala Bonds as under:
a. Maturity period: Minimum original
maturity period for Masala Bonds raised
upto USD 50 million equivalent in INR per
financial year should be 3 years and for
bonds raised above USD 50 million
equivalent in INR per financial year should be
5 years.
b. All-in-cost ceiling: The all-in-cost ceiling
for such bonds will be 300 basis points over
the prevailing yield of the Government of
India securities of corresponding maturity.

2. June 5-9, 2017
c. Recognised investors: Entities permitted
as investors under the provisions of
paragraph 3.3.3 of the Master Direction but
should not be related party within the
meaning as given in Ind-AS 24.
https://www.rbi.org.in/Scripts/Notificatio
nUser.aspx?Id=10994&Mode=0
Recording of PPO Number in the passbook
of Pensioners / Family Pensioners
Reserve Bank of India (RBI) vide Notification
No. RBI/2016-17/319
DGBA.GBD.No.3235/45.01.001/2016-17
dated 8th June, 2017 it has been decided to
record the PPO number in all the pension
passbooks of the pensioners/family
pensioners issued to them. This is to
alleviate the difficulties reported by
pensioners/family pensioners to get
duplicate Pension Payment Orders (PPO) in
case of missing of original PPO, transfer of
pension account from one bank/branch to
another bank/branch, commencement of
family pension to spouse or dependent
children after the death of pensioner, etc. in
the absence of ready availability of PPO
numbers.
https://www.rbi.org.in/Scripts/Notificatio
nUser.aspx?Id=10997&Mode=0
Master Direction - Information Technology
Framework for the NBFC Sector
Reserve Bank of India (RBI) vide Notification
No. RBI/DNBS/2016-17/53 Master Direction
DNBS.PPD.No.04/66.15.001/2016-17 dated
8th June, 2017 has issued Master Direction
on Information Technology Framework for
the NBFC sector. The focus of the proposed
IT framework is on IT Governance, IT Policy,
Information & Cyber Security, IT Operations,
IS Audit, Business Continuity Planning and IT
Services Outsourcing. The directions are
categorized into two parts, those which are
applicable to all NBFCs with asset size above
Rs. 500 crore (Considered Systemically
Important) are provided in Section-A.
Directions for NBFCs with asset size below
Rs. 500 crore are provided in Section-B.
NBFCs may place these directions before
their Board, together with a gap-analysis vis-
a-vis the Master Direction and the proposed
action by September 30, 2017. NBFCs-
Systemically Important shall comply with the
Master Directions by June 30, 2018 and
other NBFCs (asset size below Rs. 500 crore)
shall comply by September 30, 2018.
https://www.rbi.org.in/Scripts/Notificatio
nUser.aspx?Id=10999&Mode=0
MCA
MCA issues clarification w.r.t. the issue of
duplicate shares to the IEPF Authority
MCA vide Circular No. 07/2017 dated 5t
June, 2017 has issued clarification w.r.t the
issue of duplicate shares to the IEPF
Authority. It has been stated that since
transfer of shares to IEPF under Section
124(6) of the Companies Act, 2013, takes
place on account of operation of law hence
the procedure followed during transmission
of shares may be followed in such cases and
duplicate shares need not to be issued in

3. June 5-9, 2017
such cases. The MCA has clarified that the
procedure similar to what is followed in case
of transmission of shares may be followed by
companies while transferring shares to IEPF
Authority pursuant to Section 124(6) of the
Companies Act, 2013 read with applicable
rules.
http://www.mca.gov.in/Ministry/pdf/IEPF
Gcircular07_05062017.pdf
TAXATION
List of transactions not chargeable to
securities transaction tax (STT)
The Ministry of Finance, Department of
Revenue notifies the list of transactions not
chargeable to securities transaction tax
(STT). Following transactions of acquisition
of equity shares entered into on or after the
1st day of October, 2004 are not chargeable
to securities transaction tax under Chapter
VII of the Finance (No. 2) Act, 2004, such as,
acquisition of existing listed equity share in a
company through a preferential issue whose
equity shares are not frequently traded in a
recognised stock exchange of India,
transaction for acquisition of existing listed
equity share in a company which is not
entered through a recognised stock
exchange of India and acquisition of equity
share of a company during the period
beginning from the date on which the
company is delisted from a recognised stock
exchange and ending on the date
immediately preceding the date on which
the company is again listed on a recognised
stock exchange in accordance with the
Securities Contracts (Regulation) Act, 1956
read with Securities and Exchange Board of
India Act,1992 and the rules made
thereunder. However, there are certain
transactions to which this Circular shall not
apply. This notification shall come into force
with effect from the 1st day of April, 2018
and shall accordingly apply to assessment
year 2018-19 and subsequent assessment
years.
http://www.incometaxindia.gov.in/comm
unications/notification/notification43_201
7.pdf
CBDT extends deadline to furnish Form 16
CBDT has notified the Income-tax (10th
Amendment) Rules, 2017 which shall come
into force from the date of their publication
in the Official Gazette. In the Income-tax
Rules, 1962, in Rule 31(3), the deadline to
furnish Form 16 to employees extended
till June 15 from 31st day of May every year.
The Rule 31(3) provides for due date of
furnishing of Form 16 (relating to TDS) to the
employees; specifying that the employer is
required to furnish Form 16 to the
employees by June 15, 2017 following the
financial year (FY) in which salary was paid
and tax was deducted.
http://www.incometaxindia.gov.in/comm
unications/notification/notification42_201
7.pdf

4. June 5-9, 2017
24 States pass the State GST (SGST) Act
While 7 States viz.
Meghalaya,Punjab,Tamil Nadu, Kerala,
Karnataka, Jammu & Kashmir and West
Bengal have yet to pass the SGST Act.
Ministry of Finance vide Press Release dated
5th June, 2017 has announced that Twenty
Four (24) States have passed the State GST
(SGST) Act till today i.e. 5th June, 2017 while
7 States viz. Meghalaya, Punjab,Tamil Nadu,
Kerala, Karnataka, Jammu & Kashmir and
West Bengal have yet to pass the State GST
(SGST) Act .
For any query: Contact – Sunaina Jhingan
Email – Sunaina.jhingan@acquisory.com