Mutual Fund (MF) ASBA mandatory from 1st October 2010 and not from 1st July

Sub: Additional mode of payment through Applications Supported by Blocked Amount (hereinafter referred to as “ASBA”) in Mutual Funds

ASBA is already available for subscription to public  issue & rights issue of equity and now it is extended to the investors subscribing to New Fund Offers (NFOs) of mutual fund schemes. It shall co-exist with the current process, wherein cheques/ demand drafts are used as a mode of payment. The banks which are in SEBI’s list shall extend the same facility in case of NFOs of mutual fund schemes to all eligible investors in Mutual Fund units. Mutual Funds shall ensure that adequate arrangements are made by Registrar and Transfer Agents (RTA) for the implementation of ASBA. Mutual Funds/AMCs shall make all relevant disclosures in this regard in the SAI. Also read [SEBI-ASBA] Lets Learn the Concept.

Please refer to circular SEBI / IMD / Cir / No 18 / 198647 / 2010 dated March 15, 2010 regarding additional mode of payments through ASBA in Mutual Funds. The circular indicated that the Mutual Funds/AMCs have to compulsorily provide ASBA facility to the investors for all NFOs launched on or after July 01, 2010.

In partial modification of the above circular, it has been decided that Mutual Funds / AMCs shall provide ASBA facility to investors for all NFOs launched on or after October 1, 2010.

 

Source: Cir / IMD / DF / 6 / 2010 dated 28th July 2010

Lawlabz Group 2nd Year Celebrations this July 2010 with Learnlabz & OnlyThisMuch, the video way, hope you will make it

Lawlabz Biennial Day Xperiments 2010
In our 2 year long journey we have serviced more than 350 clients, 200 company secretary students passed out, 2500 copies of books sold but more importantly we enjoyed all of your support, well wishes & faith.

On this special day, commemorating Law Labz's 2nd anniversary we would like to share our joy with everyone who has made this possible.  We are also taking this opportunity to inaugurate lawlabz.com, an online portal offering corporate legal services in real-time with video based solutions. 

We have created a personalized invite for you here.

• What: Lawlabz, Learnlabz & OnlyThisMuch turns two
• When: 7pm onwards, July 28th 2010 (Wednesday)
• Where: RYA Metro (12, Saravana Mudali Street, Off South Boag Road, T.Nagar)
• Guest of Honour: Mr. K. Pandiarajan, Managing Director Mafoi Randstand
  

Agenda

1. Website & Video Release (by guest of honour)
2. Award Distribution
3. Dinner (8.30 PM onwards)
   

Looking forward to meeting you and hoping for your continued support & motivation.
A.N.S. Vijay on behalf of Lawlabz, Learnlabz & OnlyThisMuch Group

Email & Informal agreement is valid, even an Arbitration can be enforced-Supreme Court on Trimex case - Formalty not required under Contract Act

The Indian Contract Act, 1872: ss.4, 7 – Concluded contract containing arbitration clause - Valid

The  Hon’ble Supreme Court (SC) in a recent judgment in the case of “Trimex International FZE Limited, Dubai vs. Vedanta Aluminium Limited, India” in Re (2010) 3 SCC 1”. It was held that in the absence of signed agreement between the parties, it would be possible to infer from   various documents duly approved and signed by the parties in the form of exchange of emails, letter, telex, telegram and other means of communication. The Hon’ble Supreme Court has accepted the unconditional acceptance through emails and held the same to be a valid contract which satisfies the requirements of Section 4 and 7 of the Contract Act 1872 and further it satisfies Section 2(1)(b), 7 of the Arbitration and Conciliation Act 1996.  In the absence of a signed agreement inference can be from documents approved and signed by the parties in the form of exchange emails, letters, telegrams which come within Section 10 and 2(e) of the Contract Act 1972.

As per Section 4: The communication of a proposal is complete when it becomes to the knowledge of the person to whom it is made.

As per Section 7: In order to convert a proposal into a promise the acceptance must - be absolute and unqualified; and be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted.

If respondent accepts the offer of petitioner following a very strict time schedule, he cannot escape from the obligations that flowed from such an action -

• Arbitration clause can be inferred from various documents duly approved and signed by the parties in the form of exchange of e-mails, letter, telex, telegrams and other means of tele-communication even in the absence of signed agreement -
• If no inference can be drawn from the facts that the parties intended to be bound only when a formal agreement had been executed, the validity of the agreement would not be affected by its lack of formality -
• On facts, the Commercial Offer carried no clause making the conclusion of the contract incumbent upon the Purchase Order -Therefore, the moment commercial offer was accepted by the respondent, the contract came into existence - Since the contract contained arbitration clause, petitioner made out case for appointment of arbitrator - Arbitration.

Petitioner's case was that on 15.10.2007, it submitted a commercial offer through e-mail for supply of Bauxite to the respondent. After exchange of several e-mails, respondent conveyed acceptance of offer through e-mail on 16.10.2007 confirming the supply of 5 shipments of Bauxite. Dispute arose and petitioner served arbitration notice on the respondent. Respondent rejected the arbitration notice stating that there was no concluded contract between them. Petitioner filed arbitration petition for appointment of arbitrator.

Click here to download the Supreme Court Judgment 2010 on Trimex case.

Thus, Once a contract is concluded orally or in writing, the mere fact that a formal contract has to be prepared and initialed by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initialed. The Court reiterated its stand that one of the main objectives of the Act is to
minimize the supervisory role of the courts. In holding this, the Court observed that if a number of extra requirements such as seals and originals, stamps etc. are added in considering an arbitration agreement, it would amount to increasing the role of courts and not minimizing it. Relying upon UNCITRAL Model Law, the Court concluded it would be improper and undesirable for the courts to add a number of extra formalities not envisaged
by the legislation. The court’s objective should be to achieve the legislative intent.  Accordingly, the Court held in favor of the Petitioner and appointed a former judge to arbitrate the matter.  Thus, no more stamp papers & its execution of contracts just for the purpose of enforceability!!!

Keep contractin…

Website link thru BSE/NSE to download ASBA forms online with UIN for making public issue applications - SEBI

SEBI is taking steps forward to make a public issue process completely online.

1. It has been decided to make ASBA bid-cum application forms available for download and printing, from websites of the Stock Exchanges which provide electronic interface for ASBA facility i.e. Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The ASBA forms so downloaded shall have a unique application number and can be used for making ASBA applications in public issues. A sample of the form is enclosed at Annexure A. 

Understand all about ASBA - in public issues, rights issues, by Mutual Funds, by QIB's - an alternate way of investing, SEBI

2. In order that the Stock Exchanges fill up essential details of an issue, the Merchant Banker to the issue shall ensure that the following details are provided to the Stock Exchanges at least 2 days before opening of the public issue:
a. Company Name
b. Type of issue
c. Issue opening date
d. Issue closing date
e. Price/ price band
f. Bid lot
g. Other relevant details
h. Soft copy of prospectus/abridged prospectus
3. The Stock Exchanges shall ensure the following :
a. The details furnished by the Merchant Banker to the issue are duly filled in the ASBA form for a specific public issue, before making the same available on websites.
b. The ASBA form for a specific public issue is made available on the websites of the Stock Exchanges at least one day before opening of the public issue.
c. A unique application number for an issue is generated for every ASBA form downloaded and printed from the websites.  Therefore application made using photocopy of the downloaded form shall not be accepted.
d. Investors have online access to soft copy of the abridged prospectus/prospectus of the public issue.
e. For revisions of bids, investors can take print of a bid revision form.
4. Merchant Bankers and SCSBs are directed to provide a hyperlink to BSE or NSE websites for this facility on their websites.  Links are expected in http://www.nseindia.com/content/ipo/ipo_asba_procedures.htm & http://www.bseindia.com/bookbuilding/asba.asp
5. All intermediaries are directed to comply with the instructions contained in this circular.
6. This circular shall be applicable to all public issues opening on or after July 19, 2010.

Ministry of labour turns accountable & release First Annual Report of Employment - is it a hint for labour law reforms [also contains recent updates]

Ministry of Labour & Employment presents to the People of India

the First Annual Report on Employment

with the objective of generating a healthy public debate on the issue of creating quality employment with distributive justice. We solicit valuable comments and suggestions from the people on major issues highlighted in this Report specially those relating to the employment of youth, women and the disadvantaged groups.

Though the report contains most of old statistics with few recent statistics, it was good effort by the Ministry to consolidate as Ministry is accountable to labour by all means, and it is expected that there will be regular reports released to people atleast on yearly basis.  Few excerpts from the report are under:

There are three important categories of employed persons:
1. Regular Salaried/Wage Employees are those who work in others’ farm or non-farm enterprises (both household and non household) and in turn receive salary or wage on a regular basis. This category includes not only persons getting time wage but also persons receiving piece wage or salary and paid apprentices, both full time and part-time.
2. Casual Wage Labour: A person who is casually engaged in others’ farm or non-farm enterprises (both household and non-household) and, who in return, receives wages according to the terms of the daily or periodic work contract.
3. Self Employed: Persons who operate their own farm or non-farm enterprises or are engaged independently in a profession or trade on their own account or with one or a few partners are deemed to be self-employed. Self-employed persons are further categorised as follows:
a) Own-account Workers: Those self-employed persons who operate their enterprises on their own account or with one or a few partners and who, during the reference period, by and large, run their enterprise without hiring any labour.
b) Employers: Those self-employed persons who work on their own account or with one or a few partners and, who, by and large, run their enterprise by hiring labour.
c) Helpers in household enterprises: Those self-employed persons (mostly family members) who are engaged in their household enterprises, working full or part time and who do not receive any regular salary or wages in return for the work performed. They do not run the household enterprise on their own but assist the related person living in the same household in running the household enterprise

 

Recent Amendments in Labour Laws: Promoting Equity and Welfare

• The Payment of Wages Act, 1936 amended to enhance the wage ceiling for its applicability. It is presently fixed at Rs. 10,000/- per month.
• The Payment of Bonus Act, 1965 amended to enhance the eligibility limit from Rs. 3,500/- per month to Rs. 10,000/- and calculation ceiling from Rs. 2,500 to Rs. 3,500/- per month while making employees employed through contractors on building operations eligible for payment of bonus under the Act.
• The Apprentices Act, 1961 amended, inter alia, to provide for reservation for other Backward Classes.
• The Maternity Benefit Act, 1961 amended to enhance the medical bonus from Rs. 250/- to Rs. 2,500/-and also empowering the Central Government to increase it from time to time before every three years, by way of notification in the Official Gazette, subject to a maximum of Rs. 20,000/-.
• The Employees State Insurance Act, 1948 amended to improve the quality of delivery of benefits under the scheme and also to enable ESI infrastructure to be used to provide health care to workers of the unorganised sector.
• The Payment of Gratuity Act, 1972 amended for raising the ceiling of Gratuity for employees in the private sector to Rs. 10 lakh from Rs. 3.5 lakh.
• The Plantations Labour Act, 1951 amended to provide safety and occupational health care to plantations workers.

 

VISION FOR SKILL DEVELOPMENT IN INDIA

Against the various challenges, a National Skill Development Policy has been formulated in February, 2009 which targets creating 500 million skilled people by 2022 with the following vision: Skill development should harness inclusivity and reduce economic and social divisions among Indian workforce particularly across rural-urban, male-female, organized- unorganized and traditional/ contemporary. Matching the emerging demands for skills across various industries and economic enterprises. Evolving National Vocational Qualification Framework comparable with international standards. Developing standard certification system by recognizing and including quality skills acquired through any informal system of learning. Greater and more active role for workers‟ organizations, industry, civil society, Panchayati Raj Institutions and other professional bodies. Greater reduction of poverty through enhanced earnings of skilled workers.

Download the First Report of Employment (Report to People)

Download FEMA Master Circulars on FDI/ODI, etc...issued by RBI & updated on 1st July of every year 2010 with foreign exchange law of India up to date

 Note: Master Circulars are a one-point reference of instructions issued by the Reserve Bank of India on a particular subject between July-June. These are issued on July 1 every year and automatically expire on June 30 next year. You can access the Master Circulars issued in previous years by using the Archives. For printing of these circulars please use the PDF version.

Foreign Exchange
Jul 01, 2010
	Master Circular on Establishment of Liaison / Branch / Project Offices in India by Foreign Entities	110 kb
	Master Circular on Acquisition and Transfer of Immovable Property in India by NRIs/PIOs/Foreign Nationals of Non-Indian Origin	97 kb
	Master Circular on Import of Goods and Services	298 kb
	Master Circular on Risk Management and Inter-Bank Dealings	346 kb
	Master Circular on Foreign Investment in India	368 kb
	Master Circular on Memorandum of Instructions governing money changing activities	324 kb
	Master Circular on External Commercial Borrowings and Trade Credits	220 kb
	Master Circular on Export of Goods and Services	351 kb
	Master Circular on Memorandum of Instructions for Opening and Maintenance of Rupee/ Foreign Currency Vostro Accounts of Non-resident Exchange Houses	217 kb
	Master Circular on Money Transfer Service Scheme	123 kb
	Master Circular on Compounding of Contraventions under FEMA, 1999	65 kb
	Master Circular on Direct Investment by Residents in Joint Venture (JV) /Wholly Owned Subsidiary (WOS) Abroad	362 kb
	Master Circular on Non-Resident Ordinary Rupee (NRO) Account	95 kb
	Master Circular on Remittance Facilities for Non-Resident Indians /Persons of Indian Origin / Foreign Nationals	80 kb
	Master Circular on Miscellaneous Remittances from India – Facilities for Residents	266 kb

  

Source: Click here to download updated RBI Master Circular

Life insurance benefits to Provident Fund employees increased to Rs.1lakh under Deposit linked Insurance scheme (EDLI)

EDLI Scheme amended:  In effect, on death during employment, Family member/nominee will get the following:

• if Average balance is more than Rs.50,000/-
• then Insurance Amount = Rs. 50,000/- + 40% (Excess), subject to a maximum of Rs. 1,00,000/-

Paragraph 22 of Employees Deposit Linked Insurance Scheme, 1974

22.       Scales of assurance benefit and the minimum average balance to be maintained by an employee. – (1)  On the death of an employee, who is a member of the Fund or of a provident fund exempted under section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations be paid an amount, equal to the average  balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs.50,000 (erstwhile limit was Rs.25,000/-), the amount payable shall be Rs.50,000 (erstwhile Rs.25,000/-)plus 40% (earlier limit was 25%) of the amount in excess of Rs.50,000 (erstwhile Rs.25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).

Download Notification No. GSR 523(E) dated 18th June 2010.

Revised monthly wage ceiling limit of 50% of Rs.4000 increased to Rs.8000-Employees Compensation Act for maximum compensation calculation

As you are aware, Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals, the said amendment which has removed the ceiling of monthly wage limit of Rs.4,000 for the purpose of calculation of Maximum Compensation under the Act is now amended again.

 

Now, a new monthly wage ceiling limit of Rs. 8000 is introduced for the purpose of calculation of 50% of it during computation of Maximum compensation under the Act.  Hence, the maximum compensation can go UPTO 50% of 8000 which comes to Rs. 4000/- that shall be multiplied by Age factor. Thus, effectively it was erstwhile 50% of Rs.4000 and now it is 50% of Rs.8000/-. This amendment is notified vide Central Government Notification No. S.O. 1258(E) vide Ministry of Labour & Employment dated 31st May 2010.

New Scheme to close down Company & comply for non-compliances done under Companies Act, 1956 like non-filing of annual returns, accounts, compliance certificate,etc...Lawlabz Website link

Closure of defunct companies by ROC

COMPANY LAW SETTLEMENT/EASY EXIT SCHEME under The Companies Act, 1956:

The Ministry of Corporate Affairs, has announced an EASY EXIT SCHEME to facilitate the defunct company to get rid of it. The scheme has made very simple for the exit of the defunct company without much effort.

In the normal circumstances closing of a company may take several years and may need to spent lakhs of rupees.

Please contact us immediately for filing the application, for closure of your defunct company, if any at the earliest and avail this golden opportunity.

The opportunity may come once in blue moon. So do ACT IMMEDIATELY and get rid of your defunct company once for all without any future litigation for non compliances.

After the closure of the scheme, it is expected that ROC may take actions on those companies who continue to default the compliances.

Take the opportunity immediately … 

• http://settlementscheme.lawlabz.com/
• http://easyexitscheme.lawlabz.com/

OR call us now @ 044-24340416

Reach us @ 7/13, South Boag Road, T.Nagar, Chennai, 600017

Mail us: solutions@lawlabz.com

Keep closing & enjoy complying!!!

Thank You,

LawLabz

360^o

  Personalised Corporate Solutions

Preserve/Lost your Mark sheets as NO more CS Pass Certificates for Foundation & Executive will be issued by ICSI on passing Company Secretary Exams but for Professional Program

Don’t panic after your CS Results this 25th August 2010 onwards! when you don’t receive your Company Secretary Exam pass certificates, ICSI has resolved not to send the same (may be a cost cutting measure or an environment friendly measure) as it serves no purpose. 

 

I have passed CS Executive Program but I have not received my Certificate, where can I approach? Now, you can feel relaxed!!!, ICSI says.

 

The mark statement (mark sheet) hereon will serve as the proof that you have cleared CS.  The first of its kind PASS certificates, you can receive after finishing your CS Final exams. 

 

Have you lost your CS Marksheet???

Again, not to panic.  You have to shell out Rs.50/- + Rs.25/- to ICSI and apply in Application for issue of Duplicate Result-cum-Mark sheet to get a duplicate copy for further reference & usage.

 

ATTENTION STUDENTS !!

DISCONTINUATION OF ISSUE OF PASS CERTIFICATES  TO FOUNDATION/ EXECUTIVE/INTER PROGRAMME PASS STUDENTS

In accordance with the decision taken by the Council of the Institute recently, it is brought to the notice of  the student community that  henceforth (i.e. from June, 2010 Examination Session onwards),   Pass Certificates will  be issued only to such students who pass Final Course/ Professional Programme. However, Mark Sheets  will continue to be issued to students of  all stages viz. Foundation, Executive/Intermediate and Professional/Final Programmes as per existing practice.

Source:http://www.icsi.edu/webmodules/student/ss_j14.htm

New Rule 19(2)(b) & 19A for initial & continuous listing requirement of 25% of capital with public as per SCRR amendment 2010 [for all companies]: 10% for 4000 crores to be increased@5% every year

The Securities Contracts (Regulation) Rules 1957 provide for the requirements which have to be satisfied by companies for the purpose of getting their securities listed on any stock exchange in India. A dispersed shareholding structure is essential for the sustenance of a continuous market for listed securities to provide liquidity to the investors and to discover fair prices. Further, the larger the number of shareholders, the less is the scope for price manipulation. Accordingly, the Finance Minister in his Budget speech for 2009-10, inter- alia, proposed to raise the threshold for non- promoter, public shareholding for all listed companies. To implement the Budget announcement the Securities Contracts(Regulation) (Amendment) Rules, 2010 has been notified vide Press Release F.No.5/35/2006-CM dated 4th June 2010 through

this Notification. [download now]

a) The minimum threshold level of public holding will be 25% for all listed companies.

b) Existing listed companies having less than 25% public holding have to reach the minimum 25% level by an annual addition of not less than 5% to public holding.

c) For new listing, if the post issue capital of the company calculated at offer price is more than Rs. 4000 crore, the company may be allowed to go public with 10% public shareholding and comply with the 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum.

d) For companies whose draft offer document is pending with Securities and Exchange Board of India on or before these amendments are required to comply with 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum, irrespective of the amount of post issue capital of the company calculated at offer price.

e) A company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.

f) The requirement for continuous listing will be the same as the conditions for initial listing.

g) Every listed company shall maintain public shareholding of at least 25%. If the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum period of 12 months from the date of such fall.

New definitions in Rule 2 of SCRR:

(d) “public” means persons other than – (i) the promoter and promoter group; (ii) subsidiaries and associates of the company. Explanation: For the purpose of this clause the words “promoter‟ and “promoter group‟ shall have the same meaning as assigned to them under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements-ICDR) Regulations, 2009.

(e) “public shareholding” means equity shares of the company held by public and shall exclude shares which are held by custodian against depository receipts issued overseas”.

New Rule 19(2)(b) of SCRR:

(i) At least 25% of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document; or
(ii) At least 10% of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document if the post issue capital of the company calculated at offer price is more than Rs. 4000 crores;

Provided that the requirement of post issue capital being more than Rs. 4000 crores shall not apply to a company whose draft offer document is pending with SEBI on or before the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, if it satisfies the conditions prescribed in clause (b) of sub-rule 2 of rule 19 of the Securities Contracts (Regulation) Rules, 1956 as existed prior to the date of such commencement (which is: offering atleast 10% if there are 20 lakh in number of securities, Rs.100 crores of offer size is given to public and follows bookbuilding by offering 60% to QIB)
Provided further that the company, referred in sub-clause (ii), shall bring the public shareholding to the level of at least 25% by increasing its public shareholding to the extent of at least 5% per annum beginning from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India .
Provided further that the company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.

 

New Rule 19(4) of SCRR – fresh application in all cases now!!!

An application for listing shall be necessary in respect of the following: (a) all new issues of any class or kind of securities of a company to be offered to the public; (b) all further issues of any class or kind of securities of a company if such class or kind of securities of the company are already listed on a recognised stock exchange.

 

New Rule 19(6A) – taking away the power from Clause 40A of Listing Agreement of stock exchanges as there is no more Provisio!!!

All the requirements with respect to listing or continuous listing requirement prescribed by these rules, shall, so far as they may be, also apply to a body corporate constituted by an Act of Parliament or any State Legislature. [Old Provisio deleted]

Note: SEBI’s power to relax listing requirements under SCRR is withdrawn.  Also note, there is no more Clause 40A continuous listing requirement of 10% if the company has 2 crores of listed shares with a market capitalisation of Rs.1000 crore or more.

Clause 40A is now Rule 19A mandating 25% as CONTINUOUS LISTING REQUIREMENT for all Companies:

Every listed company shall maintain public shareholding of at least 25%

Provided that any listed company which has public shareholding below 25% on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, shall bring the public shareholding to the level of at least 25% by increasing its public shareholding to the extent of at least 5% per annum beginning from the date of such commencement, in the manner specified by SEBI.

Provided further that the company may increase its public sharholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.

(2) Where the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25%within a maximum period of 12 months from the date of such fall in the manner specified by the Securities and Exchange Board of India.”

Learnlabz Activity outside Company Secretary exam centres @ Chennai, Free DVDs for CS students on classes & books

Catching up the heat outside Company Secretary Exam centres at Chennai.  Learnlabz stall was crowded with CS students availing their free DVD’s with lots of excitement & sincerity.  Many were out of the exam halls too early winning their first law exam and found it interesting!!!

 

You can also enjoy our Youtube releases from http://www.youtube.com/watch?v=OO-tKh9Ptrw&feature=player_embedded

Learnlabz wishes All the Best for every exam giving you a fresh 3 hours!!! – its Only This Much.

We make learning an interesting experience!!!