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Showing posts from February 15, 2017

Plan to use P-notes? Be ready to pay 7.5% Tax

Foreign institutional investors (FPIs) issuing participatory notes (P-notes) have decided to impose a 7.5 per cent tax on those who want to use these off-shore derivative instruments to bet on India’s equity market.
Although, P-note holders are not subject to any domestic tax laws as they are not registered directly in India, the liability of short capital gains tax (STCG) fall on FPIs issuing these instruments. 

The tax department considers registered FPI as a single entity for assessment and is not concerned with multiple P-note deals that it has cut with various un-registered clients. For FPIs, the dilemma was how to appropriately pass on the short term capital gains tax to P-note holders. 
So, irrespective of whether P-note holding clients made profit or loss, FPIs will have to pay tax if there was profit recorded on their books, said lawyers and consultants who advise foreign investors. FPIs thus have decided to impose 7.5% tax on any new P-note being issued post March 31 this year …

FSSAI sets up scientific panel on food fortification and nutrition

The Food Safety and Standards Authority of India (FSSAI) on Tuesday said it has set up a scientific panel on “food fortification and nutrition” to help fight malnutrition in the country. On 2 February, the regulator notified a draft plan to make supply of fortified food mandatory for government-supported schemes such as midday meal at schools, integrated child development services (ICDS) and public distribution system (PDS). FSSAI will carry out the exercise in collaboration with the Union ministry of women and child development. Mint New Delhi,15th Februray 2017

Bankruptcy code: IBBI seeks public comments

The Insolvency and Bankruptcy Board of India, or IBBI, on Tuesday sought public comments on draft rules outlining the process that companies can follow for voluntary liquidation under the Insolvency and Bankruptcy Code, 2016. A company that has not defaulted on loans may initiate voluntary liquidation subject to certain conditions, according to the bankruptcy code. In case of default or debt outstanding, the company should be able to pay it off from the sale of assets. In case of voluntary liquidation, the law also requires shareholders of the company to pass a special resolution in a general meeting requiring the company to be liquidated voluntarily and appointing an insolvency professional to act as the liquidator. The consent of the creditors needs to be obtained to voluntarily liquidate a company in case of debt.
A working group on bankruptcy has submitted draft regulations for voluntary liquidation of companies. The draft rules for fast-track corporate insolvency resolution are yet …

Sebi changes priority regulation

Faced with legal difficulties in allowing options trading in commodities, the Securities and Exchange Board of India (Sebi) has decided to let in new institutional players in commodity futures to improve the depth of the market. Although the regulator had floatedadiscussion paper to allow options in commodities first and then let in more players, it seems to come up againstalegal snag. Sources close to the development said that “till the legal framework for allowing options is cleared, Sebi will allow new players.

Indian and overseas private equity funds and venture funds registered with Sebi under category 3 alternative investment funds (AIF) will be permitted first as their regulation permit them to participate in listed and unlisted derivatives.

Mutual funds, which are also regulated by Sebi, will be permitted after that.

In the next phase, insurers and other financial institutions will come, and in the third leg banks will be permitted.

These require the respective sectoral regulator´s …