Insights
SEBI relaxations for AIFs, VCFs, portfolio managers, CRAs, FPIs, stewardship code due to Covid-19
March 30, 2020AIFs & VCFs
SEBI has extended the due date for regulatory filings for AIFs and VCFs for the period ended 31 March 2020 and 30 April 2020 by two months over and above the timelines prescribed under the SEBI (AIF) Regulations 2020 and circulars issued thereunder. Refer circular dated 30 March 2020, here.
Portfolio Managers
SEBI has extended the timelines by two months for (a) Monthly reporting to SEBI by Portfolio Managers for the periods ending March 31, 2020 and April 30, 2020 and (b) Applicability of SEBI Circular dated February 13, 2020 on ‘Guidelines for Portfolio Managers’. Refer circular dated 30 March 2020, here.
Credit Rating Agencies (CRAs)
In view of the three month moratorium / deferment on payment permitted by RBI, if the CRA is of the view that the delay in payment of interest/principle has arisen solely due to the lockdown conditions creating temporary operational challenges in servicing debt, including due to procedural delays in approval of moratorium on loans by the lending institutions, CRAs may not consider the same as a default event and/or recognize default. Appropriate disclosures in this regard shall be made in the Press Release. This will also apply to any rescheduling in payment of debt obligation done by the issuer, prior to the due date, with the approval of the investors/lenders. The aforesaid relaxation is extended till the period of moratorium by the RBI.
Further, SEBI has relaxed the timelines for rating action/issue of press release under its circular dated 30 June 2017. It has also extended by 30 days the time for making annual and semi-annual disclosures by CRAs on its website for the period ended March 2020.
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FPIs
DDPs & Custodians may consider and process the request(s) for registration/ continuance/ KYC / KYC review & any other material change on the basis of scanned version of signed documents (instead of originals) and copies of documents which are not certified, received from (i) e-mail IDs of their Global Custodians/existing clients where these details are already captured in records or (ii) e-mail IDs of new clients received from domains which are duly encrypted with Transport –layer security (TLS) or similar encryption or the documents are password protected. These documents may be uploaded on KRAs. The other intermediaries may rely on said documents.
These temporary relaxations shall be applicable till June 30, 2020. DDPs & Custodians shall obtain the original and/or certified documents (as applicable normally) within 30 days from the aforesaid deadline. In case required documents for registration/ KYC are not received by said deadline, the accounts of such FPIs shall be blocked for any fresh purchase. In case documents are still not received within 3 months of said deadline, DDPs & Custodians shall report these cases to SEBI for appropriate action.
Refer SEBI Circular dated 30 March 2020 here.
Stewardship Code
The Stewardship Code for all Mutual Funds and all categories of AIFs, in relation to their investment in listed equities, will now be implemented with effect from 1 July 2020, instead of 1 April 2020.
Refer SEBI Circular dated 30 March 2020 here
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