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June 17, 2021

ICSI requests relaxation in RBI reporting requirements

by CA Shivam Jaiswal in Corporate Law

ICSI requests relaxation in RBI reporting requirements

The Institute of Company Secretaries of India

ICSI: PFP: 2021

June 15, 2021

Foreign Exchange Department
Reserve Bank of India

11th Floor, Central Office Building,
Shahid Bhagat Singh Road,

Mumbai-400 001

Sub: Relaxation from compliance with various reporting requirements under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017 due to the Second Wave of COVID-19 pandemic

Respected Sir/Madam,

As your goodself is aware, the second wave of COVID-19 pandemic is spreading fast and economy is again gripping in the crisis. The situation in the major cities is again worsening and the Government has imposed various restrictions as well as lockdown to curb the impacts. In these challenging times stakeholders are finding it difficult to meet the ends and function smoothly.

Further, the pandemic has strongly bounced back and the intensity of the second wave of the CoVID-19 pandemic is much more severe than it was during last year i.e. 2020. Corporates are also facing various challenges during this period due to various reasons and many factors arising out of it. Developments arising due to the COVID-19 virus have warranted the need for temporary relaxations in compliance requirements under various laws.

Considering the gravity of the situation and also keeping in view the public health, regulators such as Ministry of Corporate Affairs and the Securities & Exchange Board of India, etc., have already extended deadlines for filings and other statutory compliances by the corporates.

In this regard, we wish to submit that companies are facing difficulty in complying with RBI reporting requirements due to problem in signing of documents from Authorized Signatories.

We, therefore, request your goodself to kindly consider to grant relaxation of time period for filing the following forms as mentioned below without levy of additional fees:

Sl. No.Compliance
requirement
DetailsSuggestion
1.Annual Return
on Foreign
Liabilities and
Assets (FLA)
An Indian company which has received FDI or an LLP which has received investment by way of capital contribution in the previous year(s) including the current year, should
submit form FLA to the Reserve Bank on or before the 15th day of July of each year.
The last date to submit FLA may be extended till 15th August, 2021.
2.External
Commercial
Borrowings
Borrowers are required to report all ECB transactions to the RBI on a monthly basis through an AD Category — I Bank in the form of `ECB 2 Return’ on a monthly basis.The Requirement to file form `ECB 2 Return’ may be extended to two
months.
3.Form Foreign
Currency-
Transfer of
Shares (FC-
TRS)
Form FC-TRS shall be filed for transfer of capital instruments. The form FC- TRS shall be filed with the Authorised Dealer bank within 60 days of transfer of capital instruments or receipt/remittance of funds whichever is earlier.The timeline for filing Form FC-TRs be extended from 60 days to 90 days of transfer of capital instruments or receipt/ remittance of funds whichever is earlier.
4.Form ODIAn Indian Party and a Resident Individual making an overseas investment is required to submit form ODI. When they receive share
certificates or any other documentary evidence of investment in the foreign JV / WOS as an evidence of investment and submit the same to the designated AD within 30 days.
The timeline for filing Form ODI be extended from 30 days to 60 days.
5.Form DIAn Indian entity or an investment Vehicle making downstream investment in another Indian entity which is considered as indirect foreign investment for the investee Indian entity in terms of Regulation 14 of these Regulations shall file Form DI with the Reserve Bank within 30 days from the date of allotment of capital instruments.The timeline for filing Form DI be extended from 30 days to 60 days from the date of allotment of capital
instalments.
6.Form InViAn Investment vehicle which has issued its units to a person resident outside India shall file Form InVi with the Reserve Bank within 30 days from the date of issue of units.The time line for filing Form InVi be extended from 30 days to 60 days from the date of issue of units.
7.Form ESOPAn Indian company issuing employees’ stock option to persons resident outside India who are its employees/ directors or employees/ directors of its holding company/ joint venture/ wholly owned overseas subsidiary/ subsidiaries shall submit Form-ESOP to the Regional Office concerned of the Reserve Bank under whose jurisdiction the registered office of the company operates, within 30 days from the date of issue of employees’ stock option.The time line for filing Form ESOP be extended from 30 days to 60 days from the date of issue of employees’ stock option.
8.Form LLP (I)A Limited Liability Partnerships (LLP) receiving amount of consideration for capital contribution and acquisition of profit shares shall submit Form LLP (I) to the Regional Office of the Reserve Bank under whose jurisdiction the Registered Office of the Limited Liability Partnership is situated, within 30 days from the date of receipt of the amount of consideration.The timeline for filing Form LLP (I) be extended from 30 days to 60 days from the date of receipt of the amount of
consideration.
9.Form LLP (II)The disinvestment/ transfer of capital contribution or profit share between a resident and a non-resident (or vice versa) shall be reported in Form LLP(II) to the Authorised Dealer Bank within 60 days from the date of receipt of funds.The timeline for filing Form LLP (II) be extended from 60 days to 90 days from the date of receipt of funds.
10.Form CNThe Indian startup company issuing Convertible Notes to a person resident outside India shall report such inflows to the Authorised Dealer bank in Form CN within 30 days of such issue.The timeline for filing Form CN be extended from 30 days to 60days of issue of Convertible Notes.

We hope that the above submissions would be considered favorably.

We shall be pleased to provide any further information in this regard on hearing from your goodself.

Thanking You,
Yours faithfully,

CS Asish Mohan
Secretary

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