Corporate & Commercial Law Updates

Expansion of the FTM Route

The Securities and Exchange Board of India (SEBI) has released detailed technical clarifications to the Cybersecurity and Cyber Resilience Framework (CSCRF) applicable to SEBI-regulated entities. These clarifications provide guidance on compliance obligations for entities governed by multiple regulators, introduce specific technical standards, and reclassify the applicability of requirements for portfolio managers and merchant bankers. Further, the circular integrates cybersecurity audit policy directions in alignment with CERT-In guidelines. The objective of these clarifications is to strengthen cybersecurity safeguards, standardize compliance practices, and ensure enhanced resilience across all SEBI-regulated entities.

The Reserve Bank of India (RBI) has recently notified the Reserve Bank of India (Investment in Alternative Investment Funds) Directions, 2025. This development represents a decisive shift in the regulatory architecture governing the exposure of banks, non-banking financial companies (NBFCs), housing finance companies (HFCs), and other regulated entities (REs) to Alternative Investment Funds (AIFs). The new framework, which will come into effect from 1 January 2026, repeals the earlier circulars of December 2023 and March 2024. While the earlier regime was largely prohibitory, the new Directions are designed to be prudential, providing limits, provisioning norms, and capital treatment that balance risk containment with investment flexibility.

Based on a Report by Moneycontrol.com: In a significant move towards regulatory streamlining, the Securities and Exchange Board of India (SEBI) is reportedly considering introducing a settlement scheme to address past regulatory violations by Venture Capital Funds (VCFs) registered under the now-defunct SEBI (Venture Capital Funds) Regulations, 1996.

Source: Press Information Bureau, Government of India. The Government of India has launched the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) to catalyse the growth of domestic EV manufacturing and encourage foreign investment in the sector. This policy is aligned with India’s goals of sustainable development, net-zero emissions by 2070, and its broader vision of becoming a global EV manufacturing hub.

In a significant regulatory push, the Indian Venture and Alternate Capital Association (IVCA) has advised all venture capital funds (VCs) still operating under the erstwhile SEBI Venture Capital Fund (VCF) Regulations, 1996 to migrate to the current Alternative Investment Fund (AIF) regime ahead of the deadline set by the Securities and Exchange Board of India (SEBI).

The Reserve Bank of India (RBI) has released draft directions proposing a revised regulatory framework for investments by Regulated Entities (REs) including banks and NBFCs in Alternative Investment Funds (AIFs). These draft norms aim to address concerns around indirect exposure to stressed assets and potential evergreening of loans through AIF structures.

The Ministry of Corporate Affairs (MCA), through Notification No. File No.: 2/31/CAA/2013CL-V PART dated April 4, 2025, has issued a public notice inviting stakeholder comments on the draft Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 (“Draft CAAA Rules”).