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Introduction

SEBI has amended the ICDR Regulations, 2018, with effect from 16 March 2026, addressing key gaps in the IPO framework. The amendments primarily focus on :

(i) strengthening the enforceability of lock-in provisions in respect of pledged shares, and (ii) improving the timing and accessibility of abridged prospectus disclosures.

1. The Lock-in Challenge

1.1 Lock-in requirements are central to maintaining discipline in capital raising. However, under the earlier framework, a practical limitation existed. When shares were pledged, the depository system did not have the capability to technically enforce transfer restrictions.

This created a situation where:

• Lock-in obligations existed in law
• But their enforcement depended on contractual arrangements
• And in certain cases, pledge-related events introduced ambiguity

In essence, there was a disconnect between regulatory intent and system capability.

1.2 SEBI has now addressed this gap by introducing a clear mechanism within Regulation 17 of ICDR.

Under the revised framework:

• The issuer is empowered to instruct the depository to restrict transfer of shares subject to lock-in[i]
• The depository marks such shares as non-transferable at a system level
• This restriction operates irrespective of whether the shares are pledged

Importantly, even where:

• the pledge is invoked, or
• the pledged shares are released

the lock-in restriction continues uninterrupted for the entire prescribed period.

This marks a significant shift from contractual enforcement to technological enforcement, ensuring that the lock-in requirement is not merely theoretical but operationally binding.

1.3 Impact on the stakeholders

The amendment ensures that lock-in is now enforced directly through the depository system, making shares non-transferable even if they are pledged. As a result, issuers, depositories, and intermediaries need to coordinate to implement and monitor this properly, lenders will have limited flexibility in dealing with pledged shares during the lock-in period, and advisors must carefully structure and review such transactions under this stricter and clearly enforceable framework.

2. Reworking the Abridged Prospectus: From Late Disclosure to Early Insight

2.1 The second major reform relates to investor disclosures.

Earlier, the abridged prospectus was intended to provide a concise snapshot of the offer. It was made available only at the application stage. By that point, investors had already navigated the decision-making process, often relying on lengthy and complex offer documents.

This approach limited the effectiveness of the abridged prospectus as a decision-support tool.

2.2 The revised framework fundamentally repositions the role of the abridged prospectus.

Now:

• A Draft Abridged Prospectus (DAP) is required to be prepared and filed along with the DRHP[ii]
• It follows a standardised structure, ensuring uniformity across issuers[iii]

Further, the mode of dissemination has been modernised:

• Physical copies are replaced with QR codes and hyperlinks[iv]
• Application forms act as access points, not carriers of documents

2.3 Standardisation of Disclosure : A Structured Investor Summary

The amendment introduces a clearly defined 12 part  structure for the abridged prospectus, requiring disclosure of key investor-relevant information, including:

• Overview of the issue and business
• Industry summary
• Promoter details
• Objects of the issue
• Pre- and post-issue shareholding
• Financial highlights
• Key performance indicators
• Top risk factors
• Cost of acquisition
• Board and KMP details
• Auditor qualifications
• Outstanding litigations

Additionally, disclosures relating to Contingent Liabilities and Related Party Transactions[v] are now elevated as standalone sections in the offer document, indicating a shift in regulatory emphasis.

2.4 Before and After : A Structural Comparison

Lock-in Framework

Abridged Prospectus Framework

2.5 Impact of the amendment

The introduction of the Draft Abridged Prospectus (DAP) impacts issuers, merchant bankers, and legal advisors, as it becomes a mandatory part of the DRHP filing process and must be prepared in a standardised format at an earlier stage. For companies that have already filed their DRHP prior to the amendment, the requirement would generally apply at the stage of updating or refiling the DRHP/RHP, meaning they may need to prepare and align the DAP before proceeding further in the issue process. From an implementation perspective, while QR code–based access simplifies investor outreach, practical challenges may arise in ensuring correct linkage, version control (especially when documents are updated), seamless accessibility across devices, and maintaining consistency between the DRHP, abridged prospectus, and linked disclosures, thereby requiring careful coordination and verification before circulation.[vi]

Conclusion

The 2026 amendments reflect a clear regulatory direction, the one that prioritises enforceability and accessibility.

On one hand, SEBI has ensured that lock-in provisions are backed by system-level controls, eliminating operational loopholes. On the other, it has transformed the abridged prospectus from a procedural requirement into a meaningful disclosure tool.

Together, these changes signal a move towards a more integrated, technology-driven and investor-focused IPO framework; where compliance is not only mandated, but effectively delivered.

[i] Regulation 17 (2) of ICDR: Subject to sub-regulation (1), where lock-in of the specified securities cannot be created, the depositories shall, upon receipt of instructions from the issuer, record such securities as “non-transferable” for the duration of the applicable lock-in period

[ii] Regulation 25(2) of ICDR The lead manager(s) shall submit the following to the Board along with the draft offer document:

…

(d) a draft abridged prospectus as per Part E of Schedule VI.

…

[iii] Schedule VI, Part E, of ICDR Regulations

[iv] Regulation 34(2), 131(2), 255(2), Schedule VI, Part E (VI), of ICDR Regulations

[v] Schedule VI, Part A, Clause (6), ICDR Regulations

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The Foreign Contribution (Regulation) Amendment Bill, 2026, introduced in the Lok Sabha, proposes a significant overhaul of the 2010 Act. This legislative initiative aims to close operational gaps and establish a centralized, statutory framework for the oversight of foreign inflows.

I. Institutional Oversight & Asset Management

The Bill replaces framework of Section 15 with a comprehensive regime for handling assets when a registration is no longer active.

• The Designated Authority: A new “Designated authority” is established to supervise, manage, and safeguard foreign contributions and assets.
• Provisional vs. Permanent Vesting: Assets “provisionally vest” in the Authority upon cancellation, surrender, or cessation of a certificate. Vesting becomes “permanent” if the entity fails to renew or restore its registration within a prescribed period.
• Disposal of Assets: The Authority may transfer assets to Government agencies or sell them, crediting proceeds to the Consolidated Fund of India.
• Places of Worship: A specific safeguard ensures that if a vested asset is a place of worship, its religious character must be maintained during management.

II. Governance & Expanded Liability

Defining “Key Functionary”: The term “key functionary” is introduced to replace fragmented terms like “directors” or “office bearers”. This definition now explicitly covers Kartas of HUFs, partners in firms, trustees, and any individual responsible for the management or affairs of the person.

Individual Accountability: Under the new Section 39, key functionaries are deemed guilty of offences committed by the entity unless they can prove the offence happened without their knowledge or despite their due diligence.

III. Compliance Lifecycle & Timelines

• Cessation of Certificate: New Section 14B clarifies that a certificate “ceases” automatically upon expiry if a renewal application is not made, is refused, or is not granted before the expiry date.
• Time-Bound Utilization: Prior permission is now valid only for a specific purpose or amount; funds must be received and utilized within a period to be prescribed by the Government.
• Suspension Safeguards: While a certificate is suspended, entities are expressly prohibited from alienating or encumbering any assets created from foreign contributions without prior Government approval .

IV. Rationalized Enforcement & Penalties

• The maximum term of imprisonment for contravening the Act is reduced from five years to one year.
• The penalty provision now explicitly includes the illegal utilization of foreign contributions, alongside acceptance.
• A significant procedural hurdle is introduced – no investigation into an offence under the Act can be initiated without the prior approval of the Central Government.

In conclusion, the proposed amendments signify a decisive move towards a more structured, transparent and enforcement-oriented regulatory regime under the FCRA framework. By addressing existing gaps and introducing clearer accountability, procedural safeguards and asset management mechanisms, the Bill is poised to enhance regulatory certainty while imposing heightened compliance expectations on regulated entities.

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Following our analysis of structural changes in Part I, this second part focuses on amendments in Sections 206 and above of the Companies Act, 2013, proposed in the Corporate Laws (Amendment) Bill, 2026. Key highlights include the centralisation of merger jurisdictions, mandatory dormant status for inactive entities, and a revamped adjudication machinery featuring Recovery Officers and Settlement Authorities. We also examine the widened eligibility for voluntary strike-off and the transfer of restoration powers to the Regional Director, aimed at streamlining administrative exits and protecting external stakeholders. The significant amendments introduced in this Part are as follows:

I. Mergers and Amalgamations (Sections 230, 233)

• Section 230: Where multiple companies are involved in a scheme, the application shall be filed only before the NCLT bench having jurisdiction over the Transferee Company, eliminating multiple applications.
• Section 233 (Fast-track Merger):
  • Creditor Consent: The threshold for creditor approval is lowered from 9/10ths to 75% in value, aligning it with the requirements of Section 230.
  • Present and Voting: Clarification that the 75% majority is calculated based on creditors/members “present and voting” (in person or by proxy/postal ballot), rather than the total value/number.

II. Strike-Off (Sections 248, 252)

• Section 248 (Strike-Off Conditions): A company cannot be struck off if it has carried out any Significant Accounting Transaction during the current or previous financial year.
• A company is now ineligible for strike-off (either suo moto by ROC or voluntary under 248(2)) if it has performed a Significant Accounting Transaction in the current financial year.
• Pursuant to the omission of the reference to sub-section (1) from sub-section (2) of section 248, the grounds for voluntary strike-off are no longer restricted to the specific technical defaults listed for the Registrar’s suo motu action
• Section 252 (Restoration): Powers to restore a struck-off company are transferred from the NCLT to the Regional Director (RD) to expedite administrative relief, if the application of restoration made within 3 years of struck off.

III. Special Entities (Sections 366, 378P, 378Y)

• Section 366 (Conversion): Provisions expanded to allow the registration of Non-Trading Companies registered with state governments into section 8 companies under this Part, facilitating a smoother transition for existing entities into the Companies Act framework.
• Producer Companies:
  • Section 378P: The directors can be appointed in any General meeting, earlier restricted to Annual General Meeting
  • Section 378Y: Quorum of General meeting related provision modified to allow producer company to have a quorum of at least one-fourth of the total members or 100, whichever is less.

IV. Adjudication and Recovery (Sections 454, 454B, 454C)

Section 454 (Adjudication): 

• Authority: Designation of Assistant Registrar of Companies (AROC) as an Adjudicating Officer to handle adjudication proceedings
• Application: Introduction of a prescribed form for companies to suo moto apply for adjudication of a default.
• Section 454B (Recovery): Appointment of a Recovery Officer with powers to attach/sell movable and immovable property and, in extreme cases, arrest and detention of the defaulter in case of failure to pay penalty under this Act.
• Section 454C (Settlement): Enables settlement of defaults before an adjudication order is passed. Settlement is restricted to civil defaults and generally excludes “Serious Fraud” or non-compoundable offences.

V. Penalties and Compounding (Sections 403, 441, 446B, 447)

• Section 403 (Additional Fee): Empowers CG to make rules under first proviso to section 403(1) instead of minimum additional fee for delayed filing set at ₹100 per day. Furthermore, CG can prescribe certain classes of companies, for which maximum cap is prescribed for additional fees to Rs. 2 lakhs
• Section 441 (Compounding): RD’s power to compound offences increased to cases where the fine is up to ₹1 Crore from 25 lakh.
• Section 446B (Lesser Penalties): The “Lesser Penalty” benefit for Small Companies/Startups is redefined including a fixed percentage (e.g., 50%) of the standard penalty.
• Section 447 (Fraud Threshold): The monetary threshold for “Serious Fraud” (attracting mandatory imprisonment) is increased from ₹10 Lakh to ₹25 Lakh.

VI. Miscellaneous Provisions (Sections 455, 466A)

• Section 455 (Dormant Company): The phrase “may apply” is replaced with “shall apply”, making the transition to dormant status as a mandatory instead of a matter of choice for the company. Thereby preventing misrepresentation of active status and ensuring transparency for external stakeholders.
  • In defining “Inactive Company,” the word “and” is replaced with “or”, making the criteria cumulative (no filing of financial statements or annual return) aligned with section 164 of the Companies Act, 2013
• Section 466A (Administrative Power): Section empowering the Central Government to issue Directions, Guidelines, and Circulars to provide clarity on procedural ambiguities without amending the Rules if CG is of the opinion that it is necessary in the public interest. Further it is clarified that in case of any conflict, the rule shall prevail.

The Corporate Laws (Amendment) Bill, 2026, was introduced in the Lok Sabha on March 23, 2026, and has been referred to a Joint Parliamentary Committee (JPC) for detailed scrutiny. These provisions remain proposals and will carry statutory force only once approved by Parliament and formally enacted through notification in the Official Gazette

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India’s capital markets have evolved significantly over the last decade. IPO sizes have grown larger, valuations have increased sharply, and several companies now reach market capitalisations that were once seen only in global markets.

Against this backdrop, the Government has amended the Securities Contracts (Regulation) Rules, 1957 (SCRR) through the Securities Contracts (Regulation) Amendment Rules, 2026, notified on 13 March 2026, effective on the date of their publication in the Official Gazette.

The amendment revises Rule 19(2)(b), which prescribes the minimum offer and allotment to the public required for listing on a recognised stock exchange.

While the earlier framework applied a relatively simple threshold, the amended rule introduces a graduated public offer structure based on the size of the company’s post-issue capital. The change reflects the realities of modern capital markets and is particularly relevant for large and mega IPOs.

The Earlier Framework

Before this amendment, the listing requirement under Rule 19[1] of SCRR broadly required the following:

• At least 25% of each class of equity shares to be offered to the public; or
• At least 10% public offer, where the post-issue capital exceeded ₹4,000 crore, subject to the condition that the company would increase public shareholding to 25% within three years of listing.

This framework worked reasonably well when most IPOs were within a few thousand crore rupees. However, with the emergence of very large companies, the rule sometimes resulted in extremely large issue sizes simply to satisfy regulatory thresholds.

What the 2026 Amendment Introduces

The 2026 amendment replaces the earlier simplified framework with a tiered structure linked to the company’s post-issue capital.

Under the amended Rule 19(2)(b), the minimum public offer requirement now varies depending on the size of the company.

Revised Public Offer Requirements

The amendment therefore recognises that very large companies may not need to dilute a large percentage of equity at the time of listing, while still ensuring that a meaningful amount of shares are available in the market.

Gradual Increase in Public Shareholding

Even though companies may list with a lower public float under this framework, the law continues to require companies to increase public shareholding over time.

This ensures that market liquidity and investor participation are maintained in the long run.

Practical Impact on Companies

The amendment is likely to have several practical implications for companies planning to go public.

1. Listing of large companies made easier:

For companies with very large valuations, the earlier public float framework often resulted in IPO sizes far exceeding realistic market absorption levels. Using LIC’s IPO as a reference point, a company valued at about ₹6 lakh crore would have required an issue size of nearly ₹60,000 crore if a 10% public float were mandated, which would have been difficult for the market to absorb in one transaction. The amended Rule 19 now addresses this challenge by allowing such companies to list with a minimum public offer of ₹15,000 crore and at least 1% equity, instead of a fixed percentage threshold. By introducing this value-based threshold, the amendment enables large companies to access public markets without forcing excessively large IPO sizes, while still ensuring gradual compliance with minimum public shareholding norms.

2. Greater flexibility in IPO structuring

Earlier, companies sometimes had to increase issue size simply to meet the regulatory percentage requirement.

Under the new framework, companies may be able to design more efficient IPO structures, where the issue size reflects:

• capital requirements of the company; and
• market conditions at the time of listing.

This may also allow promoters to phase dilution through future transactions, such as:

• Offer for Sale (OFS)
• Qualified Institutional Placement (QIP)
• Follow-on public offers.

3. Potential increase in large IPOs

The amendment could encourage large private companies and unicorn-stage companies to consider listing in India.

For many high-valuation companies, offering 25% at listing could translate into extremely large IPO sizes. The new framework reduces this barrier and may therefore make the Indian market more attractive for mega listings.

4. Extra Time for MPS Compliance, But Past Defaults Still Liable

Companies already listed and which were unable to achieve the prescribed minimum public shareholding (MPS) may avail the benefit of the revised timelines under the Securities Contracts (Regulation) Amendment Rules, 2026 to regularise their MPS; however, such relaxation does not absolve past non-compliances, and the stock exchanges retain the authority to impose fines or penalties for breaches occurring prior to the commencement of the amended rules.

Conclusion

The SCRR Amendment Rules, 2026 represent an important step in modernising India’s listing framework.

By introducing a graduated public offer structure, the amendment recognises the changing scale of Indian companies and the evolving nature of the IPO market.

For companies planning to list, the amendment offers greater flexibility in structuring IPOs and managing promoter dilution. For the market as a whole, it may facilitate more large-scale listings in India, while continuing to ensure sufficient public participation over time. In that sense, the amendment reflects a broader policy objective of making India a more attractive destination for large and global-scale IPOs while maintaining strong market integrity

[1] Rule 19(2) of SCRR

 (b) (i) At least twenty five per cent. 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 ten per cent 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 four thousand crore rupees:

Provided that the requirement of post issue capital being more than four thousand crore rupees shall not apply to a company whose draft offer document is pending with the Securities and Exchange Board of India 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:

Provided further that the company, referred to in sub clause (ii), shall increase its public shareholding to at least twenty five per cent, within a period of three years from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India.

(c) Notwithstanding anything contained in clause (b), a public sector company, shall offer and allot at least ten per cent, of each class or kind of equity shares or debentures convertible into equity shares to public in terms of an offer document.

This article is published on the taxguru link below.

https://taxguru.in/corporate-law/scrr-rule-19-amendment-means-large-ipos.html#:~:text=Listing%20of%20large%20companies%20made%20easier%3A&text=The%20amended%20Rule%2019%20now,of%20a%20fixed%20percentage%20threshold.

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The Reserve Bank of India has revised the External Commercial Borrowings (ECB) framework under Schedule I of the Foreign Exchange Management (Borrowing and Lending) Regulations. The revised framework introduces significant changes aimed at simplifying cross-border borrowing rules, expanding borrower eligibility, increasing borrowing limits, and providing greater flexibility in structuring ECB transactions.

The following FAQs address the key regulatory changes and their practical implications for borrowers and lenders.

1. Who is eligible to raise ECB under the revised framework?

Under the revised framework, any person resident in India (other than individuals) that is incorporated, established or registered under a Central or State Act is eligible to raise External Commercial Borrowings, provided such borrowing is permitted under the applicable laws governing that entity.

Entities undergoing restructuring or corporate insolvency resolution process (CIRP) may also raise ECB where such borrowing is specifically permitted under the restructuring or resolution plan.

Further, a person against whom investigation, adjudication, or appeal proceedings are pending under FEMA or related regulations may still qualify as an eligible borrower, provided that details of such proceedings are disclosed in Form ECB-1.

2. Which activities/ end use shall be restricted for ECB?

Under the earlier ECB framework, only entities eligible to receive Foreign Direct Investment (FDI) were permitted to raise ECB. The revised framework removes this restriction, thereby broadening the category of eligible borrowers.

The revised framework also aligns the end-use principles broadly with paragraph 2 of Schedule I to the FEMA (Non-Debt Instruments) Rules, subject to certain restrictions.

ECB (Reg. 3A) vs NDI Rules –Prohibition Comparison Table

Sector / Activity	ECB (Borrowing & Lending Reg. – Restriction on end use)	NDI Rules (FDI Prohibited Sectors)
Lottery business	Not expressly restricted	Prohibited (includes online lotteries, etc.)
Gambling / Betting / Casinos	Not expressly restricted	Prohibited
Chit funds	Prohibited	Prohibited
Nidhi company	Prohibited	Prohibited
Real estate business / construction of farm houses	Prohibited Exception: Construction-development projects allowed subject to trunk infrastructure conditions Industrial parks allowed subject to conditions (min. 10 units, 66% industrial use, etc.)	Prohibited Exception (broad): Development of townships, construction of residential/commercial premises, infrastructure, REITs, leasing income etc. are not treated as “real estate business”
Agriculture & animal husbandry	Prohibited Exceptions: Controlled environment agriculture, seeds, allied services, pisciculture, aquaculture, apiculture, allied services etc.	Not in prohibited list → Permitted subject to sectoral conditions under FDI policy
Plantation sector	Prohibited Exception: Tea, coffee, rubber, cardamom, palm oil, olive oil	Not prohibited → Permitted with conditions under FDI policy
Trading in Transferable Development Rights (TDR)	Prohibited	Prohibited
Investment / dealing in securities	Prohibited Exception: Strategic transactions (merger, demerger, acquisition, IBC, SARFAESI, etc.)	FDI allowed subject to sectoral caps/conditions
Tobacco (cigars, cigarettes etc.)	Not expressly restricted	Prohibited
Activities not open to private sector (e.g., atomic energy, railway operations)	Not expressly restricted	Prohibited
On-lending for prohibited purposes	Prohibited (explicitly restricted)	NA
Repayment of domestic loan (linked to restricted use / NPA)	Prohibited	Not specifically covered
Foreign technology collaboration in prohibited sectors	Not covered	Prohibited (for lottery & gambling sectors)

3. Who qualifies as a recognised lender under the revised ECB framework?

The revised framework recognises the following categories of lenders:

• a person resident outside India;
• a branch outside India of an entity whose lending business is regulated by the Reserve Bank of India; and
• a financial institution or a branch of a financial institution established in an International Financial Services Centre (IFSC).

Under the earlier framework, lenders were generally required to be residents of International Organisation of Securities Commissions (IOSCO) or Financial Action Task Force (FATF) compliant jurisdictions. The revised framework removes this requirement, thereby expanding the scope of potential lenders.

4. Can foreign branches or subsidiaries of Indian banks lend ECB in Indian Rupees?

Under the earlier ECB framework, foreign branches or subsidiaries of Indian banks were permitted to lend ECB only in foreign currency.

The revised framework no longer imposes such restriction. Accordingly, foreign branches or subsidiaries of Indian banks may now extend ECB denominated in Indian Rupees, thereby providing additional flexibility in structuring cross-border financing.

5. In what currency can ECB be raised?

Under the revised framework, ECB may be raised in foreign currency (FCY) or Indian Rupees (INR).

This position is consistent with the earlier framework; however, the revised regulations provide greater flexibility regarding conversion of the currency of borrowing during the tenure of the loan.

6. Can the currency of ECB be changed during the life of the borrowing?

Yes. The revised framework permits conversion of the currency of borrowing, including:

• from one foreign currency to another foreign currency;
• from foreign currency to INR; and
• from INR to foreign currency.

Under the earlier ECB regime, conversion from INR to foreign currency was not permitted. The revised framework therefore provides greater flexibility in managing currency exposure.

7. Which transactions are not treated as ECB?

The revised framework clarifies that the following transactions do not constitute ECB:

• trade credit with original maturity up to three years;
• export advances received under FEMA Export Regulations;
• investments received under the FEMA (Debt Instruments) Regulations, 2019;
• investments through convertible notes issued under the FEMA (Non-Debt Instruments) Rules, 2019; and
• debt investments made by Foreign Venture Capital Investors (FVCIs) under the FEMA (Non-Debt Instruments) Rules.

This clarification provides greater certainty regarding the classification of cross-border funding structures.

8. What are the borrowing limits under the revised ECB framework?

Under the earlier ECB framework, borrowers could raise ECB up to USD 750 million (or equivalent) per financial year.

The revised framework introduces a new borrowing limit structure. An eligible borrower may raise ECB up to the higher of:

• outstanding ECB upto USD 1 billion , or
• Total outstanding borrowings (external and domestic) up to 300% of its net worth, based on the latest audited standalone financial statements.

For this purpose:

• “Outstanding borrowings” include only fund-based debt;
• Exclude non-fund based facilities (e.g., guarantees, LCs) and mandatorily convertible into equity; and
• The proposed ECB (other than refinancing) must also be included while checking the limit.

These limits do not apply to borrowers regulated by financial sector regulators, who are governed by separate prudential norms.

9. What is the minimum average maturity period (MAMP) under the revised framework?

The revised ECB framework prescribes a minimum average maturity period (MAMP) of three years.

For borrowers engaged in the manufacturing sector, ECB may be raised with a maturity period between one and three years, provided that the outstanding amount of such ECB does not exceed USD 150 million.

Under the earlier framework, the MAMP varied depending on the purpose of the borrowing, as specified in the ECB Master Directions.

10. What is the permitted cost of borrowing under the revised ECB framework?

Under the revised framework, the cost of borrowing must be aligned with prevailing market conditions.

For ECB with an average maturity period of less than three years, the cost of borrowing must comply with the cost ceiling applicable to trade credit under the relevant regulations.

Under the earlier ECB framework, the all-in-cost ceiling was capped at 450 basis points over benchmark interest rates. The revised framework therefore moves towards a more market-driven pricing mechanism.

11. Have the reporting requirements changed under the revised ECB framework?

Yes. The revised framework introduces updated reporting formats and timelines.

Applications for obtaining the Loan Registration Number (LRN) and reporting any changes in ECB parameters must be submitted through the designated Authorised Dealer Category-I bank in Form ECB-1.

Changes to previously reported parameters must be reported through Revised Form ECB-1 within seven calendar days from the end of the month in which the change becomes effective.

Illustration:

If the interest payment schedule is revised during March, the change must be reported in Revised Form ECB-1 by 7 April.

Further, any event affecting the outstanding borrowing under a particular LRN including receipt of ECB proceeds or debt servicing must be reported in Form ECB-2 within seven calendar days from the end of the relevant month.

The revised reporting formats no longer require certification by a Chartered Accountant or Company Secretary, as was mandated under the earlier framework.

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