MCA | Companies (Specification of Definitions Details) Third Amendment Rules, 2021



Quick Summary
The Ministry of Corporate Affairs (MCA) has introduced amendments to the Companies (Specification of Definitions Details) Rules, 2014. These changes clarify that electronic offerings, subscriptions, or listings of securities within International Financial Services Centres (IFSCs) will not be classified as 'electronic mode' for the purposes of Section 2(42) of the Companies Act. This amendment aims to specifically exclude the electronic presence of foreign companies operating via IFSCs from certain definitions.

The MCA has notified a new set of Rules to amend the existing Companies (Specification of Definitions Details) Rules, 2014 which shall come into force on the date of its publication in the Official Gazette (not yet published).

In Rule 2(1)(h) of the said rules, the following explanation is inserted: 

'Explanation- For the purposes of this clause, electronic based offering of securities, subscription thereof or listing of securities in the International Financial Services Centres set up under section 18 of the Special Economic Zones Act, 2005 (28 of 2005) shall not be construed as 'electronic mode' for the purpose of clause (42) of section 2 of the Act.' 

MCA Rules Amendment: IFSC Securities Not  Electronic Mode

The purpose of this amendment is to exclude from the definition of foreign company u/s 2(42) of the Act, the electronic presence of a foreign company by the means of- electronic based offering of securities, subscription thereof or listing of securities in the IFSC.

Courtesy: CS Tanveer Singh Saluja

Click here to read the official notification

FAQ :

The amendment clarifies that electronic offerings, subscriptions, or listings of securities in International Financial Services Centres (IFSCs) are not considered 'electronic mode' under Section 2(42) of the Companies Act.

The new rules will come into force on the date of their publication in the Official Gazette.

Electronic based offering of securities, subscription thereof, or listing of securities in International Financial Services Centres (IFSCs).

The purpose is to exclude the electronic presence of a foreign company, through means like electronic securities offerings or listings in IFSCs, from the definition of a foreign company under Section 2(42) of the Act.

The Companies (Specification of Definitions Details) Rules, 2014 are being amended.




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