Reserve Bank of India amends Cross Border Merger Regulations to replace NCLT with Companies Act 'Competent Authority'
Corporate legal and M&A teams executing India-related cross-border mergers must rely on approval from a Companies Act 'Competent Authority' under the FEMA Cross Border Merger Regulations, in place of the prior NCLT reference.
Change
The Reserve Bank of India amended the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 by inserting a definition of 'Competent Authority' (any authority empowered under the Companies Act, 2013 to approve a merger or amalgamation scheme) and replacing 'NCLT' with 'Competent Authority' in regulations 4, 5, 7 and 9, effective from publication in the Official Gazette.
Why it matters
The amendment ties merger-approval authority in the cross-border merger framework to whichever body is empowered under the Companies Act to approve a scheme, rather than naming the NCLT specifically. Corporate parties relying on these Regulations for cross-border merger steps must take approval from, and reference, a qualifying 'Competent Authority' in their filings and documentation. The change takes effect on publication in the Official Gazette.
Implications
- — Corporate legal and M&A teams executing India-related cross-border mergers must obtain and rely on an approval issued by an authority qualifying as 'Competent Authority' under the Companies Act before submitting documentation under the FEMA Cross Border Merger Regulations.
- — Company secretaries and regulatory filing teams must update references to 'NCLT' to 'Competent Authority' in cross-border merger submissions and internal documentation to align with the amended Regulations.
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