Recently, SEBI came up with set of wider
disclosure norms for the Credit Rating Agencies
(CRA).

• It introduced a “probability of default”
mechanism under which rating agencies have
to disclose the probability of default for the
issuers they rate by December 2019.
• It also provides for formulation of Uniform
Standard Operating Procedure for tracking
and timely recognition of default.

👆🏻Current affairs on Credit rating agencies

Credit Rating Agencies in India
• The Securities and Exchange Board of India (Credit
Rating Agencies) Regulations, 1999 empowers SEBI
to regulate CRAs operating in India.
• As per the Regulations, CRA is defined as “a body
corporate which is engaged in, or proposes to be
engaged in, the business of rating of securities
offered by way of public or rights issue”.
• SEBI (Credit Rating Agencies) Regulations, 1999
provide for a disclosure-based regulatory regime,
where the agencies are required to disclose their
rating criteria, methodology, default recognition
policy, and guidelines on dealing with conflict of
interest.
• There are seven Credit Rating Agencies registered
with SEBI, viz. CRISIL, ICRA, CARE, India Ratings and
Research, SMERA, Infomerics and Brickworks.

@Commerceoptional

Daily Answer Writing Practice- DAY-51
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-51/

Daily Answer Writing Practice- DAY-52
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-52/

Daily Answer Writing Practice- DAY-53
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-53/

Daily Answer Writing Practice- DAY-54
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-54/

Daily Answer Writing Practice- DAY-55
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-55/

Daily Answer Writing Practice- DAY-56
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-56/


Daily Answer Writing Practice- DAY-57
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-57/


Daily Answer Writing Practice- DAY-58
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-58/

Daily Answer Writing Practice- DAY-59
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-59/

Daily Answer Writing Practice- DAY-60
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-60/

Daily Answer Writing Practice- DAY-61
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-61/


Daily Answer Writing Practice- DAY-62
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-62/

Daily Answer Writing Practice- DAY-63
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-63/


Daily Answer Writing Practice- DAY-64
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-64/


Daily Answer Writing Practice- DAY-65
Costing topic of Paper 1 of UPSC Commerce Optional

https://www.civilservicegurukul.com/daily-answer-writing-practice-for-commerce-optional-upsc-mains-day-65/

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Join🔜 @commerceoptional
Also Join soon @civilservicegurukul

Join🔜 @commerceoptional
Also Join soon @civilservicegurukul

Join🔜 @commerceoptional
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Recent amendments to FDI policy – a boon or a bane?

UPSC Commerce Optional-
Routes of FDI, External commercial borrowing etc.

Mains level : Paper 3- What are the issues with the FDI policy of India?


Q.1 What changes were made in the FDI policy?

Government approval route for investment: Investment is permitted through government route only in the following cases-

1) An entity situated in a country which shares a land border with India.

2) Where the owner of investment into India is situated in or is a citizen of any such country.


FDI is defined under the Rules to mean investment through equity instruments by a person resident outside India in an unlisted Indian company, or in 10% or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company.

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Difficulties in seeking government approval

The requirement of seeking government approval may also pose operational difficulties for many entities.

For instance, the approval requirement seems to be applicable in all cases of further investments irrespective of the threshold.

It applies whether or not such investments are in the form of rights issue (where all or almost all existing shareholders also participate) or preferential allotments.

This may require global acquisitions of entities in other jurisdictions which have subsidiaries/ investee companies in India, by a person in one of India’s neighbouring countries, to be subject to the approval requirements, thereby impacting timelines for closing.

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No restrictions on external commercial borrowings (ECB)

There are presently no such commensurate restrictions under the ECB regulations.

Therefore, an eligible borrower could avail ECB from a recognised lender.

Which includes a foreign equity holder in one of India’s neighbouring countries which are FATF compliant for any immediate funding requirements.

Any conversion of the ECB or any part thereof, into shares of the Indian company, would be subject to the restrictions and approval requirements under the FDI policy and the Rules.

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Conclusion

The government/RBI should provide necessary clarifications on these issues and ambiguities at the earliest. With there being no sunset clause presently contemplated on the applicability of these restrictions, only time will tell if the amendments to the Rules are a boon to the economy and a step in the right direction, or otherwise.

👆🏻Current affairs for Commerce Optional for UPSC (IAS) Exam.😊

What is ‘Rights issue’

Cash-strapped companies can turn to rights issues to raise money when they really need it.

In these rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price.

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company.

This type of issue gives existing shareholders securities called rights.

With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date.

The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

Until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way that they would trade ordinary shares.

The rights issued to a shareholder have value, thus compensating current shareholders for the future dilution of their existing shares’ value.

Dilution occurs because a rights offering spreads a company’s net profit over a larger number of shares.

Thus, the company’s earnings per share, or EPS, decreases as the allocated earnings result in share dilution.

What is the Limited Liability Partnership (LLP)?

LLPs are a flexible legal and tax entity that allows partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners.

In a general partnership, all partners share liability for any issue that may arise.

The LLP is a formal structure that requires a written partnership agreement and usually comes with annual reporting requirements depending on your legal jurisdiction.

What is the FVCI route of investment?

Foreign Venture Capital Investor’ (FVCI) means an investor incorporated and established outside India and registered with Securities and Exchange Board of India under Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000.

The amount of consideration for all investment by an FVCI has to be received/made through inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/ or a Special Non-Resident Rupee (SNRR) account maintained by the FVCI with an AD bank in India.

The foreign currency account and SNRR account shall be used only and exclusively for transactions under the relevant Schedule.

👆🏻Basics related with Current affairs for Commerce Optional for UPSC (IAS) Exam.😊

Civil Service Gurukul will start Daily answer Practice for UPSC Commerce Optional and Test Series for 2021 from 01/05/2020.

All syllabus for commerce optional will be completed by November 2020.

This guidance program will be very helpful for UPSC Aspirant.

Guidance program of UPSC Commerce Optional by Civil Service Gurukul @commerceoptional
For more details , Contact @cadhananjay

👆🏻Schedule of Guidance Program of UPSC Commerce Optional for UPSC (IAS) Exam 2021
For more details
contact @cadhananjay

Morning motivation 😍