JSA Corporate InVision | June 2026 Edition

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SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

Guidelines for winding up of Alternative Investment Funds and introduction of ‘Inoperative Fund’ status

SEBI, vide circular dated June 16, 2026, has issued guidelines permitting Alternative Investment Funds (“AIFs“) and erstwhile Venture Capital Funds, to retain liquidation proceeds beyond their permissible fund life and obtain an ‘Inoperative Fund’ status in specified circumstances. Some of the key provisions are as follows:

• AIFs may retain liquidation proceeds beyond the liquidation or dissolution period where: (a) a litigation notice, tax demand, regulatory communication or similar legal claim has been received; (b) at least 75% of investors by value consent to retention for anticipated liabilities; or (c) monies are required for residual winding-up related operational expenses;
• where retention is based on anticipated liabilities, the manager must disclose the amount proposed to be retained and the estimated retention period to investors while seeking their consent;
• retention of monies for residual operational expenses cannot exceed 3 (three) years from the end of the permissible fund life and must be supported by invoices, records or comparable expense data;
• retained monies must be invested only in permitted liquid instruments in accordance with the SEBI (AIFs) Regulations, 2012;
• AIFs having retained monies and intending to surrender their registration may apply to SEBI for ‘Inoperative Fund’ status, and such status may also be obtained where no monies are retained but the fund continues solely in anticipation of a favourable litigation outcome;
• an AIF tagged as an ‘Inoperative Fund’ cannot launch new schemes or charge management fees and must continue to invest retained monies in accordance with regulatory requirements;
• ‘Inoperative Funds’ are exempt from several ongoing compliance requirements, including activity reports, compliance test reports, performance benchmarking disclosures, valuation requirements, investor reporting obligations and certain certification and custodial requirements; and
• AIFs with retained monies and AIFs tagged as ‘Inoperative Funds’ must submit an annual status report to SEBI and investors, within 30 (thirty) days from the end of each financial year, detailing retained amounts, outstanding liabilities, investments made from retained monies and the expected timeline for resolution.

 

RESERVE BANK OF INDIA (RBI)

Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026

RBI, vide circular dated May 29, 2026, has amended the Foreign Exchange Management (Cross Border Merger) Regulations, 2018. Some of the key amendments are as follows:

• term “Competent Authority” is defined as any authority empowered under the Companies Act, 2013, or any subordinate legislation made thereunder, to approve a scheme of merger or amalgamation; and
• in Regulations 4 (inbound merger), 5 (outbound merger), 7 (miscellaneous) and 9 (deemed approval), the reference to ‘National Company Law Tribunal’ is replaced with ‘Competent Authority’, thereby broadening the scope of approving authorities for cross-border mergers.

 

Amendments to the regulatory framework on investments by Foreign Portfolio Investors in Government Securities

RBI, vide circular dated June 5, 2026, has introduced amendments to the regulatory framework governing investments by Foreign Portfolio Investors (“FPIs“) in Government Securities (“GS”). Some of the key amendments are as follows:

• the requirement for FPIs to comply with the short-term investment limit, security-wise limit, and concentration limit, for their investments in GS under the general route is withdrawn;
• the ‘general’ and ‘long-term’ sub-categories of investment limits for Central GS and State GS have been merged into a single limit for each category;
• the investment limits for financial year 2026–27 are revised;
• the definitions of ‘long-term FPIs and short-term investments’ have been omitted from the RBI (Non-resident Investment in Debt Instruments) Directions, 2025;
• the proviso exempting investments made under the special rupee vostro account route from the short-term investment limit has been omitted as a consequential change; and
• new instruments are added under the Fully Accessible Route as ‘specified securities’. Under FAR, all new issuances of 5 (five) year, 7 (seven) year, 10 (ten) year, 15 (fifteen) year, 30 (thirty) year and 40 (forty) year tenors by the Central Government (including new issuances of ‘sovereign green bonds’ in these tenors); and any other security as specified by RBI, are included (previously FAR included all new issuances of only 5 (five) year, 7 (seven) year, 10 (ten) year tenors).

 

Foreign Exchange Management (Export of Goods and Services) (First Amendment) Regulations, 2026

RBI, vide circular dated June 5, 2026, has amended the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 by amending the provisions pertaining to the period within which export value of goods/software/ services to be realised. Some of the key amendments are as follows:

• in Regulation 9(1), the period for realisation of export proceeds is reduced to 9 (nine) months (earlier this was 15 (fifteen) months); and
• in Regulation 9(2)(a), the reference period is reduced to 9 (nine) months (earlier this was 15 (fifteen) months).

 

Swap facility for Foreign Currency Non-Resident (B) deposits

RBI, vide circular dated June 8, 2026, has introduced a United States Dollar (“USD”) -Rupee forex swap facility for fresh Foreign Currency Non-Resident (B) (“FCNR (B)”) deposits. Some of the key provisions are as follows:

• the swap facility will be available to Authorised Dealer (“AD”) Category-I banks for fresh FCNR (B) deposits mobilised in any freely convertible currency (including deposits renewed upon maturity) for a minimum tenor of 3 (three) years and a maximum tenor of 5 (five) years; however, the swap with RBI will be available in USD only;
• the tenor of the swap must be in alignment with the tenor of the underlying deposits;
• banks must maintain separate records for FCNR (B) deposits covered under this scheme along with a proper audit trail of transactions, and will be free to price these deposits within the overall ceiling prescribed by RBI;
• the underlying deposits are subject to a lock-in of 1 (one) year (with premature withdrawal thereafter permitted at the discretion of the banks as per their internal policy); however, swaps undertaken with RBI cannot be cancelled; and
• the swap facility comes into effect immediately and will remain open until October 16, 2026, for deposits mobilised between the date of the circular and September 30, 2026.

 

Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2026

RBI, vide notification dated June 13, 2026, has amended the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019. Some of the key amendments are as follows:

• Schedule III is substituted to provide that investments by individuals resident outside India, including Non-Resident Indian (“NRIs”) and Overseas Citizen of India (“OCIs”), on a repatriation basis must be made through inward remittance from abroad through banking channels or out of funds held in any repatriable deposit account maintained under the Foreign Exchange Management (Deposit) Regulations, 2016 (“Deposit Regulations”). A designated repatriable rupee account is required to be maintained exclusively for investments permitted under the Schedule;
• Schedule III is amended to provide that subscriptions to the National Pension System (“NPS”) by NRIs and OCIs may be made through inward remittance from abroad through banking channels or out of funds held in any repatriable foreign currency account, repatriable rupee account, or NRO account maintained under the Deposit Regulations. Further, sale proceeds of equity instruments may be remitted outside India or credited to the designated rupee account, while proceeds from mutual fund units and NPS investments may be remitted outside India or credited to any account maintained under the Deposit Regulations, at the option of the investor;
• Schedule XI is substituted to provide that payment for purchase or subscription of equity shares of Indian companies listed on international exchanges may be made through banking channels to the foreign currency account of the Indian company maintained under the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015, or through inward remittance from abroad or funds held in any repatriable foreign currency or rupee account maintained under the Deposit Regulations. Sale proceeds may be remitted outside India or credited to the permissible holder’s bank account maintained under the Deposit Regulations; and
• Regulation 4(9) is amended to require designated AD Category-I banks to report to RBI, in Form LEC (IFI), the purchase or transfer of equity instruments by an individual person resident outside India, including NRIs and OCIs, on stock exchanges in India.

 

Liberalisation of FPI under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019

Pursuant to the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026, RBI, vide circular dated June 15, 2026, has liberalised the FPI framework under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, by permitting all individual persons resident outside India (and not only NRIs and OCI) to invest in equity instruments of listed Indian companies on recognised stock exchanges, subject to enhanced investment limits and applicable conditions. AD Category-I banks are permitted to facilitate such investments by opening repatriable INR accounts and must ensure compliance with existing reporting, monitoring, and limit-tracking frameworks applicable to FPIs.

 

Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026

RBI, vide notification dated June 18, 2026, has amended the Deposit Regulations, to provide greater flexibility in the operation of Special Non-Resident Rupee (“SNRR”) accounts and to incorporate provisions relating to International Financial Services Centres (“IFSCs”). Some of the key amendments are as follows:

• non-residents may now open, hold and maintain SNRR accounts with ADs in India or their branches outside India, including branches located in an IFSC;
• transfers from non-resident ordinary account to non-resident external accounts or SNRR accounts are permitted within the limits prescribed under the Foreign Exchange Management (Remittance of Assets) Regulations, 2016;
• the scope of SNRR accounts has been expanded to allow permissible current and capital account transactions with residents in India, as well as bona fide transactions with persons resident outside India;
• restrictive provisions relating to SNRR accounts have been removed through deletion of certain paragraphs in Schedule 4 of the Deposit Regulations; and
• transactions between non-residents through SNRR accounts may be undertaken based on instructions from the account holder specifying the underlying purpose of the transfer.

 

Modification of returns/reporting requirements under Foreign Exchange Management Act, 1999

RBI, vide circular dated June 24, 2026, has revised the reporting requirements under Foreign Exchange Management Act, 1999 and the Foreign Exchange Management (Authorised Persons) Regulations, 2026. The changes aim to simplify compliance, streamline reporting obligations, and update reporting formats for authorised persons, money changers, and entities operating under the Money Transfer Service Scheme (“MTSS”). Some of the key provisions are as follows:

• the format of the FLM-8 return has been revised to include reporting of foreign currency notes written off, and the requirement for prior RBI approval for write-off of foreign currency notes exceeding USD 2,000 (USD two thousand) has been discontinued;
• authorised persons with franchisee arrangements and Indian Agents under MTSS are required to submit quarterly lists of franchisees and sub-agents, respectively, within 15 (fifteen) days from the end of each calendar quarter;
• prescribed formats of registers FLM-1 to FLM-7 (form numbers) have been discontinued, although entities must continue to maintain complete records of foreign exchange transactions for regulatory inspection purposes;
• certain reporting requirements, including returns relating to foreign currency accounts funded through export proceeds, MTSS additional location disclosures, quarterly veracity confirmations, and statements of collateral under MTSS, have been discontinued; and
• new and revised reporting formats have been prescribed, including formats relating to foreign currency transactions, forex correspondents, franchisee arrangements, and fit and proper criteria for promoters, directors, and key managerial personnel.

 

MINISTRY OF FINANCE (MoF)

Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026

MoF, vide notification dated June 12, 2026, has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. Some of the key amendments are as follows:

• Chapter V is amended by replacing references to “NRIs or OCIs” with “an individual person resident outside India including an NRI or OCIs”;
• Rule 12(1) is substituted to permit an individual person resident outside India to purchase or sell, on a repatriation basis, equity instruments of a listed Indian company and other securities under Schedule III. Prior Government approval is required where such investment results in transfer of ownership or control to entities or citizens of countries sharing a land border with India, or where the beneficial owner is a citizen of such country;
• Rule 13 is amended to permit an individual person resident outside India holding equity instruments or units on a repatriation basis to transfer the same by way of sale or gift to another person resident outside India, subject to applicable Government approval requirements;
• Schedule II is amended to clarify that the total holding of a FPI, including through an investor group, must remain below the prescribed individual limit. Investments of 10% or more are to be treated in accordance with the provisions applicable to foreign direct investment;
• Schedule III is amended to prescribe that the holding of any individual person resident outside India must remain below 10% of the paid-up equity capital of a listed Indian company on a fully diluted basis, while the aggregate holding of all such individuals must not exceed 24%; and
• Schedule III further provides that any breach of the 10% limit must be rectified through divestment within 5 (five) trading days, failing which the entire investment will be treated as foreign direct investment, in which case the investor cannot make any further portfolio investment in the concerned company. The investor must also notify the depositories and the concerned company through the designated AD branch within 7 (seven) trading days of settlement of the trades causing the breach.

 

MINISTRY OF HOME AFFAIRS (MHA)

MHA notifies amendments to the foreign contribution regulatory framework

MHA has introduced significant changes to the foreign contribution regulatory framework through the Foreign Contribution (Regulation) Amendment Rules, 2026 and the amendments to the compounding framework of 2022. These amendments tighten the registration, compliance, utilisation, and disclosure requirements applicable to registered entities. They also strengthen the enforcement framework by introducing additional utilisation-based contraventions under the compounding regime and expanding reporting obligations.

For a detailed analysis, please refer to the JSA Prism of July 10, 2026.

 

MINISTRY OF CORPORATE AFFAIRS (MCA)

Companies (Registered Valuers and Valuation) Amendment Rules, 2026

MCA, vide notification published on June 3, 2026, has amended the Companies (Registered Valuers and Valuation) Rules, 2017 (“Principal Rules”). Some of the key amendments are as follows:

• Rule 12(1)(i) (eligibility for registered valuers organisations) is substituted to provide that a registered valuer organisation must be a company registered under Section 25 of the Companies Act, 1956 or Section 8 of the Companies Act, 2013;
• a registered valuer organisation must have a minimum paid-up share capital of INR 25,00,000 (Indian Rupees twenty-five lakh);
• a registered valuer organisation must have the sole object of dealing with matters relating to regulation of valuers of an asset class or asset classes;
• the organisation must have bye-laws containing the requirements specified in Annexure III of the Principal Rules; and
• a proviso is inserted in Rule 12(1)(i) stating that a registered valuer organisation which does not meet the minimum paid-up share capital requirement of INR 25,00,000 (Indian Rupees twenty-five lakh) on the date of commencement of the Companies (Registered Valuers and Valuation) Amendment Rules, 2026 must comply with this requirement on or before March 31, 2028.

 

DIRECTORATE GENERAL OF FOREIGN TRADE (DGFT)

Amendments to the Foreign Trade Policy, 2023

The Directorate General of Foreign Trade, vide notification dated June 2, 2026, has amended para 2.03A(iii) of the Foreign Trade Policy, 2023, pertaining to the applicability of Quality Control Orders (“QCOs”) and Bureau of Indian Standards (“BIS”) requirements on imports made by Special Economic Zone (“SEZ”) units. The amendment revises the scope of exemption from QCO issued under the BIS Act, 2016, and significantly expands the exemption by allowing SEZ units and SEZ developers to import all permissible goods, including raw materials, components, consumables, spares, and capital goods, required for authorised SEZ operations without QCO compliance at the import stage (previously the exemption from mandatory QCOs was limited to imports of inputs required for export production, subject to restrictions on domestic tariff area clearance and available only for physical exports). The exemption applies only when the imported goods are used within the special economic zone for authorised operations. If the imported goods, or goods manufactured or processed from them, are removed, transferred or cleared into the domestic tariff area, they must comply with applicable quality control orders, BIS requirements and other applicable laws at the time of clearance.

 

JSA UPDATES

Supreme Court of India clarifies scope of writ jurisdiction against orders passed under Section 16 of the Arbitration and Conciliation Act, 1996 

In a decision concerning the scope of writ jurisdiction in the context of arbitration proceedings, the Supreme Court of India (“Supreme Court”) held that the exercise of writ jurisdiction to set aside an order passed under Section 16 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) was not justified. The Supreme Court particularly emphasised that such interference was unwarranted where the arbitrator was seized of the arbitration proceedings. The judgment reinforces the principle of minimal judicial interference in ongoing arbitration proceedings and reiterates that non-stamping or inadequate stamping is a curable defect that does not deprive the arbitral tribunal of jurisdiction.

For a detailed analysis, please refer to the JSA Prism of June 12, 2026.

 

Supreme Court clarifies scope of expert certification under Section 63(4) of the Bharatiya Sakshya Adhiniyam, 2023

Supreme Court, in a recent judgment, has upheld the validity of Section 63(4) of the Bharatiya Sakshya Adhiniyam, 2023, which strengthens the framework for admissibility of electronic records by requiring certification and disclosure of hash value to ensure authenticity and integrity. The Supreme Court has also clarified that expert certification for electronic evidence is not limited to examiners under Section 79A of the Information Technology Act, 2000 (“IT Act”) and may extend to other persons with requisite technical expertise, thereby providing greater flexibility while balancing evidentiary safeguards.

For a detailed analysis, please refer to the JSA Prism of June 23, 2026.

 

Delhi High Court reaffirms that terminated Share Purchase Agreements cannot be revived by invoking Section 9 of the Arbitration Act for interim reliefs

The Delhi High Court (“Delhi HC”), in a recent decision, has reaffirmed the primacy of contractual certainty in commercial transactions, emphasising that courts cannot dilute agreed terms under the guise of granting interim protection. The Delhi HC declined relief under Section 9 of the Arbitration Act noting that such intervention would effectively revive a share purchase agreement that had already lapsed due to the non-fulfilment of conditions precedent, a recognised termination event. In doing so, the Delhi HC underscored that informal correspondence, parties’ conduct, or unexecuted drafts cannot override expressly agreed contractual mechanisms. The ruling further clarifies that orders of institutional/emergency arbitrators do not bind courts exercising independent statutory jurisdiction under Section 9 of the Arbitration Act.

For a detailed analysis, please refer to the JSA Prism of June 24, 2026.

 

Delhi HC holds that despite not performing public function, private airlines amenable to writ jurisdiction in cases emanating from award of Industrial Tribunal

In a recent decision, the Delhi HC has clarified the law on maintainability of writ petitions against private employers in the context of industrial disputes.

While the Delhi HC accepts the principle that a private entity performing no public function is not ordinarily amenable to writ jurisdiction, it draws a clear distinction where the challenge is to an award passed by a court or tribunal under the Industrial Dispute Act, 1947. Therefore, it held that although a privatised entity such as Air India may not ordinarily be amenable to writ jurisdiction, the position changes when the challenge is aimed at an industrial tribunal’s award and the adjudicatory process behind it.

The judgment is significant as it carves out a nuanced exception to maintainability of writ against private parties like Air India. The judgement also confirms that awards passed by tribunals under the Industrial Disputes Act, 1947 are not rendered immune from judicial review merely because the employer is a private entity, particularly where no statutory appellate remedy is available.

For a detailed analysis, please refer to the JSA Prism of June 24, 2026.

 

Indian Computer Emergency Response Team issues blueprint for reducing exposure and defending against Artificial Intelligence-assisted vulnerabilities and exploitation in digital infrastructure

On May 25, 2026, the Indian Computer Emergency Response Team issued the ‘Blueprint for Reducing Exposure and Defending against AI-Assisted Vulnerabilities Exploitation in Digital Infrastructure’ (“Blueprint”), recognising the growing use of Artificial Intelligence (“AI”) by threat actors to automate cyber exploitation, accelerate vulnerability discovery, and conduct sophisticated cyber-attacks at scale.

For a detailed analysis, please refer to the JSA Prism of June 12, 2026.

 

Maharashtra Tenancy and Agricultural Lands Laws (Amendment) Act, 2026: Attempt to encourage genuine industrial projects 

The Maharashtra Tenancy and Agricultural Lands Laws (Amendment) Act, 2026 marks another important step in the State of Maharashtra’s broader effort to facilitate industrial development and rationalise land regulation. The reforms introduce greater flexibility for industrial projects by extending the timelines for commencement of industrial use, simplifying certain procedural requirements and harmonising the tenancy legislations with the revised conversion premium regime under the Maharashtra Land Revenue Code, 1966.

While the amendments are likely to improve flexibility and implement certainty for industrial projects, they may also increase acquisition and conversion costs through market value-linked premiums and enhanced regulatory oversight.

For a detailed analysis, please refer to the JSA Prism of June 15, 2026.

 

A shift in the approval framework for High-Rise Buildings in Chennai Metropolitan Area

The recent amendment to the Tamil Nadu Combined Development and Building Rules, 2019, streamlines the approval process for high-rise buildings in Chennai Metropolitan Area by consolidating decision-making authority with Chennai Metropolitan Development Authority. For developers, this translates to faster approvals and reduced holding costs. For landowners in joint development arrangements, it offers greater certainty on project timelines. However, this shift also raises questions about whether expedited approvals will maintain a robust scrutiny, making it crucial for all stakeholders and public at large.

For a detailed analysis, please refer to the JSA Prism of June 23, 2026.

 

ChatGPT is not an intermediary says Calcutta High Court

As generative AI reshapes how users discover and access information online, Indian courts are beginning to grapple with questions the law was never designed to answer. In a landmark interim ruling, the Calcutta High Court designates ChatGPT as an originator and not an intermediary under the IT Act.

For a detailed analysis, please refer to the JSA Prism of June 25, 2026.

 

This Newsletter has been prepared by:

Varun Sriram Partner	Vinit Patwari Partner
Pratiksha Easwar Associate	Abheejit Vijayaraghavan Associate	Vaastu Tyagi Associate

 

For more details, please contact km@jsalaw.com