Legal & Industry Updates - January 2025
LEGAL & INDUSTRY UPDATES
The Securities and Exchange Board of India (“SEBI”) Introduces Simplified Compliance Framework for Listed Companies (source)
SEBI has rolled out a new compliance framework for listed entities, introducing integrated filing for governance and financial disclosure under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, starting 31st December, 2024, with the aim to streamline compliance, reduce filing burdens, and enhance transparency. Under the new framework:
Governance filings such as investor grievance redressal statements and corporate governance compliance must be submitted within 30 days after the quarter ends. Also, financial filings, including disclosures on related-party transactions, are required to be filled within 45 days and the year-end submissions will have a 60-day deadline.
SEBI has now mandated the quarterly disclosure of material events, including updates on tax litigation, minor penalties, and acquisitions surpassing certain thresholds.
Listed entities must disclose details of employee benefit schemes and obtain board approval before redacting commercially sensitive information.
The new framework sets timelines for disclosures on shareholding patterns, credit ratings, and reclassifications, with penalties for non-compliance.
SEBI Proposes Comprehensive Definition of Not-For-Profit (“NPO”) Organizations, Expanded Activities Under Social Enterprise (source)
SEBI, on 20th January, 2025, has recommended to broaden the definition of NPOs and expand eligible activities to include welfare for disadvantaged groups and promote arts and culture as social enterprises while also allowing the NPOs to register on the Social Stock Exchange (“SSE”) for upto 2 years without fundraising. The primary objective is to improve clarity, expand eligibility, and enhance transparency in the SSE. Additionally, the SSE advisory committee has further proposed separating annual disclosures into financial and non-financial aspects with revised timelines and separate impact reports for listed and significant non-listed projects. Also, SSE advisory committee has recommended to expand the list of legal structures permissible to be recognized as NPOs to include trusts, charitable societies and companies.
Draft Digital Personal Data Protection Rules, 2025 (“DPDP Rules, 2025”) (source)
The Ministry of Electronics and Information Technology, on 3rd January, 2025, released the draft DPDP Rules, 2025 with the aim to operationalize the Digital Personal Data Protection Act, 2023 and ensure robust protection and privacy of personal data in the digital realm. The DPDP Rules, 2025 states that:
Consent manager framework: The consent managers must register with Data Protection Board (“DBP”) and must have minimum net worth of INR 12 crore.
Setting up of DPB: The rules also proposed the establishment of DBP as a regulatory body. It will operate as a digital office, with remote hearings and will have powers to investigate breaches, and enforce penalties.
Processing personal data of children: A data fiduciary would implement measures to ensure that the person providing consent for a child’s data processing is the child’s parent or legal guardian, and that the parent or guardian is identifiable.
Department for Promotion of Industry and Internal Trade (“DPIIT”) Signs Memorandum of Understanding With Startup Policy Forum (“SPF”) to Boost Startup Ecosystem (source)
DPIIT, on 3rd January, 2025, has entered into a landmark partnership with SPF, a premier industry organization representing India's leading new-age companies, with the aim to establish India as a global hub for innovation and entrepreneurship while also curating specialized immersive programs, designed to connect global investors with India's vibrant startup ecosystem. The primary objective of the collaboration is to amplify innovation, drive technology adoption, boost manufacturing capabilities in India, promote Indian startup ecosystem globally and facilitate relationship with stakeholders and ecosystem enablers.
Venture Capital (“VC”) Investors Pursue Indian Artificial Intelligence (“AI”) Startups (source)
As reported, AI, which is rapidly gaining momentum in India and further making its way into every other sector, has also become a hot bet for VC investors. The usage of AI as technology (“tech”) tool is garnering interest in India since its use cases are expanding as founders are now looking beyond enterprise tech to build AI-led solutions for customers. In 2024, AI startups raised $1.2 billion, and this trend is expected to continue in 2025 as well, as AI is on the verge of becoming central to investment strategies, especially in consumer tech and enterprise solutions. Therefore, various notable firms are increasing their focus on consumer-oriented AI applications, with examples in content, gaming, and health.
Indian Companies Face Rising Costs and Complexity Due to Overlapping Cybersecurity Laws (source)
As reported, companies in India are currently facing mounting challenges due to overlapping cybersecurity laws and guidelines from various regulators such as SEBI, and the Reserve Bank of India, among others as well as the legal frameworks including the Information Technology Act, 2000, the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, and the National Cybersecurity Policy. Therefore, experts have called for harmonization of these laws under a single regulatory body to reduce compliance costs and confusion, and to further improve resilience against cyber threats, particularly for new-age startups.
Supreme Court (“SC”): Order Passed on Oral Consent Provided by Counsel Cannot be Reviewed on Ground that there was No Written Consent (source)
SC, on 20th January, 2025, set aside an order of the Calcutta High Court (“HC”) that allowed a review petition in a service matter based solely on the lack of written consent for an earlier order passed by the HC. The SC emphasized that all constitutional courts in India accept oral statements made by counsels on behalf of parties, and an order cannot be reviewed solely on the ground that consent was not provided in writing. Therefore, it was made clear by the SC that as oral consent of the counsel appearing for the respondents has been expressly recorded, therefore the order dated April, 2024 could not have been reviewed on the ground that there was no written consent.
SC Raises Concerns Regarding Stringent Limitation Provisions Curtailing Arbitration Appeal Remedies (source)
The SC, on 11th January, 2025, has flagged judicial overreach in arbitration under the Arbitration and Conciliation Act, 1996 (“A&C Act”), urging legislative reforms to clarify limitation provisions after dismissing a time-barred challenge, further highlighting how excessive intervention could undermine arbitration’s efficiency and public confidence. SC criticized the excessive intellectualization and over interpretation by courts in arbitration under the A&C Act which undermines arbitration’s goal of swift dispute resolution and thus has urged Parliament to introduce clarity and flexibility, aligning with the 2014 Law Commission report on reducing judicial interference.
Ministry of Electronics & Information Technology (“MeitY”) Contemplates Promotion of Skill Development, Training to Boost Semiconductor Sector (source)
MeitY is concentrating on facilitating training activities, including skill development, as India's semiconductor sector takes off with multiple multinationals on board. India Semiconductor Mission, which was launched in 2021 with an outlay of INR 76,000 crore, is structured to promote the domestic semiconductor industry through incentives and strategic partnerships. MeitY is further eyeing to provide skills in the semiconductor space and those who are already skilled would be provided with adequate training.
Women Workforce to Dominate Semiconductor Industry (source)
In India’s booming semiconductor industry, women are strategically revamping India’s semiconductor landscape, while making strong decisions and claiming their stake in a rapidly growing industry. Their participation from 20% in 2020 is expected to rise to 30% by 2027 since numerous semiconductor companies are investing in supporting and retaining female employees, thereby expanding the talent pool and developing career advancement paths. It is also reported that the increasing participation of women workforce can be attributed to the pay gap in this sector being less than 10% as well as the emphasis on employee benefits such as maternity leave, allowing for career breaks, work-from-home, part-time and project-based work.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.