In what is seen as a huge relief for the industry, the Centre proposes to exempt reporting certain notifiable M&A transactions to the Competition Commission of India (CCI).
This is expected to reduce the industry’s compliance burden and facilitate ease of doing business.
A draft of the Competition Commission of India (exempted combination) Rules 2024 has been issued by the Corporate Affairs Ministry (MCA). Public comments have been invited on the draft Rules by April 10.
Commenting on the draft, Samir Gandhi, Co-founder & Partner, Axiom5Law Chambers said the draft Rules provide a useful framework for evaluating whether certain transactions are exempt from notification to the CCI. “Past practice and interpretations had resulted in some ambiguity in the availability of these exemptions, and the proposed draft exemptions are a step in the right direction to introduce an element of predictability and reduce uncertainty”, Gandhi said.
Vaibhav Choukse, Partner & Head - Competition Law, JSA Advocates & Solicitors, said the draft rules enlist certain kinds of M&A transactions which will not require approval from the Competition Commission of India, including intra-group transactions, certain types of minority and creeping acquisitions, and rights issue as these will not have an impact on the competition in the market.
“The rules will replace and modify the existing categories of M&A transactions that are exempt. The rules also modify the affiliate test required to map overlaps between the parties to the M&A transaction”, he added.