The government's move to relax a requirement for combinations under the competition law will remove "artificial timing pressures" and provide relief, especially for parties involved in deals requiring multi- jurisdictional filings, says a report.
Following the relaxation, an individual or enterprise that is party to a combination is not required to seek fair trade regulator Competition Commission of India's (CCI) nod within 30 days of finalising a particular deal.
Legal firm Shardul Amarchand Mangaldas said elimination of a filing deadline is a recommended practice by the International Competition Network and brings India in line with the global standards.
"While notifiable transactions will still require approval from the CCI prior to closing and remain subject to penalties for gun-jumping, the elimination of the filing deadline will remove artificial timing pressures on filing parties and facilitate the coordination of multi jurisdictional merger reviews," it said in a report.
According to the law firm, the trigger exemption is a welcome relief for parties, especially those involved in multi-jurisdictional filings.
"The nature and volume of information required to make a filing in India is onerous, and parties tend to take substantial time to prepare a notification form. Parties can now align their strategies and coordinate their approaches to global filings," it added.
Prior to the relaxation provided by the Corporate Affairs ministry, combinations beyond a certain threshold had to be intimated to the CCI within 30 days of being finalised by the parties concerned.
The CCI comes under the administrative control of the Corporate Affairs ministry. While announcing the relaxation last week, the government had said the move was in line with its objective of ease of doing business. Entities are liable for penalty in case they fail to give notice to the CCI before bringing into effect a particular combination.
As per the report, the CCI has regularly initiated suo moto investigations within one year following the consummation of a notifiable transaction against parties for failing to file a notification.