Draft rules to exempt certain categories of combinations from the Competition Commission of India (CCI) approval requirement have been issued by the corporate affairs ministry
New Delhi: The government has proposed exempting intra-group transactions and certain other mergers and acquisitions from the requirement of Competition Commission approval, a move that is likely to help in reducing the regulatory burden on the watchdog.
Draft rules to exempt certain categories of combinations from the Competition Commission of India (CCI) approval requirement have been issued by the corporate affairs ministry.
Vaibhav Choukse, Partner & Head – Competition Law at JSA Advocates & Solicitors, said the draft rules enlist certain kinds of M&A (Merger & Acquisition) transactions which will not require approval from the CCI.
These include intra-group transactions, certain types of minority and creeping acquisitions, and rights issues as they will not have an impact on the competition in the market, he added.
According to him, 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.
“This will reduce the regulatory burden of the CCI as well as provide a big relief to the parties involved in M&As,” he added.
In September, draft combination regulations were published for public comment but at that time, it did not mention exempted categories of transaction.
Meanwhile, the ministry has also issued draft rules in relation to green channel approvals and ‘De Minimis’ provisions.
Regarding the draft norms related to green channel approvals, Avaantika Kakkar, Partner (Head – Competition Law) at Cyril Amarchand Mangaldas, said that following the recent increase in the small target exemption thresholds and jurisdictional thresholds under the Competition Act, the ministry has proposed to constrict exemptions available to minority investors.
“The new rules will make the green channel route more stringent and complicated to assess, going forward,” she added.
