In a welcome development, on 29 June 2017 the Ministry of Corporate Affairs (MCA) issued a Notification (Notification) that does away with the requirement to necessarily notify a combination within 30 calendar days of the trigger event. The measure has been taken to alleviate the concerns of stakeholders who felt constrained by the deadline stipulated under the Competition Act, 2002 (“Act”). Please find attached a copy of the Notification. We set out key takeaways from the Notification below.

Prior to the Notification, the merger notification requirement under the Act contained the following aspects:

i. Mandatory 30-day filing requirement: Section 6(2) of the Competition Act required that any proposed transaction that qualifies as a combination on the basis of the asset/turnover thresholds under Section 5 of the Competition Act should be mandatorily notified to the CCI within 30 days of the execution of definitive documents or a public announcement or the final board resolution approving a merger or amalgamation between parties;

ii. Suspensory requirement: Section 6(2A) required that a transaction could not be closed until the CCI has approved the transaction or until 210 days have passed from the date of filing the notification with the CCI; and

iii. Penalties for belated filing: Section 43A of the Competition Act penalizes enterprises for not filing a notice under Section 6(2) of the Competition Act and such penalty could extend upto 1 percent of the total turnover or the assets, whichever is higher, of such combination.

The Notification does away with the 30-day filing requirement and provides parties the flexibility to file combinations when they are ready to file a notice with the CCI. Importantly, the Notification puts an end to the possibility of penalties for delayed filing. Transaction parties will no longer be constrained to decide on the strategy, collect information and make the filing within the short window of 30 calendar days. Parties to global transactions requiring notification in multiple jurisdictions can now make the filing in India contemporaneous with other jurisdictions. The notification will not only help the parties align their strategy but also help the CCI align its review timelines with other jurisdictions.

Notably, the requirement to file a notice with the CCI is still mandatory and the suspensory regime (i.e., requirement to receive CCI approval prior to closing) still applies. Accordingly, any breach of these requirements will still lead to penalties under Section 43A of the Act (set out above). However, removal of a 30-day deadline makes it significantly easier for businesses to comply with the merger notification requirement in India and is in line with international best practices in merger control.