INSITE - INDIA - 21 August 2023
- Jodha Legal
- Aug 21, 2023
- 6 min read
DIGITAL PERSONAL DATA PROTECTION BILL, 2023 GETS PRESIDENT'S ASSENT
Summary: President Droupadi Murmu has signed the Digital Personal Data Protection Bill (now an Act), which ensures that people's digital personal data is handled properly. This law applies to personal data collected in digital or non-digital form (digitised subsequently) in India, and even if data processing happens outside India, as long as goods or services are provided to people in India. This helps protect individual rights and allows the lawful use of personal data. Fines of up to Rs 250 crore may be levied on organisations not following the rules.
In Detail: Any organisation collecting personal data must adhere to key principles, including the "Principle of Legality," "Principle of Purpose Limitation," "Principle of Data Minimisation," "Principle of Data Accuracy," "Principle of Storage Limitation," "Principle of Reasonable Safeguards," and "Principle of Accountability."
Key provisions of the bill:
(1) Firms handling user data must safeguard it, even if stored by third-party processors.
(2) Data breaches require companies to inform the Data Protection Board (DPB) and users.
(3) Consent from guardians is needed for processing children's and disabled persons' data.
(4) Significant Data Fiduciaries (notified by the Central Government) must appoint a Data Protection Officer (DPO) and share details with users.
(5) The centre can limit personal data transfer outside India.
(6) Appeals against DPB will be heard by Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
(7) DPB can summon, examine under oath, and inspect documents of data companies.
(8) DPB will decide penalties based on breach severity and impacted data.
(9) DPB can recommend an intermediary access block for repeated Digital Personal Data Protection Bill breaches.
(10) Penalties of up to Rs 250 crore may be imposed for breaches, data protection failures
Pursuant to Section 17(3), the Central Government has the authority to exempt Indian startups from fulfilling specific requirements based on the amount and nature of personal data they process.
Obligations of Data Fiduciaries:
(1) Consent Notice (Section 5): Data Fiduciaries must get permission from Data Principals (people the data relates to) by explaining what data will be collected and why.
(2) Information About Impact and Sharing (Section 8(3)): Data Fiduciaries need to tell Data Principals if their data processing could affect them or if data is shared with others.
(3) Data Retention (Section 8(7)): Data Fiduciaries should use collected data for legal purposes and erase it if consent is withdrawn or the purpose is done.
(4) Providing Data Summary (Section 11): Data Fiduciaries must share a summary of processed data with Data Principals.
(5) Special Data Fiduciary Duties (Section 10): Depending on factors like data volume and sensitivity, risks, and public order, the Central Government can label certain Data Fiduciaries as Significant. These Significant Data Fiduciaries must appoint a Data Protection Officer, an independent data auditor and undertake regular data protection assessments.
Conclusion: The legislation will support India's progress in adopting AI and future technologies. This law will also enable Indian businesses to collaborate more effectively with international counterparts through mutual agreements. For businesses, important points include provisions for cross-border data transfer with a negative list and exemptions for certain data handlers, including startups from certain requirements. The 2023 Bill is another step toward India finally enacting its long-awaited data protection law.
Key Links:
SEBI ASKS MARKET INFRASTRUCTURE INSTITUTIONS TO SET UP AND OPERATE A COMMON ODR PLATFORM
Summary: A fresh online dispute resolution (ODR) system is being introduced for the capital market, involving institutions, conciliators, and arbitrators. Market regulator Securities and Exchange Board of India (SEBI) recently issued a circular on July 31 to simplify the current dispute resolution process in the securities market. This involves creating a shared ODR portal under the supervision of stock exchanges and depositories, known as Market Infrastructure Institutions. The upcoming system will utilize online conciliation and arbitration to settle disputes that arise within the securities market.
In Detail: The Securities and Exchange Board of India (SEBI) has instructed stock exchanges and depositories, known as Market Infrastructure Institutions (MIIs), to create a shared online dispute resolution portal (ODR Portal). This portal will enable online conciliation and arbitration to settle disputes in the securities market. The circular, issued on July 31, 2023, aims to simplify the current dispute resolution process in India's securities market. MIIs will collaborate to establish and run this ODR Platform, which will handle conflicts between investors/clients and listed companies, as well as specified intermediaries/regulated entities within the securities market. The MIIs, along with their approved ODR institutions, will establish and run the ODR portal, which will be linked to the SEBI SCORES portal or SEBI intermediary portal, as outlined in the circular.
Key Highlights:
(1) This circular's provisions will be carried out in two phases:
First Phase - to be completed by August 1, 2023, which involves creating the portal, approving ODR institutions by MIIs, appointing conciliators and arbitrators by these institutions, and registering Trading Members and Depository Participants on the ODR Portal by August 15, 2023. Furthermore, starting from August 16, 2023, complaints/disputes against brokers and depository participants will be registered and resolved.
Second Phase - By September 15, 2023, all other Market Participants will be registered on the ODR Portal, and from September 16, 2023. All processes and requirements outlined in this Circular will be effective by September 16, 2023.
(2) This circular applies to resolving any disputes or issues related to service requests between parties mentioned in Schedule A and Schedule B.
(3) The ODR Portal Mechanism:
(a) MIIs, in consultation with their empaneled ODR Institution will establish an ODR Portal. (b) MIIs will create and manage this platform. They'll establish an agreement detailing their roles, expenses, platform oversight, and inspections.
(c)The ODR Portal must connect to each ODR Institution and the SEBI Complaints Redress System (SCORES) portal/SEBI Intermediary portal.
(d) All market participants will see a link to the ODR Portal on their website or app homepage.
(4) ODR Portal's Essential Functions: Enroll investors/clients and Market Participants, submit complaints/disputes along with document uploads, offer complaint/dispute status updates gathered from ODR Institutions. The MIIs will regularly review and enhance the portal's features, adding new ones as needed by the Board.
(5) ODR Institutions will use online methods for Arbitration and Conciliation, allowing investors, Market Participants, and Conciiliators/Arbitrators to engage through audio-video online modes.
(6) Registering a complaint/dispute on the ODR Portal is free of charge.
(7) Specified Intermediaries and Regulated Entities are listed in Schedules A and B, while Schedule C outlines Norms for ODR Institution selection by MIIs and their ongoing responsibilities.
(8) Schedule D offers suggested norms for conciliator/arbitrator selection.
(9) Schedule E sets out the Code of Conduct.
Key Links:
VALIDITY PERIOD OF APPROVAL GRANTED BY SEBI TO ALTERNATIVE INVESTMENT FUNDS (AIFS) AND VENTURE CAPITAL FUNDS (VCFS) FOR OVERSEAS INVESTMENT
A recent circular, SEBI/HO/AFD/PoD/CIR/P/2023/137, dated August 04, 2023, has changed the previous six-month time frame for AIFs and VCFs to invest offshore after SEBI's approval. This adjustment, suggested by the Alternative Investments Policy Advisory Committee, reduces the time to four months for AIFs and VCFs to use their allocated investment limits effectively. If these funds remain unused within this period, SEBI can allocate them to other AIFs/VCFs. The goal is to ensure quicker and more efficient utilization of these limits in the AIF industry.
Key Links:
PARLIAMENT APPROVES BILL AMENDING 28% GST ON ONLINE GAMING
On August 11, 2023, Parliament approved amendments to the Central and Integrated Goods and Service tax (GST) laws, allowing a 28% tax on the total face value of bets in online gaming, casinos, and horse race clubs. These changes make it possible to impose a 28% GST on the full amount of bets placed in casinos, horse racing, and online gaming.
The latest GST council meeting decided to impose a 28% GST on the complete face value for the mentioned activities.
The original decision was made on July 11 during the 50th GST Council meeting, but the online gaming industry wanted clearer information about how the GST would be applied. They also asked for a reconsideration, saying it would negatively impact them.
The Union Revenue Secretary, Sanjay Malhotra, clarified that the decision to apply GST on the full face value is definite, and it will only affect online real money games (RMG). However, the specific method of taxation for the complete face value wasn't clear.
On August 2, the GST council specified that the tax would be based on the initial deposit made by players. While this brought some relief, the online gaming industry still believes the impact will be significant.
Key Links:
Comments