Page 30 - Plastics News May 2019

FEATURES

7. Factoring units may be created in each module as on the settlement obligations generated by the TReDS
required. Each such unit will have the same sanctity platform.
and enforceability as allowed for physical instruments 17. On the due date, the corporate buyer transfers the
under the ‘Factoring Regulation Act, 2011’ or under GXH DPRXQW WR WKH ÀQDQFLHU $OO WKH ZKLOH WKH 75H'6
the ‘Negotiable Instruments Act, 1881’.
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8. The standard format and features of the ‘factoring and their banks reminding them of the amount due.
unit’ will be decided by the TReDS platform. But each
18. If the buyer doesn’t pay on the due date, it will
XQLW ZLOO UHSUHVHQW D FRQÀUPHG REOLJDWLRQ IURP WKH attract penal provisions and enable the banker to
buyer to pay. The unit will have all details such as proceed against the corporate buyer.
information of the seller and the buyer, issue date,
due date, amount due, etc. 19. Any action in this regard will be strictly non-recourse
with respect to the MSME sellers.
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factoring units by any of the above parameters. This 20. After financing, these instruments are rated by
SURYLGHV ÁH[LELOLW\ RI RSHUDWLRQV WR WKH VWDNHKROGHUV the TReDS platform and may be further transacted
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10. A notice or advice is created and automatically sent segment.
to the buyer’s bank once the factoring unit and all
the details have been generated. 21. Any successful trade in the secondary segment will
also automatically result in a direct debit authority
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being enabled by the buyer’s bank in favour of the
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ÀQDQFLHU
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can be viewed only by the MSME seller and not other ,Q FDVH DQ\ IDFWRULQJ XQLW LV XQÀQDQFHG WKH EX\HU
ÀQDQFLHUV corporate will pay the MSME seller outside of the
TReDS platform.
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to quote these bids against factoring units. Further,
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valid. the Companies Act, 2013

13. The MSME then chooses and accepts any bid. The 0XFK DZDLWHG HUURU LQ ÀOLQJ H )RUP ,1& $ $&7,9( L H
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been accepted. is now resolved by MCA.

2QFH D ELG LV DFFHSWHG E\ WKH 060( VHOOHU ÀQDQFLHUV All the Companies incorporated on or before 31
cannot revise or change their bid. 'HFHPEHU DUH UHTXLUHG WR ÀOH D RQH WLPH UHWXUQ
with MCA in e- Form INC-22A - Active Company Tagging
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and the funds will be deposited in the MSME seller’s
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DFFRXQW E\ WKH ÀQDQFLHU RQ 7 EDVLV WZR EXVLQHVV and Key Managerial Personnel.
days after the date of acceptance). However, TReDS
platforms can choose to speed up the time taken for 7KH 0&$ KDV LVVXHG D FODULÀFDWLRQ GDWHG 0D\
payment. For instance, MSMEs on the M1xchange wherein it has been mentioned that the companies
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day after the acceptance). 1 April, 2014 to 20 October, 2014 for appointment of
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6LPXOWDQHRXVO\ ÀQDQFLQJ E\ D ÀQDQFLHU JHQHUDWHV June, 2019.
another notice to the buyer’s bank which enables
a direct debit from the buyer’s account to the 7KH IRUPV ÀOHG DIWHU -XQH VKDOO EH VXEMHFW
to fees and additional fees as the case may be as per
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Plastics News May 2019 30