Every factor shall register transaction with registry under SARFAESI, vide Factoring Regulation (Amendment) Act, 2021

The Parliament passes the Factoring Regulation (Amendment) Act, 2021 on 7th August, 2021, amending the Factoring Regulation Act, 2011.

Key changes enacted by the amendment are:

  • The amendment states that every factor shall register the particulars of every transaction of assignment of receivables in his favor with the Central Registry set-up under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
  • In cases where any trade receivables are financed through a Trade Receivables Discounting System, the particulars shall be filed with the Central Registry on behalf of the factor by the Trade Receivables Discounting System. Trade Receivables Discounting System refers to a payment system authorized by the Reserve Bank under the Payment and Settlement Systems Act, 2007 for the purpose of facilitating financing of trade receivables.
  • The Reserve has the power to make regulations and carry out the provisions of the Act.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

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