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Showing posts with label SEBI Drafts. Show all posts
Showing posts with label SEBI Drafts. Show all posts

Friday, December 5, 2008

SEBI extend observation letter validity, rights entitlement in Demat & no early exit for close ended MF



PRESS RELEASE

PR No.283/2008

SEBI Board Meeting

1. SEBI to extend validity of the observation letter

SEBI Board has approved extension of validity of observation letter issued for public / rights issue from present three months to one year, subject to filing of updated document with SEBI where there are material changes.

2. SEBI to introduce electronic rights entitlements and ASBA in the Rights Issue process.

SEBI Board has approved certain policy measures pertaining to rights issue process, which inter-alia include enabling electronic rights entitlement, which can be traded electronically in Stock Exchanges, introducing alternate mode for making applications in rights issue viz Applications Supported by Blocked Amount (ASBA) mode and mandating that the issuer can get access to rights issue proceeds only after the allotment is finalized.

Currently a shareholder intending to renounce his/her Rights entitlements fills up part B of the rights issue application form. The renouncee can trade this form or apply in the Rights Issue by filling up Part C of the form. Renunciation forms are traded in physical segment in Bombay Stock Exchange. The right entitlement will now be made available in demat form for all shareholders holding the underlying shares in demat form.

The policy measures approved by the Board in this meeting, along with measures undertaken in the recent past for reduction in timelines, are expected to streamline the rights issue process and make it more efficient.

3. It was decided that no early exit will be allowed in any scheme of Mutual Fund in the nature of a close ended scheme. The schemes which have been approved earlier but not yet launched will also have to be amended accordingly. It will be obligatory for the Asset Management Company to list the close ended schemes. The Board also decided that for such close ended schemes the underlying assets will not have a maturity beyond the date on which the scheme expires.

4. The Board decided to adopt a code to avoid conflict of interest for the members of the Board. It was further decided that this code will be put up in the public domain by publishing it on the SEBI website before December 12, 2008.

  1. In order to bring transparency in the working of the Board it was decided that the agenda papers submitted to the Board on all policy issues will be made available in the public domain by putting them up on the SEBI website after the Board has taken a decision on the issue. The minutes of the meeting relating to such items will also be made available on the SEBI website after the Board has approved the minutes. Accordingly the agenda papers for today's Board meeting will be made available on the SEBI website by December 15, 2008.

Tuesday, June 10, 2008

Consultative paper on amendments to SEBI (Prohibition of Insider Trading) Regulations, 1992


Dear All,
 

 

Objective of proposed Amendment in SEBI Insider Trading Regulations.  Click the link above.

 

To harmonize requirements of acquisition/sale of shares reported under the SEBI (Prohibition of Insider Trading) Regulations, 1992 and the requirements of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 it was proposed that transaction disclosures made under either regulation (with the same or higher level of disclosure) should be deemed to be good disclosure under the other. It was also proposed to increase the harmonization between the two in terms of threshold limits set.

 

Reduce disclosure time limit under Regulation 13 from total 9 days to 2 days in order to prompt dissemination of price sensitive information and to make it in line with SEBI Takeover regulations.

 

You can send your comment by e-mail upto 26th June, 2008 to jyotis@sebi.gov.in and sunilk@sebi.gov.in

 

Also please find attached Consultative paper for your detailed reference.

 

Thanks & Regards

 Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Tel: 044-28151034/3445/3658
Moble: 919884731993/ 919790906827
e-mail: alagar.muthu@karvy.com

Friday, January 18, 2008

Imposing of Price Band on the day of Listing

SEBI proposes to impose price band on the day of Listing

PROPOSED POLICY FOR IMPOSITION OF PRICE BANDS ON THE DAY OF LISTING OF INITIAL PUBLIC OFFERS (IPO's)
q Introduction
This is a proposal by SEBI for imposing a price band of 25% on the issue price on the day of listing of IPOs of issue size upto Rs 250 Cr. This proposal does not apply in case of re-commencement of trading of the equity shares of a company on the stock exchanges.
q Background
Currently, the stock exchanges do not apply price bands on the day of listing of Initial Public Offerings (IPOs). The price fixed by the company in consultation with its lead managers is left open to price discovery in the matter and after the day of listing, this process of price discovery may continue within a price band of 20%. For IPO issue sizes that are greater than Rs.500 Cr, price bands are not imposed even after the day of listing if such scrips are available for trading on the derivative segment.
q Issue for Consideration
Recently, it has been noticed by SEBI that there are significant price & volume spikes/ volatility on the day of listing of IPOs. This was particularly noticed in IPOs of issue size upto Rs 250 cr. In particular, for several such IPOs, where the stock available for trading in the hands of public, after excluding shares of promoters and others that face a lock in period is about 25-30% of the equity capital of the company, the price may not sustain on subsequent days leading long-term investors to become dissatisfied with the dramatic activity on the day of listing.
While it is appreciated that demand /supply mechanics should freely determine the market price, large scale price/volume fluctuations on the first day of trading seem to warrant a systemic response to contain such sharp movements. Accordingly, there seems to be a need to consider a price band even on the day of listing of IPOs. This would not only assist in a more orderly price discovery process over a period of time, instead of on the day of listing, but more importantly also have a salutary impact on potential abnormal price movements on the day of listing.
The matter has been also deliberated at length in the meetings held by SEBI with the stock exchanges. A back testing was also carried out by the stock exchanges on the IPOs during the past year, using parameters such as issue size, price variation on day of listing, maximum variation on day of listing as well as price variation on subsequent days. It was noticed by SEBI that IPOs of issue size upto Rs 250 Cr exhibited more volatility than IPOs of greater issue size. After taking into account the views of the stock exchanges and the results of back testing, it was felt that there is a need to impose price bands on the day of listing of IPOs in a cautious and gradual manner to facilitate steady and sustained price discovery over a period of time.
Comments/suggestions are invited from the public on the above proposal by SEBI, so as to reach SEBI by January 31, 2008.
Comments /suggestions may be sent by email to the following addresses
sanjayp@sebi.gov.in (Mr Sanjay Purao)
sapnas@sebi.gov.in (Ms Sapna Sinha)


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Thursday, October 25, 2007

SEBI Board Meeting on P Notes Issue

PRESS RELEASE

PR No.286/2007

SEBI Board Meeting

The SEBI Board today discussed the various issues relating to registration of FIIs viz issuance of P-Note/ODIs by some FIIs/Sub-accounts, the linkages (or absence thereof) between quantum of P-Notes/ODIs issued v/s the capital flows into the Indian markets.

The Board also discussed the nature of measures that need to be implemented immediately vis-à-vis the long term direction of the policy aspects relating to participation of foreign entities in the Indian Securities Market. It was felt that in the long term, SEBI may consider introduction of a regime of KYC/AML/CFT certification on foreign entities seeking to invest in the Indian markets, as is currently applicable on domestic entities, compliance with which will enable such entity to invest directly.

Having regard to the need to contain the export of the Indian capital markets, the Board felt that in the long term the approach should be to enable access to Indian markets by quality investors, by introducing a range of innovative products, including OTC derivatives, as are available in other markets, at competitive costs.

The Board discussed the policy measures on Offshore Derivative Instruments (Participatory Notes) hosted by SEBI on its website on October 16, 2007. Having considered the comments and suggestions in response to the proposals, the Board has taken the following decisions:

1. It was proposed that "FIIs and their sub-accounts shall not issue/renew ODIs with underlying as derivatives with immediate effect. They are required to wind up the current position over 18 months, during which period SEBI will review the position from time to time."

It is has already been clarified by SEBI that there is no proposed bar on ODI contracts, expiring this month or in the following months, being renewed, provided the renewal does not go beyond 18 months. It was further made clear that this proposal did not in any manner seek to restrict renewal or rollover of Indian Exchange Traded Derivative Contracts by the FIIs.

FIIs/sub-accounts are free to invest in derivatives traded on recognized stock exchanges.

The Board decided that starting from the date of implementation of this proposal, they can not issue P-Notes that are based on such derivatives.

2. It was proposed that "further issuance of ODIs by the sub-accounts of FIIs will be discontinued with immediate effect. They will be required to wind up the current position over 18 months, during which period SEBI will review the position from time to time."

The Board decided that from the date of implementation of the proposal, no sub-account can issue fresh ODIs. Existing ODI issuing sub-accounts have to ensure that they wind up all their ODIs within 18 months of implementation of the proposal.

SEBI had received several requests from existing P-Note issuing sub-accounts on the above proposal. Taking note of the transition being made by the sub-accounts currently issuing participatory notes, into FIIs, and in order to ensure implementation of the proposals in a non-disruptive manner, the Board has decided that that these applicants be treated as if they were FIIs as on the date decided for calculation of the AUC for the above proposals.

3. It was proposed that "The FIIs who are currently issuing ODIs with notional value of PNs outstanding (excluding derivatives) as a percentage of their AUC in India of less than 40% shall be allowed to issue further ODIs only at the incremental rate of 5% of their AUC in India. "

The Board confirmed the proposal with the understanding that 5% incremental issuance allowed to such FIIs would be applicable on an annual basis, till such time that the percentage reaches 40%, after which the entity will abide by the proposal applicable to entities above the 40% limit.

4. It was proposed that "Those FIIs with notional value of PNs outstanding (excluding derivatives) as a percentage of their AUC in India of more than 40% shall issue PNs only against cancellation / redemption / closing out of the existing PNs of at least equivalent amount." The Board confirmed the proposal.

5. The Board discussed several possible dates for implementation of the above proposals. Taking into account the fact that reporting of P-Notes/ODIs by FIIs is on a monthly basis and the last available data with SEBI was in respect of September 2007, the Board decided that the effective date for calculation of the AUC for the purpose of determining the notional value of PNs issued as a percentage of AUC, for the above proposals shall be September 30, 2007. The proposal will however take effect after close of trading hours on October 25, 2007.

In view of the submissions of some PN-holders that they would like to register with SEBI directly, instead of participating through the P-Note route but are are unable to adhere to the eligibility criteria prescribed under the FII Regulations, the SEBI board has agreed to the following changes to the registration criteria

1. Broad-based criteria

The "broad-based" criteria shall now be modified to include entities having at least 20 investors, no single investor holding more than 49% (instead of 10% at present).

2. Track record of the applicant

Track record of individual fund managers will be considered for the purpose of ascertaining the track record of a newly set up fund, subject to such fund manager providing its disciplinary track record details.

3. Issuance of ODIs/PNs would be limited to only "regulated" entities and not "registered" entities.

4. FII and sub-account registrations will be perpetual, subject to payment of fees.

5. The Board further discussed the issue of registration of Pension Funds, Foundations, Endowments, University Funds and Charitable trusts or societies, which are not regulated with any regulatory authority and having regard to the nature of these entities, advised that these entities may be registered as FIIs without imposing the requirement of their being "regulated".

Mumbai

October 25, 2007


Thanks & Regards
Alagar


Wednesday, October 17, 2007

SEBI's Proposal on PN which shook the Stock Market

Paper for discussion on Offshore Derivative Instruments (Participatory Notes) Objective This paper sets out the proposed policy measures on Offshore Derivative Instruments (Participatory Notes). Background With a view to monitoring the investment by FIIs through Offshore Derivative Instruments (ODIs) such as Participatory Notes (PNs), Equity Linked Notes, Capped Return Notes, Participating Return Notes etc., SEBI had prescribed reporting of issuance / renewal / cancellation / redemption of the ODIs on a monthly basis since October 2001. The figures submitted by the FIIs on a month to month basis showed an increasing trend. In the latter half of 2003, a Technical Committee of SEBI Regulated Entities was constituted by the HLCCFM to examine the issues pertaining to P-Notes more closely. The Committee, comprising representatives of RBI, IRDA, SEBI and NSE met in October, 2003 and extensively discussed the issues like : • Whether PNs should be allowed to be issued at all, • Whether restrictive use of PNs is possible, • Monitoring of compliance • Phasing out of PNs that are non-compliant with new restrictions, etc The Committee, having examined the concerns raised by the participants, felt that while these issues and concerns would have to be addressed in the interest of the market, the measures taken should be practical, pragmatic, non-disruptive and enforceable without great difficulty. Recognizing that it may be difficult to enforce a complete ban on PNs, the Committee made certain recommendations which included issuance of PNs only to regulated entities subject to KYC requirements. The same was implemented through suitable amendment to FII regulations. However, the year on year increase in ODIs, the anonymity that the ODI provides to the investors and the copious inflows into the country from foreign investors has been engaging the attention of the Government and the regulators such as the Reserve Bank of India and SEBI. This has been a topic for discussion in many fora such as HLCC and various committees set up by the Government/ regulators. Current Scenario: Currently 34 FIIs / Sub-accounts issue ODIs. This number was 14 in March 2004. The notional value of PNs outstanding which was at Rs.31,875 crores (20% of AUC 1) in March 2004 has grown to Rs.3,53,484 crores (51.6% of AUC) by August 2007. The value of outstanding ODIs with underlying as derivatives currently stands at Rs1,17,071 crores, which is approximately 30% of total PNs outstanding. The notional value of outstanding PNs, excluding derivatives as underlying as a percentage of AUC is 34.5% at the end of August 2007. Proposed Measures: Following consultation with the Government, the following measures are proposed to be implemented urgently: 1) FIIs and their sub-accounts shall not issue/renew ODIs with underlying as derivatives with immediate effect. They are required to wind up the current position over 18 months, during which period SEBI will review the position from time to time. 2) Further issuance of ODIs by the sub-accounts of FIIs will be discontinued with immediate effect. They will be required to wind up the current position over 18 months, during which period SEBI will review the position from time to time. 3) The FIIs who are currently issuing ODIs with notional value of PNs outstanding (excluding derivatives) as a percentage of their AUC in India of less than 40% shall be allowed to issue further ODIs only at the incremental rate of 5% of their AUC in India. 1 AUC = Assets Under Custody of all FIIs/Sub Accounts 4) Those FIIs with notional value of PNs outstanding (excluding derivatives) as a percentage of their AUC in India of more than 40% shall issue PNs only against cancellation / redemption / closing out of the existing PNs of at least equivalent amount. In view of urgency, any comments on the above proposals may be sent to odireporting@sebi.gov.in by 20th October 2007 with the subject line "Paper for discussion on Offshore Derivative Instruments - Comments" *****************



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Trezrrr every pulsss
http://yehseeyes.blogspot.com/

Tuesday, October 16, 2007

Proposed Changes in SEBI QIP Norms

As many of you may aware of that as per existing SEBI QIP norms, offering of securities through Qualified Institutional Placement (QIP) is a Private Placement. As per Section 67(3) of the Companies Act, 1956 we cannot make offer to more than 49 Investors under the private placement. It means that we cannot issue an offer document inviting for subscription under the QIP placement to more than 49 Investors. The SEBI has confirmed this restriction through its informal guideline No. CFD/DIL/SM/98649/2007 dated July 13, 2007. To ease this restriction the SEBI is planning to make changes to Qualified Institutional Placement (QIP) norms in terms of investor eligibility and the floor price for the issue.

The SEBI will issue relevant Circular in this regard.
Thanks & Regards

Alagar
09884731993

Thursday, October 11, 2007

SEBI draft - Investment Adviser

Draft SEBI (Investment Advisers) Regulations, 2007
SEBI has framed draft SEBI (Investment Advisers) Regulations, 2007 and the same are placed in public domain for comments and suggestions.
Comments on the draft Regulations annexed herewith may be sent on or before October 31, 2007 through email to ashas@sebi.gov.in or to the address mentioned below:

Chief General Manager

MIRSD – DPS III

Securities and Exchange Board of India

SEBI Bhavan, 2nd Floor, A- wing,

Plot No: C – 4A, G Block,

Bandra Kurla Complex,

Mumbai 400 051.

Find full regulation in http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/commreport/inv.html

Thanks & Regards

Alagar
09884731993



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