SEBI Amendments dated 19th March 2008

Dear All,

20^th March 2008

Operationalisation of Short Selling and Securities Lending and Borrowing

As you aware SEBI vide circular dated December 20, 2007 had specified the broad framework for short selling by institutional investors and a full-fledged securities lending and borrowing scheme for all market participants. It has been decided by the SEBI vide its Circular No. MRD/DoP/SE/Cir- 05 /2008 dated 19th March 2008 to operationalise the above with effect from Monday, April 21, 2008.

The Stock Exchanges and the Depositories are advised to:

Ø Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.

Ø Bring the provisions of this circular to the notice of the member brokers/clearing members, depository participants and also disseminate the same on their website.

Ø Communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

Margining of institutional trades in the cash market

As you aware SEBI vide circular dated February 23, 2005 had specified the risk management framework for the cash market. In order to provide a level playing field to all the investors in the cash market as in the case of derivatives market, the aforesaid circular is partially modified to provide that all institutional trades in the cash market would be subject to payment of margins as applicable to transactions of other investors. This would be implemented with effect from Monday, April 21, 2008.

To begin with, The SEBI vide its Circular No. MRD/DoP/SE/Cir- 06 /2008 dated 19^th March 2008 stated that from April 21, 2008, all institutional trades in the cash market would be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade.

Subsequently, with effect from June 16, 2008, the collection of margins would move to an upfront basis.

The Stock Exchanges shall issue the necessary guidelines in this regard and shall put in place the necessary systems to ensure the operationalization of the above.

You can access entire text of the circular at http://groups.google.com/group/cschennai/files

Thanks & Regards

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