Sub: Trading Hours on Stock Exchanges
In consultation with the Stock Exchanges and other market participants, it has been decided to permit the Stock Exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that
a. The trading hours are between 9 AM and 5 PM, and
b. The Exchange has in place risk management system and infrastructure
commensurate to the trading hours.
SEBI Master Circulars on Stock Exchange/Depositories
SECTION – 1: BULK DEALS AND BLOCK DEALS ............................................... 5
1.1 Bulk Deal ............................................................................................................. 5
1.2 Block Deal ........................................................................................................... 5
SECTION – 2: CIRCUIT FILTER / PRICE BANDS ................................................. 7
2.1 Index based Market wide circuit filter ................................................................. 7
2.2 Scrip wise price bands ......................................................................................... 7
SECTION – 3 : IMPLEMENTATION OF UNIFORM SECURITY SPECIFIC
ACTION IN STOCK EXCHANGES........................................................................... 8
3.1 Uniform security specific measure ...................................................................... 8
SECTION – 4 : MARGIN TRADING.......................................................................... 9
4.1 Margin trading ..................................................................................................... 9
4.2 Securities eligible for margin trading .................................................................. 9
4.3 Eligibility requirements for brokers to provide margin trading facility to clients9
4.4 No-objection certificate .................................................................................. 10
4.5 Agreement.......................................................................................................... 10
4.6 Source of Funds for the broker for providing margin trading facility to his
clients and maximum permissible borrowing by any broker............................. 10
4.7 Margin requirements.......................................................................................... 11
4.8 Liquidation of securities by the broker in case of default by the client............. 11
4.9 Maintenance of Records .................................................................................... 12
4.10 Disclosure of exposure to the Margin Trading Facility ..................................... 12
4.11 Arbitration.......................................................................................................... 13
4.12 Usage of Investor Protection Fund and Trade/Settlement Guarantee Fund ...... 13
4.13 General provisions ............................................................................................. 13
SECTION – 5 : MARKET MAKER............................................................................ 15
5.1 Guidelines for Market Maker............................................................................. 15
5.1.1 Criterion for selection of scrips for Market Making.......................................... 16
5.1.2 Exclusivity of Market Makers ........................................................................... 16
5.1.3 Number of Market Makers for each share ......................................................... 17
5.1.4 Qualifications for a registered Market Maker.................................................... 17
5.1.5 The obligations and responsibilities of Market Makers..................................... 17
5.1.6 Rights of the Market Maker............................................................................... 18
5.1.7 Voluntary De-registration .................................................................................. 18
5.1.8 Compulsory De-registration............................................................................... 18
5.1.9 Dissemination of Information ............................................................................ 18
5.1.10 Number of Shares per Market Maker ................................................................ 18
5.1.11 Risk Containment Measures and monitoring for Market Makers ..................... 18
SECTION – 6: NEGOTIATED DEALS..................................................................... 20
6.1 Negotiated Deals................................................................................................ 20
SECTION – 7 : ODD LOT .......................................................................................... 21
7.1 Trading and Settlement of trades in dematerialised securities ................ 21
SECTION – 8: PERMANENT ACCOUNT NUMBER ........................................... 22
8.1 Mandatory PAN requirement for transaction in Cash Market........................... 22
8.2 PAN as a sole identification number for all transactions in the securities market
………………………………………………………………………………….22
8.3 Incase of Central and State Govt., and officials appointed by courts ................ 22
8.4. Exemptions for Investors in Sikkim .................................................................. 23
8.5 Incase of FIIs/Institutional Clients..................................................................... 23
8.6 Incase of UN entities and multilateral agencies which are exempted from paying
taxes/ filling tax returns in India ........................................................................ 23
8.7 Incase of HUF, Association of Persons (AoP), Partnership Firm, unregistered
Trust, Registered Trust, Corporate Bodies, minors, etc..................................... 24
8.8 Incase of Slight mismatch in PAN card details as well as difference in maiden
name and current name (predominantly in the case of married women) of the
investors.............................................................................................................24
8.9 Incase of NRI/PIOs ............................................................................................ 24
8.10 PAN requirement for transfer of shares in physical form.................................. 24
SECTION – 9: PROPRIETARY TRADING.............................................................. 26
9.1 Disclosure of Proprietary Trading by Broker to Client ..................................... 26
9.2 Pro-account Trading Terminal........................................................................... 26
SECTION – 10 : SHORT SELLING AND SECURITIES LENDING AND
BORROWING SCHEME............................................................................................ 28
10.1 Broad Framework for Short Selling and Securities Lending and Borrowing.... 28
10.2 Annexure 1 – Broad framework for short selling .............................................. 28
10.3 Annexure 2 - Broad framework for securities lending and borrowing .. 29
SECTION – 11: SPOT AND OFF-THE-FLOOR TRANSACTIONS..................... 34
SECTION – 12: SECURITIES TRANSACTION TAX............................................. 35
12.1 Implementation of Securities Transaction Tax .................................................. 35
SECTION – 13 : TIME STAMPING OF ORDERS................................................... 35
13.1 Time Stamping of Orders................................................................................... 35
SECTION – 14 : TRADING IN GOVERNMENT SECURITIES............................ 36
14.1 Government Securities....................................................................................... 36
SECTION – 15: UNIQUE CLIENT CODE............................................................... 37
SECTION - 16: TRANSACTION CHARGES BY THE STOCK EXCHANGES.. 38
SECTION 17 - PRESERVATION OF RECORDS .................................................... 39
SECTION 18 - DISCLOSURE OF INVESTOR COMPLAINTS AND
ARBITRATION DETAILS ON STOCK EXCHANGE WEBSITE......................... 40
It contains the following,
Section-1 - Beneficial Owner (BO) Accounts
1.1 Opening of BO Account by non-body corporates
1.1.1 Proof of Identity (PoI)
1.1.2 Proof of Address (PoA)
1.2 Exemptions from and clarifications relating to mandatory requirement
of PAN
1.3 Fees/Charges to be paid by BO
1.4 Transfer of funds and securities from Clearing Member pool account to
BO Account
1.5 Printing of Grievances Redressal Mechanism on Delivery Instruction
Form Book
1.6 Exemption to Depository Participants (DPs) from providing hard
copies of transaction statements to BOs
1.7 Safeguards on transfer of securities in dematerialized mode
Section-2 - Issuer related
2.1 Charges to be paid by Issuers
2.2 Activation of International Securities Identification Number (ISIN) in
case of IPO
2.3 Registrar and Transfer Agents
2.4 Mandatory admission of debt instruments on both the Depositories
2.5 American Depository Receipts (ADRs)/Global Depository Receipts
(GDRs)
2.6 Electronic Clearing System (ECS) facility
2.6.1 Dividend Distribution
2.6.2 Refund in public/rights issues
Section-3 – Depositories/ Depository Participant (DP) Related
3.1 Designated e-mail ID for redressal of investor complaints
3.2 Approval of amendments to Bye Laws / Rules of Stock Exchanges and
Depositories
3.3 Preservation of Records
3.4 Foreign investments in infrastructure companies in securities markets
3.5 Activity schedule for depositories for T+2 rolling Settlement
3.6 Settlement of transactions in case of holidays
3.7 Supervision of branches of depository participants
3.8 Designated e-mail ID for regulatory communication with SEBI
3.9 Disclosure of investor complaints and arbitration details on Depository
website
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In continuation of Press Note 8 issued by DIPP with effect from 16.12. 2009 that No limits for royalty/lumpsum payment in FEMA under Current Account Transaction as per PN 8 – DIPP allowed it under Automatic route (ie) without the approval of RBI
The Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2010 is passed. They shall be deemed to have come into force with effect from the 16th day of December, 2009.
In terms of Rule 4 of the Foreign Exchange Management (Current Account Transactions) Rules 2000, prior approval of the Ministry of Commerce and Industry, Government of India, is required for drawing foreign exchange for remittances under technical collaboration agreements where payment of royalty exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds USD 2 million [item 8 of Schedule II to the Foreign Exchange Management (Current Account Transactions) Rules, 2000]. The Government of India has reviewed the extant policy with regard to liberalization of foreign technology agreement and it was decided to omit item number 8 of Schedule II to the Foreign Exchange Management (Current Account Transaction) Rules, 2000, and the entry relating thereto.
Accordingly, AD Category-I banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of Ministry of Commerce and Industry, Government of India.
The amendment to the Foreign Exchange Management (Current Account Transactions) Rules, 2000, in this regard has been notified by the Government of India vide Notification No.G.S.R.382 (E) dated May 5, 2010.
Source: RBI/2009-10/465 A. P. (DIR Series) Circular No. 52 dated 13th May 2010
Release of Foreign Exchange for Visits Abroad – Currency Component
Attention of Authorised Persons in foreign exchange is invited to A.P.(DIR Series) Circular No. 19 dated October 30, 2000 and A.P. (DIR Series) Circular No.11 [ A.P. ( F.L. Series ) Circular No.1 ] dated November 13, 2001, in terms of which Authorised Dealers and Full Fledged Money Changers are permitted to sell foreign exchange in the form of foreign currency notes and coins, up to USD 2,000 [increased to USD 3000] or its equivalent, to the travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States, without the prior permission from the Reserve Bank (RBI).
Authorised Dealers and Full Fledged Money Changers may, as hitherto, continue to sell foreign exchange in the form of foreign currency notes and coins up to USD 5,000 or its equivalent to the travellers proceeding to Iraq or Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States.
Instances have been observed where Non Banking Finance Companies (NBFCs) have made overseas investments without regulatory clearance of the Department of Non-Banking Supervision, Reserve Bank of India. Any investments made by NBFCs without regulatory clearance is a violation of FEMA 2004 and attracts penal provisions.
In this regard, it is emphasised that all NBFCs desirous of making any overseas investment must obtain 'No Objection' (NoC) of the Department of Non-Banking Supervision (DNBS) of RBI before making such investment, from the Regional Office in whose jurisdiction the head office of the company is registered.
Applications in this regard shall clearly state the activities intended to be undertaken by the overseas entity. NBFCs may also note that in terms of the Regulations ibid, they are not permitted to make direct investment in a foreign entity engaged in activities not approved under FEMA.
Source: RBI/2009-10/442 DNBS (PD).CC. No.173/03.10.01 /2009-10 dated 3rd May 2010
SEBI Credit Rating Guidelines
Effective use of credit ratings by the users is crucially dependent upon quality and quantity of disclosures made by the Credit Rating Agencies (CRAs).
CRA should publish information about the historical default rates of CRA rating categories and whether the default rates of these categories have changed over time, so that the public can understand the historical performance of each category and if and how rating categories have changed, and be able to draw quality comparisons among ratings given by different CRAs.
The default rates shall be calculated in the following manner:
In case of unsolicited credit ratings, i.e. the credit ratings not arising out of the agreement between a CRA and the issuer, credit rating symbol shall be accompanied by the word “UNSOLICITED” in the same font size.
Obligations in respect of Rating of Structured Finance Products
A CRA may undertake rating of structured finance products, namely, instruments / pay-outs resulting from securitization transactions (under SARFAESI Act, 2002 read with SEBI (POLSDI) Regulations, 2008). In such cases, apart from following all the applicable requirements in case of non-structured ratings, few other additional requirements shall also be complied with. The rating symbols shall clearly indicate that the ratings are for structured finance products. A CRA shall also disclose at least once in every six months, the performance of the rated pool, i.e., collection efficiency, delinquencies of the Structured Finance Products.
SEBI had, vide circular no SEBI/CFD/DIL/LA/4/2007/27/12 dated December 27, 2007 informed that Electronic Data Information Filing And Retrieval (EDIFAR) will be phased out gradually in view of new portal viz. Corporate Filing and Dissemination System (CFDS) put in place jointly by BSE and NSE at the URL www.corpfiling.co.in. No more EDIFAR...File it thru corpfiling SEBI says
SEBI has since discontinued the EDIFAR system w.e.f from April 1, 2010. In view of this, Stock Exchanges are advised to carry out the consequential amendments in Equity Listing Agreement i.e. removal of words, “and also through the EDIFAR website” from Clause 32 and omission of Clause 51 from Equity Listing Agreement. The Stock Exchanges are also advised to inform about discontinuation of EDIFAR to all the listed companies.
Now on, all the Stock Exchange/SEBI related filing such as
can be done online through Microsoft Excel sheet as downloaded from the said website. The portal aims at providing a single interface to the investors/shareholders/stakeholders to keep track of the latest filings of all the listed companies in India online irrespective of the Stock Exchange.
In consultation with market intermediaries, SEBI has issued a press release for Listing with Stock Exchanges to be made within 12 days of closure of public issue wef 1st May 2010.
In the new process, the syndicate members shall capture all data relevant for
purposes of finalizing basis of allotment while uploading bid data in the electronic bidding system of the stock exchanges. In order that the data so captured is accurate, syndicate members may be permitted an additional day to amend some of the data fields entered by them in the electronic bidding system.
It is to be noted that syndicate members shall be responsible for any error in the bid details uploaded by them. In case of apparent data entry error by either syndicate member or collecting bank in entering the application number in their respective schedules other things remaining unchanged, the application may be considered as valid and such exceptions may be recorded in minutes of the meeting submitted to stock exchange(s). In the event of mistake in capturing the application number by either the syndicate member or collecting bank leading to rejection of application, the registrar may identify based on the bid form, the entity responsible for the error. Valid records in electronic file will be those for which money is received.
This circular contains indicative timelines for the various activities in the issue process. The non-ASBA process in this regard is given in Annexure I of the circular. Since the ASBA process also needs to be revised pursuant to the
reduced timelines, the revised ASBA process is indicated in Annexure II of the circular.
Details of the mandatory data fields which are required to be captured into the electronic bidding system by the syndicate members including the fields which are modifiable/non-modifiable is given in Annexure III of the circular.
In order to facilitate quicker processing of applications for the purpose of allotment, instead of the name of the applicant, it is proposed to use PAN which is a unique identification number of the applicant. In this regard, the merchant bankers are directed to ensure that the following is clearly disclosed in the prospectus/abridged prospectus, application form and the pre-issue advertisements: “The applicants may note that in case the DP ID & Client ID and PAN mentioned in the application form and entered into the electronic bidding system of the stock exchanges by the syndicate members do not match with the DP ID & Client ID and PAN available in the depository database, the application is liable to be rejected.”
Stock Exchanges are directed to ensure that in case of revision of bids, there shall be appropriate provisions to capture the details of the payment instrument for difference of amount, if any. It is given to understand that there is no uniformity in the documents required to be submitted to the stock exchanges along with the listing application which results in delay in the process. In this regard, stock exchanges are directed to clearly indicate the list of documents which they require for giving listing approval, at the time of grant of in-principle approval.
Stock Exchanges, Merchant Bankers, Registrar to an Issue, Bankers to an issue including those acting as Self Certified Syndicate Banks and depositories are directed to ensure that the instructions contained in this circular are complied with. This revised procedure shall be applicable to all public issues opening on or after May 3, 2010.
Download the IPO Timeline or Public Issue Schedule issued by SEBI from T+0 till T + 12 days, where “T” is the issue closing date and “T+12” is the date of commencement of trading vide SEBI CIR/CFD/DIL/3/2010 dated 22nd April 2010.
Execution of Power of Attorney (PoA) by the Client in favour of the Stock Broker and Depository Participant
1. A Power of Attorney is executed by the client in favour of the stock broker /stock broker and depository participant to authorize the broker to operate the client’s demat account and bank account to facilitate the delivery of shares and pay – in/ pay – out of funds. The cleint shall not be forced to execute Irrevocable Power of Attorney.
2. Generally, the PoA is taken from the clients who want to avail internet based trading services. For offering internet based trading services, a Stock Broker requires necessary authorizations for seamless trading, collection of margins as well as settlement of funds and securities. Further, some of the Stock Brokers also obtain authorizations from their clients to offer non-internet based services.
3. Standardizing the norms for PoA must not be construed as making the PoA a condition precedent or mandatory for availing broking or depository participant services. PoA is merely an option available to the client for instructing his broker or depository participant to facilitate the delivery of shares and pay-in/pay-out of funds etc. No stock broker or depository participant shall deny services to the client if the client refuses to execute a PoA in their favour.
4. The Stock Brokers shall take necessary steps to implement this circular latest by May 31, 2010 for the new clients and ensure to take necessary steps latest by September 01, 2010 to revoke those authorizations given by the existing clients to the stock brokers/ stock broker and depository participants through PoA that are inconsistent with the present guidelines.
5. The POA should be limited & shall not facilitate the stock broker to do the following:
a. Transfer of securities for off market trades.
b. Transfer of funds from the bank account(s) of the Clients for trades executed by the clients through another stock broker.
c. Open a broking / trading facility with any stock broker or for opening a Beneficial Owner account with any Depository Participant.
d. Execute trades in the name of the client(s) without the client(s) consent.
e. Prohibit issue of Delivery Instruction Slips (DIS) to beneficial owner (client).
f. Prohibit client(s) from operating the account.
g. Merging of balances (dues) under various accounts to nullify debit in any other account.
h. Open an email ID/ email account on behalf of the client(s) for receiving statement of transactions, bills, contract notes etc. from stock broker / Depository Participant.
i. Renounce liability for any loss or claim that may arise due to any blocking of funds that may be erroneously instructed by the Stock Broker to the designated bank.
