Requirement of Fee Clearance and NOC – Non applicability in
respect of certain category of members of stock exchanges
1. In terms of clause 4 (e) of SEBI Circular No.SEBI/SMD/SE/Cir-24/2003/18/06 dated June 18, 2003 members of the stock exchanges are required to obtain ‘NOC’ from SEBI through the respective stock exchanges before claiming refund of excess Base Minimum Capital from the stock exchange.
2. Further, in terms of clause 4 of SEBI Circular No.MIRSD/MSS/Cir-30/13289/03 dated July 9, 2003, members of the stock exchanges are required to obtain ‘fee clearance’ from SEBI through the respective stock exchanges for the following purposes:
(a) Change in shareholding pattern without change in control,
(b) Issue and redemption of preference shares, issue of bonus shares, and
(c) Change in directors other than designated / whole time directors
3. On a review, it has been decided that the above referred provisions of the aforesaid circulars shall, henceforth, be not applicable to the following categories of members of the stock exchanges:
(i) trading members and clearing members in the equity derivatives and currency derivatives segments
(ii) stock brokers in the cash segment who are covered under Schedule III A [payment of fees by stock brokers] of the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 and
(iii) stock brokers in the cash segment who may migrate to Schedule III A
[payment of fees by stock brokers] of the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 in future (as and when they migrate).
4. However, the stock brokers who are covered under Schedule III [payment of fees by stock brokers] of the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 will be required to comply with the above referred provisions of the aforesaid circulars.
Friday, January 29, 2010
Fee Clearance & NoC NA to certain Intermediaries under SEBI
In person verification,once for account by Depository Participant or Stock Broker, SEBI clarification
Mandatory Requirement of in-person verification of clients
It is clarified that the ‘in person’ verification done for opening beneficial owner’s account by a Depository Participant (DP) will hold good for opening trading account by a stock broker and vice versa, it the Stock broker and DP is the same entity or if one of them is the holding or subsidiary company of the other.
For eg: If Karvy is a Depository Participant as well as a Stock Broker registered under SEBI (Intermediaries) Regulation, 2008, then ‘in person’ verification done for opening beneficial owner’s account by (Karvy as a) Depository Participant (DP) will hold good for opening trading account by (Karvy as a) stock broker.
Clauses in Mutual Fund Advertisement Code to be printed in BOLD, SEBI Circular [MF Cl.10,13,14]
It is essential for the investors to be aware that the investments made in mutual funds are subjects to risk and that the scheme related documents should be read before investing. Hence it was mandated that statements appearing in Clauses 10, 13 and 14 of Schedule VI of SEBI (Mutual Funds) Regulations, 1996 on Advertisement Code should appear in all advertisements. However, it is noted that the advertisements issued are generally lengthy and hence these disclosures are not bought to the attention of the investors.
In order to make these statements more prominent, it is advised that the disclosures as stated in Clauses 10, 13 and 14 of Schedule VI of SEBI (Mutual Funds) Regulations, 1996 on Advertisement Code shall be printed in BOLD.
The said Clauses are reproduce for your reference.
Clause 10: All advertisements shall also make a clear statement to the effect that all mutual funds and securities investments are subject to market risks, and there can be no assurance that the fund’s objectives will be achieved.
Clause 13: All advertisements issued by a mutual fund or its sponsor or asset management company, shall state ‘all investments in mutual funds and securities are subject to market risks’ and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market.
Clause 14: All advertisement launched in connection with the scheme should also disclose prominently the risk factors as stated in the offer document alongwith the following warning statements :—
(a) ............ is only the name of the scheme and does not in any manner indicate either the quality of the scheme, its future prospects or returns; and
(b) please read the offer document before investing.
All mutual funds shall comply with the above requirements in letter and spirit.
Source: SEBI/IMD/CIR No.15/191378 /2010 dated 18th January 2010
Mobile Banking Transaction Guidelines & increase in limits 50,000/- per customer, RBI says
Mobile Banking Transactions in India - Operative Guidelines for Banks
A reference is invited to the guidelines appended to our circular no. RBI/2008-09/ 208, DPSS.CO.No.619 /02.23.02/ 2008-09 dated October 08, 2008, on the captioned subject.
Transaction limit: In amendment of provisions of paragraph 8.1 of the above guidelines, banks are now permitted to offer this service to their customers subject to a daily cap of Rs 50,000/- per customer for both funds transfer and transactions involving purchase of goods/services. Presently, such transactions are subject to separate caps of Rs 5000/- and Rs 10000/ -respectively.
Technology and Security Standard: Transactions up to Rs 1000/- can be facilitated by banks without end-to-end encryption. The risk aspects involved in such transactions may be addressed by the banks through adequate security measures.
Remittance of funds for disbursement in cash:
In order to facilitate the use of mobile phones for remittance of cash, banks are permitted to provide fund transfer services which facilitate transfer of funds from the accounts of their customers for delivery in cash to the recipients. The disbursal of funds to recipients of such services can be facilitated at ATMs or through any agent(s) appointed by the bank as business correspondents. Such fund transfer service shall be provided by banks subject to the following conditions:-
I. The maximum value of such transfers shall be Rs 5000/- per transaction.
II. Banks may place suitable cap on the velocity of such transactions, subject to a maximum value of Rs 25,000/- per month, per customer.
III. The disbursal of funds at the agent/ATM shall be permitted only after identification of the recipient. In this connection, attention of banks is drawn to the provisions of the Notification dated November 12, 2009, issued by Government of India, under Prevention of Money Laundering Act, 2002, as amended from time to time.
IV. Banks may carry out proper due diligence of the persons before appointing them as authorized agents for such services.
V. Banks shall be responsible as principals for all the acts of omission or commission of their agents.
Source: RBI/2009-10/273 DPSS.CO.No.1357/02.23.02/ 2009-10 dated 24th December, 2009
RBI Guidelines on Money Changing Activity & Cross Border Inward Remittance under MTSS
Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009- Money changing activities vide RBI/2009-10/235 A.P. (DIR Series) Circular No.17 & A.P. (FL/RL Series) Circular No.04 dated 27th November 2009
Click here to download Norms for Money Changing Activities.
Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of APs(Indian Agents) under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009-
Cross Border Inward Remittance under Money Transfer Service Scheme vide RBI/2009-01/ 236 A.P. (DIR Series) Circular No.18 & A.P. (FL Series) Circular No.05 dated 27th November 2009.
Click here to download Norms for Cross Border Inward Remittance under MTSS
These guidelines are also applicable mutatis mutandis to all agents / franchisees of Authorised Persons and it will be the sole responsibility of the
franchisers to ensure that their agents / franchisees also adhere to these guidelines.
Advance Remittance & bank guarantee for import of Services NA to Public Sector Company or a Department of Government, RBI says
Advance Remittance for import of Services
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 15 dated September 8, 2008, in terms of which the limit for advance remittance for all admissible current account transactions for import of services without bank guarantee was raised from USD 100,000 to USD 500,000 or its equivalent.
It is clarified that the increase in the limit for advance remittance for all admissible current account transactions for import of services without bank guarantee is not applicable for a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments.
In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would continue to be required.
Source: RBI/2009-10/ 175 A.P. (DIR Series) Circular No.10 dated October 5, 2009
Issue of Bank Guarantee on behalf of service importers
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Regulation 4 of the Foreign Exchange Management (Guarantees) Regulations, 2000 notified vide Notification No. FEMA 8/2000-RB dated May 3, 2000, as amended from time to time. In terms of Regulation 4(3)(iv) thereof [amended vide Notification No. FEMA 151/2007-RB dated January 4, 2007] and A.P. (DIR Series) Circular No. 13 dated November 17, 2006, banks are allowed to issue guarantees in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, for an amount up to USD 100,000 or its equivalent, subject to the terms and conditions stipulated in the said circular.
With a view to further liberalise the procedure (other than in respect of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments) for import of services, it has been decided to increase the limit for issue of guarantee by AD Category-I banks from USD 100,000 to USD 500,000. Accordingly, AD Category-I banks are now permitted to issue guarantee for amount not exceeding USD 500,000 or its equivalent in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, provided:
(a) the AD Category-I bank is satisfied about the bonafides of the transaction;
(b) the AD Category-I bank ensures submission of documentary evidence for import of services in the normal course; and
(c) the guarantee is to secure a direct contractual liability arising out of a contract between a resident and a non-resident.
In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for issue of guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be required.
Source: RBI/2009-10/ 176 A.P. (DIR Series) Circular No.11 dated 5th October, 2009
Tuesday, January 26, 2010
Spend Rupees for Spectrum Allocation,get it refinanced with ECB within 12months under Government Route, RBI says in addition to exisitng Automatic route
RBI/2009-10/ 292 dated January 25, 2010 vide A.P. (DIR Series) Circular No. 28
As per the existing ECB policy, eligible borrowers in the telecommunication sector are permitted to avail of ECB for the purpose of payment for spectrum allocation, under the automatic route. Keeping in view the large outlay of funds required to be paid directly to the Government within a limited period of time, it has been decided to make a one-time relaxation in the end-use conditions of the ECB policy.
Accordingly, the payment for spectrum allocation may initially be met out of Rupee resources by the successful bidders, to be refinanced with a long-term ECB, under the Government approval route, subject to the following conditions:
i) The ECB should be raised within 12 months from the date of payment of the final installment to the Government;
ii) The designated AD - Category I bank should monitor the end-use of funds;
iii) Banks in India will not be permitted to provide any form of guarantees; and
iv) All other conditions of ECB, such as eligible borrower, recognized lender, all- in-cost, average maturity, etc, should be complied with.
Eligible borrowers in the telecommunications sector proposing to fund the payment for Spectrum allocation directly out of the proceeds of the ECBs may continue to avail of the ECBs under the automatic route as per the existing policy.
Click here to track all the External Commercial Borrrowing related Updates
Monday, January 25, 2010
Calendar Quarterly Report by VCF within 7 days as per Regulations in Revised Format w.e.f 31/03/2010
Sub: Quarterly Reporting by Venture Capital Funds (VCF)
Source: SEBI/IMD/DOF-1/VCF/CIR-1/2010 dated 11th January 2010
1. Please refer to SEBI circular No SEBI/MFD/VCF/CIR no 1/7352/03 dated April 29, 2003 regarding submission of quarterly report on venture capital activity in the prescribed format.
2. Format for the quarterly report on venture capital activity to be submitted by Venture Capital Funds has been revised as per enclosed Annexure. In accordance with Regulation 22 of SEBI (Venture Capital Funds) Regulations, 1996, all venture capital funds are directed to submit the report on venture capital activity to SEBI, complete in all respects in the new format with effect from the quarter ended 31st March, 2010.
3. The report is to be uploaded online on SEBI portal within 7 days from the end of each calendar quarter. Physical copies of the report are not required to be submitted.
Tuesday, January 19, 2010
CS Tax Laws: Excise & CENVAT Credit Rules for Professional Programme exams, concepts in a nutshell, enjoy passin...
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Tuesday, January 12, 2010
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Sunday, January 10, 2010
Debt Listing: Special Exemptions to regulated financial sector entities eligible for meeting capital requirements as specified by respective regulators, SEBI amendment
SEBI/IMD/DOF-1/BOND/Cir-1/2010 dated 7th January 2010
SEBI has introduced Simplified Debt Listing Agreement that prescribed norms for issue of public or privately placed debt securities and listing of such securities on the exchange and has also issued Clarification on applicability of SEBI Regulations/ Circulars on Initial and Continuous Disclosures for Convertible and Non-Convertible Debt.
Since Part-A of the Listing Agreement for debt is applicable for debt issuers with already listed equity, it is clarified that the covenants in the Equity Listing Agreement that require submission of a draft offer document to SEBI for observations or obtaining of an acknowledgement card are not applicable in case of an issue of debt securities which is made in terms of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
Further, SEBI vide SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated 26th November, 2009 has amended the Debt Listing Agreement.
In continuation thereof, it has been decided to amend the Simplified Listing Agreement for Debt Securities as follows with immediate effect:
(a) After clause 5, the following proviso shall be inserted:
Clause 5: In respect of its listed debt securities, the Issuer agrees that it shall maintain 100% asset cover sufficient to discharge the principal amount at all times for the debt securities issued and shall disclose to the exchange on half-yearly basis and in their annual financial statements the extent and nature of security created and maintained.
Provisio: Provided that this requirement shall not be applicable in case of unsecured debt instruments issued by regulated financial sector entities eligible for meeting capital requirements as specified by respective regulators.
(b) In clause 16, after sub-clause (a), the following proviso shall be inserted:
Clause 16(a): In respect of its listed debt securities, the Issuer agrees that it shall maintain 100% asset cover sufficient to discharge the principal amount at all times for the debt securities issued and shall disclose to the exchange on half-yearly basis and in their annual financial statements, the extent and nature of security created and maintained.
Provisio: Provided that this requirement shall not be applicable in case of unsecured debt instruments issued by regulated financial sector entities eligible for meeting capital requirements as specified by respective regulators.
(c) In clause 29A, in sub-clause (b) and sub-clause (c), the word “un-audited” shall be omitted.
Clause 29A(b): Such unaudited half-yearly results [meaning, EITHER audited half yearly results OR unaudited with Limited Review Report as per Clause 29A(a)] should have been taken on record by the Board of Directors/ Council of Issuer as the case may be or its Sub Committee and signed by the Managing Director / Executive Director.
Clause 29A(c): The Issuer shall, within 48 hours of the conclusion of the Board/Council or its Sub Committee Meeting, publish the unaudited financial results [meaning, EITHER audited results OR unaudited with Limited Review Report as per Clause 29A(a)] in at least one English daily newspaper circulating in the whole or substantially the whole of India.
