December CS Exam Results February 2010 & Checklist of programmes after passing Company Secretary Foundation or Executive or Professional

The results of the CS Foundation Course, Intermediate and Final (Old Syllabus) and Foundation Programme, Intermediate/Executive Programme, and Professional Programme (New Syllabus) examinations of the Company Secretaries held in December, 2009 are scheduled to be declared at 12.00 Noon on 25^th February, 2010 at www.icsi.edu and also try www.icsi.in & http://icsi.examresults.net or details in http://yehseeyes.blogspot.com/2010/02/download-or-sms-cs-december-exam.html

HEARTIEST WISHES FOR EVERY ONE WHO HAS WON & IN THE PROCESS OF WINNING COMPANY SECRETARY EXAMS

Candidates registered upto and including the month of February in a year are eligible for appearing in both the groups of the Executive Programme or all 4 modules of Professional Programme examination held in June of next year. So, its mandatory for you to submit prescribed forms before 2nd March 2010 (also note even 27 & 28th February viz Saturday and Sunday is a full working day for ICSI) to appear for all modules in December 2010.  There is one another new requirement in lieu of TOP, SMTP, etc…which is called Student Induction Programme (SIP), Executive Development Programme (EDP)  and Professional Development Programme (PDP) from 1st September 2009 0nwards.  Details in http://yehseeyes.blogspot.com/2010/02/newcstrainingsipedpmsoppdpparttimeicsic.html

Before visiting the nearest ICSI office, make sure you are ready with following things:

For Foundation passed:

1. Click here to register online for CS Executive Program Application -http://www.icsi.in and arrange for fees as per http://www.icsi.edu/LinkClick.aspx?link=http%3a%2f%2fwww.icsi.edu%2fwebmodules%2flinksofweeks%2fREVISION+OF+FEES.doc&tabid=528&mid=3166

2. Get to know your subjects and classes schedules at http://csclasses.learnlabz.com
3. Register for Computer Training with Aptech or produce your Certificates to write Exemption exam on or before February 2010: www.icsi.aptechtrainingsolutions.com
4. Enroll for Student Induction Programme (SIP), a 7 full day program with ICSI which shall be completed within 6 months.  Details in http://yehseeyes.blogspot.com/2010/02/newcstrainingsipedpmsoppdpparttimeicsic.html
5. Get your Bcom degree too BCom CS Executive & MCom CS Professional programme is possible -IGNOU & ICSI offers this mutli-degrees for Company Secretaries

6. Get your scholarship based on your school marks from 10&12th Standard Marks for 100% Company Secretary Course fees, says ICSI by Students Education Fund Trust scheme-60/75/90%

7. Start writing CC papers for eligibility Just write 1 CC paper for CS Executive/Professional/Foundation programme, instead of 3 CC papers per subject but to secure 40% marks and submit on or before August 2010.

8. Enjoy reading CS Executive Programme books from http://csbooks.learnlabz.com

For Executive passed:

1. Click here to download & fill CS Professional Program Application -http://www.icsi.edu/webmodules/student/final.doc and arrange for fees as per Apply for Executive Development Program (EDP) and find details from nearest ICSI -http://www.icsi.edu/webmodules/student/TopForm.doc (its a mandatory pre-requisite to commence CS Training). EDP is a 8 full day program offered at ICSI and your training will commence only on completion of this program.  Details in http://yehseeyes.blogspot.com/2010/02/newcstrainingsipedpmsoppdpparttimeicsic.html

2. Then, start sending emails & applications of RESUME for CS Training to

   1. List of Company Secretaries in Practice Registered for Imparting Training

   2. Registered Companies for Training

3. For 15-month CS Training related information, you can visit http://yehseeyes.blogspot.com/2008/05/icsi-15-months-managementapprentice.html

4. Start looking out for Professional Development Programs (PDP) as its mandatory to attend for 25 hours or you have the option to register for National Convention of ICSI.

5. Get your Mcom degree too BCom CS Executive & MCom CS Professional programme is possible -IGNOU & ICSI offers this mutli-degrees for Company Secretaries

6. Get your scholarship based on your school marks from 10&12th Standard Marks for 100% Company Secretary Course fees, says ICSI by Students Education Fund Trust scheme-60/75/90%

7. Get to know your subjects and classes schedules at http://csclasses.learnlabz.com
8. Start writing CC papers for eligibility Just write 1 CC paper for CS Executive/Professional/Foundation programme, instead of 3 CC papers per subject but to secure 40% marks and submit on or before February 2010.

9. Enjoy reading CS Professional books @ http://csbooks.learnlabz.com

For Professional passed:

1. Pending Training you are eligible for Licentiate Membership of ICSI -http://www.icsi.edu/webmodules/student/Licentiate.doc and you will get Chartered Secretary (Members magazine) free of cost.

2. Complete your CS Training or Claim exemption from it following http://yehseeyes.blogspot.com/2008/05/icsi-15-months-managementapprentice.html

3. Complete RoC Training or Stock Exchange training, if applicable. Send e-mail to training2@icsi.edu to get the sponsorship letter.

4. Complete 25 hours PDP's, 15 full days MSOP’s, etc… in http://yehseeyes.blogspot.com/2010/02/newcstrainingsipedpmsoppdpparttimeicsic.html
5. Then, apply for the esteemed membership of ICSI following, http://yehseeyes.blogspot.com/2009/01/checklistformsfeesguide-to-apply-for.html

Are you not satisfied with your CS results? then apply for Verification of marks (casually called revaluation or re-counting) within 30 days from today (ie) within 30 days from declaration of CS results.  For more details, visit http://yehseeyes.blogspot.com/2009/02/revaluation-retotalling-cs-marks.html

Enjoy passin... Of course, you can keep track of all updates, happenings and all about Company Secretaries by following http://yehseeyes.blogspot.com/and Get See Yes -> Yes, ACS delivered by email

New Format Cheque under Cheque Truncation System (CTS) Standard issued by RBI, in addition to MICR, yet to be notified

"CTS-2010 Standard" for Cheque Forms – Specifications

RBI has proposed a New Cheque Truncation System (CTS) and a Model of proposed cheque, the effective date of which will be intimated soon.

It has since been decided to prescribe certain benchmarks towards achieving
standardisation of cheques issued by banks across the country. These include provision of mandatory minimum security features on cheque forms like quality of paper, watermark, bank’s logo in invisible ink, void pantograph, etc., and standardisation of field placements on cheques. In addition, certain desirable features are also being suggested which could be implemented by banks based on their need and risk perception. The set
of minimum security features would not only ensure uniformity across all cheque forms issued by banks in the country but also help presenting banks while scrutinising /recognising cheques of drawee banks in an image-based processing scenario. The homogeneity in security features is expected to act as a deterrent against cheque frauds, while the standardisation of field placements on cheque forms would enable straightthrough-processing (STP) by use of optical / image character recognition technology (MICR).

Source: RBI Circular DPSS.CO.CHD.No.1832/04.07.05/2009-2010 dated February 22, 2010

New NBFC Classification: AFC, IFC, Investment & Loan company as per RBI

Consequent upon re-classification of NBFCs, in the proposed structure the following categories of NBFCs will emerge:

1. Asset Finance Company
2. Investment Company
3. Loan Company
4. Infrastructure Finance Company (IFC) – a new category as notified by RBI vide DNBS.PD. CC No.168 /03.02.089 /2009-10 dated 12th February 2010.

Conversion into New Pricing Norms for FCCB on or before 15th August 2010 (ie) average 2 week high & low prices only like QIP under ICDR

A Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme was notified in 1993 to allow the Indian Corporate sector to access global capital markets through issue of Foreign Currency Convertible Bonds (FCCB)/Equity Shares under the Global Depository Receipt Mechanism (GDR) and American Depository Receipt Mechanism (ADR). The Scheme has been amended several times since then.

What is FCEB?

Amendment: On or before 15th August 2010 (6 month period from 15th February 2010), the corporates have the option to revise from OLD CONVERSION PRICE norms to NEW CONVERSION PRICE norm (as below) for FCCB’s.  The said revision of conversion price is subject to the following conditions:

• Prior approval from RBI (PRBI) is mandatory.
• The issuing Company shall ensure that the revision of price and consequent issue of shares may not breach Foreign Direct Investment (FDI) limit (Sectoral caps) under Automatic or Approval route.
• The issuing Company shall take approval from its Board as well as from its shareholders (Board Resolution + Ordinary Resolution).
• The issuing Company shall enter into a fresh agreement with the FCCB holders in terms of re-negotiation of the conversion price.

Source: Ministry of finance Press Note F.No.9/3/2009-ECB dated 15th February 2010.

[Old Conversion Price]FCCB Pricing Norm prior to 27th November 2008:

Listed Companies – The pricing should not be less than the higher of the following two averages:

(i) The average of the weekly high and low of the closing prices of the related shares quoted on the stock
      exchange during the six months preceding the relevant date;

(ii) The average of the weekly high and low of the closing prices of the related shares quoted on a stock
       exchange during the two week preceding the relevant date.

The “relevant date” means the date thirty days prior to the date on which the meeting of the general body of shareholders is held, in terms of section 81 (IA) of the Companies Act, 1956, to consider the proposed issue.”

[New Conversion Price]FCCB Pricing Norm from 27th November 2008: similar to QIP pricing under ICDR

Listed Companies – The pricing should not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the relevant date; [avg 2 weeks high & low]
The “relevant date” means date of the meeting in which the Board of the company or the Committee of Directors duly authorized by the Board of the company decides to open the proposed issue.”

Source: FINMIN

Revised CS Training programme: 7,8,15days training programmes after Foundation, Executive & Professional Programme exams…Understand it!!!

Updated New Company Secretary Training Provisions

1. Applicability: Students enrolled for Company Secretary (CS) course on or after 1^st September 2009.
2. Student Induction Program (SIP): Students shall complete SIP Within 6 months of Registration for CS Executive Programme. SIP is a 7 full days training programme (introduced for the very first time). SIP will be conducted by ICSI's Regional Councils like NIRC, SIRC, EIRC & WIRC and 'A' & 'B' grade Chapters as provided in www.icsi.edu. To register for SIP, only physical application shall be made to the nearest ICSI chapter along with a fees of Rs.1,000/- To Get exemption from SIP, follow https://docs.google.com/open?id=1XBh5rCmnC1ZP_Fjq-lU2dXop9VnyJh1aggwku6CX_WG3TfihHBw-VdU6dUS3
3. Executive Development Program (EDP): EDP is the new name of erstwhile Training Orientation Programme (TOP). EDP is a 8 full days (instead of 5 days as earlier) training programme. EDP as a pre-requisite for Training which shall be done after passing CS Executive Programme Exams remains as such. To register for EDP, only physical application shall be made to the nearest ICSI chapter along with a fees of Rs.1,000/
4. Professional Development Program (PDP): PDP is the new name of erstwhile Academic Development Programme (ADP) which remains for the period of 25 hours. PDP's are the lectures, seminars, etc...conducted by ICSI on daily basis or weekend basis or half-day basis and will have PDP hours mentioned in it. PDP's will be counted after completion of Executive Development Programme (EDP) and during the course of CS Training. It shall be completed before applying for ACS Membership.
5. Wholly or Partly with PCS & Company & Firms/Institutions: The existing 15 month Training Programme remains as such. ICSI has specifically mentioned that Students are free to undergo training wholly or partly with Practising Company Secretary or Registered Companies. Further,
   6 (SIX) MONTHS OF 15 MONTHS TRAINING CAN BE DONE WITH FINANCIAL INSTITUTIONS/ MANAGEMENT CONSULTANTS / LAW FIRMS REGISTERED WITH ICSI.
   
6. RoC/Stock Exchange Training: The 15 day RoC or Specialised Institutions training on completion of 12 months of CS Training remains as such.
7. Management Skills Orientation Programme (MSOP): MSOP, the erstwhile Secretarial Modular Training Programme (SMTP) or Residential Secretarial Modular Training Programme (RSMTP) @ ICSI-CCGRT remains for 15 full days at the ICSI's Regional Councils. MSOP shall be completed after passing CS Professional Programme exams.
8. Membership Application: Details in http://yehseeyes.blogspot.com/2009/01/checklistformsfeesguide-to-apply-for.html
9. Full details about new CS Training, courses to be undergone and details can be found in http://yehseeyes.blogspot.com/2008/05/icsi-15-months-managementapprentice.html

Source: ICSI Notification & Website

The Council of the Institute has approved the following decisions
pertaining to training of the students of the Company Secretaryship
Course.:
A) 15 months training with Law Firms, Consultancy Firms,
Financial Institutions
The Council of the Institute has allowed imparting 15 months
training by Law Firms, Consultancy Firms and Financial
Institutions. Earlier they were allowed to impart training for 6
months only. Further the Council has removed the criteria of
standing, minimum number of partners and fixed assets for
registration of Law Firms and Consultancy Firms and approved the
revised guidelines for registration of Law Firms, Consultancy
Firms, Financial Institutions for imparting 15 months training
which is available at training link on the website of the Institute
www.icsi.edu.
B) Removal of requirement of remitting fee of ₹ 50/-with
Apprenticeship Agreement by the Practising Company
Secretaries
The Council has removed the requirement of remitting a fee of
₹ 50/- by the PCS towards registration of apprenticeship training
of the students.
C) 15 days with any one specialised agency:
The Council has also allowed undergoing training of 15 days with
any one specialised agency as prescribed under Regulation 50 (b)
of the Company Secretaries Regulations, 1982, with the broking
firms/ companies, Law firms, Universities (recognized by UGC),
Merchant Bankers, Mutual Funds, Insurance Companies, SMEs,
Industry Associations/ Chambers of Commerce, all Ministries,
SEBI, IRDA, TRAI, CCI, Courts, Tribunals and other quasi-judicial
bodies

Websites/Blogs/astrology predictions or advice/Newspaper Advertisements/SMS’s/Emails/rumours NO Papa...Only SEBI Registered Intermediaries for Investments

SEBI PR No.36/2010 dated 10th February 2010

Caution to investors

Securities and Exchange Board of India (SEBI) is a regulatory body established by an Act of Parliament to protect the interests of investors in the securities market, to promote the development of, to regulate the securities market and for matters connected therewith or incidental thereto.

The following caution is issued by SEBI in the interest of investors.

SEBI has observed a proliferation of websites that offer investment advice to investors. Many of these websites offer investment advice not backed by any reasonable basis and prima facie appear to be misguiding. Investors should realize that when they follow such advice they are exposing themselves to undue risk in using unconfirmed information available on such Websites/Blogs/astrology predictions or advice/Newspaper Advertisements/SMS’s/Emails/rumours/ advice rendered through television or print media and trading tips on an intra-day basis, short term basis or long term basis. The public in general is advised not to fall prey to or be lured by such sources of information promising quick gains and unrealistic high returns. It is advised that investors should take well informed investment decisions.

The following may be borne in mind:

· Deal only with/ through SEBI registered intermediaries.

· Do not get carried away by advertisements promising unrealistic gains and windfall profits.

· Do not invest based on market rumours or unconfirmed or unauthentic news.

· Be aware that advice through television or print media does not mean that it is the opinion of the channel or publisher.

· Be extra cautious while using information available from media sources such as Websites/ Blogs/ Newspaper Advertisements/ SMS’s Emails/rumours/ advice through television or print media for information and tips for intra-day, short term or long term investing.

· Do not be guided by astrological predictions on share prices and market movements.

· Do not make investment decisions on the basis of implicit/explicit promises made by anyone.

· Do not be unduly influenced by indicative returns.

· Do not be unduly influenced by Bull Runs/Bear Runs while making investment decisions.

No prior RBI approval for ECB changes: Name of Borrower or Currency or Repayment or Bank after allotment of LRN, if other Terms are same

External Commercial Borrowings (ECB) Policy – Liberalisation vide RBI/2009-10/311 A. P. (DIR Series) Circular No.33 dated 9th February 2010
As per the extant ECB procedures, any changes or amendment in the terms and conditions of the ECB after obtaining the Loan Registration Number (LRN) from the Department of Statistics and Information Management (DSIM), Reserve Bank, require the prior approval of the Reserve Bank. Accordingly, the requests of the borrowers for changes in the terms and conditions, such as, drawdown / repayment schedules, currency of borrowing and changes in designated AD bank, name of the borrowing company, etc. are referred to the Reserve Bank for necessary approval.

As a measure of simplification of the existing procedures, it has been decided to delegate powers to the designated AD category-I banks to approve the following requests from the ECB borrowers, subject to specified conditions:
a) Changes / modifications in the drawdown / repayment schedule (maintaining Average Maturity Period)
Designated AD Category – I banks may approve changes / modifications in the drawdown / repayment schedule of the ECBs already availed, both under the approval and the automatic routes, subject to the condition that the average maturity period, as declared while obtaining the LRN, is maintained. The changes in the drawdown / repayment schedule should be promptly reported to the DSIM, Reserve Bank in Form 83. However, any elongation / rollover in the repayment on expiry of the original maturity of the ECB would require the prior approval of the Reserve Bank.
b) Changes in the currency of borrowing (with same terms)
Designated AD Category I banks may allow changes in the currency of borrowing, if so desired, by the borrower company, in respect of ECBs availed of both under the automatic and the approval routes, subject to all other terms and conditions of the ECB remaining unchanged. Designated AD banks should, however, ensure that the proposed currency of borrowing is freely convertible.
c) Change of the AD bank (with NoC & Due Diligence)
Designated AD Category - I banks may allow change of the existing designated AD bank by the borrower company for effecting its transactions pertaining to the ECBs subject to No-Objection Certificate (NOC) from the existing designated AD bank and after due diligence.
d) Changes in the name of the Borrower Company  (with Evidence)
Designated AD Category - I banks may allow changes in the name of the borrower company subject to production of supporting documents evidencing the change in the name from the Registrar of Companies (Name Approval Letter [pursuant to e-form 1A] with Fresh Certificate of Incorporation [pursuant to e-form 1B]).

The modifications to the ECB guidelines will come into force with immediate effect.

To know, all about ECB http://yehseeyes.blogspot.com/search/label/RBI%20FEMA%20ECB

FDI in NBFC-Statutory Auditors Certification-half yearly within 1 month to RBI R.O.

Compliance with FDI norms-Half yearly certificate from Statutory Auditors of NBFCs

NBFCs having Foreign Direct Investment (FDI) whether under automatic route or under approval route have to comply with the stipulated minimum capitalisation norms and other relevant terms and conditions, as amended from time to time under which FDI is permitted.

As such these NBFCs are required to submit a certificate from their Statutory Auditors on half yearly basis (half year ending September and March) certifying compliance with the existing terms and conditions of FDI. Such certificate may be submitted not later than one month from the close of the half year to which the certificate pertains, to the Regional Office in whose jurisdiction the head office of the company is registered.

Source:RBI/2009-10/304 DNBS (PD).CC. No 167 /03.10.01 /2009-10 dated 4th February 2010

MF Valuation of Money market & Debt securities revised from 1st July 2010 based on 91 days maturity & others

The valuation method of debt and money market instruments specified in the earlier circulars were discussed in the Advisory Committee of Mutual Funds. With a view to ensure that the value of money market and debt securities in the portfolio of mutual fund schemes reflect the current market scenario, the current provisions regarding valuation of these securities need to be modified, as under:
I. Valuation of money market and debt securities with residual maturity of upto 91 days:
All money market and debt securities, including floating rate securities,
with residual maturity of upto 91 days shall be valued at the weighted
average price at which they are traded on the particular valuation day.
When such securities are not traded on a particular valuation day they
shall be valued on amortization basis. It is further clarified that in case of
floating rate securities with floor and caps on coupon rate and residual
maturity of upto 91 days then those shall be valued on amortization basis
taking the coupon rate as floor.
II. Valuation of money market and debt securities with residual maturity of over 91 days:
All money market and debt securities, including floating rate securities, with residual maturity of over 91 days shall be valued at weighted average price at which they are traded on the particular valuation day. When such securities are not traded on a particular valuation day they shall be valued at benchmark yield/ matrix of spread over risk free benchmark yield obtained from agency(ies) entrusted for the said purpose by AMFI.
III. Valuation of securities not covered under the current valuation policy:
In case of securities purchased by mutual funds do not fall within the current framework of the valuation of securities then such mutual fund shall report immediately to AMFI regarding the same. Further, at the time of investment AMCs shall ensure that the total exposure in such securities does not exceed 5% of the total AUM of the scheme.
AMFI has been advised that the valuation agencies should ensure that the valuation of such securities gets covered in the valuation framework within 6 weeks from the date of receipt of such intimation from mutual fund.
In the interim period, till AMFI makes provisions to cover such securities in the valuation of securities framework, the mutual funds shall value such securities using their proprietary model which has been approved by their independent trustees and the statutory auditors.
IV. Dissemination of information:
All mutual funds shall provide transaction details, including inter scheme transfers, of money market and debt securities on daily basis to the agency entrusted for providing the benchmark yield/ matrix of spread over risk free benchmark yield. Submission of data would help in daily matrix generation and would improve uniformity and accuracy of valuation in the mutual funds industry. The format in this regard is provided in SEBI Circular No.MFD/CIR/23 /066 / 2003 dated March 7, 2003.
V. Methodology for matrix of spread for marking up the Benchmark yield
In the methodology for pricing the non traded debt securities detailed in para 3(ii)(b) of SEBI Circular. MFD/CIR/ 8 / 92 / 2000 dated September 18, 2000 and para 3 of SEBI circular MFD/CIR/ no 14 / 442 / 2002 dated February 20, 2002, additional duration bucket(s) viz., 0.25- 0.5 yrs shall be provided.
VI. Consistency
All AMC’s shall ensure that similar securities held under its various schemes shall be valued consistently.
The aforesaid valuation would be applicable with effect from July 1, 2010.

Source: SEBI/IMD/CIR No.16/ 193388/2010 dated 2nd February 2010

Quarterly & Weekly reports by Depositories on Investor Compliants & Arbitration details to SEBI in prescribed formats

Disclosure of investor complaints and arbitration details on Depository (NSDL & CDSL) website
1. SEBI has received feedback from investors and investor associations to improve transparency in the ‘grievance redressal mechanism’. Based on the feedback and inputs received from them transparency in ‘grievance redressal’ is identified as a key area to augment investor protection. It is envisaged that transparency will also improve the general functioning of the market by providing investors the wherewithal to make informed choice.
2. Accordingly, it has been decided that the Depositories shall henceforth disclose the details of complaints lodged by Beneficiary Owners (BO’s)/investors against Depository Participants (DPs) in their website. The aforesaid disclosure shall also include details pertaining to arbitration and penal action against the DPs.
3. The format for the reports for the aforesaid disclosure, prepared following due deliberations and inputs from the Depositories, are given as annexure to this circular (12 pages), consisting of the following reports:
a. Report 1A: Complaints received against DPs during 2009-10
b. Report 1B: Redressal of Complaints received against DPS during 2008-
09
c. Report 1C: Redressal of Complaints received against DPs during 2009-
10
d. Report 2A: Details of Arbitration Proceedings (where Investor is a
party) during 2008-09:
e. Report 2B: Details of Arbitration Proceedings (where Investor is a
party) during 2009-10
f. Report 3A: Penal Actions against DPs during 2008-09
g. Report 3B: Penal Actions against DPs during 2009-10
h. Report 4A: Redressal of Complaints lodged by investors against Listed
Companies during 2008 -09
i. Report 4B: Redressal of Complaints lodged by investors against Listed
Companies during 2009 -10
j. The Depositories are accordingly advised to:
a. bring the provisions of this circular to the notice of the DPs, Companies and their Registrar & Transfer Agents (RTA’s) and also to disseminate the same on the website;
b. arrange to disclose details as per the aforesaid reports in their website within a period of one month from the date of this circular on a continuous basis;
c. arrange to update the aforesaid reports on a quarterly basis, except the reports 1A, which shall be updated on a weekly basis;
d. make amendments to the relevant bye-laws, rules and regulations for the implementation of the aforesaid disclosures, if necessary;
e. communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

Source: SEBI/MRD/ OIAE/ Dep/ Cir- 4/2010 dated 29th January 2010

Rs.7,500 Currency Notes per resident individual travelling abroad can take outside or bring inside India, RBI FEMA limit amendment/extended

Export and Import of Currency
Attention of Authorised Persons is invited to clauses (a) and (c) of sub-regulation (1) of Regulation 3 of Foreign Exchange Management (Export and Import of Currency) Regulations, 2000, notified vide Notification No. FEMA 6 /RB-2000 dated May 3, 2000, in terms of which, any person resident in India may take outside India or having gone out of India on a temporary visit, may bring into India (other than to and from Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.5,000 per person.
2. As part of providing greater flexibility to the resident individuals travelling abroad, the existing limits, mentioned above, have been enhanced to Rs. 7,500 per person. The Government of India, has notified vide G.S.R.548 (E) in the Gazette of India dated July 24, 2009 [Notification No.FEMA.195/2009-RB dated July 7, 2009] (copy annexed), an amendment to clauses (a) and (c) of sub-regulation (1) of Regulation 3 of the Notification referred to above.
3. Accordingly, any person resident in India,
i) may take outside India (other than to Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.7,500 (Rupees seven thousand five hundred only) per person; and
ii) who had gone out of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.7,500 (Rupees seven thousand five hundred only) per person.

Source: RBI/2009-10/297 A. P. (DIR Series) Circular No. 30 & A.P. (FL/ RL Series) Circular No.06 dated 1st February 2010.

Fee Clearance & NoC NA to certain Intermediaries under SEBI

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.

Source: SEBI/MIRSD/Cir. No.03/2010 dated 21st January, 2010

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.

Source: SEBI/MIRSD/Cir.No. 02/2010 dated 18th January 2o10

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

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

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.

Click here to download New Quarterly Report Format for VCF

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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.

Transmission or Transposition & death of Joint holder of shares mandates PAN for listed companies & for mismatch or maiden name for married woman, a proof of identity or address to be submitted for corroborative evidence to RTA

SEBI/MRD/DoP/SE/RTA/Cir-03/2010 dated 7th January, 2010

Sub: PAN requirement for transmission of shares in physical form
The Securities and Exchange Board of India (SEBI) vide circular ref. no. MRD/DoP/Cir-05/2007 dated April 27, 2007 made PAN mandatory for all securities market transactions. Thereafter, vide circular no. MRD/DoP/ Cir-05/2009 dated May 20, 2009 it was clarified that for securities market transactions and off-market/ private transactions involving transfer of shares in physical form of listed companies, it shall be mandatory for the transferee(s) to furnish copy of PAN card to the Company/ RTAs for registration of such transfer of shares.

Based on representations/ clarifications sought by market participants and in continuation to the aforesaid circulars, it is hereby clarified that it shall be mandatory to furnish a copy of PAN in the following cases –

1. Deletion of name of the deceased shareholder(s), where the shares are held in the name of two or more shareholders (Joint Shareholdings).
2. Transmission of shares to the legal heir(s), where deceased shareholder was the sole holder of shares.
3. Transposition of shares – when there is a change in the order of
   names in which physical shares are held jointly in the names of two or
   more shareholders.

Incase of mismatch in PAN card details as well as difference in maiden name and current name (in case of married women) of the investors -

• The Registrar & Transfer Agents (RTAs) can collect the PAN card as submitted by the transferee(s).  However, this would be subject to the RTAs verifying the veracity of the claim of such transferee(s) by collecting sufficient documentary evidence in support of the identity of the transferee(s) as provided for at para. 2 in the SEBI circular no. MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004 (ie) based on proof of identity or proof of address documents as given below:

• (ie) A copy of any one of the following may be accepted for proof  of identity / proof of address:

  A.  Proof of Identity

  I. Passport
  II. Voter ID Card
  III. Driving license
  IV. PAN card with photograph
  V. MAPIN card
  VI. Identity card/document with applicant's Photo, issued by

  a) Central/State Government and its Departments,
  b) Statutory/Regulatory Authorities,
  c) Public Sector Undertakings,
  d) Scheduled Commercial Banks,
  e) Public Financial Institutions,
  f) Colleges affiliated to Universities,
  g) Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and
  h) Credit cards/Debit cards issued by Banks.

  B.  Proof of Address

  I. Ration card
  II. Passport
  III. Voter ID Card
  IV. Driving license
  V. Bank passbook
  VI. Verified copies of

  a) Electricity bills (not more than two months old),
  b) Residence Telephone bills (not more than two months old) and
  c) Leave and License agreement / Agreement for sale.

  VII. Self-declaration by High Court & Supreme Court judges, giving the new address in respect of their own accounts.
  VIII. Identity card/document with address,  issued by

  a) Central/State Government and its Departments,
  b) Statutory/Regulatory Authorities,
  c) Public Sector Undertakings,
  d) Scheduled Commercial Banks,
  e) Public Financial Institutions,
  f) Colleges affiliated to universities; and
  g) Professional Bodies such as ICAI, ICWAI, Bar Council etc., to their Members.

• read with SEBI circular no. MRD/DoP/Cir-08/2007 dated June 25, 2007.  It details the discontinuation with respect to the requirement of Unique Identification Number (UIN) under the SEBI (Central Database of market Participants Regulations), 2003 (MAPIN regulations)/circulars and to make PAN as the sole identification number for all participants in the securities market, irrespective of the amount of transaction.

Revision in lot size for derivative contracts in individual securities mandates 2 week notice by Stock Exchanges & any increase in lot size can only be prospective

The Stock Exchanges shall review the lot size for derivative contracts on individual securities once in every 6 months based on the average of the closing price of the underlying for last 1 month and wherever warranted, revise the lot size by giving an advance notice of atleast 2 weeks to the market.

If the revised lot size is higher than the existing one, it will be effective for only new contracts. In case of corporate action, the revision in lot size of existing contracts shall be carried out as per SEBI circular SMDRP/DC/CIR-15/02 dated December 18, 2002.

 

Click here for the Standardised Derivative Lots size based on the Price Band of the Individual Securities as per SEBI/DNPD/Cir- 50/2010 dated 8th January 2010

Contracts under Securities Lending & Borrowing (SLB) framework extended to 12 months, SEBI

Sub: Review of Securities Lending and Borrowing (SLB) Framework
The framework for SLB was specified vide circular no. MRD/DoP/SE/Dep/Cir- 14 /2007 dated December 20, 2007 and was operationalised with effect from April 21, 2008. The SLB framework was revised vide circular no. MRD/DoP/SE/Cir-31/2008 dated October 31, 2008. Pursuant to feedback received from market participants and proposals for revision of SLB received from NSE and BSE, the framework is now modified as under:

The tenure of contracts in SLB may be upto a maximum period of 12 months. The Approved Intermediary (Clearing corporation/ Clearing House) shall have the flexibility to decide the tenure (maximum period of 12 months).

For more details, visit SEBI/MRD/DoP/SE/Dep/Cir- 01 /2010 dated 6th January 2010.

Internal Audit made mandatory for another intermediary, the Credit Rating Agencies (CRA) by PCS or PCA or PCWA on half yearly basis within 2 months to Board of Directors & ATR to SEBI

SEBI/MIRSD/CRA/Cir-01/2010 dated 6th January 2010

SEBI has decided in consultation with the credit rating agencies (CRAs)  that the audit envisaged under Regulation 22 of the SEBI (Credit Rating Regulations), 1999 shall include an internal audit (similar to that of Stock Brokers & Clearing Members by CA’s) to be undertaken in the following manner:

a. It shall be conducted on a half yearly basis.
b. It shall be conducted by Chartered Accountants, Company Secretaries (PCS) or Cost and Management Accountants who are in practice and who do not have any conflict of interest with the CRA.
c. It shall cover all aspects of CRA operations and procedures, including investor grievance redressal mechanism, compliance with the requirements stipulated in the SEBI Act, Rules and Regulations made thereunder, and guidelines issued by SEBI from time to time.
d. The report shall state the methodology adopted, deficiencies observed, and consideration of response of the management on the deficiencies.
e. The report shall include a summary of operations and of the audit, covering the size of operations, number of transactions audited and the
number of instances where violations / deviations were observed while making observations on the compliance of any regulatory requirement.
f. The report shall comment on the adequacy of systems adopted by the CRA for compliance with the requirements of regulations and guidelines issued by SEBI and investor grievance redressal.

The time schedule for the internal audit shall be as under:
a. The CRA shall receive the report of the internal audit within 2 months from the end of the half-year.
b. The Board of Directors of the CRA shall consider the report and take steps to rectify the deficiencies, if any, and the CRA shall send an Action Taken Report (ATR) to SEBI within next 2 months.

It is clarified that for the half-year October 2009 - March 2010, the CRA shall receive the report of the internal audit by May 31, 2010. Its Board of Directors shall consider the report and take appropriate measures to rectify the deficiencies and the CRA shall send the Action Taken Report to SEBI by July 31, 2010.

Download all Press Notes from 1991 to 2009 issued by DIPP as it proposes to consolidate PNs in 2010 to release a comprehensive FDI policy in India like Master Circulars with a sunset clause of 6 months

Draft Master Press Note with FDI Regulatory Framework

The Legal basis: Foreign Direct Investments (FDI) by non-resident (NRI) in resident entities through transfer or issue of security to person resident outside India (PROI) is a ‘Capital account transaction’ and Government of India and Reserve bank of India (RBI) regulate this under the FEMA 1999 and its various regulations. Keeping in view the current requirements, the Government comes up from time to time with new regulation, amends/changes in existing one through order/allied rules, Press Notes, etc. . The regulatory framework over a period of time thus consists of Acts, Regulations, Press Notes, Press Releases, Clarifications, etc.

This draft Press Note consolidates into one document all the prior regulations on FDI and reflects the current ‘regulatory framework’ on FDI. It is clarified that this is a consolidation/compilation and comprehensive listing of most matters on FDI and is not intended to make changes in the extant regulations. While attempt has been made to deal with the subject comprehensively, if some aspect(s) has been left out then that will continue to be dealt in the current way where it is listed.

It is the intent and objective of the Government to have a regulatory framework which is transparent, predictable, understandable, simple and clear to reduce the regulatory burden and promote foreign direct investment. The new system of continuous consolidation and updation is primarily evinced as a measure of investor and investment friendliness.

This Press Note will have a sunset clause of 6 months and will automatically lapse on 30th September, 2010. A new press Note on Regulatory Framework would be issued every six months which will incorporate and reflect all the changes in the regulations during the last intervening period of 6 months. Thus the Government will issue Press Note on FDI Regulatory Framework twice a year in April and October which would be the current regulatory framework on that date.

All earlier Press Notes on FDI issued by Department of Industrial Policy and Promotion (DIPP), Government of India stand rescinded.

Notwithstanding the rescindment of earlier Press Notes, anything done or any action taken or purported to have been done or taken under the resinded Press Notes shall in so far as it is not inconsistent with this Press Note be deemed to have been done or taken under the corresponding provisions of this Press Note.

Download all Press Notes issued by DIPP from 1991 to 2009 here

Foreign Investment in Commodity Exchanges to be diluted on or before 31st March 2010 – PN 7 issued by DIPP

Press Note 7 of 2009 vide D/o IPP F.No. 12(58)/2005-FC dated 26.09.2009

Difficulties have been brought to the notice of the government in complying with the provisions of the earlier Press Notes within the stipulated time frame by Commodity Exchanges in India. The Government, on consideration and in order to facilitate the existing Commodity Exchanges to comply with the guidelines notified vide Press Note 2 (2008), has now decided to allow a further transition / complying/correction time to the existing Commodity exchange(s) beyond 30.09.2009. Accordingly, all such Commodity Exchanges are hereby advised to adhere to the conditions of Press Note 2 (2008) by 31.03.2010. This would comprise the last opportunity for such compliance.

All Commodity Exchanges shall furnish a status report informing the foreign investment in the Commodity Exchange as on 30.09.2009, along with details of equity structure, as well as the steps already taken/proposed to be taken with regard to compliance with the guidelines notified vide Press Note 2(2008), to the Department of Industrial Policy & Promotion (DIPP), Department of Consumer Affairs, Foreign Investment Promotion Board (FIPB), the Forward Market Commission (FMC) and SEBI.

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

Press Note 8 of 2009 as notified by 0/0 IPP F. No. 5(6)/2008-FC dated 16.12.2009

The existing policy of Government of India on the payment of royalties under Foreign Technology Collaboration provides for automatic approval for foreign technology transfers involving payment of lumpsum fee of US$ 2 million and payment of royalty of 5% on domestic sales and 8% on exports. In addition, where there is no technology transfer involved, royalty up to 2% for exports and 1% for domestic sales is allowed under automatic route on use of trademarks and brand names of the foreign collaborator. Separate norms are available for the hotel sector vide Press Note 18 (1991 Series) and Press Note 1 (1995 Series). Technology transfers involving payments above these limits required prior permission of the Government of India (Project Approval Board, Department of Industrial Policy and Promotion).

The Government of India has reviewed the extant policy and it has been decided to permit, with immediate effect, payments for royalty, lumpsum fee for transfer of technology and payments for use of trademark/brand name on the automatic route i.e. without any approval of the Government of India. All such payments will be subject to Foreign Exchange Management (Current Account Transactions) Rules, 2000 as amended from time to time.

Meaning, Payment of Royalty and Lumpsum fees is fully liberalised now without any ceiling limits and will fall under Automatic Route.

Download SEBI Master Circular on MFs - a one stop legal reference on Mutual Funds issued by SEBI consolidating all about MF as on January 2010

SEBI / IMD / MC No.1 /189241/ 2010 dated 1st January, 2010

To All Mutual Funds, Asset Management Companies (AMCs)
and Association of Mutual Funds in India (AMFI)

Sub: Master Circular for Mutual Funds

For effective regulation of the Mutual Fund Industry, Securities & Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Mutual Funds has been prepared.  This Master Circular is a compilation of all the circulars issued by SEBI on the above subject, which are operational as on date of this circular.

1. This Master Circular includes circulars issued upto December 31, 2009.
2. In case of any inconsistency between the master circular and the applicable circulars, the contents of the relevant circular shall prevail.
3. Master Circular is a compilation of all the existing/applicable circulars issued by Investment Management Department of SEBI issued to Mutual Funds. Efforts have been made to incorporate certain applicable provisions of existing circulars (as on December 31, 2009) issued by other Department/Division of SEBI relevant to Mutual Funds.

The said Master Circular is divided under the following heads:

ABBREVIATIONS............................................................................. 5
CHAPTER 1..................................................................................... 6
OFFER DOCUMENT FOR SCHEMES ................................................. 6
CHAPTER 2................................................................................... 16
CONVERSION AND CONSOLIDATION OF SCHEMES AND LAUNCH OF
ADDITIONAL PLAN........................................................................ 16
CHAPTER 3................................................................................... 21
NEW PRODUCTS ........................................................................... 21
CHAPTER 4………………………………………………………………………….24
RISK MANAGEMENT SYSTEM........................................................ 24
CHAPTER 5................................................................................... 27
DISCLOSURES & REPORTING NORMS ........................................... 27
CHAPTER 6................................................................................... 35
GOVERNANCE NORMS .................................................................. 35
CHAPTER 7................................................................................... 55
SECONDARY MARKET ISSUES ...................................................... 55
CHAPTER 8................................................................................... 59
NET ASSET VALUE........................................................................ 59
CHAPTER 9................................................................................... 68
VALUATION .................................................................................. 68
CHAPTER 10................................................................................. 89
LOADS, FEES AND EXPENSES ....................................................... 89
CHAPTER 11................................................................................. 94
DIVIDEND DISTRIBUTION PROCEDURE ....................................... 94
CHAPTER 12................................................................................. 96
INVESTMENT BY SCHEMES........................................................... 96
CHAPTER 13................................................................................110
ADVERTISEMENTS ......................................................................110

CHAPTER 14................................................................................126
INVESTOR RIGHTS & OBLIGATIONS............................................126
CHAPTER 15................................................................................133
CERTIFICATION AND REGISTRATION OF INTERMEDIARIES .......133
CHAPTER 16................................................................................135
TRANSACTION IN MUTUAL FUNDS UNITS .....................................135

Formats & Annexures are given as attachments.

Download SEBI Master Circular on Mutual Funds (MF)

SEBI ICDR now applies to Convertible preference shares, fast track issues liberalised, employee reservation value limited to Rs. 1 lakh, Anchor Investors in IDR & new book building system introduced based on bids at highest price

No. LAD-NRO/GN/2009-10/23/186926 dated 11th December 2009

Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2009 [SEBI ICDR Amendment]

Reg 2(k) “convertible security” means a security which is convertible into or
exchangeable with equity shares of the issuer at a later date, with or without the option of the holder of the security and includes convertible debt instrument and convertible preference shares.

Reg 2(zd) “Qualified Institutional Buyer” (QIB) has 11 items now:

“(xi) insurance funds set up and managed by army, navy or air force of
the Union of India;”

Fast Track Issues – FTI

• Reg 10(b): The average market capitalisation of public shareholding of the issuer is at least five thousand crore rupees (thus reduced to Rs.5,000 crores from erstwhile Rs.10,000 crores).
• Reg 10(b): the annualised trading turnover of the equity shares of the issuer during 6calendar months immediately preceding the month of the reference date has been at least 2% of the weighted average number of equity shares listed during such 6 months’ period. 
  • Provided that for issuers, whose public shareholding is less than 15% of its issued equity capital, the annualised trading turnover of its equity shares has been at least 2% of the weighted average number of equity shares available as free float during such 6 months’ period.
• Reg 10(e): the issuer has been in compliance with the equity listing agreement for a period of at least 3 years immediately preceding the reference date.
  • Provided that if the issuer has not complied with the provision of the equity listing agreement relating to composition of board of directors, for any quarter during the last 3 years immediately preceding the reference date, but is compliant with such provisions at the time of filing of offer document with the Registrar of Companies (RoC) or designated stock exchange, as the case may be, and adequate disclosures are made in the offer document about such non-compliances during the 3 years immediately preceding the reference date, it shall be deemed as compliance with the condition.

Reg 29: An issuer may offer specified securities at different prices, subject to the following: [Differential Pricing]
(a) retail individual investors or retail individual shareholders or employees of the issuer entitled for reservation (on competitive basis) made under regulation 42 making an application for specified securities of value not more than 1 lakh rupees may be offered specified securities at a price lower than the price at which net offer is made to other categories of applicants: Provided that such difference shall not be more than ten per cent. of the price at which specified securities are offered to other categories of applicants.

Reg 42(4): The reservation on competitive basis shall be subject to following conditions:
(a) the aggregate of reservations for employees shall not exceed 5% of the post issue capital of the issuer [not the erstwhile 10% of issue size].

Also, a new Clause is inserted as:

“(g) value of allotment to any employee in pursuance of reservation made under sub-regulations (1) [reservations when issue made through book building] or (2) [reservations when issue made through OTHER THAN book building], as the case may be, shall not exceed 1 lakh rupees.”

Reg 50: Allotment procedure and basis of allotment.
(1) The allotment of specified securities to applicants other than anchor investors shall be on proportionate basis within the specified investor categories and the number of securities allotted shall be rounded off to the nearest integer, subject to minimum allotment being equal to the minimum application size as determined and disclosed by the issuer.

“Provided that value of specified securities allotted to any person in pursuance of reservation made under clause (a) of sub-regulation (1) or clause (a) of sub-regulation (2) [ie, to employees of issuer] of regulation 42, shall not exceed 1 lakh rupees.”

New Clause: Regulation 55A in Rights Issue: Reservation for employees alongwith rights issue:
55A. Subject to other applicable provision of these regulations the issuer may make reservation for its employees alongwith rights issue subject to the condition that value of allotment to any employee shall not exceed 1 lakh rupees.

 

IDR Amendments

Out of the portion to Qualified Institutional Buyer (QIB), UPTO 30% to Anchor Investors (AI) as per Schedule XI. Allocation to AI shall be made on same day of bidding. AI shall be,

2 or more, if allocation is	UPTO 250 crores
5 or more, if allocation is	ABOVE 250 crores

UPTO 1/3^rd of AI portion is reserved for domestic Mutual Funds (MF).

 

Reg 98: Condition for issue of IDR:

(e) The balance 50% may be allocated among the categories of non-institutional investors and retail individual investors including employees at the discretion of the issuer and the manner of allocation shall be disclosed in the prospectus. Allotment to investors within a category shall be on proportionate basis;

“Provided that atleast 30% of the said 50% IDR issued shall be allocated to retail individual investors and in case of under subscription in retail individual investor category, spill over to the extent of under-subscription shall be permitted to other categories.”

Schedule VIII dealing with DISCLOSURES IN OFFER DOCUMENT, ABRIDGED PROSPECTUS AND ABRIDGED LETTER OF OFFER is amended and in specific cases of this Schedule, the regulations will be implemented w.e.f. 1st January & 1st April 2010.

SCHEDULE XI
[See regulation 28(3) and 102]
BOOK BUILDING PROCESS

The following Paragraph is newly inserted:

“PART D
Alternate method of book building

(may be inspired from French Auction.  In case of Dutch Auction, allotments made at single price (like the existing book building process). In case of French Auction, allotments made at bid price)

In case of further public offers, the issuer may opt for an alternate method of book building, as given in this part subject to the following:
(a) Issuer shall follow the procedure laid down in Part A of this Schedule except clause (13) [determination of price] and clause (15) (a) [proportionate allotment] thereof.
(b) The issuer shall disclose a floor price in the red herring prospectus.
(c) Investors other than retail individual investors shall bid at any price above the floor price.
(d) The bidder who bids at the highest price shall be allotted the number
of securities that he has bided for and then the bidder who has bided at the second highest price and so on, until all the specified securities on offer are exhausted.
(e) Allotment shall be on price priority basis for investors other than retail individual investors.
(f) Allotment to retail individual investors shall be made proportionately as illustrated in this Schedule.
(g) Where, however the number of specified securities bided for at a price is more than available quantity (HEAVY DEMAND), then allotment shall be done on proportionate basis.
(h) Retail individual investors shall be allotted specified securities at the floor price.
(i) The issuer may place a CAP either in terms of No. of specified securities or % of issued capital of the issuer that may be allotted to a single bidder.”

Download SEBI (ICDR) Regulations, 2009 amended as till year 2009.

FII debt allocation through bidding process and first come first serve process - SEBI

This is in continuation of SEBI FII notification regarding allocation of debt investment limits vide [SEBI]FII allocation of government debt investment limit&link to FII section in SEBI website

Allocation through bidding process

In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/ 37/2009, no single entity shall be allocated more than Rs.300 cr. of the government debt investment limit.

In partial amendment to clause 3 (c) and 3(d) of the earlier circular, the minimum amount which can be bid for shall be Rs.50 cr. and the minimum
tick size shall be Rs.50 cr.

The bidding process shall be on December 17, 2009 on the Bombay Stock Exchange (BSE).

Allocation through first come first serve process
An investment limit of Rs.350 cr. in Government debt shall be allocated among the FIIs/sub-accounts on a first come first served basis in terms of SEBI circular dated January 31, 2008, subject to a ceiling of Rs.50 cr. per registered entity.

The debt requests in this regard shall be forwarded to the dedicated email id
fii_debtrequests@sebi.gov.in. The window for first come first served process shall open at 23:59 PM IST, December 17, 2009. Time period for utilization of the allocated debt limit through first come first served basis shall be 11 working days from the date of the allocation.

Source: Cir No. IMD/FII & C/41/2009 dated 15th December, 2009