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Wednesday, July 7, 2010
Download FEMA Master Circulars on FDI/ODI, etc...issued by RBI & updated on 1st July of every year 2010 with foreign exchange law of India up to date
Wednesday, June 30, 2010
Life insurance benefits to Provident Fund employees increased to Rs.1lakh under Deposit linked Insurance scheme (EDLI)
EDLI Scheme amended: In effect, on death during employment, Family member/nominee will get the following:
- if Average balance is more than Rs.50,000/-
- then Insurance Amount = Rs. 50,000/- + 40% (Excess), subject to a maximum of Rs. 1,00,000/-
Paragraph 22 of Employees Deposit Linked Insurance Scheme, 1974
22. Scales of assurance benefit and the minimum average balance to be maintained by an employee. – (1) On the death of an employee, who is a member of the Fund or of a provident fund exempted under section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations be paid an amount, equal to the average balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs.50,000 (erstwhile limit was Rs.25,000/-), the amount payable shall be Rs.50,000 (erstwhile Rs.25,000/-)plus 40% (earlier limit was 25%) of the amount in excess of Rs.50,000 (erstwhile Rs.25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).
Saturday, June 26, 2010
Revised monthly wage ceiling limit of 50% of Rs.4000 increased to Rs.8000-Employees Compensation Act for maximum compensation calculation
As you are aware, Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals, the said amendment which has removed the ceiling of monthly wage limit of Rs.4,000 for the purpose of calculation of Maximum Compensation under the Act is now amended again.
Now, a new monthly wage ceiling limit of Rs. 8000 is introduced for the purpose of calculation of 50% of it during computation of Maximum compensation under the Act. Hence, the maximum compensation can go UPTO 50% of 8000 which comes to Rs. 4000/- that shall be multiplied by Age factor. Thus, effectively it was erstwhile 50% of Rs.4000 and now it is 50% of Rs.8000/-. This amendment is notified vide Central Government Notification No. S.O. 1258(E) vide Ministry of Labour & Employment dated 31st May 2010.
Thursday, June 17, 2010
New Scheme to close down Company & comply for non-compliances done under Companies Act, 1956 like non-filing of annual returns, accounts, compliance certificate,etc...Lawlabz Website link
Closure of defunct companies by ROC
COMPANY LAW SETTLEMENT/EASY EXIT SCHEME under The Companies Act, 1956:
The Ministry of Corporate Affairs, has announced an EASY EXIT SCHEME to facilitate the defunct company to get rid of it. The scheme has made very simple for the exit of the defunct company without much effort.
In the normal circumstances closing of a company may take several years and may need to spent lakhs of rupees.
Please contact us immediately for filing the application, for closure of your defunct company, if any at the earliest and avail this golden opportunity.
The opportunity may come once in blue moon. So do ACT IMMEDIATELY and get rid of your defunct company once for all without any future litigation for non compliances.
After the closure of the scheme, it is expected that ROC may take actions on those companies who continue to default the compliances.
Take the opportunity immediately …
OR call us now @ 044-24340416
Reach us @ 7/13, South Boag Road, T.Nagar, Chennai, 600017
Mail us: solutions@lawlabz.com
Keep closing & enjoy complying!!!
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Personalised Corporate SolutionsMonday, June 14, 2010
Preserve/Lost your Mark sheets as NO more CS Pass Certificates for Foundation & Executive will be issued by ICSI on passing Company Secretary Exams but for Professional Program
Don’t panic after your CS Results this 25th August 2010 onwards! when you don’t receive your Company Secretary Exam pass certificates, ICSI has resolved not to send the same (may be a cost cutting measure or an environment friendly measure) as it serves no purpose.
I have passed CS Executive Program but I have not received my Certificate, where can I approach? Now, you can feel relaxed!!!, ICSI says.
The mark statement (mark sheet) hereon will serve as the proof that you have cleared CS. The first of its kind PASS certificates, you can receive after finishing your CS Final exams.
Have you lost your CS Marksheet???
Again, not to panic. You have to shell out Rs.50/- + Rs.25/- to ICSI and apply in Application for issue of Duplicate Result-cum-Mark sheet to get a duplicate copy for further reference & usage.
ATTENTION STUDENTS !!
DISCONTINUATION OF ISSUE OF PASS CERTIFICATES TO FOUNDATION/ EXECUTIVE/INTER PROGRAMME PASS STUDENTS
In accordance with the decision taken by the Council of the Institute recently, it is brought to the notice of the student community that henceforth (i.e. from June, 2010 Examination Session onwards), Pass Certificates will be issued only to such students who pass Final Course/ Professional Programme. However, Mark Sheets will continue to be issued to students of all stages viz. Foundation, Executive/Intermediate and Professional/Final Programmes as per existing practice.
Sunday, June 6, 2010
New Rule 19(2)(b) & 19A for initial & continuous listing requirement of 25% of capital with public as per SCRR amendment 2010 [for all companies]: 10% for 4000 crores to be increased@5% every year
The Securities Contracts (Regulation) Rules 1957 provide for the requirements which have to be satisfied by companies for the purpose of getting their securities listed on any stock exchange in India. A dispersed shareholding structure is essential for the sustenance of a continuous market for listed securities to provide liquidity to the investors and to discover fair prices. Further, the larger the number of shareholders, the less is the scope for price manipulation. Accordingly, the Finance Minister in his Budget speech for 2009-10, inter- alia, proposed to raise the threshold for non- promoter, public shareholding for all listed companies. To implement the Budget announcement the Securities Contracts(Regulation) (Amendment) Rules, 2010 has been notified vide Press Release F.No.5/35/2006-CM dated 4th June 2010 through
this Notification. [download now]
a) The minimum threshold level of public holding will be 25% for all listed companies.
b) Existing listed companies having less than 25% public holding have to reach the minimum 25% level by an annual addition of not less than 5% to public holding.
c) For new listing, if the post issue capital of the company calculated at offer price is more than Rs. 4000 crore, the company may be allowed to go public with 10% public shareholding and comply with the 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum.
d) For companies whose draft offer document is pending with Securities and Exchange Board of India on or before these amendments are required to comply with 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum, irrespective of the amount of post issue capital of the company calculated at offer price.
e) A company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.
f) The requirement for continuous listing will be the same as the conditions for initial listing.
g) Every listed company shall maintain public shareholding of at least 25%. If the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum period of 12 months from the date of such fall.
New definitions in Rule 2 of SCRR:
(d) “public” means persons other than – (i) the promoter and promoter group; (ii) subsidiaries and associates of the company. Explanation: For the purpose of this clause the words “promoter‟ and “promoter group‟ shall have the same meaning as assigned to them under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements-ICDR) Regulations, 2009.
(e) “public shareholding” means equity shares of the company held by public and shall exclude shares which are held by custodian against depository receipts issued overseas”.
New Rule 19(2)(b) of SCRR:
(i) At least 25% of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document; or
(ii) At least 10% of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document if the post issue capital of the company calculated at offer price is more than Rs. 4000 crores;
Provided that the requirement of post issue capital being more than Rs. 4000 crores shall not apply to a company whose draft offer document is pending with SEBI on or before the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, if it satisfies the conditions prescribed in clause (b) of sub-rule 2 of rule 19 of the Securities Contracts (Regulation) Rules, 1956 as existed prior to the date of such commencement (which is: offering atleast 10% if there are 20 lakh in number of securities, Rs.100 crores of offer size is given to public and follows bookbuilding by offering 60% to QIB)
Provided further that the company, referred in sub-clause (ii), shall bring the public shareholding to the level of at least 25% by increasing its public shareholding to the extent of at least 5% per annum beginning from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India .
Provided further that the company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.
New Rule 19(4) of SCRR – fresh application in all cases now!!!
An application for listing shall be necessary in respect of the following: (a) all new issues of any class or kind of securities of a company to be offered to the public; (b) all further issues of any class or kind of securities of a company if such class or kind of securities of the company are already listed on a recognised stock exchange.
New Rule 19(6A) – taking away the power from Clause 40A of Listing Agreement of stock exchanges as there is no more Provisio!!!
All the requirements with respect to listing or continuous listing requirement prescribed by these rules, shall, so far as they may be, also apply to a body corporate constituted by an Act of Parliament or any State Legislature. [Old Provisio deleted]
Note: SEBI’s power to relax listing requirements under SCRR is withdrawn. Also note, there is no more Clause 40A continuous listing requirement of 10% if the company has 2 crores of listed shares with a market capitalisation of Rs.1000 crore or more.
Clause 40A is now Rule 19A mandating 25% as CONTINUOUS LISTING REQUIREMENT for all Companies:
Every listed company shall maintain public shareholding of at least 25%
Provided that any listed company which has public shareholding below 25% on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, shall bring the public shareholding to the level of at least 25% by increasing its public shareholding to the extent of at least 5% per annum beginning from the date of such commencement, in the manner specified by SEBI.
Provided further that the company may increase its public sharholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.
(2) Where the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25%within a maximum period of 12 months from the date of such fall in the manner specified by the Securities and Exchange Board of India.”
Wednesday, June 2, 2010
Learnlabz Activity outside Company Secretary exam centres @ Chennai, Free DVDs for CS students on classes & books
Catching up the heat outside Company Secretary Exam centres at Chennai. Learnlabz stall was crowded with CS students availing their free DVD’s with lots of excitement & sincerity. Many were out of the exam halls too early winning their first law exam and found it interesting!!!
You can also enjoy our Youtube releases from http://www.youtube.com/watch?v=OO-tKh9Ptrw&feature=player_embedded
Learnlabz wishes All the Best for every exam giving you a fresh 3 hours!!! – its Only This Much.
We make learning an interesting experience!!!
Saturday, May 29, 2010
Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs: Notification in Official Gazette as on 24th May 2010
As you are aware Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing Rs.3,50,000
The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18th May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10 lakhs.
The said Act shall come into force with effect from 24th May 2010 as per the Notification S.O. 1217(E) published in the Official Gazette.
Tuesday, May 25, 2010
Money laundering transaction records & definition of beneficial owner in Amendment Rules 2010 - RBI
Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Amendment Rules, 2010 - Obligation of banks/All India Financial institutions
Government of India vide its Notification No. 7/2010-E.S.F.No.6/8/2009-E.S dated February 12, 2010 has amended the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. A copy of the Notification is enclosed for ready reference in DBOD. AML.BC. No. 95 /14.01.001/2009-10 dated 23rd April 2010.
The salient features of the amendment inter alia require banks and All India
Financial Institutions:
• to maintain the records of all transactions including the records of transactions detailed in rule 3 sub-rule (1).
• the records referred to in rule 3 should contain all necessary information specified by the Regulator to permit reconstruction of individual transactions including the information detailed in rule 4.
Further, in rule 9 in sub-rule (1A) an explanation of 'beneficial owner' has been inserted in terms of which " ' Beneficial Owner' shall mean the natural person who ultimately owns or controls a client and or the person on whose behalf a transaction is being conducted, and includes a person who exercise ultimate effective control over a juridical person".
Monday, May 24, 2010
NBFC investment in Joint Venture or subsidiary abroad shall 'No Objection' (NoC) of the Department of Non-Banking Supervision of RBI
Overseas Investment by NBFCs- No Objection (NoC) from DNBS, RBI
Please refer to Regulation No. 7 of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Amendment) Regulations, 2004, dated July 07, 2004, in terms of which an Indian party requires prior approval of the concerned regulatory authorities both in India and abroad, to make an investment in an entity outside India engaged in financial services activities. Further in terms of para B.5.3 of the Master Circular on Direct Investment in Joint Venture (JV) / Wholly owned subsidiary (WOS) abroad dated July 01, 2009 issued by Foreign Exchange Department, RBI, regulated entities in the financial sector making investments in any activity overseas are required to comply with the above regulation.
2. Instances have been observed where NBFCs have made overseas investments without regulatory clearance of the Department of Non-Banking Supervision, Reserve Bank of India. Any investments made by NBFCs without regulatory clearance is a violation of FEMA 2004 and attracts penal provisions.
3. In this regard, it is emphasised that all Non Banking Finance Companies desirous of making any overseas investment must obtain 'No Objection' (NoC) of the Department of Non-Banking Supervision of RBI before making such investment, from the Regional Office in whose jurisdiction the head office of the company is registered.
4. Applications in this regard shall clearly state the activities intended to be undertaken by the overseas entity. NBFCs may also note that in terms of the Regulations ibid, they are not permitted to make direct investment in a foreign entity engaged in activities not approved under FEMA.
Source: DNBS (PD).CC. No.173/03.10.01 /2009-10 dated 3rd May 2010
ECB by IFC now under Automatic route UPTO 50% of owned funds, RBI
As a measure of liberalisation of the existing procedures, it has been decided to permit the IFCs to avail of ECBs, including the outstanding ECBs,
- up to 50% of owned funds under the automatic route, subject to their compliance with the prudential guidelines already in places.
- above 50% of their owned funds would require the approval of the Reserve Bank and will, therefore, be considered under the approval route.
Source: A. P. (DIR Series) Circular No. 51 dated 11th May 2010
Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing Rs.3,50,000
The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18th May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10 lakhs. Whereas the date of effect of the revised ceiling may be decided by the Central Government through Official Gazette as per THE PAYMENT OF GRATUITY (AMENDMENT) ACT 2010
Notification in Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs: Notification in Official Gazette as on 24th May 2010
Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals
Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the definition of employee includes clerical employees & casual employees also. Further,
- the minimum compensation limits on no-fault basis are increased to Rs.1,20,000 & 1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
- under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is removed. hence, the maximum compensation can go UPTO 50% of Total Monthly Wages now, irrespective of limits [now a new ceiling of Rs.8000/- is introduced].
- Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
- The employee shall be reimbursed the actual (full) medical expenditure incurred by him for treatment of injuries caused during the course of employment.
- Time limit for disposal of cases relating to compensation introduced- The Commissioner shall dispose of the matter relating to compensation within 3 months of reference.
Old definition: "workman" means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is….
New definition: Section 2
“(dd) “employee” means a person, who is—
(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989), not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or
(ii) (a) a master, seaman or other members of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle.
(d) a person recruited for work abroad by a company,
and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or
(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been” injured shall, where the employee is dead, include a reference to his dependants or any of them;’;
Employees definition under Gratuity Act amended to included all types of works irrespective of salary limits
The Payment of Gratuity Act, 1972 definition of the term “employee” under Section 2 got widened. It is no more the old definition of persons employed in administrative or managerial capacity.
The new definition is as follows,
Employees means any persons [NOT being an Apprentice] employed for wages in any kind of work (manual or otherwise) or in connection with work of factory, mine, plantation, oilfield, railway company, port or other establishment.
So, even teachers are eligible for gratuity now overriding the famous Ahmedabad Private Primary Teachers Association case.
Revised ESI limit Rs.15000 (not Rs.10000) for employees/workers w.e.f 1st May 2010 - as amended by the Act [extended]
Ministry of Labour & Employment vide G.S.R. 394(E), dated 20th April, 2010 has made Employees State Insurance Act, 1948 read with ESI (Central) (Amendment) Rules, 2010 applicable to employees whose wages does not exceed Rs. 15,000/- (Fifteen Thousand Only).
The said notification shall come into effect from 1st May 2010.
Sunday, May 23, 2010
Old SEBI circular on revised Trading hours in Stock Exchanges
Sub: Trading Hours on Stock Exchanges
In consultation with the Stock Exchanges and other market participants, it has been decided to permit the Stock Exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that
a. The trading hours are between 9 AM and 5 PM, and
b. The Exchange has in place risk management system and infrastructure
commensurate to the trading hours.
SEBI master ciruclar on Stock Exchange, Depository, etc...updated as on 31st March 2010
SEBI Master Circulars on Stock Exchange/Depositories
Annexure 1 – Master Circular for Stock Exchange/ Cash Market – Trading Part- I. It contains the following,
SECTION – 1: BULK DEALS AND BLOCK DEALS ............................................... 5
1.1 Bulk Deal ............................................................................................................. 5
1.2 Block Deal ........................................................................................................... 5
SECTION – 2: CIRCUIT FILTER / PRICE BANDS ................................................. 7
2.1 Index based Market wide circuit filter ................................................................. 7
2.2 Scrip wise price bands ......................................................................................... 7
SECTION – 3 : IMPLEMENTATION OF UNIFORM SECURITY SPECIFIC
ACTION IN STOCK EXCHANGES........................................................................... 8
3.1 Uniform security specific measure ...................................................................... 8
SECTION – 4 : MARGIN TRADING.......................................................................... 9
4.1 Margin trading ..................................................................................................... 9
4.2 Securities eligible for margin trading .................................................................. 9
4.3 Eligibility requirements for brokers to provide margin trading facility to clients9
4.4 No-objection certificate .................................................................................. 10
4.5 Agreement.......................................................................................................... 10
4.6 Source of Funds for the broker for providing margin trading facility to his
clients and maximum permissible borrowing by any broker............................. 10
4.7 Margin requirements.......................................................................................... 11
4.8 Liquidation of securities by the broker in case of default by the client............. 11
4.9 Maintenance of Records .................................................................................... 12
4.10 Disclosure of exposure to the Margin Trading Facility ..................................... 12
4.11 Arbitration.......................................................................................................... 13
4.12 Usage of Investor Protection Fund and Trade/Settlement Guarantee Fund ...... 13
4.13 General provisions ............................................................................................. 13
SECTION – 5 : MARKET MAKER............................................................................ 15
5.1 Guidelines for Market Maker............................................................................. 15
5.1.1 Criterion for selection of scrips for Market Making.......................................... 16
5.1.2 Exclusivity of Market Makers ........................................................................... 16
5.1.3 Number of Market Makers for each share ......................................................... 17
5.1.4 Qualifications for a registered Market Maker.................................................... 17
5.1.5 The obligations and responsibilities of Market Makers..................................... 17
5.1.6 Rights of the Market Maker............................................................................... 18
5.1.7 Voluntary De-registration .................................................................................. 18
5.1.8 Compulsory De-registration............................................................................... 18
5.1.9 Dissemination of Information ............................................................................ 18
5.1.10 Number of Shares per Market Maker ................................................................ 18
5.1.11 Risk Containment Measures and monitoring for Market Makers ..................... 18
SECTION – 6: NEGOTIATED DEALS..................................................................... 20
6.1 Negotiated Deals................................................................................................ 20
SECTION – 7 : ODD LOT .......................................................................................... 21
7.1 Trading and Settlement of trades in dematerialised securities ................ 21
SECTION – 8: PERMANENT ACCOUNT NUMBER ........................................... 22
8.1 Mandatory PAN requirement for transaction in Cash Market........................... 22
8.2 PAN as a sole identification number for all transactions in the securities market
………………………………………………………………………………….22
8.3 Incase of Central and State Govt., and officials appointed by courts ................ 22
8.4. Exemptions for Investors in Sikkim .................................................................. 23
8.5 Incase of FIIs/Institutional Clients..................................................................... 23
8.6 Incase of UN entities and multilateral agencies which are exempted from paying
taxes/ filling tax returns in India ........................................................................ 23
8.7 Incase of HUF, Association of Persons (AoP), Partnership Firm, unregistered
Trust, Registered Trust, Corporate Bodies, minors, etc..................................... 24
8.8 Incase of Slight mismatch in PAN card details as well as difference in maiden
name and current name (predominantly in the case of married women) of the
investors.............................................................................................................24
8.9 Incase of NRI/PIOs ............................................................................................ 24
8.10 PAN requirement for transfer of shares in physical form.................................. 24
SECTION – 9: PROPRIETARY TRADING.............................................................. 26
9.1 Disclosure of Proprietary Trading by Broker to Client ..................................... 26
9.2 Pro-account Trading Terminal........................................................................... 26
SECTION – 10 : SHORT SELLING AND SECURITIES LENDING AND
BORROWING SCHEME............................................................................................ 28
10.1 Broad Framework for Short Selling and Securities Lending and Borrowing.... 28
10.2 Annexure 1 – Broad framework for short selling .............................................. 28
10.3 Annexure 2 - Broad framework for securities lending and borrowing .. 29
SECTION – 11: SPOT AND OFF-THE-FLOOR TRANSACTIONS..................... 34
SECTION – 12: SECURITIES TRANSACTION TAX............................................. 35
12.1 Implementation of Securities Transaction Tax .................................................. 35
SECTION – 13 : TIME STAMPING OF ORDERS................................................... 35
13.1 Time Stamping of Orders................................................................................... 35
SECTION – 14 : TRADING IN GOVERNMENT SECURITIES............................ 36
14.1 Government Securities....................................................................................... 36
SECTION – 15: UNIQUE CLIENT CODE............................................................... 37
SECTION - 16: TRANSACTION CHARGES BY THE STOCK EXCHANGES.. 38
SECTION 17 - PRESERVATION OF RECORDS .................................................... 39
SECTION 18 - DISCLOSURE OF INVESTOR COMPLAINTS AND
ARBITRATION DETAILS ON STOCK EXCHANGE WEBSITE......................... 40
Annexure 2 – Master Circular for Stock Exchange/ Cash Market – Trading Part- II
Annexure 3 – Master Circular for Stock Exchange/ Cash Market – Settlement
Annexure 4 – Master Circular for Stock Exchange/ Cash Market – Comprehensive Risk Management
Annexure 5 – Master Circular for Stock Exchange - Companies shifted from Trade for trade to Rolling Settlement
Annexure 6 – Master Circular on allotment of codes to Stock Exchanges, Subsidiary management by Stock Exchanges, Governance of recognised Stock Exchanges and Arbitration in recognised Stock Exchanges.
Annexure 7 - Master Circular for Depositories:
It contains the following,
Section-1 - Beneficial Owner (BO) Accounts
1.1 Opening of BO Account by non-body corporates
1.1.1 Proof of Identity (PoI)
1.1.2 Proof of Address (PoA)
1.2 Exemptions from and clarifications relating to mandatory requirement
of PAN
1.3 Fees/Charges to be paid by BO
1.4 Transfer of funds and securities from Clearing Member pool account to
BO Account
1.5 Printing of Grievances Redressal Mechanism on Delivery Instruction
Form Book
1.6 Exemption to Depository Participants (DPs) from providing hard
copies of transaction statements to BOs
1.7 Safeguards on transfer of securities in dematerialized mode
Section-2 - Issuer related
2.1 Charges to be paid by Issuers
2.2 Activation of International Securities Identification Number (ISIN) in
case of IPO
2.3 Registrar and Transfer Agents
2.4 Mandatory admission of debt instruments on both the Depositories
2.5 American Depository Receipts (ADRs)/Global Depository Receipts
(GDRs)
2.6 Electronic Clearing System (ECS) facility
2.6.1 Dividend Distribution
2.6.2 Refund in public/rights issues
Section-3 – Depositories/ Depository Participant (DP) Related
3.1 Designated e-mail ID for redressal of investor complaints
3.2 Approval of amendments to Bye Laws / Rules of Stock Exchanges and
Depositories
3.3 Preservation of Records
3.4 Foreign investments in infrastructure companies in securities markets
3.5 Activity schedule for depositories for T+2 rolling Settlement
3.6 Settlement of transactions in case of holidays
3.7 Supervision of branches of depository participants
3.8 Designated e-mail ID for regulatory communication with SEBI
3.9 Disclosure of investor complaints and arbitration details on Depository
website
Friday, May 21, 2010
Learnlabz Promotional Videos on Company Secretary (CS) Executive & Professional Programme Coaching Classes & Only This Much books released on Youtube today to make learning an interesting experience!!! [can also fetch you UPTO 50 marks in exams]
Learnlabz Promotional Videos on Company Secretary Executive & Professional Programme Coaching Classes & Only This Much books. It covers Topics which are important for last minute revisions during CS Exams. Enjoy passing. Do give your critical comments on the video.
This video is made exclusively from the CS student point of view considering their difficulty or better word be lack of interest to pursue CS course, just for the reason that there is lack of Understanding!!! What to read & What not to read? What to remember? becomes the real question for the CS students. This helps to address the same to the best possible extent. Interestingly the content of this Video covers UPTO 50 marks in your CS exams or even CA/CWA IPCC & Final exams!!!
Other links:
- www.youtube.com/user/learnlabz – Learnlabz Channel
- http://www.youtube.com/view_play_list?p=29990BFE23082131 – Learnlabz Playlist to play all the Videos as a Movie
This exams, appear with Confidence!!! Be thorough with whatsoever you have read till date. Show your confidence in every word that you write in every page of your every subject in Company Secretary Foundation, Executive & Professional Programme.
“Just think you are given FRESH & NEW 3 hours in every exam, forget yesterday & tomorrow….Today’s exam is going to be the best exam you have written forever.” Repeat this sentence whenever you go appearing for every exam. Then you will say, CS Exams are as FUN!!!
At Learnlabz, we make CS learning an interesting experience!!! For more details, do visit www.learnlabz.com
Learnlabz wishes ALL THE BEST for your CS Exams and do communicate your results on February/August.
Tuesday, May 18, 2010
Professional Misconduct for CS,CA & CWA: Don't talk when your Client Drives (& viceversa) - if its true!!!
Many road safety campaigns targets the drivers and the passengers. But Bangalore Traffic police is different (Hats off)!!!
Believe, atleast if our Profession makes this as a Misconduct, everyone's Conduct will change! see Yes.
Monday, May 17, 2010
No Ministry of Commerce approval is required for Royalty/Lumpsum payment above 5%/8% - RBI Current Account Transaction Amendment
In continuation of Press Note 8 issued by DIPP with effect from 16.12. 2009 that No limits for royalty/lumpsum payment in FEMA under Current Account Transaction as per PN 8 – DIPP allowed it under Automatic route (ie) without the approval of RBI
The Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2010 is passed. They shall be deemed to have come into force with effect from the 16th day of December, 2009.
In terms of Rule 4 of the Foreign Exchange Management (Current Account Transactions) Rules 2000, prior approval of the Ministry of Commerce and Industry, Government of India, is required for drawing foreign exchange for remittances under technical collaboration agreements where payment of royalty exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds USD 2 million [item 8 of Schedule II to the Foreign Exchange Management (Current Account Transactions) Rules, 2000]. The Government of India has reviewed the extant policy with regard to liberalization of foreign technology agreement and it was decided to omit item number 8 of Schedule II to the Foreign Exchange Management (Current Account Transaction) Rules, 2000, and the entry relating thereto.
Accordingly, AD Category-I banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of Ministry of Commerce and Industry, Government of India.
The amendment to the Foreign Exchange Management (Current Account Transactions) Rules, 2000, in this regard has been notified by the Government of India vide Notification No.G.S.R.382 (E) dated May 5, 2010.
Source: RBI/2009-10/465 A. P. (DIR Series) Circular No. 52 dated 13th May 2010
Tuesday, May 11, 2010
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Wednesday, May 5, 2010
USD 3000 foreign visits abroad, USD 5000 to Iran/Iraq, Libya, Russia & Republics of Commonwealth of Independent States - RBI FEMA currency limits
Release of Foreign Exchange for Visits Abroad – Currency Component
Attention of Authorised Persons in foreign exchange is invited to A.P.(DIR Series) Circular No. 19 dated October 30, 2000 and A.P. (DIR Series) Circular No.11 [ A.P. ( F.L. Series ) Circular No.1 ] dated November 13, 2001, in terms of which Authorised Dealers and Full Fledged Money Changers are permitted to sell foreign exchange in the form of foreign currency notes and coins, up to USD 2,000 [increased to USD 3000] or its equivalent, to the travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States, without the prior permission from the Reserve Bank (RBI).
Authorised Dealers and Full Fledged Money Changers may, as hitherto, continue to sell foreign exchange in the form of foreign currency notes and coins up to USD 5,000 or its equivalent to the travellers proceeding to Iraq or Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States.
NBFC requires RBI NoC for overseas direct investment (ODI) in Joint Ventures or wholly owned subsidiary (JV/WoS) abroad
Instances have been observed where Non Banking Finance Companies (NBFCs) have made overseas investments without regulatory clearance of the Department of Non-Banking Supervision, Reserve Bank of India. Any investments made by NBFCs without regulatory clearance is a violation of FEMA 2004 and attracts penal provisions.
In this regard, it is emphasised that all NBFCs desirous of making any overseas investment must obtain 'No Objection' (NoC) of the Department of Non-Banking Supervision (DNBS) of RBI before making such investment, from the Regional Office in whose jurisdiction the head office of the company is registered.
Applications in this regard shall clearly state the activities intended to be undertaken by the overseas entity. NBFCs may also note that in terms of the Regulations ibid, they are not permitted to make direct investment in a foreign entity engaged in activities not approved under FEMA.
Source: RBI/2009-10/442 DNBS (PD).CC. No.173/03.10.01 /2009-10 dated 3rd May 2010
Tuesday, May 4, 2010
SEBI Credit Rating Guidelines/Regulations with provisions for unsolicited credit ratings & structured finance products provisions
SEBI Credit Rating Guidelines
Effective use of credit ratings by the users is crucially dependent upon quality and quantity of disclosures made by the Credit Rating Agencies (CRAs).
CRA should publish information about the historical default rates of CRA rating categories and whether the default rates of these categories have changed over time, so that the public can understand the historical performance of each category and if and how rating categories have changed, and be able to draw quality comparisons among ratings given by different CRAs.
The default rates shall be calculated in the following manner:
- One Year Default Rate is the weighted average of default rates of all possible 1 year static pools in the 5-year period.
- Cumulative Default Rate: The cumulative default rate (CDR) represents the likelihood of an entity that was rated at the beginning of any multi-year period defaulting at any time during the multi-year period.
- 3 year cumulative default rate shall be computed as:
3 year CDR for rating category X = No. of issuers which defaulted over the 3 year period / No. of issuers outstanding at the beginning of the 3 year period.
In case of unsolicited credit ratings, i.e. the credit ratings not arising out of the agreement between a CRA and the issuer, credit rating symbol shall be accompanied by the word “UNSOLICITED” in the same font size.
Obligations in respect of Rating of Structured Finance Products
A CRA may undertake rating of structured finance products, namely, instruments / pay-outs resulting from securitization transactions (under SARFAESI Act, 2002 read with SEBI (POLSDI) Regulations, 2008). In such cases, apart from following all the applicable requirements in case of non-structured ratings, few other additional requirements shall also be complied with. The rating symbols shall clearly indicate that the ratings are for structured finance products. A CRA shall also disclose at least once in every six months, the performance of the rated pool, i.e., collection efficiency, delinquencies of the Structured Finance Products.
Wednesday, April 28, 2010
What is Corpfiling for Listed Company & how investors can get information online now (excel based filing), SEBI/Stock exchange website
SEBI had, vide circular no SEBI/CFD/DIL/LA/4/2007/27/12 dated December 27, 2007 informed that Electronic Data Information Filing And Retrieval (EDIFAR) will be phased out gradually in view of new portal viz. Corporate Filing and Dissemination System (CFDS) put in place jointly by BSE and NSE at the URL www.corpfiling.co.in. No more EDIFAR...File it thru corpfiling SEBI says
SEBI has since discontinued the EDIFAR system w.e.f from April 1, 2010. In view of this, Stock Exchanges are advised to carry out the consequential amendments in Equity Listing Agreement i.e. removal of words, “and also through the EDIFAR website” from Clause 32 and omission of Clause 51 from Equity Listing Agreement. The Stock Exchanges are also advised to inform about discontinuation of EDIFAR to all the listed companies.
Now on, all the Stock Exchange/SEBI related filing such as
- Company Results
- Corporate Announcements
- Company Factsheet
- Quarterly Compliance Report
- Share Holding Pattern
- SAST (Takeover Code)
- Insider Trading
can be done online through Microsoft Excel sheet as downloaded from the said website. The portal aims at providing a single interface to the investors/shareholders/stakeholders to keep track of the latest filings of all the listed companies in India online irrespective of the Stock Exchange.
SEBI Timelines for 12 day listing of IPO/FPO/Public issue of securities w.e.f 3rd May 2010 - The Public offer schedule to commence trading
In consultation with market intermediaries, SEBI has issued a press release for Listing with Stock Exchanges to be made within 12 days of closure of public issue wef 1st May 2010.
In the new process, the syndicate members shall capture all data relevant for
purposes of finalizing basis of allotment while uploading bid data in the electronic bidding system of the stock exchanges. In order that the data so captured is accurate, syndicate members may be permitted an additional day to amend some of the data fields entered by them in the electronic bidding system.
It is to be noted that syndicate members shall be responsible for any error in the bid details uploaded by them. In case of apparent data entry error by either syndicate member or collecting bank in entering the application number in their respective schedules other things remaining unchanged, the application may be considered as valid and such exceptions may be recorded in minutes of the meeting submitted to stock exchange(s). In the event of mistake in capturing the application number by either the syndicate member or collecting bank leading to rejection of application, the registrar may identify based on the bid form, the entity responsible for the error. Valid records in electronic file will be those for which money is received.
This circular contains indicative timelines for the various activities in the issue process. The non-ASBA process in this regard is given in Annexure I of the circular. Since the ASBA process also needs to be revised pursuant to the
reduced timelines, the revised ASBA process is indicated in Annexure II of the circular.
Details of the mandatory data fields which are required to be captured into the electronic bidding system by the syndicate members including the fields which are modifiable/non-modifiable is given in Annexure III of the circular.
In order to facilitate quicker processing of applications for the purpose of allotment, instead of the name of the applicant, it is proposed to use PAN which is a unique identification number of the applicant. In this regard, the merchant bankers are directed to ensure that the following is clearly disclosed in the prospectus/abridged prospectus, application form and the pre-issue advertisements: “The applicants may note that in case the DP ID & Client ID and PAN mentioned in the application form and entered into the electronic bidding system of the stock exchanges by the syndicate members do not match with the DP ID & Client ID and PAN available in the depository database, the application is liable to be rejected.”
Stock Exchanges are directed to ensure that in case of revision of bids, there shall be appropriate provisions to capture the details of the payment instrument for difference of amount, if any. It is given to understand that there is no uniformity in the documents required to be submitted to the stock exchanges along with the listing application which results in delay in the process. In this regard, stock exchanges are directed to clearly indicate the list of documents which they require for giving listing approval, at the time of grant of in-principle approval.
Stock Exchanges, Merchant Bankers, Registrar to an Issue, Bankers to an issue including those acting as Self Certified Syndicate Banks and depositories are directed to ensure that the instructions contained in this circular are complied with. This revised procedure shall be applicable to all public issues opening on or after May 3, 2010.
Download the IPO Timeline or Public Issue Schedule issued by SEBI from T+0 till T + 12 days, where “T” is the issue closing date and “T+12” is the date of commencement of trading vide SEBI CIR/CFD/DIL/3/2010 dated 22nd April 2010.
Optional & Limited power of attorney execution by client in favour of stock exchange/depository participant - SEBI guidelines
Execution of Power of Attorney (PoA) by the Client in favour of the Stock Broker and Depository Participant
1. A Power of Attorney is executed by the client in favour of the stock broker /stock broker and depository participant to authorize the broker to operate the client’s demat account and bank account to facilitate the delivery of shares and pay – in/ pay – out of funds. The cleint shall not be forced to execute Irrevocable Power of Attorney.
2. Generally, the PoA is taken from the clients who want to avail internet based trading services. For offering internet based trading services, a Stock Broker requires necessary authorizations for seamless trading, collection of margins as well as settlement of funds and securities. Further, some of the Stock Brokers also obtain authorizations from their clients to offer non-internet based services.
3. Standardizing the norms for PoA must not be construed as making the PoA a condition precedent or mandatory for availing broking or depository participant services. PoA is merely an option available to the client for instructing his broker or depository participant to facilitate the delivery of shares and pay-in/pay-out of funds etc. No stock broker or depository participant shall deny services to the client if the client refuses to execute a PoA in their favour.
4. The Stock Brokers shall take necessary steps to implement this circular latest by May 31, 2010 for the new clients and ensure to take necessary steps latest by September 01, 2010 to revoke those authorizations given by the existing clients to the stock brokers/ stock broker and depository participants through PoA that are inconsistent with the present guidelines.
5. The POA should be limited & shall not facilitate the stock broker to do the following:
a. Transfer of securities for off market trades.
b. Transfer of funds from the bank account(s) of the Clients for trades executed by the clients through another stock broker.
c. Open a broking / trading facility with any stock broker or for opening a Beneficial Owner account with any Depository Participant.
d. Execute trades in the name of the client(s) without the client(s) consent.
e. Prohibit issue of Delivery Instruction Slips (DIS) to beneficial owner (client).
f. Prohibit client(s) from operating the account.
g. Merging of balances (dues) under various accounts to nullify debit in any other account.
h. Open an email ID/ email account on behalf of the client(s) for receiving statement of transactions, bills, contract notes etc. from stock broker / Depository Participant.
i. Renounce liability for any loss or claim that may arise due to any blocking of funds that may be erroneously instructed by the Stock Broker to the designated bank.
Market makers in SME exchange for Rs.10 lakh & max bid ask spread may be prescribed later, SEBI guidelines
Sub: Guidelines for market makers on Small and Medium Enterprise (SME) exchange/separate platform of existing exchange having nation wide terminal
SEBI has put in a framework for setting up of new exchange or separate platform of existing stock exchange having nationwide terminals for SME (hereinafter referred to as the ‘Exchange/ SME Exchange’). In order to operationalise the said framework, necessary changes have been made to applicable Regulations, circulars etc. As per the framework, market making has been made mandatory in respect of all scrips listed and traded on SME exchange. The following guidelines shall be applicable to the Market Makers on this exchange.
1. Applicability
These guidelines are applicable to all the registered Market makers for making market in all scrips listed and traded on SME exchange.
2. Registration of the Market Maker
Any member of the Exchange would be eligible to act as Market Maker provided the criteria laid down by the exchange are met. The member brokers desirous of acting as Market Maker in this exchange shall apply to the concerned stock exchange for registration as Market Makers unless already registered as a Market Maker.
3. The obligations and responsibilities of Market Makers
The Market Maker shall fulfil the following conditions to provide depth and
continuity on this exchange:
(a) The Market Maker shall be required to provide a 2-way quote for 75% of
the time in a day. The same shall be monitored by the stock exchange. Further, the Market Maker shall inform the exchange in advance for each and every black out period when the quotes are not being offered by the Market Maker.
(b) The minimum depth of the quote shall be Rs.1,00,000/- . However, the
investors with holdings of value less than Rs 1,00,000 shall be allowed to offer their holding to the Market Maker in that scrip provided that he sells his entire holding in that scrip in one lot along with a declaration to the effect to the selling broker.
(c) Execution of the order at the quoted price and quantity must be guaranteed by the Market Maker, for the quotes given by him.
(d) There would not be more than five Market Makers for a scrip. These would be selected on the basis of objective criteria to be evolved by the Exchange which would include capital adequacy, networth, infrastructure, minimum volume of business etc.
(e) The Market Maker may compete with other Market Makers for better
quotes to the investors;
(f) Once registered as a Market Maker, he has to start providing quotes from
the day of the listing / the day when designated as the Market Maker for the respective scrip and shall be subject to the guidelines laid down for market making by the exchange;
(g) Once registered as a Market Maker, he has to act in that capacity for a
period as mutually decided between the Merchant Banker and the market
maker.
(h) Further, the Market Maker shall be allowed to deregister by giving one
month notice to the exchange, subject to (g) above.
4. Dissemination of Information
The exchange should disseminate the list of Market Makers for the respective scrip to the public.
5. Number of Shares per Market Maker
The number of companies in whose shares a Market Maker would make market should be linked to his capital adequacy as decided by the exchange.
6. Risk Containment Measures and monitoring for Market Makers
All applicable margins should be levied and collected without any waiver/exemption.
Capital Adequacy
The exchanges would prescribe the capital adequacy requirement for its members to commensurate with the number of companies which Market Maker proposes to make market. Further, the stock exchange may lay down
additional criteria also for Market Makers as risk containment measures. The
same shall be monitored by the stock exchange.
Monitoring
All the requirements with regard to market making shall be monitored by the stock exchange and any violation of these requirements would be liable for punitive action to be taken by the Disciplinary Action Committee (DAC) of the Exchange, which may also include monitory penalty apart from the trade restriction as decided by the DAC under intimation to the Merchant Banker.
7. Price Band and Spreads
The exchanges shall prescribe the maximum spread between bid and ask price. The exchange, may at its discretion also prescribe the price bands for
the same. Further, in case of new issue the spread shall also be specified in
the offer document with the prior approval of the exchange.
Whether BSE/NSE is a regulator or a profit making entity, answer sebi now
Corporatisation & Demutualisation of Stock Exchanges has brought to the fore a new conflict between the ‘profit maximization goal’ of an Exchange vis-Ã -vis its ‘regulatory role’. Exchanges have traditionally been the first line of regulators in the securities market. With growing commercialisation of the exchanges and the resultant competition between exchanges, it would be necessary for the market regulator to recognize the possibility that exchanges may compromise on its regulatory role in its urge to canvass larger volumes of business from intermediaries and investors.
Internationally, the practice prevalent among regulators has been to allow Exchanges to pursue their commercial operations, while exercising regulatory oversight.
The SEBI Board, in its meeting held on December 22, 2009, (the detailed agenda note is available at http://www.sebi.gov.in/boardmeetings/129/corpgovern.html) decided to set up a Committee to look into the above issues and give suitable recommendations. Accordingly, a Committee under the Chairmanship of Dr. Bimal Jalan has been constituted. The Committee has decided to adopt a consultative process. Accordingly, a questionnaire has been devised to seek
the views of market infrastructure institutions, market participants, users and public on the concerns related to Ownership and Governance of Market Infrastructure Institutions, as elaborated above. You are requested to forward your responses for the questionnaire to any of the following email ids latest by May 10, 2010:
1. bhartendrakg@sebi.gov.in
2. divyav@sebi.gov.in
3. vishakham@sebi.gov.in
SEBI guidelines for derivative contracts on Volatility Index, like NSE has
Sub: Introduction of derivative contracts on Volatility Index
Further to SEBI circular no. SEBI/DNPD/Cir-35/2007 dated January 15, 2008 with regard to introduction of Volatility Index, it has now been decided to permit Stock Exchanges to introduce derivative contracts on Volatility Index, subject to the condition that;
a. The underlying Volatility Index has a track record of at least 1 year.
b. The Exchange has in place the appropriate risk management framework
for such derivative contracts.
2. Before introduction of such contracts, the Stock Exchanges shall submit the
following:
i. Contract specifications
ii. Position and Exercise Limits
iii. Margins
iv. The economic purpose it is intended to serve
v. Likely contribution to market development
vi. The safeguards and the risk protection mechanism adopted by the exchange to ensure market integrity, protection of investors and smooth and orderly trading
vii. The infrastructure of the exchange and the surveillance system to effectively monitor trading in such contracts, and
viii. Details of settlement procedures & systems
ix. Details of back testing of the margin calculation for a period of one year considering a call and a put option on the underlying with a delta of 0.25 & -0.25 respectively and actual value of the underlying.
Thursday, April 22, 2010
Understand all about ASBA - in public issues, rights issues, by Mutual Funds, by QIB's - an alternate way of investing, SEBI
Understand what is Application Supported by Blocked Amounts (ASBA)?
Whether ASBA is applicable for Rights Issues?
Can QIB’s apply in a public issue under ASBA mechanism?
Till now only Indian Retail Individual Investors bidding at cut-off Price were entitle to use ASBA facility.
In this regard, Stock Exchanges, Merchant Bankers, Registrar to an Issue and Bankers to an issue acting as Self Certified Syndicate Banks are advised to ensure that appropriate arrangements are made to accept ASBA forms from Qualified Institutional Buyers (QIBs) also in addition to the existing categories of investors on or after 1st May 2010.
Source: SEBI CIR/CFD/DIL/2/2010 dated 6th April 2010
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