Changes in definition of QIB under SEBI DIP Guidelines

The SEBI vide its circular dated today, National Investment Fund (NIF), a fund set up by the Government of India vide Gazette Notification no. F. No. 2/3/2005-DD-II dated November, 23, 2005 , has been included in the definition of QIB, in the SEBI (DIP) Guidelines. NIF is a fund consisting of the proceeds from disinvestment of Central Public Sector Undertakings, which would invest in equity in accordance with broad investment guidelines provided by the Government of India.

SEBI has issued necessary instructions to all registered Merchant Bankers in this regard.
Accordingly the SEBI amended the definitionof QIB to insert NIF in definition part. you can access entire text of the ciruclar at http://groups.google.com/group/cschennai/files.

Erstwhile definition & Understanding:
2.2.2B(v) of SEBI (DIP) Guidelines, 2000 defines ''Qualified Institutional Buyer'' shall mean:
a. public financial institution as defined in section 4A of the Companies Act, 1956;
b. scheduled commercial banks;
c. mutual funds;
d. foreign institutional investor registered with SEBI;
e. multilateral and bilateral development financial institutions;
f. venture capital funds registered with SEBI.
g. foreign Venture capital investors registered with SEBI.
h. state Industrial Development Corporations.
i. insurance Companies registered with the Insurance Regulatory and Development Authority (IRDA).
j. provident Funds with minimum corpus of Rs. 25 crores
k. pension Funds with minimum corpus of Rs. 25 crores.

Yes....analysing the definition, it uses the word "SHALL" making the following meaning, a mandatory one and very strict. Then uses the word "MEANS", so its an Exhaustive Definition (NOT an Inclusive Definition); i.e., the scope of the term is limited to extent which is listed below. So, now because of this amendment, NIF = QIB. Keep Understandin....Vj

Thanks & Regards
Alagar
-- Karvy Investor Services Limited
G-1 Swathi Court22, Vijayaraghava Road
T.Nagar, Chennai - 600 017
Tel: 044-28151034/3445/3658
Moble: 919884731993
e-mail: alagar.muthu@karvy.com

[SEBI]Portfolio manager shall not maintain pool accounts after 10th May 2009&to keep client’s listed securities separately or stop dealing

Portfolio Managers shall keep every client’s listed securities separately on or before 10th May 2009 OR stop undertaking new clients for portfolio management services and submit monthly progress reports till they become fully compliant.

From 10th May 2009 onwards all the POOL ACCOUNTS of clients securities shall be FROZEN and there shall be NO fresh purchases EXCEPT FOR selling or transferring securities from the said account.

 

As per Regulation 16(8) of SEBI (PORTFOLIO MANAGERS) (AMENDMENT) REGULATIONS, 2008, every portfolio manager shall segregate each clients' listed securities and keep them separately before 10th February 2009, further, the second provisio to this regulation empowers SEBI to relax the said provision.  SEBI vide Circular No. IMD/CIR No.1/155740/2009 dated February 27, 2009 has extended the said time limit to 10th May 2009 and also mandated to furnish a compliance report to SEBI within a week of expiry of the above deadline.

Further, it stated that any non compliance after the extended period may attract penal action under the provisions of the SEBI Act, 1992 and the regulations framed there under.

In continuation of the above, SEBI vide circular no. IMD/PMS/2/2009/11/05 dated May 11, 2009 has been decided that those portfolio managers, who have not complied with the said requirement of Regulation 16(8) by the said deadline of May 10, 2009, shall immediately STOP undertaking new clients for portfolio management services till the time they become fully compliant with the said requirements.  Such portfolio managers shall submit a monthly progress report in regard to status of compliance.

Post the deadline of May 10, 2009, portfolio managers are also advised to comply with the following:
1. Client securities which are held in a pool account as on May 11, 2009 shall be frozen with respect to any further transactions.
2. Selling of securities, however, from such pool account shall be permitted
3. Transfer of securities from such pool account to respective client’s account shall also be permitted.
4. No fresh purchases on behalf of such clients should be made.
The above is without prejudice to SEBI’ s rights to take such actions against them for the said non-compliance as may be deemed appropriate in the matter.

Source: SEBI vide circular no. IMD/PMS/2/2009/11/05 dated May 11, 2009

Imposing of Price Band on the day of Listing

SEBI proposes to impose price band on the day of Listing

PROPOSED POLICY FOR IMPOSITION OF PRICE BANDS ON THE DAY OF LISTING OF INITIAL PUBLIC OFFERS (IPO's)

q Introduction

This is a proposal by SEBI for imposing a price band of 25% on the issue price on the day of listing of IPOs of issue size upto Rs 250 Cr. This proposal does not apply in case of re-commencement of trading of the equity shares of a company on the stock exchanges.

q Background

Currently, the stock exchanges do not apply price bands on the day of listing of Initial Public Offerings (IPOs). The price fixed by the company in consultation with its lead managers is left open to price discovery in the matter and after the day of listing, this process of price discovery may continue within a price band of 20%. For IPO issue sizes that are greater than Rs.500 Cr, price bands are not imposed even after the day of listing if such scrips are available for trading on the derivative segment.

q Issue for Consideration

Recently, it has been noticed by SEBI that there are significant price & volume spikes/ volatility on the day of listing of IPOs. This was particularly noticed in IPOs of issue size upto Rs 250 cr. In particular, for several such IPOs, where the stock available for trading in the hands of public, after excluding shares of promoters and others that face a lock in period is about 25-30% of the equity capital of the company, the price may not sustain on subsequent days leading long-term investors to become dissatisfied with the dramatic activity on the day of listing.

While it is appreciated that demand /supply mechanics should freely determine the market price, large scale price/volume fluctuations on the first day of trading seem to warrant a systemic response to contain such sharp movements. Accordingly, there seems to be a need to consider a price band even on the day of listing of IPOs. This would not only assist in a more orderly price discovery process over a period of time, instead of on the day of listing, but more importantly also have a salutary impact on potential abnormal price movements on the day of listing.

The matter has been also deliberated at length in the meetings held by SEBI with the stock exchanges. A back testing was also carried out by the stock exchanges on the IPOs during the past year, using parameters such as issue size, price variation on day of listing, maximum variation on day of listing as well as price variation on subsequent days. It was noticed by SEBI that IPOs of issue size upto Rs 250 Cr exhibited more volatility than IPOs of greater issue size. After taking into account the views of the stock exchanges and the results of back testing, it was felt that there is a need to impose price bands on the day of listing of IPOs in a cautious and gradual manner to facilitate steady and sustained price discovery over a period of time.

Comments/suggestions are invited from the public on the above proposal by SEBI, so as to reach SEBI by January 31, 2008.

Comments /suggestions may be sent by email to the following addresses

sanjayp@sebi.gov.in (Mr Sanjay Purao)

sapnas@sebi.gov.in (Ms Sapna Sinha)

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5, 50, 500, 5000 - Store N number of mails in your inbox. Click here.

[FII, Participatory Notes, Sub Account Registration,ODI, AMC & PIM by NRI, CIS]Amendment to SEBI (Foreign Institutional Investors) Regulations, 1995

Amendment to SEBI (Foreign Institutional Investors) Regulations, 1995

Thanks, Lucknow CA Group

SEBI, vide Notification dated May 22, 2008 has amended SEBI (Foreign Institutional Investors) Regulations, 1995.

The salient features of the amendments are as under:

v The policy measures on Offshore Derivative Instruments (Participatory Notes) and changes to the registration criteria specified in SEBI Press Release dated October 25, 2007 have been incorporated in the regulations.

v In order to streamline the process of registration, the Application Forms for grant of registration as a FII and Sub Account have been modified.

v An asset management company, investment manager or advisor or an institutional portfolio manager set up and/ or owned by non resident Indians (NRIs) shall be eligible to be registered as FII subject to the condition that they shall not invest their proprietary funds. This has been enabled by suitable modification to Explanation II under Regulation 13 of the said regulations.

v The type of securities in which FIIs are permitted to invest has been widened to include schemes floated by a Collective Investment Scheme.

Click to read The amended regulations

Further,

Foreign Institutional Investors & Custodians Division
Investment Management Department
Website: www.sebi.gov. in Fax: 022 26449026
Circular No. IMD/FII & C/ 28 /2008
27th May 2008

To
All Foreign Institutional Investors, and
Custodians of Securities

Dear Sir/Madam,
Undertakings for ODI activity

In partial amendment to SEBI circular reference no IMD/CUST/15/ 2004 dated April 02, 2004, the undertaking required to be provided by the Foreign Institutional Investors (FIIs) and their sub-accounts with respect to the offshore derivative instruments (ODIs) is being revised to state the following w.e.f the Monthly ODI Report from May 2008:

“We undertake that we/ our associates have not issued/ subscribed/ purchased any of the offshore derivative instruments directly to/ from Non Resident Indians/ Indian Residents.”

Further, the following statement may also be included in the monthly ODI report, henceforth

“As of ____________ *, our assets under custody (AUC) in the Indian securities market amount to Rs.________crore and the total value of outstanding offshore derivative instruments issued by us as a percentage of AUC is ____ percent.”

* last date of the monthly reporting period to be mentioned.

This circular is being issued under Regulation 20A of the SEBI (Foreign Institutional Investors) Regulations 1995.

A copy of this circular is available at the web page “F.I.I.” on our website www.sebi.gov. in. The custodians are requested to bring the contents of this circular to the notice of their FII clients.

SEBI guidelines for Exit option to Regional Stock Exchanges

RSE means Recognised Stock Exchange u/s. 4 of SCRA as Regional Stock Exchange concept is almost extinct.

For - Regional Stock Exchanges (RSEs) whose recognition is withdrawn and/or renewal of recognition is refused by SEBI and RSEs who may want to surrender their recognition

1. The brokers/trading members of such de-recognised stock exchanges shall be liable to pay SEBI registration fees as per Schedule III of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 till the date of such de-recognition. Dues of the brokers to SEBI shall be recovered by the exchange out of the brokers’ deposits / capital / share of sale proceeds / winding up proceeds / dividend payable, etc. available with the exchange and transferred to SEBI.
2. In case the stock exchange, after de-recognition, continues as a corporate entity under the Companies Act, 1956, it shall not use the expression ‘stock exchange’ or any variant in its name or in its subsidiaries name so as to avoid any representation of any present or past affiliation with the stock exchange.
3. The companies which are listed in such de-recognised RSEs and also listed in any other stock exchange(s) may continue to remain listed in the other stock exchange(s). In case of companies exclusively listed on those de-recognised stock exchanges, it shall be mandatory for such companies to either seek listing at other stock exchanges or provide for exit option to the shareholders as per SEBI Delisting Guidelines / Regulations after taking shareholders’ approval for the same, within a time frame, to be specified by SEBI, failing which the companies shall stand delisted through operation of law.

Find full details in SEBI Circular MRD/DoP/SE/Cir- 36 /2008 dated 29.12.2008

New 6.42 disclosures for rights issue & ASBA also made applicable & utilisation of funds only after finalisation of allotment, SEBI DIP amended

SEBI/CFD/DIL/DIP/38/2009/08/20 dated August 20, 2009

Download Amended SEBI (DIP) Guidelines, 2000 till date

1. Applications Supported by Blocked Amount (ASBA) in rights issues:

It has now been decided to make ASBA applicable to all rights issues. ASBA will co-exist with the current process, wherein cheque/demand draft is used as a mode of payment. Since the web enabled interface of stock exchanges is now operational [have a look at NSE’s Workstation] for the purpose of acceptance of the rights issue applications, self certified syndicate banks shall upload the application data in to the aforesaid interface of stock exchanges.  Understand about ASBA from [SEBI-ASBA] Lets Learn the Concept.

Conditions:

1. All applicants who desire to apply through ASBA should hold shares of the issuer company in a depository account.
2. The applicants shall indicate either in (i) in Part A of the composite application form of rights issue or (ii) in the plain paper application, as to whether they desire to avail of the ASBA option.
3. All other provisions shall apply mutatis mutandis (means, as like a Public Issue with such modification of the words as Rights issue).

2. Other Amendments numbered as A, B, C, D & E for reference

As you are aware that under clause 8.19 of the SEBI (DIP) Guidelines provides that in a rights issue, the issuer may utilise the issue proceeds collected after satisfying the designated stock exchange that minimum 90% subscription is received and also SEBI has reduced the time period taken for finalization of basis of allotment in the rights issues to 15 days from the date of closure of the issue.  In a public issue, in terms of section 73 of the Companies Act, 1956, the issuer company can access the issue proceeds only after allotment and listing is completed.  All the following Amendments shall be applicable for all rights issues where Draft letters of offer are filed or where Final Letter of Offer is yet to be filed with SEBI on or after the date of this circular.

A. In the clause 5.7.2: In the case of rights issues, lead merchant banker shall ensure that the abridged letters of offer ALONG WITH COMPOSITE APPLICATION are dispatched to all shareholders at least 3 days before the date of opening of the issue.

B. All the new clauses are using the word COMPOSITE application instead of STANDARD application as earlier (in case of rights issues).

C. In CHAPTER VI of the DIP Guidelines dealing with DISCLOSURES regarding rights issue, many amendments were made as below:

SECTION III – CONTENTS OF THE LETTER OF OFFER

There are 3 types of disclosures,

• 6.42 disclosures on satisfaction of certain conditions
• Partly Section I and Partly 6.42 disclosures
• Section I disclosures as like the existing provision

I. A listed issuer company making a rights issue shall make disclosures, as
specified in clause 6.42, in the letter of offer, if it satisfies the 6.39 conditions as mentioned below:
(a) the issuer company has been filing periodic reports, statements and
information in compliance with the listing agreement for the last 3 years immediately preceding the date of filing of the letter of offer with the designated stock exchange or SEBI.
(b) the information referred to in sub-clause (a) above are available on the website of any recognised stock exchange with nationwide trading terminals or on a common e-filing platform specified by the SEBI.

(c) the issuer company has investor grievance-handling mechanism which includes meeting of the Shareholders’ or Investors’ Grievance Committee at frequent intervals, appropriate delegation of power by the board of directors of the issuer company as regards share transfer and clearly laid systems and procedures for timely and satisfactory redressal of investor grievances.

As per 6.43, every such listed company shall also make a copy of offer document available to the public in the manner specified in sub-clause (ii) of clause 5.6.2 and shall also make such document available as a material document for inspection.

II. NON SATISFACTION OF ABOVE CONDITIONS

Clause 6.40: If the listed issuer company does not satisfy the ABOVE conditions, it shall make disclosures in the letter of offer as specified in Section I and as specified in sub-clauses (d), (e) and (f) of clause 6.42.16.2 of Section III.

III. SPECIFIC TYPE OF LISTED COMPANIES

Clause 6.41: Irrespective of whether the conditions specified in clause 6.39 are satisfied or not, the following listed issuer companies shall make disclosures, as specified in Section I, in the letter of offer:
(a) A listed issuer company whose management has undergone change pursuant to acquisition of control in accordance with the provisions of SEBI Takeover Code.
(b) An issuer company whose securities have been listed consequent to relaxation granted by the Board under sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957 for listing of its securities pursuant to a scheme sanctioned by a High Court under sections 391 to 394 of the Companies Act, 1956.

D. In chapter VI, Section IV shall be substituted with the following section as under:-
SECTION IV - CONTENTS OF THE ABRIDGED LETTER OF OFFER: In that clauses 6.44, 6.45 and 6.46 are SUBSTITUTED with new clauses.

E. Chapter VIII - OTHER ISSUE REQUIREMENTS
For clause 8.19.1, the following clause shall be substituted, namely:-
“The issuer company may utilise the funds collected in the rights issue only after the basis of allotment is finalized.”  Just remember, it is no more after minimum 90% subscription is received.

File @ SEBI Regional office for Issue size UPTO 100 crores for prescribed States with New Delhi, Ahmedabad, Chennai & Kolkata

SEBI extends the role of its Regional offices to accept applications for public issues under ICDR regulations vide CIR/CFD/DIL/9/2010 dated 13th October 2010

When issue size is 100 crores or less

SEBI, New Delhi office for Companies proposed to be listed in Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Uttar Pradesh, Chandigarh, Delhi & Uttarakhand

SEBI, Kolkata office for Companies proposed to be listed in Assam, Bihar,
Manipur, Meghalaya, Nagaland, Orissa, West Bengal, Tripura, Arunachal Pradesh, Mizoram & Jharkhand

SEBI, Chennai office for Companies proposed to be listed in Andhra Pradesh, Karnataka, Kerala, Tami Nadu & Puducherry

SEBI, Ahmedabad office for Companies proposed to be listed in Gujarat & Rajasthan.

For other states & when issue size is more than 100 crores

At SEBI Bhawan, Mumbai.

Merchant Bankers are accordingly advised to file the draft offer documents / offer documents with the concerned office of SEBI, based on the estimated issue size accordingly.

Download Notification.

SEBI's Proposal on PN which shook the Stock Market

Paper for discussion on Offshore Derivative Instruments (Participatory Notes) Objective This paper sets out the proposed policy measures on Offshore Derivative Instruments (Participatory Notes). Background With a view to monitoring the investment by FIIs through Offshore Derivative Instruments (ODIs) such as Participatory Notes (PNs), Equity Linked Notes, Capped Return Notes, Participating Return Notes etc., SEBI had prescribed reporting of issuance / renewal / cancellation / redemption of the ODIs on a monthly basis since October 2001. The figures submitted by the FIIs on a month to month basis showed an increasing trend. In the latter half of 2003, a Technical Committee of SEBI Regulated Entities was constituted by the HLCCFM to examine the issues pertaining to P-Notes more closely. The Committee, comprising representatives of RBI, IRDA, SEBI and NSE met in October, 2003 and extensively discussed the issues like : • Whether PNs should be allowed to be issued at all, • Whether restrictive use of PNs is possible, • Monitoring of compliance • Phasing out of PNs that are non-compliant with new restrictions, etc The Committee, having examined the concerns raised by the participants, felt that while these issues and concerns would have to be addressed in the interest of the market, the measures taken should be practical, pragmatic, non-disruptive and enforceable without great difficulty. Recognizing that it may be difficult to enforce a complete ban on PNs, the Committee made certain recommendations which included issuance of PNs only to regulated entities subject to KYC requirements. The same was implemented through suitable amendment to FII regulations. However, the year on year increase in ODIs, the anonymity that the ODI provides to the investors and the copious inflows into the country from foreign investors has been engaging the attention of the Government and the regulators such as the Reserve Bank of India and SEBI. This has been a topic for discussion in many fora such as HLCC and various committees set up by the Government/ regulators. Current Scenario: Currently 34 FIIs / Sub-accounts issue ODIs. This number was 14 in March 2004. The notional value of PNs outstanding which was at Rs.31,875 crores (20% of AUC 1) in March 2004 has grown to Rs.3,53,484 crores (51.6% of AUC) by August 2007. The value of outstanding ODIs with underlying as derivatives currently stands at Rs1,17,071 crores, which is approximately 30% of total PNs outstanding. The notional value of outstanding PNs, excluding derivatives as underlying as a percentage of AUC is 34.5% at the end of August 2007. Proposed Measures: Following consultation with the Government, the following measures are proposed to be implemented urgently: 1) FIIs and their sub-accounts shall not issue/renew ODIs with underlying as derivatives with immediate effect. They are required to wind up the current position over 18 months, during which period SEBI will review the position from time to time. 2) Further issuance of ODIs by the sub-accounts of FIIs will be discontinued with immediate effect. They will be required to wind up the current position over 18 months, during which period SEBI will review the position from time to time. 3) The FIIs who are currently issuing ODIs with notional value of PNs outstanding (excluding derivatives) as a percentage of their AUC in India of less than 40% shall be allowed to issue further ODIs only at the incremental rate of 5% of their AUC in India. 1 AUC = Assets Under Custody of all FIIs/Sub Accounts 4) Those FIIs with notional value of PNs outstanding (excluding derivatives) as a percentage of their AUC in India of more than 40% shall issue PNs only against cancellation / redemption / closing out of the existing PNs of at least equivalent amount. In view of urgency, any comments on the above proposals may be sent to odireporting@sebi.gov.in by 20th October 2007 with the subject line "Paper for discussion on Offshore Derivative Instruments - Comments" *****************

--
Vj
Trezrrr every pulsss
http://yehseeyes.blogspot.com/

[SEBI-ASBA] Lets Learn the Concept

Credits to Mr. CS Pradeep for this wonderful presentation

 

LET’S LEARN

 

ASBA – APPLICATIONS SUPPORTED BY BLOCK AMOUNT

 

What is ASBA?

 

SEBI has laid down detailed guidelines for a new application process for public issues. The new scheme named ASBA - Applications Supported by Blocked Amount is being introduced to cut down complaint-prone refund process in IPOs.

 

Is it compulsory?

 

The process is available as an alternate mode of application in all public issues made through the book building route. The scheme begun as a supplementary process and shall co-exist with the current process, wherein cheque is used as a mode of payment.  Click here to know the Detailed Guidelines.

 

How does it work?

 

Ø     The bank will block the money corresponding to the value of shares applied for in the bank account of the applicant itself. During the allotment period, the money does not leave the account of the investor, but since it is blocked he can’t use it for any other purpose.

 

Ø     If and when the shares get allotted, the money will be transferred to the issuer. In case the bid is rejected then, the money will be released immediately.

 

Ø     To keep it simple to begin with, SEBI has said that only those investors who are bidding at “cut off” [the final decided price] can opt for this scheme. Only one option is accepted for the number of shares bid for. It also says investors cannot revise their bid, though they can withdraw their bid in the period.

 

Ø     However, investor can’t go to any bank of his choice and ask for the service, yet. The Regulator said banks willing to offer this facility to apply for the same.

 

Ø     “A bank desirous of offering ASBA facility shall submit a certificate to SEBI, as per the specified format, for inclusion of its name in SEBI’s list of Self Certified Syndicate Banks (SCSB).

 

Ø     The IPO applications through this process can be accepted only by SCSBs, whose names appear in the list of SCSBs displayed in SEBI’s website, the SEBI order said. The investor will have the option of applying either through physical application forms or through electronic forms. 

 

Ø     SEBI has also notified other intermediaries like the merchant bankers, registrars to the issue and stock exchanges to make adequate changes in their systems to ensure that the applications that come through the new channel are treated on par with those from conventional channel.

 

What are the advantages of ASBA?

 

This will do away with immense paperwork involved and loss of money and peace of mind of investors. Consequently, there should be less investor complaints.

 

Click here to read the Detailed Guidelines.

SEBI amends Clause 49

SEBI amends Clause 49

Loophole left in the Clause 49 was plugged...

1) Companies are complying with Clause 49 of the listing Agreement only in letter and not in spirit. Now, if you have a person related to promoter as non-executive chairman, then half of the board should be independent.

2) The age limit of the Independent director fixed to a minimum of 21 years.

3) The time limit for appointment of another independent director after resignation of an independent director fixed as max. 180 days...but if the one-third/half composition is complied with, even after resignation, then this provision is not applicable.

SEBI had received requests/suggestions to bring about clarifications on certain provisions of the clause. After examining the same, it has been decided to modify the existing Clause 49. Hence SEBI vide circular SEBI/CFD/DIL/CG/1/2008/08/04 dated April 08, 2008 issued to stock exchanges has amended Clause 49 of the Listing Agreement to include the following provisions:

Mandatory provisions:

1. If the non-executive Chairman is a promoter or is related to promoters or persons occupying management positions at the board level or at one level below the board, at least one-half of the board of the company should consist of independent directors.

2. Disclosures of relationships between directors inter-se shall be made in specified documents/filings.

3. The gap between resignation/removal of an independent director and appointment of another independent director in his place shall not exceed 180 days. However, this provision would not apply in case a company fulfils the minimum requirement of independent directors in its Board, i.e., one-third or one-half as the case may be, even without filling the vacancy created by such resignation/removal.

4. The minimum age for independent directors shall be 21 years.

Non-mandatory provisions:

The company shall ensure that the person who is being appointed as an independent director has the requisite qualifications and experience which would be of use to the company and which, in the opinion of the company, would enable him to contribute effectively to the company in his capacity as an independent director.

Full text of SEBI circular at http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/circulars/2008/cfdcir08.html

Understand the SEBI Updates here....

Same exit loads for all Mutual Fund (MF) holders irrespective of Subscription amounts, SEBI says

SEBI / IMD / CIR No. 6 /172445/ 2009 dated August 7, 2009 & SEBI / IMD / CIR No. 7 /173650 / 2009 dated August 17, 2009

It is observed that the mutual funds are making distinction between the unit
holders by charging differential exit loads based on the amount of subscription. In order to have parity among all classes of unit holders, it has now been decided that no distinction among unit holders should be made based on the amount of subscription while charging exit loads.

While complying with the aforesaid circular, it shall be ensured that:

1. The principle laid down in the SEBI circular No. SEBI/IMD/CIR No. 5/126096/08 dated May 23, 2008 (clause 16 of the standard observations) that “any imposition or enhancement in the load shall be applicable on prospective investments only” shall be followed.
2. The parity among all classes of unit holders in terms of charging exit load shall be made applicable at the portfolio level.

Further, you are aware that SEBI vide circular No. SEBI/IMD/CIR No. 5/126096/08 dated May 23, 2008 has simplified the formats for Offer Document and Key Information Memorandum of Mutual Funds Scheme [SEBI-Simplification of Offer Document and Key Information Memorandum of Mutual Funds Scheme]. The simplified Scheme Information Document format provides that “Wherever quantitative discounts are involved the following shall be disclosed – The Mutual Fund may charge the load within the stipulated limit of 7% and without any discrimination to any specific group of unit holders. However, any change at a later stage shall not affect the existing unit holders adversely”.

Consultative paper on amendments to SEBI (Prohibition of Insider Trading) Regulations, 1992

Dear All,

 

Consultative paper on amendments to SEBI (Prohibition of Insider Trading) Regulations, 1992

 

Objective of proposed Amendment in SEBI Insider Trading Regulations.  Click the link above.

 

To harmonize requirements of acquisition/sale of shares reported under the SEBI (Prohibition of Insider Trading) Regulations, 1992 and the requirements of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 it was proposed that transaction disclosures made under either regulation (with the same or higher level of disclosure) should be deemed to be good disclosure under the other. It was also proposed to increase the harmonization between the two in terms of threshold limits set.

 

Reduce disclosure time limit under Regulation 13 from total 9 days to 2 days in order to prompt dissemination of price sensitive information and to make it in line with SEBI Takeover regulations.

 

You can send your comment by e-mail upto 26th June, 2008 to jyotis@sebi.gov.in and sunilk@sebi.gov.in

 

Also please find attached Consultative paper for your detailed reference.

 

Thanks & Regards

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

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.

SEBI Order - Ketan Parekh

PR No.295/2007
Order against Shri Ketan V. Parekh and his associated entities by Securities and Exchange Board of India (SEBI)

SEBI conducted investigations into the buying, selling and dealings in the scrips of Himachal Futuristic Communications Limited, Zee Telefilms Limited, Adani Exports Limited, Global Tele-Systems Limited, Ranbaxy Laboratories Limited, Shri Adhikari Brothers Television Network Limited, Shonkh Technologies International Limited, Padmini Technologies Limited and Aftek Infosys Limited during the period October 1999 to March 2001.

The investigations revealed that Shri Ketan V. Parekh and 17 other entities who were directly/indirectly related/associated to him were involved in market manipulation in the aforesaid scrips in violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 and/or SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The modus operandi adopted by all the above mentioned entities in manipulating various scrips was, by and large, the same and Shri Ketan V. Parekh was found to be the master mind behind all the acts of omission or commissions by these entities.

In view of the above, Dr. T.C. Nair, Whole Time Member, SEBI, has passed an order dated November 12, 2007:

a. Restraining Shri Ketan V. Parekh and his 10 associates namely Shri Kartik K. Parekh, Classic Credit Ltd., Panther Fincap and Management Services Ltd., Luminant Investment Pvt. Ltd., Chitrakut Computers Pvt. Ltd., Saimangal Investrade Ltd., Classic Infin Ltd., Panther Investrade Ltd., Goldfish Computers Pvt. Ltd., and Nakashtra Software Pvt. Ltd. from accessing the securities market and also prohibiting them from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever, whether directly or indirectly, for a period of fourteen years.

b. Restraining Shri Navinchandra N. Parekh, Shri Kirtikumar N. Parekh, Shri Jayant N. Parekh and Shri Vipul D. Parekh, from accessing the securities market and also prohibiting them from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever, whether directly or indirectly, for a period of one year.

c. Restraining Triumph International Finance India Ltd., Triumph Securities Ltd., and NH Securities Ltd. from accessing the securities market and also prohibiting them from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever, whether directly or indirectly, for a period of five years.

In regard to the entities namely, Shri Ketan V. Parekh, Shri Kartik K. Parekh, Classic Credit Ltd., Panther Fincap and Management Services Ltd., Luminant Investment Pvt. Ltd., Chitrakut Computers Pvt. Ltd., Saimangal Investrade Ltd., Classic Infin Ltd. and Panther Investrade Ltd., which were covered under SEBI order dated December 12, 2003 (debarring them from securities market), this order shall run concurrently and shall be deemed to be effective from December 12, 2003.

As regards the remaining entities, the order shall come into effect from the date of the order.

Full order in http://www.sebi.gov.in/cmorder/ketanorder1.pdf

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 DIP Guidelines Current & Earlier Provision as on 28th Aug 2008- An Overview

Credits to Mr. CS Pradeep & Mr. R. Anand

Rights Issue

N	Particulars	Earlier Provision	Current Provision
1	Advertisement	An advertisement giving the date of completion of despatch of letters of offer, shall be released in Newspapers ATLEAST 7 days BEFORE date of opening of issue	7 days reduced to 3 days
2	Issue of Shares / Refunds	Details of Issue of Allotment letters/Refunds to be made WITHIN a period of 7 weeks and Interest in case of delay in refund at the prescribed rate under section 73(2)/(2A)	7 weeks reduced to 15 days
3	Non-receipt of Minimum subscription	If the Company does NOT receive the Minimum Subscription of 90% of the issue, the entire subscription shall be REFUNDED to the applicants WITHIN 42 days from the date of closure of the issue.	42 days reduced to 15 days
4	Issue Period	Rights issues shall be kept OPEN for ATLEAST 30 days and not more than 60 days	Rights issues shall be kept OPEN for ATLEAST 15 days and not more than 30 days
5	Book-closure period	Minimum Notice period was 15 days (demat shares with no derivative trading), 21 days (physical shares with no derivative trading) and 30 days (with derivative trading)	The minimum notice period has been made as 7 working days for ALL categories (only for Rights issue)
6	Notice to Stock Exchange	Company has to give PRIOR intimation to the Exchange about the Board Meeting at which proposal for Rights issue or issue of Convertible Debentures or of Debentures carrying a right to subscribe to Equity shares or the passing over of dividend is due to be considered at least 7 days in advance.	7 days reduced to 2 working days (only for Rights issue)

 

QIB / QIP related (Chapter XIIIA)
1. Erstwhile "Qualified Institutional Buyers" [QIB]

Hereon "Qualified Institutional Buyers" [QIB], defined in the Definition Section itself of the SEBI (DIP) Guidelines, 2000,

1.2.1 (xxiva) The same Definition has been brought in, with an amendment in sub-clause (d) as to Foreign Institutional Investors (FII):
"a foreign institutional investor and sub-account registered with SEBI, OTHER THAN a sub-account which is a foreign corporate or foreign individual".

 

2. QIP Pricing guidelines amended - pricing to be 2 weeks average high and low OR more [Floor Price], of the closing prices of the related shares quoted on the stock exchange during the TWO WEEKS preceding the 'relevant date'.

 

3. Meaning of 'Relevant Date' amended -  means Date of Board or Committee meeting (previously it was Shareholders Meeting) decided to open the proposed issue.

 

4. Companies which have been listed during the preceding one year pursuant to approved scheme(s) of merger/ demerger/ arrangement they are now allowed to raise funds by QIP route. Such companies are said to have taken into account the listing history of the listed companies with which they have entered into the approved scheme(s) of merger/ demerger/ arrangement.

 

Preferential Allotment (Chapter XIII)
1. In case of preferential allotment to QIB, pricing to be at 2 weeks average for allotment to QIBs, provided that the number of QIB allottees in such preferential allotment does NOT exceed five.

2. Warrants and Shares BOTH will be subject to lock-in period of one year or three years from the date of allotment of such shares.
(No set-off of lock-in period allowed against the period during which Warrants where already locked-in)

 

Debt Securities

The SEBI (Issue and Listing of Debt Securities) Regulations, 2008 were notified on June 6, 2008 and are applicable to public issue of debt securities and listing of debt securities issued through public issue or on private placement basis on a recognised stock exchange. As per regulation 33(1) of these regulations, the
provisions of the SEBI (DIP) Guidelines, in so far as these relate to issue and listing of debt securities, shall stand rescinded on the commencement of these regulations. Consequential amendments have accordingly been made in the SEBI (DIP) Guidelines.

 

Others

1. Filing of offer documents at SEBI Regional Offices, the LIMIT has been increased from 20 Crores to 50 Crores.

 

2. Even, "Offer for sale" and INCLUSION in the "Promoters' Contribution" of those shares which have been acquired pursuant to a restructuring exercise approved by High Court(s), in lieu of business and invested capital which had been in existence for a period of MORE than one year prior to the restructuring exercise.

 

Effect

The amendments made vide this circular shall be applicable as under:
(a) Amendments to clause 1.2.1(xxiva) shall be applicable after the date of this circular to :
(i) all notices for general meeting sent to shareholders for approval of the issue, in case of preferential allotment and QIP; and
(ii) all prospectuses (in case of a fixed price issue) and Red Herring
Prospectuses (in case of a book built issue) filed with the Registrar of Companies or letters of offer filed with Designated Stock Exchange, as the case may be.
(b) Amendments to clauses 13.1.1.1, 13.1.1.2, 13.1.1.3, 13.3.1, 13A.1.1, clause 13A.3.1, and 13A.3.2.2 shall be applicable to all notices for general meeting sent to shareholders for approval of the preferential allotment or QIP, as the case may be; after the date of this circular.
(c) Amendments to clauses 4.6.2, 16.1.1 and 4.14.2(ii) shall be applicable to all draft offer documents filed with SEBI after the date of the circular;
(d) All amendments other than those specified in sub-paras (a) to (c) above shall come into force with immediate effect.

SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008

DOWNLOAD DIP Guidelines amended upto August 28, 2008

SEBI simplifies (Issuance and Listing of Debt Securities) Regulations, 2008

SEBI (Issue & Listing of Debt Securities) Regulations, 2008

 

In order to facilitate development of a vibrant primary market for corporate bonds in India, Securities and Exchange Board of India (SEBI) has notified Regulations for Issue and Listing of Debt Securities to provide for simplified regulatory framework for issuance and listing of non-convertible debt securities (excluding bonds issued by Governments) issued by any company, public sector undertaking or statutory corporations.  The Regulations  will not apply to  issue and listing of, securitized debt instruments  and  security receipts for which separate regulatory regime is in place.

The Regulations provide for rationalized disclosure requirements for public issues and flexibility to issuers to structure their instruments and decide on the mode of offering, without diluting the areas of regulatory concern. In case of public issues, while the disclosures specified under Schedule II of the Companies Act, 1956 shall be made, the Regulations require additional disclosures about the issuer and the instrument such as nature of instruments, rating rationale, face value, issue size, etc.

While the requirement of filing of draft offer documents with SEBI for observations has been done away with, emphasis has been placed on due diligence, adequate disclosures, and credit rating as the cornerstones of transparency. Regulations prescribe certifications to be filed by merchant bankers in this regard. The Regulations emphasize on the role and obligations of the debenture trustees, execution of trust deed, creation of security and creation of debenture redemption reserve in terms of the Companies Act.

The Regulations enable electronic disclosures. The draft offer document needs to be filed with the designated stock exchange through a SEBI registered merchant banker who shall be responsible for due diligence exercise in the issue process and the draft offer document shall be  placed on the websites of the stock exchanges for a period of seven working days inviting comments. The documents shall be downloadable in PDF or HTML formats. The requirements for advertisements have also been simplified.

While listing of securities issued to the public is mandatory, the issuers may also list their debt securities issued on private placement basis subject to compliance of simplified regulatory requirements as provided in the Regulations. The Regulations provide an enabling framework for listing of debt securities issued on a private placement basis, even in cases where the equity of the issuer is not listed. NBFCs and PFIs are exempted from mandatory listing. However, they may list their privately placed debt securities subject to compliance with the simplified requirements and Listing Agreement. A rationalized listing agreement for debt securities is under preparation.

Please find attached the full text of the SEBI (Issue and Listing of Debt Securities) Regulations <http://www.sebi.gov.in/acts/debtregu.pdf> .

Source: PR No.123/2008 dated 19th June 2008
 

Thanks & Regards

Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Moble: 919884731993/ 919790906827
 

SEBI draft - Investment Adviser

Draft SEBI (Investment Advisers) Regulations, 2007

SEBI has framed draft SEBI (Investment Advisers) Regulations, 2007 and the same are placed in public domain for comments and suggestions.

Comments on the draft Regulations annexed herewith may be sent on or before October 31, 2007 through email to ashas@sebi.gov.in or to the address mentioned below:

Chief General Manager

MIRSD – DPS III

Securities and Exchange Board of India

SEBI Bhavan, 2nd Floor, A- wing,

Plot No: C – 4A, G Block,

Bandra Kurla Complex,

Mumbai 400 051.

Find full regulation in http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/commreport/inv.html

Thanks & Regards

Alagar
09884731993

RBI Guidelines on IDR for issue, transfer & redemption into Equity which shall be made only after 1 year on compliance of FEMA, SEBI & Company Rules

RBI in order to facilitate the eligible companies resident outside India to issue Indian Depository Receipts (IDRs) through a Domestic Depository and to permit persons resident in India and outside India to purchase, possess, transfer and redeem IDRs, it has been decided to operationalise the IDR Rules, notified by the Government of India, as amended from time to time, with immediate effect.  Before further reading, first understand the basics of IDR from [SEBI-IDR]Lets Learn-Indian Depository Receipt-Meaning & Understanding.

The permission has been granted subject to compliance with the Companies (Issue of Depository Receipts) Rules, 2004 and subsequent amendments made thereto and the SEBI (DIP) Guidelines, 2000, as amended from time to time. In case of raising of funds through issuance of IDRs by financial/banking companies having presence in India, either through a branch or subsidiary, the PRIOR approval of the sectoral regulator(s) should be obtained before the issuance of IDRs.

Investment by Persons resident in India / FIIs / NRIs in IDRs
The FEMA Regulations shall not be applicable to persons resident in India as defined under section 2(v) of FEMA, 1999, for investing in IDRs and subsequent transfer arising out of transaction on a recognized Stock Exchange in India. Foreign Institutional Investors (FIIs) including SEBI approved sub-accounts of the FIIs, registered with SEBI and Non-Resident Indians (NRIs) may also invest, purchase, hold and transfer IDRs of eligible companies resident outside India and issued in the Indian capital market, subject to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 notified vide Notification No. FEMA 20 / 2000-RB dated May 3, 2000, as amended from time to time. Further, NRIs are allowed to invest in the IDRs out of funds held in their NRE / FCNR(B) account, maintained with an Authorised Dealer / Authorised bank.
Fungibility
Automatic fungibility of IDRs is not permitted.
Period of redemption
IDRs shall not be redeemable into underlying equity shares before the expiry of 1 year period from the date of issue of the IDRs.
Procedure for transfer and redemption of IDRs

At the time of redemption / conversion of IDRs into underlying shares, the Indian holders (persons resident in India) of IDRs shall comply with the provisions of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 notified vide Notification No. FEMA 120 / RB-2004 dated July 7 2004, as amended from time to time. Accordingly, the following guidelines shall be followed, on redemption of IDRs:

1. Listed Indian companies may either sell or continue to hold the underlying shares subject to the terms and conditions as per Regulations 6B and 7 of Notification No. FEMA 120/RB-2004 dated July 7, 2004, as amended from time to time.
2. Indian Mutual Funds, registered with SEBI may either sell or continue to hold the underlying shares subject to the terms and conditions as per Regulation 6C of Notification No. FEMA 120/RB-2004 dated July 7, 2004, as amended from time to time.
3. Other persons resident in India including resident individuals are allowed to hold the underlying shares only for the purpose of sale within a period of 30 days from the date of conversion of the IDRs into underlying shares.
4. The FEMA provisions shall not apply to the holding of the underlying shares, on redemption of IDRs by the FIIs including SEBI approved sub-accounts of the FIIs and NRIs.

Others

The proceeds of the issue of IDRs shall be immediately repatriated outside India by the eligible companies issuing such IDRs. The IDRs issued shall be denominated in Indian Rupees.

Source: RBI/2009-10/106 A.P. (DIR Series) Circular No. 05 dated 22nd July 2009

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.

Download Pre-requisite softwares for corpfiling.

Source: SEBI CIR/CFD/DCR/3/2010 dated 16th April 2010