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....

Company Secretary (CS) Study Videos on Directors appointed by Board u/s. 260, 262 & 313 of Companies Act, 1956

Yet another effort, a try to make CS (Company Secretary) study very interestin...Now its video venture....Yes...its "See Yes E-C(ast)"....

Here, three videos on Appointment of Directors by Board covering Sections 260, 262 & 313 of the Companies Act, 1956.

This is purely an adventurous venture to make CS study very excitin...Comment your needs & satisfaction, as by it, only I can improve, or inspire more....please keep inspirin...

Welcome, advice or suggestions from earnest friends & professionals to enhance my work.

Review it as critically as possible, now hav a look at it....

Part-I


Part-II


Part-III


Keep Viewin...Keep Communicatin...Vj

SEBI Revision in Fees&changes in Depositories&Participants Regulations&Cos(AS) amendment rules,2008

Securities And Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2008 dated 31/03/2008 which is applicable with effect from 1st April 2008.

Yes....SEBI has revised its fee structure under various regulations, its very clearly explained in the SEBI circular itself http://thisisvj.googlepages.com/SebiCircular.pdf

Now, through SEBI (Depositories and Participants) (Amendment) Regulations, 2008 dated 17/03/2008, the following amendments were made in Regulation 7 (i.e) Grant of Certificate of Registration:
1. In Regulation 7(d), the balance of the equity capital of the depository shall be held by its participants is DELETED, so only condition being "the sponsor shall, at all times, hold at least fifty-one per cent. of the equity share capital of the depository;”
2. The meaning of foreign entity and their Minimum Holding in equity of Depository as given in Regulation 7(e) is DELETED and in lieu of which, the following is inserted under R-7
"(ea) no person other than a sponsor, whether resident in India or not, shall at any time, either individually or together with persons acting in concert, hold more than five per cent of the equity share capital in the depository;
Explanation: For the purposes of this clause, -
(i) the expression “person resident in India” shall have the meaning assigned to it in clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);
(ii) the expression “persons acting in concert” shall have the meaning derived from clause (e) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997;
(eb) the combined holding of all persons resident outside India in the equity share capital of the depository shall not exceed, at any time, forty-nine per cent of its total equity share capital, subject further to the following:-
(i) the combined holdings of such persons acquired through the foreign direct investment route is not more than twenty six per cent of the total equity share capital, at any time;
(ii) the combined holdings of foreign institutional investors is not more than twenty three per cent of the total equity share capital, at any time;
(iii) no foreign institutional investor acquires shares of the depository otherwise than through the secondary market;
(ec) no foreign institutional investor shall have any representation in the Board of Directors of the depository;”

Also have a look @ Companies (Accounting Standards) Amendment Rules, 2008 in http://www.mca.gov.in/MinistryWebsite/dca/notification/pdf/Companies_Acct_Std_Amendment_Rules_2008.pdf

Keep Updatin...Vj

NSE Listing Fees & Clause 35 amendments

Credits to Mr. Ashwin...for this detailed presentation...

Listing fees as the name implies is the fees to be paid by the companies to the stock exchange where their shares are listed based on the paid up capital of the Company. This is to be paid annually. The Annual listing fee of National Stock Exchange of India Ltd.,(NSEIL) each year has to be paid on or before 30^th of April.

The listing fees of NSEIL has been revised/changed w.e.f. 1^st April, 2008 and the revised list is as follows:-

S.No.	Particulars		Amount (Rs.)
1	Initial listing Fees(one time payment)		25,000
2	Annual listing Fees (based on paid up share, bond and/or debenture and/or debt capital, etc.)
	Above(Rs.)	Upto(Rs.)
	N.A.	1 Crores	10,000
	1 Crores	5 Crores	15,000
	5 Crores	10 Crores	25,000
	10 Crores	20 Crores	45,000
	20 Crores	30 Crores	70,000
	30 Crores	40 Crores	75,000
	40 Crores	50 Crores	80,000
	50 Crores	100 Crores	130,000
	100 Crores	150 Crores	150,000
	150 Crores	200 Crores	180,000
	200 Crores	250 Crores	205,000
	250 Crores	300 Crores	230,000
	300 Crores	350 Crores	255,000
	350 Crores	400 Crores	280,000
	400 Crores	450 Crores	325,000
	450 Crores	500 Crores	375,000
	500 Crores		375,000+2500 for every increase of 5 crores or part thereof
	1000 Crores		630,000+2750 for every increase of 5 crores or part thereof

ALTERATION IN FORMAT (l)(d) UNDER CLAUSE 35 OF

LISTING AGREEMENT

Through Circular NSE/CML/2006/002 dated April 26, 2006 amendment was made in Clause 35 of listing agreement requiring the company to file shareholding pattern within 21 days from the end of the each quarter.

Under clause 35, company is also required to file statement of locked in shares in Format (l) (d)

Format (l) (d) under Clause 35 of the listing agreement is altered by introducing a new column – "Category of share holders" After the amendment it stands as follows:-

(l)(d) – Statement showing details of locked in shares

Sr.No.	Name of the shareholder	*Category of shareholders (Promoters/Public)	Number of locked-in shares	Locked-in shares as a percentage of total number of shares{i.e., Grand Total (A)=(B)+(C) indicated in Statement at para (l)(a) above}
1.
2.
TOTAL

*New addtion in the format (l)(d) of the clause

Keep updatin...

Development Banking for CS Final

Just get the essence of the subject like this...Its like...the
following points are nothing but the reproduction of the material but
its concise and you can read it many a times, making your CS Final
Exams, just a flow of writin...Every exam in CS Final is very
interestin Provided, u have the right approach to study it. Do
comment your understanding & needs. You have every right to
critically review my writing, only then I can improve, please help.

DEVELOPMENT BANKING – the gap filler

It is a multi-purpose financial institution. Financial institution
concerned with providing all types of financial assistance to business
units, in the form of loans, underwriting, investment, guarantee
operations & promotional activities – economic development in general
& industrial development.

I. EVOLUTION:
1. Institutionalism (1948-55)
2. Expansion (1955-64)
I. CONSOLIDATION & INNOVATION (1964-76):
1. Introduction of Consortium financing;
2. Industry potential survey & concessional finance for Backward areas;
3. Introduction of Loan convertibility clause, merchant banking, etc…
4. Creation of Technical consultancy organisation & Management
Development Institute (MDI, Gurgaon).
I. STABILITY & GROWTH (1976-84): Increased sanctioning & disbursement
of loans; creation of Entrepreneurship Development Institute of India,
1983.
I. DIVERSIFICATION & CHANGE (1984-92):
1. Increase in project financing and fund & fee based services;
2. Introduction of Credit Rating Agencies (CRA);
3. Guidelines for appointment of nominee directors.
I. RE-ORIENTATION (1992 onwards):
1. Establishment of commercial banks, investment banks & mutual funds;
2. IFCI which was formed as a statutory corporation is converted into company.

SNO. DEVELOPMENT BANKING; COMMERCIAL BANKING
1. Project oriented; Security oriented;
2. Influencing & collecting savings & re-channelising them to people
in need; It has an additional function of generating money;
3. Liabilities are not converted into cash-on-demand; Substantially
there are demand deposits & only banks are authorised to accept
deposits withdrawable by cheque;
4. For medium & long term needs; For short term credit requirements;
5. Funds drawn from budgetary resources of Central Government, RBI
borrowings, foreign lines of credit & bond borrowings; Funds from
deposits of public & corporate sector (demand deposits).
6. CREDIT FUNCTION; Also MONETARY FUNCTION.

GROWTH OF DEVELOPMENT BANKING – for long term investment credit;
FOR i) Industry: IDBI, SIDBI, IFCI, ICICI [(P) sector], IIBI, SFC, SIDC;
ii)Agriculture: NABARD;
iii)Exports: EXIM;
iv) Housing: NHB;
v) Infrastructure: IDFC;
In economic development of a country, development banking act as
"partners in progress" & proceed on "anticipated income theory" i.e.,
dues are expected to be realised out of the anticipated income of the
borrowers. The common functions include, Direct Investment /
Underwriting / Guaranteeing / Securing…

INDUSTRIAL FINANCIAL CORPORATION OF INDIA LTD (IFCI) – 1948
Making medium & long term credit more readily available to eligible
industrial concerns in India when, normal banking accommodation is
"inappropriate" OR recourse to capital market is "impracticable".

NODAL AGENCY for "sugar development fund" & "jute modernisation fund".

FUNCTIONS:
1. Financial assistance to industrial concerns for new, expansion,
diversification & modernisation projects in corporate & co-operative
sector;
2. Merchant banking (fund & fee), foreign & rupee currency loans;
3. Underwriting/direct subscription/guarantees;
4. Subsidiaries include IFCI financial/custodial/investor service;
5. Established MDI, Gurgaon for management training.

STATE FINANCE CORPORATION (SFC) ACT 1951: for meeting term credit
needs of small & medium industries. It complements IFCI. It raises
resources as 'trustee securities', borrows up to 2x(paid-up) from RBI,
borrow from SG/FI/Scheduled Commercial Banks within the prescribed
limits. The business includes factoring, money market, endorsing
letter of credit, trustee for debenture holders, etc…

PRIME LENDING RATE: interest rate at which bank or financial
institution is willing to lend to its prime customers (near zero
risk), so that the earnings from lending will cover, all costs &
expenses and leave adequate enough margin to service its capital. It
can be short term (<=3years) or long term (>3years). The components
include,
1. Fund cost (Deposits + Own funds); 2. Staff cost (Fund mobilisation
+ loans/advances); 3. Overheads; 4. Write-off bad & doubtful debts; 5.
Premium for Asset-Liability mismatch.
INDUSTRIAL CREDIT & INVESTMENT CORPORATION OF INDIA (ICICI) 1955: as a result of international co-operative effort (by World Bank with GOI
support) to foster private investment in India & to promote industries
in (P) sector.

FUNCTIONS: (as a Universal Bank)
1. Underwriting/direct subscription/guaranteeing/merchant banking, etc…
2. Merchant banking & Project Counselling for NRIs.
3. Foreign currency assistance for 3crores project.
4. Provides risk & loan capital for creation/expansion/modernisation
of Productive Facilities & encourages others to invest.
5. Credit facilities to indigenous manufacturers & equipment leasing services.

INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) – 1964 as a Wholly Owned
Subsidiary (WoS) of RBI, later converted into autonomous body to serve
as an APEX institution for term finance in an industry.

FUNCTIONS:
1. Established National Securities Depository Ltd., & Entrepreneurial
Development Institute at Ahmedabad.
2. Planning, promoting, co-ordinating,… the working of & assisting the
development of & to fill gaps.
3. Conducting surveys, R&D, techno-economic studies & Investment research.
4. Re-discounting to push up sales by Indigenous manufacturers.
5. Advise Government in disinvestment.
6. Entered International market with floating rate note issue.
7. Direct loans under Project Finance Scheme for 5crores with
convertibility up to 20% of loans into equity.

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI): an APEX bank for
tiny, small & cottage sector, established as a WoS of IDBI & it
administers SID fund & National Equity fund.

FUNCTIONS:
1. Direct assistance through project, equipment & infrastructure financing;
2. Indirect financing through 100% refinancing if repayment on
quarterly basis to loans for a period of 25years;
3. Equity type assistance including Seed Capital scheme, self
employment for ex-servicemen, et al.
4. Commercial exploitation of lab-tested technology in association
with CSIR (Council for Scientific & Industrial Research).

INDUSTRIAL INVESTMENT BANK OF INDIA (IIBI), 1997 as a Government
Company; an AIFI (All India Financial Institution) providing financial
assistance to SICK & Non-Sick industries (medium & large scale)
needing modernisation, diversification & technological updation by way
of term loans, bridging urgent liquidity gaps, etc… The ancillary
services include Consultancy (Viability Report), Merchant banking
(Scheme of M&A) & equipment leasing. The repayment period of 10years
is based on surplus generation capacity. The schemes include Short
term loans, Short term Working capital loans & Asset credit scheme.

VENTURE CAPITAL: provides initial support to new companies (with sound
project ideas) using high technology & have potential for high profits
but suffer from capital inadequacy.

SEBI (VENTURE CAPITAL FUNDS (VCF) REGULATIONS), 1996:
1. Venture fund incorporated in India can exit the company within
1year of going public or stay invested, foregoing the Tax Pass Through
Benefit (TPTB).
2. Foreign funds not incorporated in India have no TPTB though
registered with SEBI.
3. Acquisition of shares will be exempt form Takeover Code.
4. Investor in Venture Fund for 5lakhs & Minimum corpus of the fund to
be 5crores & investment in a company up to 25%.
5. Mutual fund can invest till 5% (Corpus) in open-ended schemes & 10%
(Corpus) in close-ended schemes.
6. VCF can invest in IPO as QIB (Qualified Institutional Buyer).

EXPORT IMPORT (EXIM) BANK 1982 established as a statutory corporation
from IDBI providing financial assistance to exporters/importers & to
promote country's international trade. The operations include deferred
payment @ post-shipment stage, multi-currency financing for project
exporters & term loans to SEZ.

FUNCTIONS:
I. Loans to Indian companies:
1. Direct financial assistance through Risk syndication facility;
2. Facilities for deemed exports & overseas investment financing;
3. Pre-shipment credit if cycle time of export contract is >3months;
II. Loans to foreign Government & Financial Institution:
1. Overseas Buyers Credit: Foreign importers for Indian goods/services;
2. Line of Credit (LoC) to foreign government & re-lending facility to
bank overseas;
Foreign BuyerBANK OverseasEXIM (Intermediary)Suppliers.
III. Loans to commercial bank in India:
1. Export bills re-discounting; 100% re-finance of export credit;
2. Guaranteeing of obligation for execution of export contracts & also
in-principle approval for such contracts at bid stage if its worth
beyond 2crores.

Joint venture with Global Trace Finance for forfeiting & factoring;
Got award for "Export Development" from ADFIAP Awards, 2002;
Book for "Business practises of Successful Indian Exporters";
"EXIMius centre" at Bangalore;

UNIT TRUST OF INDIA (UTI) 1963 as statutory public sector investment
institution.
STEP1: Mobilise savings through sale of units under schemes;
STEP2: Invest in good companies;
STEP3: Distribute tax-free dividend to unit-holders.

TRIPLE ADVANTAGE to small investors as to SAFETY, STEADY RETURN &
LIQUIDITY, also benefit of leaving task of portfolio management to
experts.

SCHEMES include OPEN ENDED – tailored to suit the needs of different
categories of peoples & different purposes; CLOSE ENDED – Income &
Growth schemes. Thus, SUPER MARKET for instruments.

SUGGESTIONS of Deepak Parekh Committee: for sustaining investor
confidence & strengthening about US64 scheme by taking a) Measures to
provide financial support by enhancing promoter's stake, GOI
participation, etc…; b) Measures for qualitative changes in funding of
UTI through independent trustees in Board, reconstitute AMC,
NAV-driven schemes, etc...

LIFE INSURANCE CORPORATION (LIC) 1956: accumulate in the form of "life
fund" & is the single largest investor to subscribe/underwrite/provide
term loans;

Accretion to "Controlled Fund" invested as per Insurance Act, 1938:
<=20% in CG Marketable securities; <=25% (including above) as loan to
National Housing bank; <=50% (including above) in CG/SG securities;
<=75% (including above) in Social Oriented sectors; Balance (25%) as
per commercial judgement subject to Prudential Norms.

Investment for General Insurance Corporation (GIC) being <=20% in
CG/SG securities; <=15% to housing loans; <=55% to market sector &
Balance to Social Oriented Sectors.

NATIONAL BANK FOR AGRICULTURAL & RURAL DEVELOPMENT (NABARD) 1981 by merging agricultural credit & rural planning cell of RBI &
Agricultural Refinance Development Corporation (ARDC) as APEX
Development bank for promotion of agriculture, SSI, cottage & village
industries & economic activities in rural areas.

FUNCTIONS
*. CREDIT FUNCTION:
1. Refinance <=18months for seasonal agriculture, marketing of inputs,
& other production & marketing activities; conversion & rescheduling
of loans <=7years from out of "National Rural Credit
(Stabilisation/Long term operations) Fund".
2. Medium/Long term credit assistance to Banks/FI.
3. Incorporated the "Co-operative Development Fund" & Rural
Infrastructure Development Fund (RIDF) for quicker completion of
on-going projects.
*. DEVELOPMENT FUNCTION:
1. Assist & act as agents to Government & RBI for rural development efforts;
2. Assist SG to contribute to share capital of eligible institutions.
*. REGULATORY FUNCTION:
1. For Regional Rural Banks & Co-operative banks, NOT being Primary banks;
2. Undertake inspection & required to file returns & documents.

NATIONAL HOUSING BANK (NHB) 1987: Principal Agency of APEX institution
in housing finance & support services.

FUNCTIONS:
1. Promotion & Development: Equity support & conducts training;
2. Regulation & Supervision: S24 – power to inspect & call
information; S30 – regulate/prohibit issue of
Prospectus/Advertisement; S31 – collect information & issue
directions.
3. Financing: Equity & Re-financing for Land development & shelter
projects, Infrastructure projects & Slum re-development schemes;
front-end charge up to 2% of sanctiond amount.
4. Housing Finance Company (HFC) accepts deposits from public
(12-84months) & can give interest <=15% p.a. but such limit will not
apply if Net Owned Funds (NoF) >= 50lakhs.
5. HFC should have a minimum credit rating of "A" grade.
The major amendment being on default of loan, apply to Recovery
Officer, NOT under Transfer of Property Act.

LOAN SYNDICATION:
STEP1: When prospective borrower, approaches the Financial Institution
(Lead Manager/Mandated Institution) & request it to arrange for
credit;
STEP2: Such financial institution prepares Information Memorandum with
details of projects, credit requirements, terms, etc…
STEP3: Such information memorandum is for Prospective Lenders to
participate in credit offer;
STEP4: Such prospective lenders do Independent Evaluation of Borrower,
Project & Credit offer;
STEP5: Meeting of Financial Institution (FI) & prospective lenders for
finalisation & appoint Agent FI by entering into agreement with limits
for agency services;
STEP6: Such Agent FI communicates to borrower who then offers his
written consent & then executes documents based on "Single Window
Clearance".
STEP7:
Credit deposition by FIDisbursement of amountRepaymentProrata entitlement.

METHODS – Loan Syndication:
1. Direct Lending: Executing Independent loan agreement & Several liability;
2. Participation Method: Agent FI is the only lending bank.

Thats it...this chapter...come on...u r nearin Victory.....Enjoy passin...Vj

CS Financial Management Starter Pack

Yes,

CS Final FTFM gets a life over here. These are the few pages, which created very exciting interests to study & pass Financial Management even to a person like me, who hates finance subjects.

Salutes to the author Mr. Pattabhiram, whose every style right from scripting every letter in the page is awesome. He narrates a story of Financial Management here.

Find http://www.primeacademy.com/mafachapter1.pdf here.

Friends, dont get carried away by this, as it contains lots of informations, as far as, CS Final is concerned, just get the idea from this, as this makes the concept very clear, then you may proceed with your study material and guideline answers.

Just read it....atleast for the sake of readin it....you feel the passion then.

Enjoy Passin....Vj

Voluntary Delisting

Thanks to Mr. CS Mukund Srinath of IGate for this wonderful presentation on Voluntary Delisting.

View Album

Get your own

Format - Invitation to tender Equity Shares http://thisisvj.googlepages.com/LettertoShareholder1-Final.pdf

Format - Application Form for Exit Option http://thisisvj.googlepages.com/LettertoShareholder2-21-01.pdf

Special Purpose Acquisition Companies (SPACs)

Special Purpose Acquisition Companies (SPACs): on the rise

Thank you Amit Yadav...

Special Purpose Acquisition Companies (SPACs) that are also known as "blank check companies" are gradually acquiring prominence in the Indian markets. It is worth briefly examining these entities and their advantages as well as the risks surrounding them.

SPACs are essentially shell entities with no business operations, and which raise funds from the public through an initial public offering (IPO). These funds are raised on the basis that they will be utilised by the SPAC to acquire one or more companies in the future so as to provide returns to their shareholders. The details of the future acquisitions or even the identity of the target entities are not known at the time of the IPO. The investors in the IPO largely rely on the management skills and reputation of the founders of the SPAC while making investments. SPACs are usually committed to a time-frame within which they are required to make acquisitions. In case the committed time elapses without any acquisitions, the investments will have to be returned to the shareholders with certain carrying costs..

SPACs have acquired prominence internationally, especially in the US and in Europe. last year, there were 66 initial public offerings for SPACs, raising a total of $12 billion. Many of these SPACs have also successfully implemented acquisitions. What is important to note, however, SPACs are yet not traded on the main stock exchanges around the world. For example, neither the NYSE nor NASDAQ permits listing of SPACs, resulting in most of the existing US listings taking place on the American Stock Exchange (AMEX). Even on the London Stock Exchanges, SPACs are usually listed on its AIM segment. The cautious approach adopted by the more prominent exchanges is owed to the innate risks and uncertainties involved in listing entities that do not have existing businesses (or even fairly concrete business plans) at the time of their public offering of securities.

The SPAC phenomenon is catching on in India as well. It has been reported by VC Circle that several SPACs have been formed in order to pursue acquisitions of Indian companies. These SPACs have been listed on both the AMEX as well as the LSE AIM. The reverse trend is also assuming importance, whereby Indian companies are contemplating SPACs that would be used to aid their acquisition of foreign companies. This trend can be gathered from HCL's plans to set up an SPAC for overseas acquisitions. HCL's example is important on two counts. First, it indicates the utility of SPACs for Indian companies as a means of financing overseas acquisitions. Second, it indicates that SPACs are not confined to financial investors, and that it can be used by strategic investors as well for acquisitions. With more avenues being made available for SPAC listings (in case the current NYSE and NASDAQ proposals to allow SPAC listings take effect), it is likely that SPACs would become more prominent in acquisitions both by Indian companies and of Indian companies.

That leaves the crucial question of whether SPACs can be listed in India. It seems to me that the current disclosure requirements of SEBI as well as the listing requirements of the stock exchanges would not permit a company such as an SPAC to be listed on the Indian stock exchanges. This is because the SPAC has no business whatsoever or even a track record, but only certain broad business plans to acquire target companies that are yet to be identified. This creates uncertainties and risks to investors. Unless the existing regulations are amended to create a separate category of listings for SPACs, or unless specific waivers are granted from the applicability of the disclosure guidelines for IPOs to such companies, Indian listings would be unlikely. At the same time, it would be prudent for the regulatory authority (being SEBI) and the Indian stock exchanges to tread cautiously on this front, and to permit such listings only after assessing the experience (and success) of SPACs world-over and those specifically involving Indian promoters or Indian target companies. SPAC investors need proper protection as they are signing "blank checks" after all.

SEBI Amendments dated 19th March 2008

Dear All,

20^th March 2008

Operationalisation of Short Selling and Securities Lending and Borrowing

As you aware SEBI vide circular dated December 20, 2007 had specified the broad framework for short selling by institutional investors and a full-fledged securities lending and borrowing scheme for all market participants. It has been decided by the SEBI vide its Circular No. MRD/DoP/SE/Cir- 05 /2008 dated 19th March 2008 to operationalise the above with effect from Monday, April 21, 2008.

The Stock Exchanges and the Depositories are advised to:

Ø Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.

Ø Bring the provisions of this circular to the notice of the member brokers/clearing members, depository participants and also disseminate the same on their website.

Ø Communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

Margining of institutional trades in the cash market

As you aware SEBI vide circular dated February 23, 2005 had specified the risk management framework for the cash market. In order to provide a level playing field to all the investors in the cash market as in the case of derivatives market, the aforesaid circular is partially modified to provide that all institutional trades in the cash market would be subject to payment of margins as applicable to transactions of other investors. This would be implemented with effect from Monday, April 21, 2008.

To begin with, The SEBI vide its Circular No. MRD/DoP/SE/Cir- 06 /2008 dated 19^th March 2008 stated that from April 21, 2008, all institutional trades in the cash market would be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade.

Subsequently, with effect from June 16, 2008, the collection of margins would move to an upfront basis.

The Stock Exchanges shall issue the necessary guidelines in this regard and shall put in place the necessary systems to ensure the operationalization of the above.

You can access entire text of the circular at http://groups.google.com/group/cschennai/files

Thanks & Regards

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