11th April 2009
The Federal Deposit Insurance Corporation said in a statement that New Frontier Bank, one of Colorado state's biggest banks, was closed down by state regulators.
It is Based in Greeley, Colorado. On March 24, it had total assets of two billion dollars and and total deposits of about 1.5 billion.
It was the 23rd bank to close business since January. In this year so far, this is the biggest bank failure. Before this, the biggest bank to fail this year had been California's Merced Bank, which had 1.7 billion in assets.
The FDIC said it "created the Deposit Insurance National Bank of Greeley (DINB), which will remain open for approximately 30 days to allow depositors time to open accounts at other insured institutions."
New Frontier's failure will cost the FDIC around 670 million dollars.
There were no bank failures at all in 2005 and 2006. The US banking system saw three banks going under in 2007, followed by 25 in 2008. So far in 2009, 23 failed.
http://uk.biz.yahoo.com/11042009/323/colorado-bank-biggest-bank-failure-2009.html
Friday, April 10, 2009
Saturday, December 8, 2007
SEBI News July - December 2007
PR No.312/2007
SEBI amends DIP Guidelines
Rating requirements for Corporate Bonds simplified
Structural Restrictions on Corporate Bond issuances removed
In order to facilitate development of a vibrant primary market for corporate bonds in India, Securities and Exchange Board of India (SEBI) has amended the provisions pertaining to issuances of Corporate Bonds under the SEBI (Disclosure and Investor Protection) (DIP) Guidelines, 2000 vide circular dated December 03, 2007. The highlights of the amendments are:
1. For public/ rights issues of debt instruments, issuers will now need to obtain rating from only one credit rating agency instead of from two as required at present. This is with a view to reduce the cost of issuances.
2. In order to facilitate issuance of below investment grade bonds to suit the risk/ return appetite of investors, the stipulation that debt instruments issued through public/ rights issues shall be of at least investment grade has been removed.
3. Further, in order to afford issuers with desired flexibility in structuring of debt instruments, it has been decided that structural restrictions such as those on maturity, put/call option, on conversion, etc currently in place have been done away with.
The full text of the circular and the entire text of SEBI (DIP) Guidelines, including the amendments issued vide the aforementioned circular, are available on the website at www.sebi.gov.in.
Mumbai
December 03, 2007
-------------------
Amendment to DIP Rules 2000
November 2007
FAST ATRACK ISSUES
IDR ISSUE RULES
Down load circular from
http://www.sebi.gov.in/circulars/2007/cfddip28.pdf
---------------
SEBI (Mutual Funds) (Second Amendment) Regulations,
14 Nov 2007
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 31st October, 2007
SECURITIES AND EXCHANGE BOARD OF INDIA
(MUTUAL FUNDS) (SECOND AMENDMENT) REGULATIONS, 2007
No. 11/LC/GN/2007/4646 In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely :-
1. These regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2007.
2. (1) The provisions of clauses (ii), (iii) and (v) of regulation 3 shall come into force on such date as may be specified by the Board by notification in the Official Gazette.
(2) All other provisions of these regulations shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, -
(i) in regulation 2, after clause (mm), the following clause shall be inserted, namely:-
(mn) index fund scheme means a mutual fund scheme that invests in securities in the same proportion as an index of securities;
(ii) in regulation 44, for sub-regulation (4), the following sub-regulation shall be substituted, namely:-
(4) A mutual fund may lend and borrow securities in accordance with the framework relating to short selling and securities lending and borrowing specified by the Board.
(iii) for regulation 45, the following regulation shall be substituted, namely:-
Carry forward transactions, derivatives transactions and short selling transactions.
45. (1) The funds of a scheme shall not in any manner be used in carry forward transactions:
Provided that a mutual fund may enter into derivatives transactions on a recognized stock exchange, subject to the framework specified by the Board.
(2) A mutual fund may enter into short selling transactions on a recognized stock exchange, subject to the framework relating to short selling and securities lending and borrowing specified by the Board.
(iv) in regulation 52, -
a. after sub regulation (2), the following proviso shall be inserted, namely:-
Provided that in case of an index fund scheme, the investment and advisory fees shall not exceed three fourths of one percent (0.75%) of the weekly average net assets.
b. in sub regulation (6), after the second proviso, the following new proviso shall be inserted, namely:-
Provided further that in case of an index fund scheme, the total expenses of the scheme including the investment and advisory fees shall not exceed one and one half percent (1.5%) of the weekly average net assets.
(v) in the Seventh Schedule, for clause 6 and the proviso thereto, the following clause and provisos shall be substituted, namely:-
6. Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver the securities:
Provided that a mutual fund may engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by the Board:
Provided further that a mutual fund may enter into derivatives transactions in a recognized stock exchange, subject to the framework specified by the Board.
M. DAMODARAN
CHAIRMAN
SECURITIES AND EXCHANGE BOARD OF INDIA
[ADVT III/IV/69-ZB/2007/Exty.]
Footnotes:
(1) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the Principal Regulations were published in the Gazette of India on December 9, 1996 vide S.O. No. 856(E).
(2) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 were subsequently amended:
(a) on April 15, 1997 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1997 vide S.O. No.327(E).
(b) on January 12, 1998 by the Securities and Exchange Board of India? (Mutual Funds) (Amendment) Regulations, 1998 vide S.O. No.32(E).
(c) on December 08, 1999 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1999 vide S.O. No.1223(E).
(d) on March 14, 2000 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2000 vide S.O. No.235 (E).
(e) on March 28, 2000 by the Securities and Exchange Board of India (Appeal to the Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O. No.278(E).
(f) on May 22, 2000 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2000 vide S.O. No.484 (E).
(g) on January 23, 2001 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2001 vide S.O. No.69 (E).
(h) on May 29, 2001 by the Securities and Exchange Board of India (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide S.O. No.476(E).
(i) on July 23, 2001 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2001 vide S.O. No.698(E).
(j) on February 20, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2002 vide S.O. No.219 (E).
(k) on June 11, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2002 vide S.O. No.625 (E).
(l) on July 30, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2002 vide S.O. No.809(E).
(m) on September 9, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2002 vide S.O. No.956(E).
(n) on September 27, 2002 by the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No.1045(E).
(o) on May 29, 2003 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2003 vide S.O.No. 632(E).
(p) on January 12, 2004 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2004 vide F.No SEBI\LAD\DOP\4\2004.
(q) on March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398(E).
(r) on January 12, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2006 vide S.O.No. 38(E).
(s) on May 22, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2006 vide S.O.No. 783(E).
(t) on August 3, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2006 vide S.O.No. 1254(E).
(u) on December 27, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2006 vide F. No. SEBI/LAD/DOP/82534/2006.
(v) on December 27, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Fifth Amendment) Regulations, 2006 vide F. No. SEBI/LAD/DOP/83065/2006.
(w) On May 28, 2007 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2007 vide F.No. 11/LC/GN/2007/2518.
----------------
SEBI amends DIP Guidelines
Rating requirements for Corporate Bonds simplified
Structural Restrictions on Corporate Bond issuances removed
In order to facilitate development of a vibrant primary market for corporate bonds in India, Securities and Exchange Board of India (SEBI) has amended the provisions pertaining to issuances of Corporate Bonds under the SEBI (Disclosure and Investor Protection) (DIP) Guidelines, 2000 vide circular dated December 03, 2007. The highlights of the amendments are:
1. For public/ rights issues of debt instruments, issuers will now need to obtain rating from only one credit rating agency instead of from two as required at present. This is with a view to reduce the cost of issuances.
2. In order to facilitate issuance of below investment grade bonds to suit the risk/ return appetite of investors, the stipulation that debt instruments issued through public/ rights issues shall be of at least investment grade has been removed.
3. Further, in order to afford issuers with desired flexibility in structuring of debt instruments, it has been decided that structural restrictions such as those on maturity, put/call option, on conversion, etc currently in place have been done away with.
The full text of the circular and the entire text of SEBI (DIP) Guidelines, including the amendments issued vide the aforementioned circular, are available on the website at www.sebi.gov.in.
Mumbai
December 03, 2007
-------------------
Amendment to DIP Rules 2000
November 2007
FAST ATRACK ISSUES
IDR ISSUE RULES
Down load circular from
http://www.sebi.gov.in/circulars/2007/cfddip28.pdf
---------------
SEBI (Mutual Funds) (Second Amendment) Regulations,
14 Nov 2007
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 31st October, 2007
SECURITIES AND EXCHANGE BOARD OF INDIA
(MUTUAL FUNDS) (SECOND AMENDMENT) REGULATIONS, 2007
No. 11/LC/GN/2007/4646 In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely :-
1. These regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2007.
2. (1) The provisions of clauses (ii), (iii) and (v) of regulation 3 shall come into force on such date as may be specified by the Board by notification in the Official Gazette.
(2) All other provisions of these regulations shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, -
(i) in regulation 2, after clause (mm), the following clause shall be inserted, namely:-
(mn) index fund scheme means a mutual fund scheme that invests in securities in the same proportion as an index of securities;
(ii) in regulation 44, for sub-regulation (4), the following sub-regulation shall be substituted, namely:-
(4) A mutual fund may lend and borrow securities in accordance with the framework relating to short selling and securities lending and borrowing specified by the Board.
(iii) for regulation 45, the following regulation shall be substituted, namely:-
Carry forward transactions, derivatives transactions and short selling transactions.
45. (1) The funds of a scheme shall not in any manner be used in carry forward transactions:
Provided that a mutual fund may enter into derivatives transactions on a recognized stock exchange, subject to the framework specified by the Board.
(2) A mutual fund may enter into short selling transactions on a recognized stock exchange, subject to the framework relating to short selling and securities lending and borrowing specified by the Board.
(iv) in regulation 52, -
a. after sub regulation (2), the following proviso shall be inserted, namely:-
Provided that in case of an index fund scheme, the investment and advisory fees shall not exceed three fourths of one percent (0.75%) of the weekly average net assets.
b. in sub regulation (6), after the second proviso, the following new proviso shall be inserted, namely:-
Provided further that in case of an index fund scheme, the total expenses of the scheme including the investment and advisory fees shall not exceed one and one half percent (1.5%) of the weekly average net assets.
(v) in the Seventh Schedule, for clause 6 and the proviso thereto, the following clause and provisos shall be substituted, namely:-
6. Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver the securities:
Provided that a mutual fund may engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by the Board:
Provided further that a mutual fund may enter into derivatives transactions in a recognized stock exchange, subject to the framework specified by the Board.
M. DAMODARAN
CHAIRMAN
SECURITIES AND EXCHANGE BOARD OF INDIA
[ADVT III/IV/69-ZB/2007/Exty.]
Footnotes:
(1) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the Principal Regulations were published in the Gazette of India on December 9, 1996 vide S.O. No. 856(E).
(2) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 were subsequently amended:
(a) on April 15, 1997 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1997 vide S.O. No.327(E).
(b) on January 12, 1998 by the Securities and Exchange Board of India? (Mutual Funds) (Amendment) Regulations, 1998 vide S.O. No.32(E).
(c) on December 08, 1999 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1999 vide S.O. No.1223(E).
(d) on March 14, 2000 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2000 vide S.O. No.235 (E).
(e) on March 28, 2000 by the Securities and Exchange Board of India (Appeal to the Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O. No.278(E).
(f) on May 22, 2000 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2000 vide S.O. No.484 (E).
(g) on January 23, 2001 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2001 vide S.O. No.69 (E).
(h) on May 29, 2001 by the Securities and Exchange Board of India (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide S.O. No.476(E).
(i) on July 23, 2001 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2001 vide S.O. No.698(E).
(j) on February 20, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2002 vide S.O. No.219 (E).
(k) on June 11, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2002 vide S.O. No.625 (E).
(l) on July 30, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2002 vide S.O. No.809(E).
(m) on September 9, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2002 vide S.O. No.956(E).
(n) on September 27, 2002 by the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No.1045(E).
(o) on May 29, 2003 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2003 vide S.O.No. 632(E).
(p) on January 12, 2004 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2004 vide F.No SEBI\LAD\DOP\4\2004.
(q) on March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398(E).
(r) on January 12, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2006 vide S.O.No. 38(E).
(s) on May 22, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2006 vide S.O.No. 783(E).
(t) on August 3, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2006 vide S.O.No. 1254(E).
(u) on December 27, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2006 vide F. No. SEBI/LAD/DOP/82534/2006.
(v) on December 27, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Fifth Amendment) Regulations, 2006 vide F. No. SEBI/LAD/DOP/83065/2006.
(w) On May 28, 2007 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2007 vide F.No. 11/LC/GN/2007/2518.
----------------
Thursday, December 6, 2007
SEBI News 2007
PR No.139/2007
Parking of Funds by Mutual Funds in Short Term Deposits of
Scheduled Commercial Banks Pending deployment
SEBI vide circular No. SEBI/IMD/CIR No. 1/91171/07 dated April 16, 2007 has stipulated guidelines for parking of funds by mutual funds in short term deposits of scheduled commercial banks pending deployment. Important features of the circular issued are detailed below:
1. Short term for such parking shall be treated as a period not exceeding ?91 days.
2. No mutual fund scheme shall park more than 15% of the net assets in Short term deposit(s) of all the scheduled commercial banks put together. However, it may be raised to 20% with prior approval of the trustees. Also, parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the mutual fund in short term deposits.
3. No mutual fund scheme shall park more than 10% of the net assets in short term deposit(s), with any one scheduled commercial bank including its subsidiaries.
4. The asset management company shall not be permitted to charge investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks in case of liquid and debt oriented schemes.
The full text of the above circular is available on the website: www.sebi.gov.in
Mumbai
April 16, 2007
-------------------
PR No.138/2007
SEBI permits BSE and NSE to launch Trading Platform for Corporate Bonds
Securities and Exchange Board of India (SEBI) had issued circulars on ????December 12, 2006 and March 01, 2007 authorizing Bombay Stock Exchange ?Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) to set up and maintain corporate bond reporting platforms to capture all information related to trading in corporate bonds as accurately and as close to execution as possible.
Continuing with the process of implementing the Union Budget proposals for developing an exchange traded market for Corporate Bonds, SEBI has issued a circular on April 13, 2007 permitting BSE and NSE to have in place corporate bond trading platforms to enable efficient price discovery and reliable clearing and settlement in a gradual manner.
To begin with, the trade matching platform shall be order driven with essential features of OTC market. BSE and NSE would make use of their existing infrastructure, with necessary modifications to set up the said platform with effect from July 01, 2007. The trade matching platform would be available to members of the respective stock exchanges.
With the introduction of the trading platform, orders executed through trading platforms of either BSE or NSE may not be reported again on the reporting platforms. At the option of the participants, they may also continue to trade Over the Counter, but would continue to be reported on the reporting platforms. In the initial phase, the trades would be settled bilaterally between trading parties. They may, at their option, use services of stock exchanges for clearing and settlement.
The circular also addresses the reduction of shut period which requires the stock exchanges to ensure that the same is reduced and aligned to that applicable for Government Securities within a reasonable period of time. The minimum trading value for Corporate Bonds for all entities has been reduced to Rs.1 lakh from the existing Rs.10 lakh. The stock exchanges may also have a limited segment for transactions in smaller market lots. The day count convention of Actual/Actual applicable for Government securities shall be mandatory for all new bond issues.
Subsequent to the stabilization of the trade matching system, BSE and NSE are permitted to move to an anonymous order matching system for trading of bonds within an appropriate period of time. BSE and NSE would then be required to provide clearing and settlement facility with multilateral netting and to devise an appropriate system of margining for trades done on the platform.
In addition to the above, certain amendments have also been made to the listing agreement for debentures. This includes the introduction of ECS, Direct Credit, RTGS or NEFT for payment of interest and redemption amounts and that all material modifications made to the structure of the debenture would henceforth be done only with the prior approval of the stock exchanges. The exchanges would disseminate such information on their websites.
The full text of the above circular is available on the website: www.sebi.gov.in
Mumbai
April 13, 2007
-----------
PR No123/2007
Common platform for electronic filing and dissemination of information about listed companies
In order to enhance transparency and efficiency of the securities market, SEBI had advised the two major stock exchanges, Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE), to explore the possibility of setting up a common electronic platform which should aim at ???(i) providing a single window filing to listed companies irrespective of multiple listing, (ii) eliminating paper filing with the Stock Exchanges ?(iii)covering all listed companies (including companies listed in Stock Exchanges other than BSE and NSE) and (iv) being a one stop shop for sourcing corporate information of listed companies by investors.
Accordingly on January 01, 2007, BSE and NSE jointly launched the common platform at www.corpfiling.co.in which is jointly owned, managed and maintained by the two exchanges. In the first phase since its launch, the platform has been disseminating filings made by companies listed on these exchanges. In the second phase which will be effective from April 02, 2007, the platform will enable electronic filing by companies listed in BSE and NSE.
Full details about the filing platform and the phased manner of implementing the same would be announced by BSE and NSE in a joint press release to be issued by them.
Mumbai
April 02, 2007
---------
PR No.115/2007
SEBI constitutes Derivatives Market Review Committee
Securities and Exchange Board of India (SEBI) has constituted a ?Derivatives Market Review Committee? to look into the developments in derivatives market in India. This Committee will also suggest future possibilities and course of action.
The members of the Committee are:
Professor M.Rammohan Rao, Dean, Indian School of Business (ISB) Hyderabad
Dr. Nachiket Mor, Dy. Managing Director, ICICI Bank, Mumbai
Ms. Chitra Ramakrishna, Dy. Managing Director, National Stock Exchange, Mumbai
Ms. Deena Mehta, ex-President, Bombay Stock Exchange, Mumbai
Dr. Sanjeevan Kapshe, Officer on Special Duty, SEBI ? Member-Secretary and Convener
Mumbai
March 30, 2007
---------
PR No.114/2007
SEBI to introduce consent orders
Securities and Exchange Board of India (SEBI) has decided to introduce consent orders for all matters which are pending regulatory action or pending before Securities Appellate Tribunal / Courts. The ‘Frequently Asked Questions’ on the subject will be put up on the SEBI website tomorrow.
Mumbai
March 28, 2007
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PR No.113/2007
SEBI to revise regulations and create master circulars
Securities and Exchange Board of India (SEBI) issues various circulars to market participants giving its views and mandates to various participants. It is proposed to compress all the circulars issued by SEBI into Master Circulars - this would be done subject by subject. For example, there would be only one Master Circular on Mutual Funds. The proposed Master Circulars would enable SEBI’s entire policy structure read with the Rules and Regulations of SEBI to be found in one place. This would help in minimising unintended or technical violation of circulars.
As our regulations and circulars have been accretive in nature, with the advent of time our circulars have become bulky and diffused. Some may even be unnecessary as the market structure has changed very rapidly over the past few years. SEBI is therefore looking at revising not merely the form, but also the content of the circulars.
In addition, SEBI would also like to review all its Regulations so that they are alive to the current market structure and address regulatory concerns adequately. This process of checking for relevance and updation in the substantive regulation would run parallel to the creation of Master Circulars in the same area so that the two efforts can be coordinated.
SEBI would like to move towards use of plain English in its regulations so that the regulations are comprehensible and easy to follow.
Given the ambitious nature of the project, it is estimated to take over a year and three months to complete. In this project, besides the relevant departments of SEBI, the National Law School of India University, Bangalore has agreed to be the partner school. National University of Juridical Sciences, Calcutta will also participate in the project subsequently. A senior securities lawyer will give his inputs on an honorary basis. A former Judge of the Supreme Court of India will give his guidance in important areas of securities law jurisprudence.
After the work and brainstorming amongst SEBI, law schools and experts the draft of one area of regulations, would be put on SEBI’s website for public comments and work will simultaneously begin on the next area. The areas and time schedules which are proposed will be separately hosted on the SEBI website in due course, so public can offer their comments on the drafts, considering which the final regulations will be drafted. The importance of public comment cannot adequately be emphasized as the success of the task will rest to a large extent on the inputs of investors, market intermediaries and professional experts to the first draft put up on the SEBI website. The first set of draft regulations and Master Circulars can be expected to be hosted on the SEBI website in the month of May 2007.
Mumbai
March 28, 2007
--------------
PR No.108/2007
SEBI constitutes Committee on Infrastructure Funds
Finance Minister Shri P. Chidambaram in his budget speech for the financial year 2007-08 has inter-alia announced that to promote the flow of investment to the infrastructure sector, Mutual Funds would be permitted to launch and operate dedicated infrastructure funds.
In order to suggest a detailed action plan to operationalise the budget announcement, it has been decided by SEBI to set up a Committee.
The Committee will be headed by Shri U.K. Sinha, Chairman & Managing Director, UTI AMC. Shri Milind Barve, Managing Director, HDFC AMC and Shri S.Naganath, President, DSP Merrill Lynch Fund Managers Ltd. will be the Members of the Committee and Shri P.K. Nagpal, Chief General Manager (CGM), SEBI will be the Member Secretary.
The Committee will be required to submit its report within a period of three months.
Mumbai
March 23, 2007
-----------------------------
PR No.91/2007
SEBI seeks public comments on Proposed changes to Clause 49
The extant Clause 49 of the Listing Agreement, after taking into account the recommendations of the Narayana Murthy Committee came into effect on January 01, 2006.? Since the coming into effect of the revised Clause 49, SEBI has received comments from various quarters ? the public, the corporate and industry associations suggesting amendments to certain provisions of Clause 49.? The various suggestions received along with SEBI?s views were placed before the Primary Market Advisory Committee (PMAC) in their meeting held on December 04, 2006.? After taking into account the views of the PMAC, the revised changes proposed to Clause 49 have been placed for public comments on SEBI?s website www.sebi.gov.in under the heading ?Proposed changes to Clause 49? in the sub-section ?Reports for Public Comments? in section ?Reports/ Documents? for a period of 21 days i.e. from March 12, 2007 to April 02, 2007.
Comments / suggestions on the same may be sent to Mr. Parag BasuDeputy General Manager, Division of Issues and Listing, SEBI or to Mr. Pradeep Ramakrishnan, Manager, Division of Issues and Listing or emailed to paragb@sebi.gov.in / pradeepr@sebi.gov.in or faxed to 91-22-26449016 on or before April 02, 2007.
Mumbai
March 09, 2007
------------------
March 2, 2007
SEBI allows NSE to set up reporting platform for Corporate Bonds trading
Securities and Exchange Board of India (SEBI) vide circular dated March 1, 2007, has authorized the National Stock Exchange of India Limited (NSE) to set up and maintain a corporate bond reporting platform with immediate effect. Earlier SEBI had authorized the Bombay Stock Exchange Limited (BSE) to set up such a platform.
Pursuant to launch of the corporate bond reporting platform at NSE, reporting of trades in Corporate Bonds may either be made to the platform of BSE or NSE. However, reporting is not to be done to both platforms for the same transaction. BSE and NSE would ensure that all the relevant details are disseminated by both the stock exchanges on their websites without segregation of data between the exchanges on the basis of its reporting origin.?
The Fixed Income Money Market and Derivatives Association of India (FIMMDA) which at present is bringing out a daily valuation report of all Central Government Securities, would also disseminate information made available on Corporate bond trading by the two exchanges with appropriate value addition.
The full text of the above circular is available on the website: www.sebi.gov.in
Mumbai
March 2, 2007
Parking of Funds by Mutual Funds in Short Term Deposits of
Scheduled Commercial Banks Pending deployment
SEBI vide circular No. SEBI/IMD/CIR No. 1/91171/07 dated April 16, 2007 has stipulated guidelines for parking of funds by mutual funds in short term deposits of scheduled commercial banks pending deployment. Important features of the circular issued are detailed below:
1. Short term for such parking shall be treated as a period not exceeding ?91 days.
2. No mutual fund scheme shall park more than 15% of the net assets in Short term deposit(s) of all the scheduled commercial banks put together. However, it may be raised to 20% with prior approval of the trustees. Also, parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the mutual fund in short term deposits.
3. No mutual fund scheme shall park more than 10% of the net assets in short term deposit(s), with any one scheduled commercial bank including its subsidiaries.
4. The asset management company shall not be permitted to charge investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks in case of liquid and debt oriented schemes.
The full text of the above circular is available on the website: www.sebi.gov.in
Mumbai
April 16, 2007
-------------------
PR No.138/2007
SEBI permits BSE and NSE to launch Trading Platform for Corporate Bonds
Securities and Exchange Board of India (SEBI) had issued circulars on ????December 12, 2006 and March 01, 2007 authorizing Bombay Stock Exchange ?Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) to set up and maintain corporate bond reporting platforms to capture all information related to trading in corporate bonds as accurately and as close to execution as possible.
Continuing with the process of implementing the Union Budget proposals for developing an exchange traded market for Corporate Bonds, SEBI has issued a circular on April 13, 2007 permitting BSE and NSE to have in place corporate bond trading platforms to enable efficient price discovery and reliable clearing and settlement in a gradual manner.
To begin with, the trade matching platform shall be order driven with essential features of OTC market. BSE and NSE would make use of their existing infrastructure, with necessary modifications to set up the said platform with effect from July 01, 2007. The trade matching platform would be available to members of the respective stock exchanges.
With the introduction of the trading platform, orders executed through trading platforms of either BSE or NSE may not be reported again on the reporting platforms. At the option of the participants, they may also continue to trade Over the Counter, but would continue to be reported on the reporting platforms. In the initial phase, the trades would be settled bilaterally between trading parties. They may, at their option, use services of stock exchanges for clearing and settlement.
The circular also addresses the reduction of shut period which requires the stock exchanges to ensure that the same is reduced and aligned to that applicable for Government Securities within a reasonable period of time. The minimum trading value for Corporate Bonds for all entities has been reduced to Rs.1 lakh from the existing Rs.10 lakh. The stock exchanges may also have a limited segment for transactions in smaller market lots. The day count convention of Actual/Actual applicable for Government securities shall be mandatory for all new bond issues.
Subsequent to the stabilization of the trade matching system, BSE and NSE are permitted to move to an anonymous order matching system for trading of bonds within an appropriate period of time. BSE and NSE would then be required to provide clearing and settlement facility with multilateral netting and to devise an appropriate system of margining for trades done on the platform.
In addition to the above, certain amendments have also been made to the listing agreement for debentures. This includes the introduction of ECS, Direct Credit, RTGS or NEFT for payment of interest and redemption amounts and that all material modifications made to the structure of the debenture would henceforth be done only with the prior approval of the stock exchanges. The exchanges would disseminate such information on their websites.
The full text of the above circular is available on the website: www.sebi.gov.in
Mumbai
April 13, 2007
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PR No123/2007
Common platform for electronic filing and dissemination of information about listed companies
In order to enhance transparency and efficiency of the securities market, SEBI had advised the two major stock exchanges, Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE), to explore the possibility of setting up a common electronic platform which should aim at ???(i) providing a single window filing to listed companies irrespective of multiple listing, (ii) eliminating paper filing with the Stock Exchanges ?(iii)covering all listed companies (including companies listed in Stock Exchanges other than BSE and NSE) and (iv) being a one stop shop for sourcing corporate information of listed companies by investors.
Accordingly on January 01, 2007, BSE and NSE jointly launched the common platform at www.corpfiling.co.in which is jointly owned, managed and maintained by the two exchanges. In the first phase since its launch, the platform has been disseminating filings made by companies listed on these exchanges. In the second phase which will be effective from April 02, 2007, the platform will enable electronic filing by companies listed in BSE and NSE.
Full details about the filing platform and the phased manner of implementing the same would be announced by BSE and NSE in a joint press release to be issued by them.
Mumbai
April 02, 2007
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PR No.115/2007
SEBI constitutes Derivatives Market Review Committee
Securities and Exchange Board of India (SEBI) has constituted a ?Derivatives Market Review Committee? to look into the developments in derivatives market in India. This Committee will also suggest future possibilities and course of action.
The members of the Committee are:
Professor M.Rammohan Rao, Dean, Indian School of Business (ISB) Hyderabad
Dr. Nachiket Mor, Dy. Managing Director, ICICI Bank, Mumbai
Ms. Chitra Ramakrishna, Dy. Managing Director, National Stock Exchange, Mumbai
Ms. Deena Mehta, ex-President, Bombay Stock Exchange, Mumbai
Dr. Sanjeevan Kapshe, Officer on Special Duty, SEBI ? Member-Secretary and Convener
Mumbai
March 30, 2007
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PR No.114/2007
SEBI to introduce consent orders
Securities and Exchange Board of India (SEBI) has decided to introduce consent orders for all matters which are pending regulatory action or pending before Securities Appellate Tribunal / Courts. The ‘Frequently Asked Questions’ on the subject will be put up on the SEBI website tomorrow.
Mumbai
March 28, 2007
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PR No.113/2007
SEBI to revise regulations and create master circulars
Securities and Exchange Board of India (SEBI) issues various circulars to market participants giving its views and mandates to various participants. It is proposed to compress all the circulars issued by SEBI into Master Circulars - this would be done subject by subject. For example, there would be only one Master Circular on Mutual Funds. The proposed Master Circulars would enable SEBI’s entire policy structure read with the Rules and Regulations of SEBI to be found in one place. This would help in minimising unintended or technical violation of circulars.
As our regulations and circulars have been accretive in nature, with the advent of time our circulars have become bulky and diffused. Some may even be unnecessary as the market structure has changed very rapidly over the past few years. SEBI is therefore looking at revising not merely the form, but also the content of the circulars.
In addition, SEBI would also like to review all its Regulations so that they are alive to the current market structure and address regulatory concerns adequately. This process of checking for relevance and updation in the substantive regulation would run parallel to the creation of Master Circulars in the same area so that the two efforts can be coordinated.
SEBI would like to move towards use of plain English in its regulations so that the regulations are comprehensible and easy to follow.
Given the ambitious nature of the project, it is estimated to take over a year and three months to complete. In this project, besides the relevant departments of SEBI, the National Law School of India University, Bangalore has agreed to be the partner school. National University of Juridical Sciences, Calcutta will also participate in the project subsequently. A senior securities lawyer will give his inputs on an honorary basis. A former Judge of the Supreme Court of India will give his guidance in important areas of securities law jurisprudence.
After the work and brainstorming amongst SEBI, law schools and experts the draft of one area of regulations, would be put on SEBI’s website for public comments and work will simultaneously begin on the next area. The areas and time schedules which are proposed will be separately hosted on the SEBI website in due course, so public can offer their comments on the drafts, considering which the final regulations will be drafted. The importance of public comment cannot adequately be emphasized as the success of the task will rest to a large extent on the inputs of investors, market intermediaries and professional experts to the first draft put up on the SEBI website. The first set of draft regulations and Master Circulars can be expected to be hosted on the SEBI website in the month of May 2007.
Mumbai
March 28, 2007
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PR No.108/2007
SEBI constitutes Committee on Infrastructure Funds
Finance Minister Shri P. Chidambaram in his budget speech for the financial year 2007-08 has inter-alia announced that to promote the flow of investment to the infrastructure sector, Mutual Funds would be permitted to launch and operate dedicated infrastructure funds.
In order to suggest a detailed action plan to operationalise the budget announcement, it has been decided by SEBI to set up a Committee.
The Committee will be headed by Shri U.K. Sinha, Chairman & Managing Director, UTI AMC. Shri Milind Barve, Managing Director, HDFC AMC and Shri S.Naganath, President, DSP Merrill Lynch Fund Managers Ltd. will be the Members of the Committee and Shri P.K. Nagpal, Chief General Manager (CGM), SEBI will be the Member Secretary.
The Committee will be required to submit its report within a period of three months.
Mumbai
March 23, 2007
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PR No.91/2007
SEBI seeks public comments on Proposed changes to Clause 49
The extant Clause 49 of the Listing Agreement, after taking into account the recommendations of the Narayana Murthy Committee came into effect on January 01, 2006.? Since the coming into effect of the revised Clause 49, SEBI has received comments from various quarters ? the public, the corporate and industry associations suggesting amendments to certain provisions of Clause 49.? The various suggestions received along with SEBI?s views were placed before the Primary Market Advisory Committee (PMAC) in their meeting held on December 04, 2006.? After taking into account the views of the PMAC, the revised changes proposed to Clause 49 have been placed for public comments on SEBI?s website www.sebi.gov.in under the heading ?Proposed changes to Clause 49? in the sub-section ?Reports for Public Comments? in section ?Reports/ Documents? for a period of 21 days i.e. from March 12, 2007 to April 02, 2007.
Comments / suggestions on the same may be sent to Mr. Parag BasuDeputy General Manager, Division of Issues and Listing, SEBI or to Mr. Pradeep Ramakrishnan, Manager, Division of Issues and Listing or emailed to paragb@sebi.gov.in / pradeepr@sebi.gov.in or faxed to 91-22-26449016 on or before April 02, 2007.
Mumbai
March 09, 2007
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March 2, 2007
SEBI allows NSE to set up reporting platform for Corporate Bonds trading
Securities and Exchange Board of India (SEBI) vide circular dated March 1, 2007, has authorized the National Stock Exchange of India Limited (NSE) to set up and maintain a corporate bond reporting platform with immediate effect. Earlier SEBI had authorized the Bombay Stock Exchange Limited (BSE) to set up such a platform.
Pursuant to launch of the corporate bond reporting platform at NSE, reporting of trades in Corporate Bonds may either be made to the platform of BSE or NSE. However, reporting is not to be done to both platforms for the same transaction. BSE and NSE would ensure that all the relevant details are disseminated by both the stock exchanges on their websites without segregation of data between the exchanges on the basis of its reporting origin.?
The Fixed Income Money Market and Derivatives Association of India (FIMMDA) which at present is bringing out a daily valuation report of all Central Government Securities, would also disseminate information made available on Corporate bond trading by the two exchanges with appropriate value addition.
The full text of the above circular is available on the website: www.sebi.gov.in
Mumbai
March 2, 2007
RBI Financial Education Site
To commemorate Children's day, the Reserve Bank of India today launched a financial education site. Mainly aimed at teaching basics of banking, finance and central banking to children in different age groups, the site will soon also have information useful to other target groups, such as, women, rural and urban poor, defence personnel and senior citizens.
To explain complexities of banking, finance and central banking in a simple and interesting way, the Reserve Bank has used comic books format for children. It has created two special created characters for this purpose – 'Raju' who learns all about banking and 'Money Kumar' who explains subjects dealt with by the Reserve Bank of India, such as monetary policy, bank regulations and currency notes. Two comic books are already available on this site – 'Raju and the Money Tree' explains basic banking and 'Money Kumar and Monetary Policy!' explains the role and relevance of the Reserve Bank's monetary policy for the common person.
The site has films on security features of currency notes of different denominations and an educative film to persuade citizens to not to staple notes. Interestingly, the site also has games section. This section aims at educating children through entertainment. The games currently on display have been especially designed to familiarise school children with India's various currency notes.
The site will soon be available in Hindi as well as in 11 regional languages.
The site can be accessed at www.rbi.org.in/financial education or from the quick link provided on the home page of the main RBI website at www.rbi.org.in
To explain complexities of banking, finance and central banking in a simple and interesting way, the Reserve Bank has used comic books format for children. It has created two special created characters for this purpose – 'Raju' who learns all about banking and 'Money Kumar' who explains subjects dealt with by the Reserve Bank of India, such as monetary policy, bank regulations and currency notes. Two comic books are already available on this site – 'Raju and the Money Tree' explains basic banking and 'Money Kumar and Monetary Policy!' explains the role and relevance of the Reserve Bank's monetary policy for the common person.
The site has films on security features of currency notes of different denominations and an educative film to persuade citizens to not to staple notes. Interestingly, the site also has games section. This section aims at educating children through entertainment. The games currently on display have been especially designed to familiarise school children with India's various currency notes.
The site will soon be available in Hindi as well as in 11 regional languages.
The site can be accessed at www.rbi.org.in/financial education or from the quick link provided on the home page of the main RBI website at www.rbi.org.in
Government Securities Act 2006 in force from 1.12.2007
The Government of India has notified December 1, 2007 as the appointed date on which the Government Securities Act, 2006 will come into force. Government Securities Regulations, 2007 will also come into effect from the same date, i.e., December 1, 2007.
It may be recalled that with a view to consolidating and amending the law relating to Government securities and its management by the Reserve Bank of India, the Parliament had enacted the Government Securities Act, 2006 (the Act). The Act received the assent of President of India on August 30, 2006 and was published in the Gazette of India, Extraordinary, Part II – Section I on August 31, 2006 for general information.
The Act applies to Government securities created and issued, whether before or after the commencement of the Act, by the Central or a State Government. Accordingly, the Public Debt Act, 1944 will cease to apply to the Government securities. The Indian Securities Act, 1920 has been repealed.
The new Act and Regulations would facilitate widening and deepening of the Government securities market and its more effective regulation by the Reserve Bank in various ways, such as:
(i) Stripping or reconstitution of Government securities;
(ii) Legal recognition of beneficial ownership of the investors in Government securities through the Constituents' Subsidiary General Ledger (CSGL);
(iii) Statutory backing for the Reserve Bank's power to debar Subsidiary General Ledger (SGL) account holders from trading, either temporarily or permanently, for misuse of SGL account facility;
(iv) Facility of pledge or hypothecation or lien of Government securities for availing of loan;
(v) Extension of nomination facility to hold the securities or receive the amount thereof in the event of death of the holder;
(vi) Recognition of title to Government security of the deceased holder on the basis of documents other than succession certificate such as will executed by the deceased holder, registered deed of family settlement, gift deed, deed of partition, etc., as prescribed by the Reserve Bank of India.
(vii) Recognition of mother as the guardian of the minor for the purpose of holding Government Securities; and
(viii) Statutory powers to the Reserve Bank to call for information, cause inspection and issue directions in relation to Government securities.
Press Release: 2007-2008/744
http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=17582
It may be recalled that with a view to consolidating and amending the law relating to Government securities and its management by the Reserve Bank of India, the Parliament had enacted the Government Securities Act, 2006 (the Act). The Act received the assent of President of India on August 30, 2006 and was published in the Gazette of India, Extraordinary, Part II – Section I on August 31, 2006 for general information.
The Act applies to Government securities created and issued, whether before or after the commencement of the Act, by the Central or a State Government. Accordingly, the Public Debt Act, 1944 will cease to apply to the Government securities. The Indian Securities Act, 1920 has been repealed.
The new Act and Regulations would facilitate widening and deepening of the Government securities market and its more effective regulation by the Reserve Bank in various ways, such as:
(i) Stripping or reconstitution of Government securities;
(ii) Legal recognition of beneficial ownership of the investors in Government securities through the Constituents' Subsidiary General Ledger (CSGL);
(iii) Statutory backing for the Reserve Bank's power to debar Subsidiary General Ledger (SGL) account holders from trading, either temporarily or permanently, for misuse of SGL account facility;
(iv) Facility of pledge or hypothecation or lien of Government securities for availing of loan;
(v) Extension of nomination facility to hold the securities or receive the amount thereof in the event of death of the holder;
(vi) Recognition of title to Government security of the deceased holder on the basis of documents other than succession certificate such as will executed by the deceased holder, registered deed of family settlement, gift deed, deed of partition, etc., as prescribed by the Reserve Bank of India.
(vii) Recognition of mother as the guardian of the minor for the purpose of holding Government Securities; and
(viii) Statutory powers to the Reserve Bank to call for information, cause inspection and issue directions in relation to Government securities.
Press Release: 2007-2008/744
http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=17582
Tuesday, October 23, 2007
Indian MF growth by 2015
Et 21-12-2006
Managed assets in India will exceed more than $1 trillion by 2015 says the global asset management 2006 report from Boston Consulting Group. This means an annual growth rate of 21% for the next nine years. The categories include, domestic MFs, pension funds, and international funds investing in India.
Indian mutual funds currently currently hold $70 billion in assets and this figure will grow to around $420-520 billion by 2015.
Assets under management(AUM) as a percentage of GDP work out to only 8% currently in India as compared to 26% in Korea and 36% in Brazil. The figure for USA works out to 70%.
In 1982, US households had 67% of their assets into cash and bank deposits, but by 2002, the same fell to 44% as managed assets moved up from 22.8% to 42.5%.
With Chidambaram and the congress government making bank deposits unattractive relative to mf units, BCG report predicts that India is expected to follow the US route.
Managed assets in India will exceed more than $1 trillion by 2015 says the global asset management 2006 report from Boston Consulting Group. This means an annual growth rate of 21% for the next nine years. The categories include, domestic MFs, pension funds, and international funds investing in India.
Indian mutual funds currently currently hold $70 billion in assets and this figure will grow to around $420-520 billion by 2015.
Assets under management(AUM) as a percentage of GDP work out to only 8% currently in India as compared to 26% in Korea and 36% in Brazil. The figure for USA works out to 70%.
In 1982, US households had 67% of their assets into cash and bank deposits, but by 2002, the same fell to 44% as managed assets moved up from 22.8% to 42.5%.
With Chidambaram and the congress government making bank deposits unattractive relative to mf units, BCG report predicts that India is expected to follow the US route.
NTN Insurance
Et 22 Dec 2006 page 14
The share of insurance premium in GDP has risen to 3.13% in India in 2005 and the global average during that period is 7.52%. This means that India's share in world insurance premium is 0.73%.
In another news report it is mentioned that India's market share in world life insurance market will increase from 0.9% in 2004 to 14.7% in 2050. Similarly, its share in property and casualty insurance market will rise from 0.3% in 2004 to 13.3% in 2050. The share of US and Japan will come down during that period. That is why many insurance companies want to open companies in India. These estimates are credited to HSBC and Swiss Re Economic Research and consulting.
The share of insurance premium in GDP has risen to 3.13% in India in 2005 and the global average during that period is 7.52%. This means that India's share in world insurance premium is 0.73%.
In another news report it is mentioned that India's market share in world life insurance market will increase from 0.9% in 2004 to 14.7% in 2050. Similarly, its share in property and casualty insurance market will rise from 0.3% in 2004 to 13.3% in 2050. The share of US and Japan will come down during that period. That is why many insurance companies want to open companies in India. These estimates are credited to HSBC and Swiss Re Economic Research and consulting.
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