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
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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
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