IPO Advertisement rules to be changed - SEBI

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The latest news from SEBI is that the rules for IPO advertising are all set to change as the Securities Exchange Board wants it to be inline with the Red herring Prospectus for that IPO, currently many IPO's give advertisement which is false and misguides investors who are new to share markets.

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So we will now see a tightened set of guidelines for an Companies IPO which maches with the draft of the Red herring prospectus for the IPO. Thus helping the investors in knowing the true picture of the company whose IPO is being floated in market.

Hence merchant bankers should become careful and more responsive now onwards.

RIL'S request for insiders trading settlement rejected

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The Securities and Exchange Board of India, or Sebi, will instead continue its investigation into trades carried out by entities allegedly linked to RIL, in November 2007, said a senior official. It’s not clear when the so-called consent application, akin to a negotiated settlement, was rejected, but it is believed to be fairly recent.

The regulator is probing the sale of stock futures of Reliance Petroleum (RPL), in the first week of November 2007, a few days before parent RIL, India’s most valuable company by market capitalisation, started trimming its stake in its refining arm. The sellers were not well-known market players, but they were allegedly located at the address of some RIL group companies, according to information provided to Sebi by unknown complainants.

If Sebi is able to conclude that the charges are true, it has the powers to impose a ban on the company from accessing the securities market and also to prohibit it from buying, selling and dealing in securities directly or indirectly or to force the company to disgorge the proceeds earned by indulging in the transactions.

SEBI makes alterations in P-note for FII'S

Securities Exchange board or SEBI directed all foreign institutional investors (FIIs) to report 'immediately' any short position they take in the Indian market, but allowed them to report all other participatory note (P-Note ) related transactions once a week.

Although a section of the market players feels this could, to some extent, deter FIIs from creating short positions, dealers and broking house officials dealing with FIIs said this might not have any major impact on FII trades in India.

BSE updates - Change in listing norms by SEBI

(Under BSE updates) - The Securities Exchange Board of India popularly known as SEBI, which controls and governs the working of Indian share markets by making amendements in the trading and listing rules in all the stock markets of india whether regional or Bombay Stock Exchange(BSE), National Stock Exchange (NIFTY) has come up with another amendement in the listing norms of the companies on indian share markets.

The change in listing norms would protect the minority share holders in any listed company on all the authorised stock markets across india. SEBI's step will prevent situations wherein companies come out with follow-on issues, rights issues or preferential allotments with higher voting rights per share, helping promoters get greater control in the company. According to Sebi amendements in norms, firms can come up with fresh issues that offer inferior voting rights or dividend, thereby helping raise equity without resorting to debt and giving up control.

However it's still not clear how the indian share markets would react to this change in coming trading days

SEBI removes entry load on MF schemes

SEBI's new guidelines stipulates that investors directly make payments to distributors instead of MF companies deducting it from the investment made in any scheme.

"There shall be no entry load for the schemes, existing or new, of a Mutual Fund. The upfront commission to distributors shall be paid by the investor to the distributor directly," SEBI said in a statement after its board meeting.

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Further, the upfront commission to distributors shall be paid by the investor to the distributor directly, the statement said.

The equity schemes of MFs are likely to be hurt the most as they attract the most entry load among schemes.

SEBI's fund to protect investors is operational now

SEBI's fund to protect investors is operational now.

After the delay of almost two years, market regulator SEBI has operationalised the fund to protect and spread awareness among investors, including giving help to investor associations in legal matters against listed entities.

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"There shall be a fund to be called the Investor Protection and Education Fund," regulations notified in official gazette stated here.

The fund has been set up with retrospective effect from July 23, 2007. SEBI had, by way of an executive order, created the fund on July 23, 2007 by crediting an initial corpus of Rs 10 crore out of the SEBI General Fund.

"The fund shall be utilised for the purpose of protection of investors and promotion of investor education and awareness," SEBI regulations said.

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According to the regulations, the fund can be used for aiding investor associations recognised by the SEBI to undertake legal proceedings in the interest of investors in securities, which are listed or proposed to be listed.

However, such an aid must not exceed 75 per cent of total expenditure on legal proceedings. Also such aid must not be considered for more than one legal proceeding in a particular matter.

SEBI to outline framework for REITs

Speaking to mediapersons after an interactive session with members of Bharat Chamber of Commerce in Kolkata on Thursday, Sebi chairman C.B. Bhave said: "The regulator is not averse to the idea of REITs. We may look at REITs at a later stage. But before that, the regulator would assess the workings of real estate mutual funds."

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Sometime in April 2008, Sebi had prepared norms for real estate mutual fund. But the launch of real estate MF was delayed due to market meltdown. Incidentally, REITs is a trust that uses the pooled capital of many investors to purchase and manage real estate assets and/or mortgage loans.

REITs are traded on major stock exchanges like normal stocks. There are three type of REITs popular in USA and in other advance economies namely equity REITs, mortgage REITs and hybrid REITs.

According to Mr Bhave, the main hindrance for introducing REIT like products in India is lack of transparency in the real estate market, variable stamp duties in different states and absence of uniform price of land and properties across India.

"We have already spoken to the union government to bring about a uniformity in stamp duties across states but it would obviously take sometime," he added.

Commenting on the transparency in different investment avenues, Mr Bhave said that the regulator is also working on new guidelines for portfolio management schemes (PMS).

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"We want to ensure that a PMS client gets to know his exact asset portfolio directly through depository participants independent of the portfolio managers. This is essential to infuse credibility in the PMS system," he said.

Earlier addressing Bharat Chamber of Commerce members, Mr Bhave said that the regulator is working on new delisting guidelines. Though it will take sometime, Sebi want to ensure that the retail investors are not left in the lurch.

SEBI makes listing of debt securities simpler

(12/5/09 SEBI news) - SEBI has simplified the issuance and listing of non-convertible debt securities by companies, as part of its attempts to develop the country’s corporate bond markets. Accordingly, a company whose shares are listed and is seeking listing of its debt securities, needs to provide only “minimal incremental disclosures” for the debt issuance. Such disclosures, according to Sebi, are sufficient, as a large amount of information is already in the public domain.

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Even for companies whose shares are not listed on the stock exchange, but are looking to list their debt securities, the disclosures for the latter need not be as comprehensive as those required for an equity listing, the regulator said.

This move is aimed to enable debt issues for a more feasible fund-raising route, as the listing compliance for shares is far more complex and expensive.

SEBI asks cos to declare dividend on a per share basis

(25/4/2009 - Indian Market Updates)  - SEBI on Friday reduced the timelines for the notice period by listed companies for all corporate actions like dividend and bonus, to name

a few. The notice period for the record date has been brought down to seven working days while that for board meetings has been reduced to two working days. It has also introduced a uniform procedure for companies in dealing with unclaimed shares. The new clause relates to those shares that could not be allotted to the rightful shareholder due to insufficient information.

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“It has been brought to the notice of the board that there is a large quantum of shares issued pursuant to the public issues, which remain unclaimed despite the best efforts of the registrar to issue or issuers, and that there is no uniform practice for dealing with such shares,” the release said.

The unclaimed shares will be credited to a demat suspense account opened by the issuer with one of the depository participants and any corporate benefit, such as dividend, bonus shares, will also be credited to such account. The allottee’s account will be credited as when he/she approaches the issuer, after undertaking the proper verification of identity. The voting rights of these shares will remain frozen till the rightful owner claims the shares. The details of the shares in the suspense account will be disclosed in the annual report.

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In order to bring about uniformity in the manner of declaring dividend among listed companies, Sebi has made it mandatory for companies to declare their dividend on a per share basis only. This means that irrespective of the face value of the share, the company will have to mention the dividend on an absolute basis.

posted under - SEBI, SEBI news, indian markets news, bse news, nse news and views, Security exchange board of india, SEBI
source - www.economictimes.com

SEBI tightens investment norms

(22/4/2009 - SEBI news ) - Market regulator SEBI imposed a ceiling of 30 per cent on resources a mutual fund can invest in the debt instruments of a single entity, a move that will help asset managers to diversify risks.

"The Board decided to amend the Seventh Schedule of SEBI (Mutual Fund) Regulations to provide that no mutual fund scheme shall invest more than 30 per cent of its net assets in money market instruments of an issuer," SEBI said in a statement after the Board meeting.

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The schemes may, however, continue to invest up to 15 per cent or 20 per cent of its net assets, in other investment grade debt instruments of an issuer as already provided in the regulations, it added.

Welcoming the decision, AMFI Chairman A P Kurien said " the move was suggested by us as it will help in reducing risk by cutting down overexposure in a single entity."

Valueresearch CEO Dhirendra Kumar said it is a modest initiative by the regulator and will lead to reducing systemic risks. It will ensure safety of investors' money although it will be bit tough for fund houses to comply with.

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However, it said, these limits will not cover investments in government securities, T-Bills and Collateralized Borrowing and Lending Obligations (CBLO).

posted under - SEBI, SEBI updates, indian markets updates, Securities exchange board, Indian stocks, BSE, BSE stocks, NSE stocks

Sebi asks 11 cos to resolve investor issues within 30 days

Market regulator Securities and Exchange Board of India on Monday asked 11 companies to resolve investor issues in a month or face penalty.

"If any of these companies fails to redress the grievances and submit the status report ... within 30 days from the date of this advertisement, SEBI shall be constrained to take actions against these companies and their directors," it said in a statement.

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The companies include Aashi Industries, Beta Naphthol, Indo American Optics, Jayant Vitamins, Motorol Enterprise, Ojas Technochem Products, Indo American Credit Corp, Hindustan Industrial Chemicals, Topline Shoes, Panjwani Packaging and Pankaj Agro Protinex.

SEBI said it has received a large number of complaints against these companies from investors and that these firms have not responded to the regulator's letter sent along with the list if complaints to them for resolution.

The regulator said, as per the SEBI Act, "such companies shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less."

posted in - SEBI updates, indian markets updates, SEBI latest news, BSE updates, NSE updates, SEBI

SEBI to simplify share inheritance rules

The Securities and Exchange Board of India (Sebi) will shortly modify some rules pertaining to inheritance of shares, based on the recommendations of the committee on ‘Transmission of Shares’, a person involved with the development told ET.

The move is likely to benefit the legal heirs awaiting inheritance of shares belonging to deceased relatives who neither made a will nor filed the mandatory nomination with depositories.

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The new guidelines will pave the way for quick transmission of shares, especially physical shares. Brokers said investors residing away from urban centres have been facing maximum difficulties with respect to share inheritances.

Transmission means devolution of title to shares otherwise than by transfer, for example, devolution by death, succession, inheritance, bankruptcy, marriage, etc. Transmission is different from ‘transfer’; in transmission a person acquires an interest in the property by operation of law such as right of inheritance or succession, whereas transfer is effected by an act of the parties.

According to some people tracking the committee’s work, Sebi took about 16 months to move ahead on the report despite unanimity among committee members on addressing the difficulties in transmission of physical and dematerialised securities.

“In case of physical shares, companies would have to fix a threshold limit of 200 shares or Rs 1 lakh, whichever is higher, for transmission of shares after submitting the standardised documents,” said a person on the committee. “The limit will be the basic minimum limit to be adhered to by all listed companies.

Companies would require a deed of indemnity, an affidavit and a NoC in case there are other legal heirs. Those companies that have a higher threshold can continue with that,” he said. When the title to shares is passed by an operation of law, the beneficiary need not perform additional formalities.

Companies have different documentary compliances for the legal heirs of the deceased security holder. In many cases, this is tedious and discourages investors from following up on small amounts.

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For instance, in case of a leading bank, a local manager submits a verification report on whether the legal heir possesses a succession certificate or the probated will. Market participants familiar with the development point to the need for updating the nomination of lakhs of investors.

posted under - SEBI, SEBI updates, indices, indian markets updates, indian share markets, indian stocks, bse updates, nse updates

SEBI increases upfront margin on warrants to 25%

The Securities and Exchange Board of India has decided to increase the upfront margin to be paid by allottees of warrants to 25 per cent from 10 per cent earlier.

The markets regulator also decided to relax the pricing norms regarding Satyam Computer, after its board examined a request for exemption of certain provisions of takeover regulation. This was done within the general context.

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SEBI has also shortened the timeframe for announcing the price band for an initial public offering to just two days against the present requirement of two weeks.

The timeline for announcement of bonus share issue has also been reduced to 15 days from 30 days earlier. Further, a company declaring the bonus issue would not require approval from the shareholders.

On dividend, SEBI said, listed companies will have to announce dividend on per share basis and not on percentage of face value of the share, as the face value may differ and mislead investors.

posted under - SEBI updates, BSE updates, BSE stocks, SEBI, SEBI news
source - www.economictimes.com

SEBI restricts early exit from close-ended mutual funds

The Securities and Exchange Board of India (SEBI) on Thursday said investors won't be allowed to exit from close-ended mutual fund schemes before maturity and asked fund houses to list them on stock exchanges.

The market regulator also said all such funds must invest in instruments in line with their maturity profile.

"For all close-ended schemes, no early exits will be provided by the funds," SEBI Chairman C B Bhave told a media briefing following a board meeting earlier in the day. "All schemes will have to be listed on the stock exchange," he added.

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The decision comes in wake of a liquidity crisis faced by the industry two months ago as investors pulled out from fixed income funds fearing their credit quality.

More than Rs 90,000 crore flowed out of debt funds during the period, creating a liquidity crunch for the Rs 4 trillion industry and forcing the central bank to offer money through a special money market operation to ease the pressure.

The regulator also extended the validity period of initial public offers to one year from three months now.

source - www.economictimes.com

SEBI may limit FMP's realty sector investments

In an effort to discourage mutual funds high exposure to the real estate sector, capital market regulator SEBI may impose limits on fund allocation to certain sectors in fixed maturity plans (FMP). SEBI, which is undertaking a structural review of FMPs, will also address the issue of asset-liability mismatch at some of the fund houses, according to sources close to the development.

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An assessment of MF portfolios by SEBI shows that some funds have 15-16 % exposure to the real estate sector and nearly 5% to non-banking finance companies (NBFCs), the sources said. MFs’ exposure in realty firms and NBFCs is through pass-through certificates.

Both big and small funds have invested in these two sectors. Some fund houses, especially a few smaller ones, were hit badly when large corporate investors exited in the wake of concerns relating to the quality of paper issued by some real estate companies.

The MFs had invested in such paper on hopes of a higher yield. An early exit by large institutional investors can put fund managers in trouble as meeting redemption requirements at short notice is tough. Their only option then will be to sell part of the investment portfolio.

SEBI now wants to close this early exit option, so that FMPs can operate mainly as closed-ended schemes. So far, the regulator has not imposed any limit on the exposure mutual funds can take in a particular sector, although there are limits in terms of investment in various instruments. Fund houses invest the FMP corpus in corporate and securitised paper, certificates of deposit and commercial paper. “We are undertaking a thorough review of the FMP structure,” a top SEBI official said.


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The sources said SEBI has noticed a mismatch in asset-liability management (ALM) at some fund houses . Although FMPs are short-term funds, fund managers have taken long-term positions in securities (maturity of one year or more), as they get a higher interest. As FMPs are short-term funds, they are ought to be invested in short-term instruments like Tbills.

The most common FMPs vary in maturities between 3 and 13 months. There is also the likelihood of SEBI introducing a lock-in period for FMPs. As a short-term measure, trustees of some fund houses recently instructed distributors to make payment for redemptions of all fixed-income schemes only after the redemption date, but within 10 days of it.

Over the past one year, FMPs have emerged as one of the most popular products as they have scored over fixed deposits in terms of higher yields and post-tax returns. As of end-September , the corpus of FMPs stood at Rs 1,32,000 crore, accounting for nearly 25% of the Rs 5,32,000-crore assets under management of mutual funds.


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from Economictimes

SEBI to educate investors - creates a INR 10 cr fund

The Securities and Exchange Board of India (SEBI) has created an Investor Protection and Education Fund with an initial corpus of Rs 10 crore and has invited public comments on the draft regulations that will govern the fund. The initial corpus has been created out of the SEBi General Fund.

The fund shall be used for the purpose of education programs through print and electronic media, organising seminars and symposia and conducting R&D. The fund will also be used for projects for investor education and protection including research activities and for financing such projects and co-ordinating with investors' associations registered with SEBI.

"Funds shall be utilised by the (SEBI)The Securities and Exchange Board of India (SEBI) has created an Investor Protection and Education Fund with an initial corpus of Rs 10 crore and has invited public comments on the draft regulations that will govern the fundi) board for the specified objective on the recommendation of a committee constituted in accordance with the proposed regulations," says the release.

Further, the term of office of the chairperson and members would be one year. The committee, which would also include representatives of investor associations, intermediaries and stock exchanges, would meet once in every quarter of a financial year.
so investors have a nice time and get educated.