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 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 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.