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.

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source - www.economictimes.com