Contact Your Financial Adviser Money Making MC
26
April 2017
SEBI (The Total Investment & Insurance
Solutions)
Market regulator SEBI on Wednesday allowed
options trading in commodity derivatives market, while allowing instant access
facility (IAF) through online mode and use of e-wallets for investment in mutual
funds (MFs). Redemption of investments made through e-wallet, however, can be
done only through a bank account of the unit holder. The Total Investment & Insurance
Solutions
The market regulator allowed investment of up
to Rs50,000 per year in MF schemes through e-wallets. "However,
redemptions of such investments can be made only to a bank account of the unit
holder. E-wallet issuers must not offer any incentive such as cash back
directly or indirectly for investing in mutual fund scheme through them.
E-wallet's balance loaded through cash or debit card or net banking, can only
be used for subscription to MF schemes and balance loaded through credit card,
cash back, or promotional scheme should not be allowed for subscription to MF
schemes. Further, this limit of Rs50,000 would be an umbrella limit for
investment by an investor through e-wallet and/or cash, per mutual fund per
financial year," SEBI said. The
Total Investment & Insurance Solutions
To channelize households' savings into
capital market and to promote digitalisation in mutual funds, SEBI Board also
decided to allow IAF in MF for up to Rs50,000 or 90% of the folio value to
resident individual investors in liquid schemes by applying lower of previous
day net asset value (NAV) or prospective NAV. The Total Investment & Insurance Solutions
"For providing such facility asset
management companies (AMCs) would not be allowed to borrow," SEBI said,
adding, "Liquidity is to be provided out of the available funds from the
scheme and AMCs to put in place a mechanism to meet the liquidity demands. This
facility can also be used for investment in mutual funds through tie-ups with
payments banks provided necessary approvals are taken from Reserve Bank of
India (RBI). Presently, any scheme providing this facility would reduce the
limit to Rs50,000, immediately and other than liquid schemes providing this
facility would completely stop this facility within one month from the date of
circular."
In a statement after its board meeting, SEBI
said, it had permitted launch of options in commodity derivatives market in
September 2016. "In this regard, to enable the Commodity Derivatives
Exchanges to organize trading of 'options', the Board, after undertaking due
public consultation process, has approved a proposal to amend the relevant
provisions of Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2012. Detailed guidelines for trading in 'option' on
commodity derivatives exchanges will be issued by SEBI," the statement
says.
Further to the merger of Forward Markets
Commission (FMC) with SEBI, the market regulator also decided to integrate
broking activities in equity and commodity derivatives market. SEBI says,
"The integration of the stock brokers in equity and commodity derivative
markets while having many synergies in terms of trading and settlement
mechanism, risk management, redressal of investor grievances, etc. would
benefit the investors, brokers, Stock Exchanges and SEBI as the same would help
to enhance the economic efficiency in terms of meeting the operational as well
as compliance obligations at a member level resulting in ease of doing
business. It will also provide for efficient use of capital for the investors,
widen market penetration leading to greater financial inclusion for
participants across all market segments and facilitate effective regulatory
oversight by stock exchanges and SEBI."
The SEBI Board, which met on Wednesday also
allowed to include non-banking finance companies (NBFCs) registered with RBI
and having a net worth of over Rs500 crore in the qualified institutional
buyers (QIBs) category. These entities can also participate in initial public
offerings (IPOs) with specially earmarked allocations, SEBI added. The Total Investment & Insurance
Solutions
Recently, many instances have been there,
where, it has been observed that the Banking sector is exposed to the risk of
significantly high non-performing assets (NPA) and banks have been advised by
the RBI to reduce the NPA and to initiate stringent actions to recover the dues
from the borrowers.
As a result, SEBI says it expects many banks
to go aggressively for recovering their dues and may opt for corporate debt
restructuring (CDR) or strategic debt restructuring (SDR) or bilateral restructuring.
In order to carry out actions for recovery from a borrower, which may be a
listed company, banks or financial institutions have sold equity shares of the
issuer during the preceding six months of the relevant date. Such banks or
financial institutions may also be one of the allottees of the specified
securities of the company pursuant to CDR approved scheme under preferential
issue route.
At presently, SEBI (Issue of Capital and
Disclosure Requirements -ICDR) Regulations prohibit the issuer from making
preferential issue to any person who has sold any equity shares of the issuer
during the six months preceding the relevant date. It also provides that the
entire pre-preferential allotment shareholding of the allottees, if any, shall
be locked-in from the relevant date up to a period of six months from the date
of trading approval. The Total
Investment & Insurance Solutions
SEBI says, its Board considered and approved
the proposal for extending such relaxation to scheduled banks and public financial
institutions, as is already being extended to mutual funds and insurance
companies.
To further strengthen the monitoring of issue
proceeds raised in IPOs, follow-on public offerings (FPOs) and rights issues,
SEBI has approved some key proposals, like...
·
Mandatory appointment
of Monitoring Agency where the issue size (excluding offer for sale component)
is more than Rs. 100 crore.
·
Frequency of
submission of Monitoring Agency Report has been enhanced from half-yearly to
quarterly.
·
Introduction of maximum
timeline of 45 days for submission of Monitoring Agency Report from the end of
the quarter in conjunction with the submission of the quarterly results.
·
Mandating the
disclosure of the Monitoring Agency Report on Company's website in addition to
submitting it to Stock Exchange(s) for wider dissemination.
·
Introduction of new
requirement, i.e., comments of Board of Directors and Management on the
findings of Monitoring Agency.The Total
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