Sebi proposed to ring fence clients’ money and collaterals from such risks through steps like greater Internet-based trades and faster settlements. The proposed move, which was issued today by Sebi as a ‘discussion paper’ inviting public comments, might also have a bearing on sale of pledged shares by large brokers or financiers which often leads [...]
Posts Tagged ‘Sebi’
Indian mutual fund industry witnessed an increase of about Rs two trillion this year, with this its assets base seen nearing Rs 8 trillion. The total industry AUM stood at Rs 6.11 lakh crore at the end of 2011. The industry is hopeful of even better days ahead in 2013. Industry expects net inflow into [...]
Private Listed companies whose promoters have kept with them the stakeholdng of more than 75 per cent may face tight situation as the regulatory body of India, Sebi is mulling options including monetary penalties and eventual delisting of non-compliant entities. Private sector listed companies have 7 more months to bring down their respective promoter [...]
Market watchdog Sebi has asked the government to frame a strong central legislation to tackle the menace of companies collecting large amount of money from the public without requisite regulatory approvals and for dubious investment projects. Stating the existing legal provisions are weak and allow such companies to benefit from certain loopholes in the regulatory [...]
Over 1,500 Indian companies raised a whopping Rs 2.39 lakh crore through private placement of debt securities or bonds in the first eight months of the year. This represents a jump of 59 per cent from Rs 1.50 lakh crore raised in the year-ago period, data from Sebi shows. In debt private placements, firms issue [...]
The advertisements and tall claims has put the online survey company, Speak Asia, under the government scanner. The company has so far collected around Rs.800 crore from over million people assuring them that they will earn four folds of their investments in a year’s time. Speak Asia website says that it has a presences in [...]
According to the report in Financial Express, all non-retail investors will have to use the Application Supported By Blocked Amount (ASBA) facility – where money is debited from investor’s account only after share allotment – the date being from May 2 to apply for share sale offers in the capital market, Sebi said today. Under [...]
The total investment by the foreign institutional investors (FIIs) in Indian market, which includes investments in equities, the debt market, stocks and bonds. The total investment by FIIs since 2011 till date is Rs. 5614.30 cr. In dollar terms, net FII inflows amount to about $1.25 billion in 2011 so far. As reported in PTI, [...]
RBI, Sebi to keep watch on illicit Swiss money returning home PTI reports that country’s apex bank and Financial regulators Sebi have enhanced vigil on Indian entities routing their funds from secretly-held Swiss bank accounts to India through Dubai and other locations, on fears of getting exposed for stashing the money in the European nation. [...]
It is reported in Financial Express that NSE had recorded PAT of Rs 614 crore for FY10, while BSE saw a net profit of Rs 213 crore. With a net profit margin at upwards of 40%, Indian exchanges are on the top compared to global peers. But the proposal to put a cap on the [...]
The regulator has also proposed to the government that the securities transaction tax, or STT, which is levied on buying or selling of stocks and on derivatives trade, should be cut by one-third and that a uniform stamp duty be levied and collected by a central agency.
These proposals have been forwarded to the finance ministry, in the run-up to the Budget, said a person with the knowledge of the proposal. The letter to the finance ministry says, “Tax benefits to corporates investing in schemes of mutual funds may be withdrawn.”
It is not just the capital markets watchdog that is uncomfortable with MF industry’s unhealthy dependence on short-term funds from corporates.
Though this helps fund houses grow their assets and boost valuations, policymakers are worried about the systemic implications of any swift outflow of such institutional funds that could hobble some of the fund houses. This was evident during the second-half of 2008, when the Reserve Bank of India (RBI) had to keep liquidity support open to help MFs meet their redemption obligations.
RBI has also been unhappy at the way banks have been parking their surplus with MFs, which in turn finds its way back to banks. The central bank has nudged banks to restrict their investments in MFs.
Any move, either to do away with the tax benefits or to tweak the tax rates, could hurt the local MF industry whose growth is linked to the flow of funds from corporates. Over 50% of the money that Indian MFs attract for their debt schemes comes from corporate treasuries and banks. According to latest data, the assets under management of the Indian MF industry are a little under Rs 7-lakh crore.
SEBI’s proposal is aimed at putting an end to the rampant misuse of debt schemes of MFs by corporates, who park short-term corporate treasury funds to enjoy a tax arbitrage. While income from their treasury operations attract the corporate tax rate of 33.99% (including surcharge and education cess), treasury investments in debt funds attract a dividend distribution tax (DDT) of only 22.66%.
“If the tax benefit is removed, it will discourage corporates from using mutual funds as a treasury instrument… as we want to develop mutual funds as a vehicle for retail investors to take exposure in the securities market,” said a SEBI official.
Recently, RBI had told banks to go slow on their MF investments. In the last fortnight of December 2009, banks withdrew more than Rs 1-lakh crore from MFs. RBI deputy governor Shyamala Gopinath too had expressed her concerns about tax arbitrage through mutual fund investments.
“Mutual funds’ fixed-income products enjoy certain tax exemptions not available to banks. But this is outside the regulatory purview. However, if these policies introduce any vulnerability in the financial system, there is a need to address this through appropriate macroprudential and microprudential regulations,” Ms Gopinath said at a Fixed Income and Money Market Dealers Association (FIMMDA) meet.
SEBI has also asked the government to drastically reduce the securities transaction tax (STT) on equity transactions, as it increases the transaction cost. The regulator has recommended that STT should be slashed by one-third, as the rate has effectively tripled with the withdrawal of STT as a rebate under Section 88E in the last Budget.
Besides proposing a uniform stamp duty that will levied and collected by a central agency and shared among states based on an agreed formula, SEBI has recommended a goods and services tax (GST)-type concept for stamp duty collection on securities trades.
Market players say that there are several anomalies in the stamp duty, as it is levied by states with each levying different rates for different securities instruments. There are also disputes among states. Transaction costs in India are one of the highest in the world, with government levies, such as stamp duty and STT, accounting for almost 75% of the cost.
SEBI also wants Indian Depository Receipts(IDRs), instruments through which Indian investors can invest in equity shares of foreign companies, to be treated as securities for tax purposes. It has also recommend to the government that IDRs should not be taxed on transfer.
The Securities and Exchange Board of India’s (SEBI) crusade to straighten out fund regulations continues apace. Earlier today, the regulator came out with a circular that banned the practice of charging lower exit loads from big-ticket investors. With entry loads banned, exit loads have generally been enhanced. All asset management companies’ (AMCs) new load structure has lower (or zero) loads above a certain limit. Typically, investors who have more than Rs 3 to 5 crore in a fund get away without any exit load.
Now, SEBI has said that no distinction can be made on ‘quantitative basis’.
Here’s the text of the circular:
Exit load – Parity among all classes of unit holders
1. SEBI vide circular No. SEBI/IMD/CIR No. 5/126096/08 dated May 23, 2008 has simplified the formats for Offer Document and Key Information Memorandum of Mutual Funds Scheme. The simplified Scheme Information Document format provides that “Wherever quantitative discounts are involved the following shall be disclosed – The Mutual Fund may charge the load within the stipulated limit of 7% and without any discrimination to any specific group of unit holders. However, any change at a later stage shall not affect the existing unit holders adversely”
2. It is observed that the mutual funds are making distinction between the unit holders by charging differential exit loads based on the amount of subscription. In order to have parity among all classes of unit holders, it has now been decided that no distinction among unit holders should be made based on the amount of subscription while charging exit loads.
With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organisation. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995.
AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.
The objectives of Association of Mutual Funds in India:
The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows:
This mutual fund association of India maintains a high professional and ethical standards in all areas of operation of the industry.
It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry.
Association of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.
AMFI undertakes all India awarness programme for investors inorder to promote proper understanding of the concept and working of mutual funds.
At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.
The sponsorers of Association of Mutual Funds in India
SBI Fund Management Ltd.
BOB Asset Management Co. Ltd.
Canbank Investment Management Services Ltd.
UTI Asset Management Company Pvt. Ltd.
GIC Asset Management Co. Ltd.
Jeevan Bima Sahayog Asset Management Co. Ltd.
BenchMark Asset Management Co. Pvt. Ltd.
Cholamandalam Asset Management Co. Ltd.
Credit Capital Asset Management Co. Ltd.
Escorts Asset Management Ltd.
JM Financial Mutual Fund
Kotak Mahindra Asset Management Co. Ltd.
Reliance Capital Asset Management Ltd.
Sahara Asset Management Co. Pvt. Ltd
Sundaram Asset Management Company Ltd.
Tata Asset Management Private Ltd.
Predominantly India Joint Ventures:-
Birla Sun Life Asset Management Co. Ltd.
DSP Merrill Lynch Fund Managers Limited
HDFC Asset Management Company Ltd.
Predominantly Foreign Joint Ventures:-
ABN AMRO Asset Management (I) Ltd.
Alliance Capital Asset Management (India) Pvt. Ltd.
Deutsche Asset Management (India) Pvt. Ltd.
Fidelity Fund Management Private Limited
Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.
HSBC Asset Management (India) Private Ltd.
ING Investment Management (India) Pvt. Ltd.
Morgan Stanley Investment Management Pvt. Ltd.
Principal Asset Management Co. Pvt. Ltd.
Prudential ICICI Asset Management Co. Ltd.
Standard Chartered Asset Mgmt Co. Pvt. Ltd.
Association of Mutual Funds in India Publications
AMFI publices mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the knowhow of their parked money.