Securities Market

Sebi issues rules for uniform nomination standards in securities markets

Markets regulator Sebi has notified rules on nomination allowing nominees to act on behalf of incapacitated investors. Additionally, it notified the rule mandating every participant to provide beneficial owners with the option to nominate a person to whom their securities will transfer upon their death. "Every participant shall provide an option to the beneficial owner to nominate, in the manner as may be specified, a person who shall be authorised to conduct transactions on behalf of the beneficial owner in the event of the incapacitation of the beneficial owner," Sebi said in a notification. The new rules are aimed at enhancing investor convenience and introducing uniform standards for nomination facilities across the Indian securities market. In the case of joint ownership, the owners can collectively nominate a person to receive the securities in the event of death of all the joint beneficial owners. Further, the depository and participant will not be held liable for any actio

Sebi proposes overhaul of household savings calculation in securities mkt

In FY23, share of such assets came to Rs 84 trn, which was in sharp contrast to RBI's computation of Rs 23.6 trn

Sebi proposes changes in debenture trustee appointment to smoothen process

To legally validate and streamline disclosure in respect of debenture trustee appointments in offer documents, markets regulator Sebi has proposed to replace the term 'consent letter' with 'debenture trustee agreement'. The change will streamline the process for appointing debenture trustees in the issuance of securities, ensure transparency in the appointment of debenture trustees, and play a crucial role in the securities market. In a consultation paper floated on Saturday, the markets watchdog proposed replacing the term "consent letter" with "debenture trustee agreement" in Sebi's (Issue and Listing of Non-Convertible Securities) rules or NCS regulations. The debenture trustee agreement (DTA), which legally validates the appointment of a debenture trustee, is considered by the regulator to be more significant than the previously used term 'consent letter'. The change will help investors make more informed decisions when investing in debentures. Earlier, a working group noted t

Sebi proposes expansion of sustainable fin framework in securities market

Markets regulator Sebi has proposed expansion of the sustainable finance framework in the securities market by introducing a new category of financial instruments. This category will include Social Bonds, Sustainable Bonds, and Sustainability-linked Bonds in addition to the current green debt securities. It aims to provide issuers with flexibility in raising funds for projects that align with environmental, social, and governance (ESG) objectives. In a consultation paper released on Friday, Sebi proposed that issuers, in addition to existing green debt securities, be allowed to raise funds through issuance of social bonds, sustainable bonds, and sustainability-linked bonds. These bonds will collectively be known as ESG Debt Securities. This will enable issuers to raise money for more sustainable projects, assisting in closing the funding gap for the Sustainable Development Goals. Sebi said it received representations from market participants including the Confederation of Indian ..

Sebi confirms order against 12 entities including V Marc India for fraud

Sebi on Friday affirmed its earlier order with some modifications against 12 entities, including promoter of V Marc India Ltd for engaging in a fraudulent scheme to manipulate volumes and price of the company's shares. Passing a 121-page confirmatory order with some modifications, Sebi restrained 12 entities from the securities market. "I, hereby confirm the directions of the interim order dated February 28, 2024, subject to the following modification - the total liability for the alleged illegal gains to be impounded stands modified to Rs 6.30 crore as Jai Kishorr Singhal has deposited the alleged illegal gains made by him," Sebi's whole time member Ananth Narayan G said in the confirmatory order. The watchdog also noted observations made in the present order are tentative in nature and pending further investigation. The probe will be carried out without being influenced by any of the directions passed or any observation made either in the interim order or in the present order. Ba

Sebi cuts face value of debt securities to boost retail participation

Markets regulator Sebi on Wednesday drastically cut the face value of debt securities to Rs 10,000 from Rs 1 lakh at present to boost participation of retail investors in the corporate bond market. Market participants are of the view that lower ticket size of debt securities may encourage more non-institutional investors to participate in the corporate bond market which in turn may also enhance liquidity. In a circular, Sebi said, "the issuer may issue debt security or non-convertible redeemable preference shares on private placement basis at a face value of Rs 10,000". This, however, would be subject to certain conditions like the issuer should appoint at least one merchant banker, and non-convertible debentures and non-convertible redeemable preference shares be plain vanilla, interest or dividend-bearing instruments. Sebi said that credit enhancements would be permitted in such instruments. With respect to General Information Document (GID), which is valid as on the 'effective

Sebi proposes easing disclosure rules for non-convertible securities

To promote ease of doing business for issuance of non-convertible securities, Sebi on Thursday proposed removing the requirement to disclose the PAN and personal address of issuers' promoters in the offer document along with other relaxations in disclosure guidelines. The current regulatory framework of Sebi's (Issue and Listing of Non-Convertible Securities) rules or NCS norms mandates disclosure of complete profile of promoters of the issuer in the offer document, which includes disclosure of PAN, personal address among others. Additionally, the regulator, in its consultation paper, suggested relaxation in the requirement of providing certain business and commercial details in case of purchase or acquisition of immoveable property in the offer document. The Securities and Exchange Board of India (Sebi) has sought comments from the public till May 30 on the proposals in its consultation paper, the regulator has proposed that details regarding branches or units of the issuer as on t

Sebi weighs mandatory direct securities payout to client's account

To enhance operational efficiency and reduce the risk to clients' securities, markets regulator Sebi on Thursday proposed making the process of direct payout of such securities to the client's account mandatory. Currently, the clearing corporation credits the pay-out of securities in the pool account of the broker, who then credits the same to the respective client's demat accounts. Further, a facility of direct delivery to investors was introduced in February 2001. "It has been decided that the process of securities payout directly to the client account shall now be mandatory," the Securities and Exchange Board of India (Sebi) said in its consultation paper. The securities for payout should be credited directly to the respective client's demat account by the clearing corporations. Moreover, clearing corporations should provide a mechanism for Trading Member(TM)/clearing members (CM) to identify the unpaid securities and funded stocks under the margin trading facility. In case of

FPI limit in G-sec unchanged at 6% of outstanding stocks of securities: RBI

The Reserve Bank on Friday said the limits for FPI investment in government securities, state development loans and corporate bonds will remain unchanged at 6 per cent, 2 per cent and 15 per cent, respectively, of outstanding stocks of securities for the current fiscal. As of now, all investments by eligible investors in the 'specified securities' will be reckoned under the fully accessible route (FAR), the RBI said in a notification. "The limits for FPI investment in government securities (g-secs), state government securities (SGSs) and corporate bonds shall remain unchanged at 6 per cent, 2 per cent and 15 per cent, respectively, of the outstanding stocks of securities for 2024-25," it said. The allocation of incremental changes in the g-sec limit (in absolute terms) over the two sub-categories 'General' and 'Long-term' will be retained at 50:50 for 2024-25, it added. The entire increase in limits for SDLs (in absolute terms) has been added to the general sub-category of state

LIC front-running case: Sebi confirms securities market ban on 5 companies

Sebi on Tuesday confirmed a securities market ban on five entities, including an employee of Life Insurance Corporation of India (LIC), in a case pertaining to front-running trades of the state-owned insurer. Front-running refers to an illegal practice in the stock market where an entity trades based on advanced information from a broker or analyst before the information has been made available to its clients. The observations made in the present order are tentative in nature and pending further investigation. The investigation will be carried out without being influenced by any of the directions passed or any observation made either in the interim order or in the present order. Based on the outcome of the investigation, appropriate proceedings may be initiated in accordance with law, Sebi said. In a confirmatory order, Sebi clarified that the restraint imposed vide the interim order dated April 27, 2023, on Yogesh Garg, Sarita Garg, Kamlesh Agarwal, Ved Prakash HUF and Sarita Garg

Sebi seeks to boost trust in mkt, expands qualified stock broker framework

Sebi on Monday announced expanding the Qualified Stock Broker (QSB) framework that will bring more brokers under enhanced obligations, a move aimed at bolstering the trust of investors in the securities market. The decision will also help in strengthening the compliance culture among stock brokers. Now, the parameters of proprietary trading volumes, compliance and grievance redressal scores will also be taken into account while classifying stock brokers as QSBs, according to a circular. At present, there are five parameters for classifying a stock broker under the QSB framework -- total number of active clients, available total assets of clients, trading volumes of the stock broker (excluding the proprietary trading volume of the stock broker), and the end of day margin obligations of all clients. The margin obligations exclude the proprietary margin obligation of the stock broker concerned in all segments. QSBs are required to meet various enhanced obligations and discharge ...

Tax dept finds inconsistencies in transaction report of market entity

The income tax department on Monday said it has identified "certain inconsistencies" in the data of the securities market provided by one of the reporting entities in the statement of financial transactions (SFT). In a post on X, the I-T department said based on feedback from taxpayers on the e-campaign for advance tax, the inconsistencies have come to light and the reporting entity has been asked to submit a revised statement to the department. "Hence, the data on AIS (Annual Information Statement) will be updated. Taxpayers are advised to wait for further updates on AIS based on the revised statement," the I-T department said. As per income tax rules, specified institutions are required to furnish SFT to the I-T department with the details of certain financial transactions or any reportable account registered/recorded/maintained by them during the year. The data submitted in SFT then gets reflected in the Annual Information Statement (AIS) of the taxpayer. "The Department has ..

Sebi extends deadline for comments on revamp of nominations framework

Markets regulator Sebi has extended the deadline till March 28 for submitting public comments on the proposal to revamp the nominations framework, a move aimed at reducing unclaimed assets in the securities market. The Securities and Exchange Board of India (Sebi) had placed the consultation paper to revise and revamp nomination facilities for the Indian securities market on its website on February 2 and sought comments by March 8. Now, it has been decided to extend the timeline for submission of comments to March 28, the Sebi said. In its consultation paper, the regulator proposed revamping the nominations framework in a move to reduce unclaimed assets in the securities market as well as smoothen the process for claiming the assets by surviving successors of the deceased investors. Also, it suggested revisions to nomination facilities for securities such as shares, bonds, units of REITs (Real Estate Investment Trusts), InvITs (Infrastructure Investment Trusts), AIFs (Alternative .

Central Depository Services India to inspect Paytm Money's KYC process

Central Depository Services India (CDSL) may initiate inspection into Paytm Money's customer verification protocols following RBI's directives and regulatory actions against Paytm Payments Bank

Sebi mulls revamping nominations framework to reduce unclaimed assets

Capital markets regulator Sebi on Friday proposed revamping the nominations framework in a bid to reduce unclaimed assets in the securities market as well as smoothen the process for claiming the assets by surviving successors of the deceased investors. In its consultation paper, the regulator proposed revisions to nomination facilities for securities such as shares, bonds, units of REITs (Real Estate Investment Trusts), InvITs (Infrastructure Investment Trusts), AIFs (Alternative Investment Funds) and other securities held in dematerialized form and for units of mutual fund schemes that are expressed in a statement of account. This will address the objective of providing convenience to investors and uniformity in the procedures to institutions. Such revamped nomination facilities will operate without affecting the prevalent systems of law governing transmission and succession -- rule of survivorship in case of joint holdings, when a person has died leaving a Will; and when a perso

Front-running case: Sebi bans 7 cos from securities market for up to 3 yrs

Sebi on Wednesday barred seven entities from the securities market for up to three years and directed to disgorge 'unlawful profit' of Rs 35 lakh made by them in a case of front-running the trades of Sanctum Wealth Management (now known as Sanctum Wealth). Front-running refers to an illegal practice in the stock market where an entity trades based on advanced information from a broker or analyst before the information has been made available to its clients. In its order, Sebi has prohibited Kishan Vishram Nanda from the securities market for three years and six entities related to him for one year. Additionally, the regulator imposed a fine of Rs 5 lakh on Nanda. Besides, these seven entities have been directed to disgorge a sum of Rs 34,84,605 along with an interest of 12 per cent per annum. The present matter came out from an alert generated by Sebi's surveillance system indicating the suspected front-running of trades of Sanctum Wealth by certain connected entities. After this,

Sebi bans individual from securities markets for unregistered PMS business

Markets regulator Sebi has restrained an individual from the securities markets for a period of two years for providing unregistered portfolio management services. The regulator also directed Sanbun Investments, its proprietor Nishaan Singh (Noticee) to cease and desist from acting as or holding himself out to be a portfolio manager. Sebi directed the noticee to refund Rs 16.19 crore received from clients and/or investors as fees or consideration or, in respect of their unregistered portfolio management activities within a period of three months, Sebi said in its order on Tuesday. The order came after Sebi received a complaint in October 2022 against Sanbun Investments, which is the sole proprietorship concern of Nishaan Singh. Pursuant to the receipt of the complaint, the regulator conducted an investigation to ascertain the veracity of the complaint and whether there had been any violation of PMS (Portfolio Managers) regulations. "I note that under the garb of providing courses

REC to raise about Rs 3,500 crore via yen-denominated green bonds

State-owned REC Ltd on Friday announced it will raise 61.1 billion yens (about Rs 3,500 crore) through issuance of green bonds. The bonds will issued as part of REC's USD 10-billion global medium-term note programme, the company said in a regulatory filing. Giving the break-up of each note, the company said a five-year bond worth 31 billion yens will have a coupon rate of 1.67 per cent, a 27.4-billion yen paper with maturity in 5.25 years will have a coupon rate of 1.79 per cent, and another 2.7-billion yen bond having maturity period of 10 years will carry a coupon rate of 2.20 per cent. These bonds will be listed on Global Securities Market of India International Exchange (India INX) and NSE IFSC, the company said. REC said the net proceeds from these notes will be used to finance green projects in accordance with the REC's Green Finance Framework and the external commercial borrowing guidelines and directions of the Reserve Bank of lndia (RBI). REC, under the Ministry of Power,

Sebi tweaks norms for online resolution of disputes in securities market

Sebi on Wednesday tweaked the framework with respect to online resolution of disputes in the securities market to provide clarity on certain aspects. In its circular, the regulator has provided clarity on the online arbitration process, and arbitrator's fee, among others. The Securities and Exchange Board of India (Sebi) said that the market participant against whom the investor pursues the online arbitration will participate in the arbitration process. Accordingly, within 10 days of the initiation of the online arbitration by the investor, the market participant will make the deposit of 100 per cent of the admissible claim value with the relevant MII (market infrastructure institutions) and make the payment of the fees for online arbitration. Non-adherence to rule by market participants may result in action against them by MIIs or Sebi. In case the market participants plan to pursue online arbitration then they will have to inform the ODR (Online Dispute Resolution) institution .

Govt asks private companies to dematerialise securities by Sept 2024

The government has asked private companies to dematerialise their securities by September 2024, a move that will help enhance transparency and will have a broad impact. The requirement will be applicable to private companies, excluding small companies and government companies. There are about 1.4 million private companies registered under the companies law with the Ministry of Corporate Affairs (MCA). Private companies can issue securities only in dematerialised form and should facilitate the dematerialisation of all securities by September 2024, according to an MCA notification. Dematerialisation refers to the conversion of securities held in physical form to dematerialised or digitised form. In this regard, amendments have been made to the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023. "A private company, which as on the last day of a financial year, ending on or after 31st March 2023, is not a small company as per audited financial statements