Brokers asked not to offer incentives to debt instrument investors

SEBI’s move to disallow brokers from passing on part of their commission to investors in debt instruments will protect the interests of investors in securities and promote the development of the securities market

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) on Monday asked brokers not to pass on part of their commission to investors in debt instruments as such offers result in unfair advantage to some, reports PTI.

The regulator said it has gathered from market participants that in public issues of debt securities, some brokers/ distributors are passing on part of their brokerage/ commission to the final investors for subscription to such public issue of debt.

“As a result, while on one hand it is giving an unfair advantage/bargaining power to a certain set of investors and distributors, on the other hand it is adding to the cost of issuance for the company,” SEBI said in a circular.

In order to curb such practices, SEBI said “it is advised that in respect of public issues of debt securities, no person connected with the issue shall offer any incentive, whether direct or indirect... to any person for making an application for allotment of specified securities”.

SEBI said the circular has been issued to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.

User

COMMENTS

dfdf

5 years ago

can sebi explain - how investor's interest is protected by such a move?

SEBI to probe firms who have not conducted AGMs

“If they (corporates) are not sending annual reports and not conducting AGMs, these are clear cut violations. I will ask my team to investigate all cases where AGMs have not been called and Annual Reports have not been sent,” SEBI chairman UK Sinha said

Chennai: Sending a strong signal to listed companies to conduct annual general meetings (AGMs) and send annual reports regularly to its shareholders, market regulator Securities and Exchange Board of India (SEBI) on Monday said it would investigate the details of those companies which have not done so, reports PTI.

“If they are not sending annual reports and not conducting AGMs, these are clear cut violations. Since this question has been raised, I will ask my team to investigate all cases where AGMs have not been called and Annual Reports have not been sent,” SEBI chairman UK Sinha said.

SEBI has allowed companies to send the annual reports via electronic mode if shareholders have consented to it, he said addressing a seminar, on “Securities Market and the Common man” organised by National Stock Exchange here.

To a query about companies being involved in manipulating share prices, Mr Sinha said the market regulator was already investigating such cases. “...If there are any violations, it will be very seriously dealt with and very quickly”.

Later talking to reporters, Mr Sinha said SEBI was advising mutual fund industry to launch less number of newer schemes.

“SEBI is encouraging mutual funds to float less number of newer schemes. If there are schemes which are similar investments schemes, SEBI is encouraging them to merge them.

We are working towards it...” he said.

Besides, SEBI was working towards reducing the number of days in initial public offer (IPO) process which currently takes 12 days for a company. “SEBI has set up a committee to review the entire IPO processes in shortening the time period between the issue closure and listing... It is too premature for me to talk about it, but the current period of 12 days and how to reduce it is part of the (committee’s) mandate”, he said.

SEBI would look into the question of uploading e-document of annual reports of those companies in the website of stock exchanges similar to company results.

User

SEBI to launch toll-free helpline for investors

With the launch of helpline, an investor can ask any question regarding the securities market which will be answered. “The reason why we are launching is that we have identified that self-help mechanism could be more useful for investor,” SEBI chairman UK Sinha told reporters

Chennai: Market regulator Securities and Exchange Board of India (SEBI) would launch a toll-free helpline as part of educating investors on the securities market, reports PTI quoting chairman UK Sinha.

With the launch of helpline, an investor can ask any question regarding the securities market which will be answered. “The reason why we are launching is that we have identified that self-help mechanism could be more useful for investor,” Mr Sinha told reporters.

Besides, SEBI would launch in association with the Central Board of Secondary Education a course curriculum on financial markets at the secondary school level as part of educating the younger generation (about the financial market).

“We are trying to make all the students aware about the basics of financial market. (Before launching), the curriculum will be tested. It will be built in to the senior secondary curriculum to begin with...” he said on the sidelines of a conference.

Asked why it has been launched through the CBSE mode than targeting the state government run schools, he said once this experiment was successful, it would be expanded into other areas.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)