Builder Fined, Asked To Provide Society Documents

The Thane District Consumer Redressal Forum has held builder Mukund Balu Keni (of Mandar Construction) guilty of providing deficient service. The builder, an NCP corporator, failed to provide the documents to the Myuresh Park Cooperative Housing Society at Kharigaon in Kalwa (Thane). The Forum ordered the builder to hand over the documents to the society within three months, failing which he will have to pay penalty of Rs500 per day of delay, until they are handed over. The builder was also ordered to pay Rs50,000 to the society for legal expenses, within three months.


SEBI gets power to search and seizure any premises

SEBI Board approved norms to exercise new powers of search and seizure, investor refund, settlement proceedings and money-pooling

Market regulator Securities and Exchange Board of India (SEBI) on Tuesday said its Board has approved norms to exercise new powers of search and seizure, investor refund, settlement proceedings and money-pooling. SEBI Board also approved expanded list of entities permitted to file shelf prospectus that includes infra debt funds as well as some classes of non-banking financial companies (NBFCs) and housing finance companies. 


While doing away with the mandatory grading for IPOs, the market regulator said prospectus filed by companies would remain valid for multiple debt offers in one year. SEBI Board however, deferred a decision on regulations for the much-awaited real estate investment trusts (REITs). As part of its third attempt to revive REITs, the market regulator in October had floated draft guidelines for it.


Here are the decisions taken by SEBI Board...


1. Amendment to Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999


The Securities Laws (Amendment) Ordinance, 2013 provides for regulation of pooling of funds under any scheme or arrangement, involving a corpus amount of one hundred crore rupees or more, to be deemed to be a Collective Investment Scheme, subject to sub-section (3) of section 11AA of the SEBI Act.


Accordingly, a proposal to amend the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999, providing a framework for regulation of such deemed Collective Investment Schemes and additional requirements for continuous compliance by a registered Collective Investment Scheme, was approved by the Board.


2. Amendments to SEBI (Investor Protection and Education Fund) Regulations, 2009


Consequent to the promulgation of Securities Laws (Amendment) (Second) Ordinance, 2013, the Board has approved amendment to SEBI (IPEF) Regulations, 2009 enabling utilization of such amounts primarily for restitution to investors and in case of failure of identification of investors, for the credit of amounts disgorged under the SEBI Act 1992, the Securities Contracts (Regulation) Act 1956 or the Depositories Act 1996 to the Investor Protection and Education Fund of SEBI.


3. Class of companies eligible to file shelf prospectus for public issuance of non-convertible debt securities


While Companies Act, 1956 had allowed only Banks and Public Financial institutions to file Shelf Prospectus, the Companies Act, 2013 enables SEBI to specify the class of the companies which can be allowed to file Shelf Prospectus. In this regard, the Board has decided to allow the following class of entities to file Shelf Prospectus for public issuance of non-convertible debt securities:

  1. Public financial institutions and Scheduled Banks;
  2. Issuers authorized by the notification of CBDT to make public issue tax free secured bonds;
  3. Infrastructure Debt Funds - Non-Banking Financial Companies;
  4. NBFCs, registered with RBI, Housing Finance Companies registered with National Housing Bank (NHB) and entities which have listed their shares/debentures in the stock exchanges for at least three years complying with the following criteria:
    • net worth of Rs500 crore,
    • track record of three years of distributable profits,
    • having a credit rating of not less than "AA-",
    • having no default history or regulatory action pending with RBI, SEBI or NHB;

To avoid fragmentation of the issues, which will affect the floating stock and thereby liquidity, it is further stipulated that only a maximum of four issuances can be made under a Shelf Prospectus.


Further, companies filing a shelf prospectus with the Registrar of Companies are not required to file prospectus afresh at every stage of offer of securities, within the period of validity of such shelf prospectus i.e. one year. They are required to file only an information memorandum, containing material updations, with respect to subsequent issues.


4. SEBI (Procedure for Search and Seizure) Regulations, 2013


The Securities Laws (Amendment) Second Ordinance, 2013, inter alia, confers direct powers on Chairman, SEBI to authorize the Investigating Authority or any other officer of SEBI to search any premises where incriminating documents are lying and seize such documents for the purpose of investigation.  The Ordinance also empowers SEBI to make regulations for executing the search operations and to ensure safe custody of any books of account or other documents that are seized.


In this respect, the Board approved the SEBI (Procedure for Search and Seizure) Regulations, 2013, made on the lines of the provisions in the Income Tax Act, 1961 and for providing the detailed procedures for such search and seizures by SEBI.


5. Making IPO Grading Mechanism Voluntary - Amendment to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009


Considering the requests received from market participants, viz. investor associations and Association of Investment Bankers of India (AIBI), the recommendation of the advisory committee of SEBI, and to align with the principles laid down by Financial Stability Board (FSB) on reducing the reliance on Credit Rating Agencies, the Board approved the proposal to make the IPO grading mechanism "voluntary" as against the current provision of the same being "mandatory".


6. SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013


The SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013 were approved by the Board, subject to inclusion of the guidelines determining the settlement terms as part of regulations These regulations have been framed, keeping in view the provisions of the SEBI Act, as modified by the Securities Laws (Amendment) Second Ordinance, 2013, as also the public comments received on the Consultation Paper on the draft regulations that was placed on the SEBI website.


The salient features of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013 are as under:


  1. The Regulations lay down the stand alone common substantive procedure for settlement of administrative and civil proceedings under all the securities laws;
  2. The Regulations formalize the already existing settlement process;
  3. They also provide for the guiding factors for dealing with the settlement process;
  4. Serious offences such as insider trading, etc. are excluded from the scope of settlement;
  5. In order to impart transparency in the process, the roles of the  of internal committee(s) and high powered advisory committee are specifically defined;
  6. The Regulations also provide for terms of settlement in monetary as well as non- monetary terms or combination of both.

7. FPI Regulations


As regards FPI Regulations, the communication from the Department of Economic Affairs to the CBDT and to SEBI, conveying the decision that all three categories of FPIs would be given similar tax treatment as available to FIIs presently, was noted.


Sensex, Nifty breaks the uptrend: Tuesday closing report

The NSE Nifty may move sideways ahead of the December F&O expiry

The BSE 30-share Sensex which opened in the positive for the fourth consecutive trading session on Tuesday was drawn into the red in the noon session after the occasional plunges in the negative in the morning session. The positive US economic data could not keep the indices in the positive and the indices closed in the red after two consecutive positive sessions. On Monday, we mentioned that Nifty has to stay above 6,280 and make higher highs, to keep the short-term rally going. Today the index closed below this level breaking the past two days of positive move.


The Sensex opened at 21,128 and after hitting a high of 21,157 went lower to hit a low of 21,011 and closed almost at the same level. The Sensex closed at 21,033 (down 68 points or 0.32%). The Nifty which opened at 6,296, hit a high of 6,302. The index hit a low 6,262 and closed at 6,268 (down 16 points or 0.26%). The NSE recorded a volume of 62.18 crore shares.


Among the other indices on the NSE, the top five gainers were Smallcap (0.86%); Midcap (0.53%); Midcap 50 (0.44%); PSU Bank (0.37%)  and Media (0.23%) while the Metal (0.96%); Finance (0.51%); Bank Nifty (0.42%); Service (0.35%) and Commodities (0.31%).


Of the 50 stocks on the Nifty, 19 ended in the green. The top five gainers were Ranbaxy (2.73%); Bhel (2.25%); Bajaj Auto (2.07%); Ambuja Cements (1.84%) and PNB (1.61%). The bottom five losers were Tata Power (3.20%); Sesa Sterlite (2.28%); Wipro (2.19%); Bank of Baroda (1.88%) and IndusInd Bank (1.82%).


Of the 1,241 companies on the NSE, 712 closed in the positive, 467 closed in the negative while 62 closed flat.


The Reserve Bank of India (RBI) could soon unveil a major change in monetary policy to explicitly manage consumer inflation, rather than wholesale prices, its main objective. The report, due by the end of the month, could also recommend making price stability the main objective of the central bank, while keeping but trimming the focus on its two other objectives: economic growth and financial stability.


US indices closed in the positive on Monday. US household purchases, which account for almost 70% of the economy, rose 0.5% after a 0.4% gain in October that was larger than previously estimated, the Commerce Department reported in Washington. A separate report showed consumer confidence increased in December. The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 82.5 from 75.1 a month earlier.


Except for Taiwan Weighted (down 0.07%) all the other Asian indices closed in the positive. The top gainer was Hang Seng which rose 1.13%.


China's central bank conducted the first reverse-repurchase agreements in three weeks, helping to ease the tightest financing conditions since a record cash crunch in June.


In Japan, the Cabinet Office released its December economic report today. The report dropped a reference to the word deflation for the first time since October 2009, saying "prices are holding firm."


Indonesia announced today that it will allow increased levels of foreign investment in the country's power plants, advertising, and pharmaceutical industries as part of government efforts to boost the slowing economy. Under the new policy, the government increased the maximum foreign investment in pharmaceutical companies to 85% from 75%, and in advertising agencies to 51% from 49%. Indonesia also allowed foreign investment of up to 100% from 95% for power plant projects carried out as a public-private partnership. Under the partnership terms, a foreign investor now can own an entire power-plant during a concession period, after which some equity transfers to the government.


European indices were trading in the green while US Future were trading marginally higher.


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