Stocks
Demarcate accounts for ASBA facility in public offers: SEBI

SEBI asked banks to ensure that for applications made under ASBA facility, the application amount should be blocked only against and in a funded deposit account and ensure that clear demarcated funds are available for ASBA applications

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has directed banks to clearly demarcate separate accounts for public offer applications, filed under the application supported by blocked amounts (ASBA) facility -- under which money remains in the investors' accounts till the time of share allotment, reports PTI.

 

SEBI said in a circular that it has noticed some banks making applications on own account using ASBA facility, without having clearly demarcated funds and that some banks are marking lien against credit limits/overdraft facility of their account holders' for ASBA applications.

 

Consequently, the regulator has asked the banks to ensure that for applications made under ASBA facility, the application amount should be blocked only against and in a funded deposit account and ensure that clear demarcated funds are available for ASBA applications.

 

SEBI also said "such account shall be used solely for the purpose of making application in public issues and clear demarcated funds should be available in such account for ASBA application."

 

The new directions would come into force with immediate effect.

 

The regulator had introduced ASBA facility for public offers first in September 2008, when retail investors were allowed to invest through this facility. The move avoids the investors' money getting blocked between the time of bidding for shares and final allotment.

 

Under ASBA mechanism, investors can bid for shares while the money remains in his/her bank account and gets debited only after allotment of the shares.

 

The facility eliminates any delays related to refunds for the unallotted shares. Initially, the facility was offered to retail investors only and was given to other investors in 2009.

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SEBI revokes ban on 317 entities in Alka Securities matter

Based on the preliminary findings in 2009 SEBI had barred 317 second-level entities identified in the interim order as used as conduits by Alka Securities, its promoters and other related entities

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has revoked its ban on 317 entities, earlier alleged to have been used by promoter and related entities of Alka Securities for involvement in circular trading, and allowed them to deal in the company's shares, reports PTI.
 
The case relates to a probe by SEBI into a spurt in the price and volume in the shares of Alka Securities Ltd (ASL) during the period of November 2008 to March 2009.
 
Based on the preliminary findings, SEBI had identified nine promoter level entities to have allegedly indulged in price manipulation, as also 42 other entities directly and 317 indirectly being part of the stock manipulation practices.
 
Consequently, SEBI passed an interim order against these entities in 2009, barring them from dealing in ASL shares.
 
SEBI said the completion of its investigation into the matter shows that the said 317 second-level entities identified in the interim order were used as conduits by ASL, its promoters and other related entities.
 
No further action, however, has been contemplated as against these entities pursuant to the investigation and therefore the interim directions issued by SEBI need not be continued, the regulator said in its final order dated 10 September 2012.
 
Accordingly, SEBI has decided to "revoke the interim directions issued vide ad interim ex-parte order dated 28 July 2009 (against the said 317 ) with immediate effect," the order said.
 
SEBI probe had found that ASL promoters had used off-market route to transfer shares to 42 first-level entities and these entities in turn dealt transferred them to other 317 'second-level' entities.
 
Further, the company, its promoters and directors were charged to have failed to provide mandatory disclosure for change in their shareholdings on various occasions. The shareholding disclosures made to BSE were incorrect and apparently false.
 

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SEBI rejigs primary market advisory panel

The Primary Market Advisory Committee chaired by TV Mohandas Pai would have 18 members, including chiefs of several financial institutions and other companies

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has reconstituted its Primary Market Advisory Committee (PMAC) which advises it on issues related to regulation and development of IPOs and other primary market segments, reports PTI.
 
The panel would be chaired by TV Mohandas Pai, formerly a senior executive at IT giant Infosys and currently Chairman of Manipal Global Education Services Pvt Ltd.
 
The other members of the 18-member panel include BSE interim CEO Ashish Chauhan, Tata Steel Group CFO Koushik Chatterjee, Morgan Stanley India CEO PJ Nayak, CRISIL Managing Director and CEO Roopa Kudva and Kotak Mahindra Bank chief Uday Kotak.
 
The panel would also have three representatives from SEBI, Executive Directors S Ravindran and J Ranganayakulu, Ministry of Finance Director (Primary Markets) Ramesh Krishnamurthi and RBI Chief General Manager KK Vohra.
 
Other members include Prime Database chief Prithvi Haldea, SIDBI Chairman Sushil Muhnot, Association of Investment Bankers of India Chairman Sanjay Sharma, Crawford Bayley and Co Partner Sanjay Asher, IIM Lucknow Faculty Member Manoj Anand and Bhopal Stock Investors Association President Arun Kothari.
 
The terms of reference of the committee includes advising SEBI on matters required to be taken up for changes in legal framework to introduce simplification and transparency in systems and procedures in the primary market.
 
Besides, it is also mandated to advise SEBI on matters relating to regulation of intermediaries for ensuring investor protection in the primary market.
 

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