Regulations
FIIs allowed to reinvest half of investment in debt holdings

From January 2014 onwards, FIIs and their sub-accounts can re-invest 50% of their debt holdings

Mumbai: Easing norms for foreign investors, market regulator Securities and Exchange Board of India (SEBI) has allowed them to re-invest half of their investments in debt holdings to the next calendar year, starting from January 2014, reports PTI.

 

Once the relaxation is in place, foreign institutional investors (FIIs) and their sub-accounts can re-invest 50% of their debt holdings.

 

"With a view to provide operational flexibility, beginning 1 January 2014, it has been decided that FIIs/sub-accounts can reinvest during each calendar year to the extent of 50% of their debt holding at the end of previous calendar year," SEBI said in a circular.

 

SEBI has said the utilisation period for government securities and corporate debt limits, allocated through bidding process, to 30 days and 60 days, respectively.

 

This would be applicable for both old-and long-term infrastructure limits.

 

Further, SEBI has relaxed the investment limits for FIIs regarding corporate debt in the long-term infrastructure category.

 

"It has been decided that FII may avail limits in the corporate debt long-term infra category without obtaining SEBI approval till the overall FII investments reaches 90% of the limit...," the circular said.

 

Once the limit is touched, auction mechanism would be initiated for allocation of remaining limits, it added.

 

SEBI said it would put in place a mechanism to monitor the utilisation of the limit.

 

Overseas investors had poured in Rs7,852 crore (about $1.5 billion) in the Indian debt market in October, the highest in eight months.

 

This was the highest net investment by FIIs in debt securities since February, when they had infused Rs10,016 crore.

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Ban on NGHI Developers to continue: SEBI

The ban on NGHI, its promoters and its directors would continue, till the schemes of the company are wound up and all the monies are refunded to the investors

Mumbai: Jaipur-based NGHI Developers and related entities will remain barred from collecting money from investors and accessing the capital market for their failure to adhere to interim regulatory orders, Securities and Exchange Board of India (SEBI) said, reports PTI.

 

"The interim order restraining NGHI, its promoters and its directors namely Pipal Singh, Bakshish Singh and Avtar Singh from accessing or dealing in the securities market shall continue, till the schemes are wound up and all the monies are refunded to the investors, to the satisfaction of SEBI," the market regulator said in an order.

 

The company was collecting funds from the public for developing plots of land through its plans.

 

SEBI said the restraining order would continue as the company has failed to wind up its scheme --collective investment schemes (CIS)-- and refund the money collected by it with returns to investors within a period of one month from the date of interim order. The interim order was passed on 9th July this year.

 

The entities also failed to deposit the money collected from the investors under under various schemes in a separate bank account within the stipulated period of three days.

 

"NGHI has been found operating CIS without obtaining a certificate of registration from SEBI... Therefore, it is necessary that such schemes of NGHI are directed to be wound up and the monies of the investors, which have been invested in the schemes, are refunded to them by NGHI," the regulator said.

 

SEBI had said it appears that NGHI is related to another company -- Nicer Green Forests Ltd -- which is also under the regulator's radar.

 

SEBI said it had found that the company was substituting Nicer Green's investment certificates with the NGHI bonds.

 

It appears that NGHI promoters and directors are using the company as a vehicle to subvert the SEBI order against Nicer Green, SEBI said.

 

SEBI through an interim order dated 9 July 2012 had prohibited these entities from trading in the securities market and had also restrained from accessing the securities market.

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No need to pay deposit for investors seeking arbitration reference

Stock market investors seeking arbitration reference for claims of up to Rs10 lakh would not be required to make any deposits with the stock exchanges and expenses on such applications would be borne by the bourses

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has said investors seeking arbitration reference for claims up to Rs10 lakh would not be required to make any deposits with the stock exchanges and expenses on such applications would be borne by the bourses, reports PTI.

 

Arbitration process generally refers to resolving disputes through an out of court settlement.

 

"A client, who has claim/counter claim up to Rs10 lakh and files arbitration reference, shall be exempt from the deposit. Expenses thus arising with regard to such applications shall be borne by the stock exchanges," SEBI said in a circular.

 

Prior to this change, investors who were resorting to arbitration reference for claims up to Rs10 lakh were exempted from making any deposit only if they filed the application within six months.

 

The six-month period was computed from the end of the quarter during which the disputed transaction(s) were executed or settled. The period excludes time taken by the Investors Grievances Redressal Committee of the stock exchange to resolve the dispute as well as the time taken by the member to attempt the resolution, among others.

 

SEBI has asked stock exchanges to immediately make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the new guideline.

 

According to the latest circular, stock exchanges are required to bring the change to the notice of its members and also disseminate the same through their websites.

 

The market regulator has asked the bourses to communicate to it, "the status of implementation of the provisions of this circular in the Monthly Development Reports".

 

Modifications have been made to the SEBI circular dated 31st August 2010.

 

The arbitration committees on the BSE and the NSE help settle disputes between a client and broker, or disputes among brokers.

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