Finance minister meets SEBI board; discusses plans for foreign investors

SEBI chairman UK Sinha informed the media that the finance minister has emphasised on the need for the regulator to be alert on various issues concerning the capital markets, including the technology related challenges

Finance minister P Chidambaram on Friday discussed with the Securities and Exchange Board of India (SEBI) the future agenda for growth of capital markets, as also steps needed for simplified KYC norms for foreign investors.
After a meeting between SEBI board members and Chidambaram, SEBI chairman UK Sinha told reporters that the finance minister has emphasised on the need for the regulator to be alert on various issues concerning the capital markets, including the technology related challenges.
Sinha said the Chidambaram addressed the SEBI board which made a presentation to the finance minister regarding various steps taken by the regulatory authority, as also on its future agenda.
The issues discussed also included simplified set of KYC norms for foreign investors and various new offices being opened by the regulator in different parts of the country for the benefit of the markets and investors.
With regard to the ongoing probe into a crash in some mid-cap stocks recently, Sinha said that the investigations are continuing and SEBI has collected some data in this regard.
SEBI chief said that the information collected so far is not conclusive in nature and the probe would take some more time.
“But, we want to assure everyone that we are acting very fast whenever there are attempts for market manipulations,” Sinha said.
SEBI chairman said that the finance minister also expressed satisfaction over various steps being taken by the regulator for the capital markets. 
According to Sinha, Chidambaram expressed satisfaction on various measures by SEBI including 25% public shareholding norm.
Further, Sinha said that the finance minister has assured that PSUs would follow the minimum public shareholding norms.
He said the market regulator is planning to open more offices across the country. “We also told him (finance minister) of our plans to reach out to various parts of the country. For example SEBI has been opening new offices in the last two years,” he said.
“There is a plan to open more and more offices,” he added.
On the subject of Know Your Customer (KYC) norms, the chairman said that process is on to make the norms simpler for the investors.
“We will be able to do it (KYC norms) in a manner that both domestic and foreign investors find that investments are becoming easier in the country,” he said.
Sinha further said SEBI would not “compromise on the KYC part in the sense that any risk will not be allowed to take place and also ensure how we can make it more simple,” The process is on and very shortly SEBI will be announcing that, he said.
Further, Sinha informed that the Chandrasekhar Committee which working on guidelines for foreign investors would be holding a meeting on 19th March.
Responding to question on Rajiv Gandhi Equity Savings Scheme, he told reporters that SEBI is ready on its part.
“If you read it (the budget document) clearly the changes have to be made by the government... It is more of a tax issue,” he said.
With regard to the mid-cap crash in July last year where shares of certain companies had fallen in the range of 20%-26%, the SEBI chairman said that it is still under probe and will take more time.
“We have acted fast... It will take a little more time. Let me assure that if there is any attempt by anybody for manipulation we will act very fast,” he said. 


World Bank bars L&T for six months over forgery

The debarment pertains to a bid submitted by L&T through regional business head of its medical equipment and systems unit to a World Bank-financed project in Tamil Nadu in 2008

The World Bank (WB) has barred Indian conglomerate Larsen & Toubro (L&T) from doing any business with it or the projects funded by it for six months, after finding that a senior executive of the Indian conglomerate has indulged in fraud.
The debarment will continue till 6th September, making L&T ineligible for being awarded contracts for any World Bank-funded projects, from receiving any loan proceeds made by the WB or participating in any of the project financed by it.
The matter pertains to a bid submitted by L&T through regional business head of its medical equipment and systems unit to a World Bank-financed project in Tamil Nadu in 2008.
L&T submitted a bid on 3 September 2008 through the regional business head, to supply 130 ultrasound scanners under the TN Health Systems project. Upon evaluation, L&T’s bid was found to be the lowest-priced, but a complaint was later received that some certificates submitted by the company might have been forged.
The bid contained 115 performance certificates purportedly issued by medical facilities stating that the ultrasound scanners supplied by L&T were working well.
The official said that some medical facilities may have mistakenly denied issuing the certificates. In December 2008, the World Bank has cancelled the tender and awarded the contract to another company. 


Ladies, here's how to manage your money

In the first half of Moneylife Foundation's fourth annual Women's Day event (supported by DSP BlackRock's Winvestor Initiative), Mumbai-based financial planner Sujata Kabraji provided our audience with a step-by-step process, tailor-made for women, to financial success. Sharing many mistakes that she herself made early on and the bad decisions of her clients, Ms Kabraji provided practical solutions to the mistakes women so often make while investing their hard-earned money.

Moneylife Foundation’s 4th annual Women’s Day event (supported by DSP BlackRock's Winvestor Initiative) began with a lecture by Ms Sujata Kabraji on the ‘10 Financial Mistakes that Women Make and How to Avoid Them!’. Using her years of experience as a stock broker and financial planner, Ms Kabraji made matters clear to all those in the audience, no matter how financially inept. With her fun slides and honest advice, she managed to make a dull subject very interesting. Here’s what she said.

I’m young and I wanna have fun!

Ms Kabraji started her lecture by advising young women to think about what better use they could use their money instead of splurging on shopping and entertainment. She said, “In my early 30s, I used to go out with my friends about three times a week. It would cost me around Rs2800. I’m not here to tell you what you shouldn’t do, but if someone had told me what I would have earned if I had put aside that money at least some of the weeks, it would have an impact on my life.” Ms Kabraji said that it may be good to note what you’re spending on each week and then cross out the things you really need.

I’m smart, I have life insurance!

A lot of people believe that life insurance is for investment, not protection. However, insurance agents promote investment-oriented insurance policies, as these give them more commissions. Ms Kabraji says, “You only need to remember one type of insurance policy – term insurance. I would also advise you to only buy insurance if you have dependents. I think it’s good to ponder over whether you actually need insurance. A lot of us buy term insurance simply because it gives us tax benefits.”

Health can eat into your wealth

Health insurance is important. Unlike life insurance, all of us need health insurance. This goes for those covered by corporate plans, too. Ms Kabraji says, “A friend of mine, Sheetal, was insured by her company for Rs5 lakh. Her parents were also insured for Rs3 lakh. Then her company went through a rough patch and she was offered voluntary retirement. She took it and start a small business from home. When she then went to take her own medical cover, she was asked to do her medical. She was diagnosed with diabetes. Now, her policy doesn’t cover diabetes-related diseases and is costing her an arm and a leg.” Ms Kabraji, therefore, advised participants to buy health insurance early on.

Honey, tell me where to sign

Too many women sign wherever their husbands ask them to, no matter what the documents. This includes wills, property, cheques, and other important documents. Ms Kabraji said, “A dear friend of mine was left penniless and husbandless after her spouse left for a younger woman, after not bothering to look at what she was signing.”

Dip your toe into the water, girl!

Women are often frightened of investing in anything but gold. Ms Kabraji advised participants to look at inflation-adjusted returns. She said, “Gold gives poor returns after inflation. Comparatively, equity delivers much better returns and is a way to beat inflation.” Ms Kabraji said that volatility is unavoidable if you want to grow your money.

Tax slab? I prefer chocolate slabs!

Ms Kabraji said that just because you’re saving money doesn’t mean you’re not making a mistake. She says, “A client of mine, when she was under 30, had saved over a crore. She had a high-paying job. She would also save her money. But she would only put in fixed deposits. Last year, she was earning 10% a year. But this would’ve made the tax department very happy. On Rs1 crore, she would have been paying Rs3 lakh to the tax department. When she came to me for help, I just moved her money to a product with a lower tax liability.”

Make sure you have the money to party on!

A lot of women think first about their husband and children, but forget that statistically they’re more likely to live longer than their husbands. She says, “You need to remember that you may live until well after everyone else is gone. A friend of mine spent all her money on her kids, without thinking about herself. When she quit her job, she had just Rs35 lakh, which she got as lump-sum on retirement. Surely, this won’t be enough for the next 30 years. Had she been smart about her money early on, she may not have been in the situation she is currently in.”

Ugh! Paperwork

Both men and women have the tendency to avoid what requires even a little bit of paperwork. When paperwork is avoided, a lot of problems can crop up. Ms Kabraji says, “If we don’t do the paperwork, we’re bound to find ourselves in bad situations. There are bad and good stories related to avoiding paperwork. Let me tell you a happy one. A friend of mine had three cupboards full of papers that belonged to her parents. She didn’t go through them. When she did, though, she found that there were Tata shares worth crores just lying in the cupboard.”

Will? What’s that?

It’s easy to disregard what is yet to come. So we constantly postpone making a will. But this is far from the right decision. Ms Kabraji says, “My parents did a wise thing by telling their two  daughters and a son how the family wealth would be split while they were alive. We were told to raise our objections while they were alive, not after. Making a will may not be prevent problems later on, but it does at least put your foot in the door.” Sujata Kabraji then went on to explain which relatives the Indian Succession laws let come after your money.

Numbers make me cross-eyed

It’s easy to be confused by numbers, but there’s no point running away from these calculations. Ms Kabraji said, “I am a statistics major, but I can’t do any mental math. I need a calculator. The solution is not avoiding the complications of a financial product. All you need to do is ask the right questions.”


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