New Delhi: Merchant bankers cannot refer clients for alternative investments beyond the securities market, such as corporate deposits and real estate, the Securities and Exchange Board of India (SEBI) has said while rejecting a plea by Barclays Securities, reports PTI.
Merchant bankers act as intermediaries between entities seeking to raise capital through sale of securities and the purchasers of these securities.
Referring clients to entities providing alternative investment services beyond the securities market do not fall under the permitted businesses for merchant bankers, SEBI has said.
Barclays Securities India Pvt Ltd (BSIPL), a wholly-owned subsidiary of UK-based banking major Barclays Bank Plc, is registered with SEBI as a portfolio manager, stock broker, merchant banker and depository participant.
The company had approached SEBI in June 2010 seeking an 'informal guidance' on whether it can engage in the business of referring clients to "Alternative Service Providers (ASPs) for non-security related products and/or services."
Barclays said such ASPs could include investment banking firms arranging investment in corporate deposits and inter-corporate deposits, property consultants for purchase and sale of real estate, companies accepting corporate deposits and firms assisting in placement of such deposits.
Besides, Barclays also listed out banks, NBFCs, home finance companies or any other lenders, including but not limited to the Barclays group, who can provide credit products.
Barclays said that such referral agreements would have no financial liabilities and would involve payment of referral fees to it based on volume of business.
BSIPL sought a 'no action letter' from SEBI, stating that its proposed activities would not attract any sanction from the regulator for it being a stock broker or merchant banker.
In its guidance, SEBI said that a stock broker may engage in referral business which does not involve any personal financial liability, subject to some conditions.
However, BSIPL was also registered as a merchant banker and the regulations do not allow merchant bankers to carry on any business other than the securities market.
SEBI said that an amendment to its merchant banking regulations permitted merchant bankers to engage in activities such as project advisory services, rupee loan syndication and international financial advisory services, but these did not include the activities requested by Barclays.
"Since referral activities for non-security related products and/or services does not fall within the purview of the activities permitted by regulation..., you are not permitted to undertake such business," SEBI has informed BSIPL.
Axis Bank launches AxisDirect; Birla Sun Life MF floats Fixed Term Plan-Series CL; ICICI Pru MF introduces Fixed Maturity Plan-Series 53-1 Year Plan F; Birla Sun Life MF unveils Short Term FMP-Series 4
Axis Bank launches AxisDirect
Axis Bank has launched AxisDirect, an online trading platform, marking their foray into retail broking business. AxisDirect is a product of Axis Securities and Sales Ltd, a 100% subsidiary of Axis Bank.
AxisDirect will offer multiple options to the customers for trading in cash, derivatives, IPO segments through NSE and BSE. The customers will also have the benefit of well-researched information about various corporate, access to independent third party research, stock research and analysis tools, and a host of innovative features and functionalities.
Axis Bank has partnered with Tata Consultancy Services (TCS) to develop this platform.
With this service, customers can research, analyse and trade from anywhere through the website, all from single integrated window. TradePassport is a simple detachable order entry panel that allows customers to execute orders from wherever they are online. It can be detached simply from the website or parent window and can be taken anywhere on the desktop with secure connection to AxisDirect trading account.
AxisDirect intelligent order entry panel allows customers to know their potential capital gains before trade order confirmation. Customers can benefit with investment ideas and access to in-house as well as best-in-class third party research and information from leading names in the industry including Recognia, The Screener, Reuters and more. With trading tools, customers can research stocks based on either pre-defined or customised parameters simultaneously. Customers can avail enhanced equity and derivatives products like Encash, Cover, E-Margin, Intraday Margin, limits against collateral securities. With trade on phone service, customers can take advantage of market opportunities when they are on the move or if they cannot access Internet.
Birla Sun Life MF floats Fixed Term Plan-Series CL
Birla Sun Life Mutual Fund has launched Birla Sun Life Fixed Term Plan-Series CL, a close-ended income scheme.
The scheme seeks to generate income by investing in a portfolio of fixed income securities maturing on or before the duration of the scheme.
The new issue opens on 5th January and closes on 13th January. The minimum investment amount is Rs5,000.
ICICI Pru MF introduces Fixed Maturity Plan-Series 53-1 Year Plan F
ICICI Prudential Mutual Fund has launched ICICI Prudential Fixed Maturity Plan-Series 53-1 Year Plan F, a close-ended scheme.
The investment objective of the plan under the scheme is to seek to generate regular returns by investing in fixed income securities/debt instruments which mature on or before the date of maturity of the plan/scheme.
The new issue opens on 5th January and closes on 18th January. The minimum investment amount is Rs5,000.
Birla Sun Life MF unveils Short Term FMP-Series 4
Birla Sun Life Mutual Fund has launched Birla Sun Life Short Term FMP-Series 4, a close-ended income scheme.
The scheme seeks to generate income by investing in fixed income securities maturing on or before the duration of the scheme.
The new issue opens on 5th January and closes on 6th January. The minimum investment amount is Rs5,000.
Mumbai: United Stock Exchange of India (USE), India's newest stock exchange has signed a memorandum of understanding (MoU) with the Associate Chamber of Commerce and Industry of India (Assocham) to promote activities aimed at creating awareness of the high growth potential in the Indian financial markets.
The MoU which was signed at Assocham's Delhi office will be aimed specifically at developing skill sets pertaining to using exchange traded currency derivatives to hedge the currency risks. The pact also entails a host of other activities intended at empowering end-users by organizing seminars, panel discussions, webcasting and presentations on financial markets and corporate governance. It will further help in creating a solid infrastructure of knowledge based technical studies related to financial markets through research, special training and education programs.
"The signing of the MoU with United Stock Exchange will involve a wide range of activities in order to enhance knowledge and awareness of the financial markets, a move which will be beneficial for all the end-users operating in this sector," said DS Rawat, Assocham secretary general.
Speaking on the development, TS Narayanasami, managing director & CEO of USE said, "We are delighted to be associated with the Associate Chamber of Commerce and Industry of India as this marks the beginning of various collaborative initiatives. The aim of this MoU is to empower people with knowledge and develop skill sets pertaining to financial markets."
USE has a unique public-private partnership with equity participation by both PSUs and the private sector banks. Apart from banks, Jaypee Capital, MMTC and Indian Potash also have stakes in USE. The Bombay Stock Exchange holds a 15% stake and all its members are connected to the new USE platform.