SEBI asked to probe charges that NSE harming investors’ interests

Accusing NSE of having issued some circulars deliberately to favour stock brokers, in violation of SEBI rules and guidelines, the Investors Protection Group plea had sought the court’s directions to SEBI to probe the issuance of those circulars

New Delhi: Stock market watchdog Securities and Exchange Board of India (SEBI) was on Wednesday asked by the Delhi High Court to examine an investor group’s allegation that the National Stock Exchange (NSE) was acting against investors to protect stock brokers’ interests, reports PTI.

“The issue raised by the petitioner needs serious consideration by SEBI,” said a bench of acting chief justice AK Sikri and justice Rajiv Sahai Endlaw, disposing a petition by Investors Protection Group (IPG), a group of investors.

Accusing NSE of having issued some circulars deliberately to favour stock brokers, in violation of SEBI rules and guidelines, the IPG plea had sought the court’s directions to SEBI to probe the issuance of those circulars.

The investors also accused NSE of providing information to investors/clients only after they are ordered to do so by an arbitration award.

The group further alleged NSE is allowing brokers to make agreements on their own without mandatory signature of the clients required at the time of registration.

The investors group also alleged SEBI was shirking its responsibility and was not ensuring proper implementation of directions, guidelines, bye-laws for protection of investors at large and not regulating the market as required for the smooth running of financial institution.

It is also not taking appropriate steps for the protection of the small investors, the IPG plea added.

It also alleged the regulator and NSE are acting in collusion to protect the interests of stock brokers.

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Stake transfers in oil fields to NRIs to come under FEMA: RBI

At present, 100% FDI is permitted in exploration and production of oil and gas under automatic route, requiring no prior approval. But now even cases like UK’s BP Plc buying 30% interest in 23 oil and gas blocks of RIL for $7.2 billion would be treated as FDI for the purpose of reporting under FEMA

Mumbai: The Reserve Bank of India (RBI) has notified that all transfer of stake or interest in an oil and gas field to non-residents will be treated as foreign direct investment (FDI) and will have to be reported under the Foreign Exchange Management Act (FEMA), reports PTI.

At present, 100% FDI is permitted in exploration and production of oil and gas under automatic route, requiring no prior approval.

But now even cases like UK’s BP Plc buying 30% interest in 23 oil and gas blocks of Reliance Industries (RIL) for $7.2 billion would be treated as FDI for the purpose of reporting under FEMA.

“It has now been decided, in consultation with the government, to treat the issue/transfer of ‘participating interest/rights’ in oil fields to a non-resident as FDI transaction under the extant FDI policy and the Foreign Exchange Management Act (FEMA regulations),” the RBI said in a notification.

It said that such transactions will have to be reported as FDI transactions under provisions of FEMA.

Transfer or sale of stake or participating interest in an oil field like Reliance’s KG-D6 is permitted under present rules. Since 100% FDI under automatic route is permitted in exploration and production, the transfer to non-residents was not covered under FEMA reporting rules.

As per the FEMA regulations, transfer of equity shares or fully and mandatorily convertible debentures or convertible preference shares of an Indian company, from a resident to a foreigner or vice-versa has to be reported to an authorised dealer bank within 60 days of transactions.

Further, the receipt of consideration for issue of shares of an Indian company to a non-resident has to be reported to the RBI though such a bank within 30 days of the transaction.

This will also entail reporting the transfer of participating interest/rights under the ‘other’ category in the FC-TRS declaration form.

The RBI said that necessary amendments to the FEMA will be notified separately for facilitating the new changes.

Reliance had earlier this year sold 30% interest in its 23 oil and gas blocks, including the showpiece eastern offshore KG-D6 fields, to Europe’s second-largest energy firm BP Plc for $7.2 billion, the single largest foreign investment in the country.

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Morgan Stanley calls on India to accelerate policy reforms

Morgan Stanley sees India’s GDP growth at 7.3% this fiscal and 7.4% in the following year, but warns that the Eurozone crisis can impact the country’s exports

Singapore: The Indian government must accelerate implementation of major policy reforms to attract investments and keep up with projected economic growth, reports PTI quoting Morgan Stanley Asia’s managing director Chetan Ahya.

India should undertake strengthening of its institutional capacity to allocate critical national resources such as land and minerals to public and private corporate sector in a transparent manner for rapid industrialisation, Mr Ahya told reporters at the two-day Morgan Stanley Asia Pacific Summit that started here today.

Mr Ahya pointed out that India’s two-pronged strategy needed strengthening of institutional capacity to manage transparent awarding of major infrastructure projects under public-private route.

India should also build a comprehensive plan for energy security along with a systematic programme for energy pricing reforms, Mr Ahya said while stressing on the need for initiating aggressive fiscal consolidation.

He said the country should allow foreign direct investment in multi-brand retail distribution, insurance and other areas to build a sustainable source of capital inflows.

Mr Ahya called on India not to delay any further the 25-30 planned infrastructure projects as quick executions of these investment-oriented developments would bring in the much needed foreign investments and capitals.

He noted India’s good initiatives including the awarding of national highway contracts and reducing the environmental approval delays for coal mining.

However, Mr Ahya cautioned that clear signs of Indian economic slowdown have emerged in the last three to four months, even though the economy had till March this year maintained relatively strong growth.

Morgan Stanley sees India’s gross domestic product (GDP) growth at 7.3% this fiscal and 7.4% in the following year, but warns that the Eurozone crisis can impact the country’s exports.

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