SEBI chairman UK Sinha said ‘Know Your Customer’ details will have to be submitted to the market regulator for any P-Note issued post-September quarter
Kolkata: Market regulator Securities and Exchange Board of India (SEBI) today said the new disclosure norms on participatory notes (P-Notes) would be sufficient to keep a tab on hot money flowing into stocks and these guidelines would be in force by October-end, reports PTI.
“Any P-Note issued by brokers, Know Your Customer (KYC) details has to be submitted to SEBI from October-end,” SEBI chairman UK Sinha said here today at an interactive session at the Bharat Chamber of Commerce here.
“The new disclosure norms for P-Notes to SEBI will be sufficient to keep a tab on foreign money flowing in,” Mr Sinha said when asked about reports of black money flowing back into the Indian market.
He later said SEBI had made mandatory for KYC details for all P-Notes issued post-September quarter.
“We do not want to discourage, but a set of rules will be framed for investor protection,” Mr Sinha said.
P-Notes are instruments like contract notes issued by FIIs to overseas investors who cannot directly invest in equity market as they are not registered.
Mr Sinha said SEBI would iron out operational issues like KYC norms for FIIs investment in mutual funds. “There are some operational issues, but they will be sorted out,” he said.
SEBI will also take a decision on overhauling the IPO process, saying, “We are taking a complete relook at the IPO process.”
Meanwhile, SEBI today asserted that the regulator would not spare any violation of regulation and take strict action.
“Unless we take strong action, the situation will not improve,” Mr Sinha said.
He said the client code modifications were to the tune of Rs56,000 crore per month. “When SEBI took action, it came down to Rs120 crore a month. Even now we are not happy.”
Mr Sinha said that one particular stock exchange’s under recovery of margin in the past was as high as Rs12,000 crore which, he feared, could have led to a payment crisis.
All panellists of the Ponzi scheme are eagerly waiting for their money they had ‘invested’ in Speak Asia for earning huge returns. According to investigative reports, almost half of the money collected by Speak Asia was transferred to Singapore, while the rest may still be in India
The Economic Offences Wing (EOW) has speeded up the investigation in the Speak Asia scam to find out where the last source of the money—which the company collected on the pretext of giving income merely for filing e-surveys—was sent.
Sources from the investigating agency confirm that Speak Asia’s financial consultant has given a few leads in the matter before been sent to jail. An officer close to the investigation, preferring anonymity, told Moneylife, “Our major focus of the investigation is to find out the money trail. So far, it is learnt that some amount has been sent to Singapore, while the remaining is still in India.”
In the meantime, there are several sites and blogs which have come up over the Internet claiming to provide “latest and authentic” information about Speak Asia. However, all the sites and blogs are merely copying each other and trying very hard to keep their herd intact. One can see the mood of panellists from the comments posted below each article or blog post. The official website of Speak Asia remains down.
Currently, the EOW has arrested Speak Asia’s financial consultant Sanjeev Dandona and Nayan Khandor, a Mumbai-based Web designer responsible for designing e-surveys. “Both of them have been sent to jail custody till 26th October,” said an official from EOW.
Mr Dandona was arrested by the EOW on 29th September, after it was learnt that he was the proxy owner of Kritanj Management & Allied Services and is linked with Speak Asia. Kritanj Management is the master distributor of Singapore-based Haren Ventures Pte Ltd (HVP) for e-zines in India. Mr Dandona is also alleged to be advising HVP and Tulsient Tech Pvt Ltd and also transferring funds collected by Speak Asia agents to Singapore.
Just the day after the arrest of Mr Dandona, it was revealed that the online surveys, which Speak Asia used to claim (and its agents used to believe), were actually created not in Singapore, but in Mumbai. This was revealed following the arrest of Nayan Khandor on 30th September, a Web designer and director of Dadar (central Mumbai)-based Brand Salon, who said that his firm was active in creating the online surveys for Speak Asia.
During the interrogation, Mr Dandona had revealed that Speak Asia was indeed running a Ponzi scheme and Mr Khandor confessed that he designed the surveys from Mumbai itself. (See: http://www.moneylife.in/article/speak-asia-advisor-finally-confesses-the-company-was-running-a-ponzi-scheme/20369.html).
In a separate development in the same matter, the Andhra Pradesh High Court, on 11th October, dismissed the bail petitions of Rajiv Mehrotra, Speak Asia’s director, along with four other employees.
The Andhra Pradesh CID has registered a case against Speak Asia for running a money-chain business without any registration. The bail petition was dismissed and the HC also vacated a stay on the arrest of the officials after they moved the HC against the FIR (First Information Report).
If the upmove continues, the Nifty may reach 5,210
Institutional buying in the second half of the session enabled the market to close in the positive, despite headline inflation for September hovering near the double-digit mark for the 10 month in succession. Yesterday, we had mentioned that the Nifty is ranged between 5,060 and 5,130. The index opened close to 5,060 and ended a little above 5,130. If the upmove continues, the Nifty may reach 5,210. The NSE (National Stock Exchange) saw a volume of 56.65 crore shares.
The market opened flat, tracking its Asian peers which were subdued in morning trade following reports that Standard & Poor’s had cut Spain’s long-term rating by one notch. Nervousness ahead of the release of India’s inflation figures for September also kept investors on the sidelines. The Nifty opened 21 points lower at 5,057 and the Sensex started the day at 16,837, down 47 points from its previous close. The opening figure was the intraday low for the Nifty, while the Sensex dipped to the day’s low in initial trade with the index at 16,828.
A minor recovery in healthcare, IT, consumer durables and oil & gas sector stocks helped the market trade in the positive zone. Unable to hold on to the initial gains, the indices slipped into the negative just before 10am. The indices sprang back into the green a short while later on institutional buying in select stocks.
Choppy trade continued with the market almost touching its previous close in the post-noon session on fears that the Reserve Bank of India may hike interest rates yet again in its quarterly policy review later this month as inflation continues to hover near the double-digit mark for 10 months in a row.
The market hit its intraday high in the last half hour with the Nifty rising to 5,141 and the Sensex scaling 17,112. The closing was a tad below those levels as the Nifty added 54 points to 5,132 and the Sensex rose to 17,083, a gain of 199 points.
The advance-decline ratio on the NSE was almost equal at 902:820.
Among the broader indices, the BSE Mid-cap index gained 0.55% and the BSE Small-cap index rose 0.31%.
BSE IT, BSE TECk (up 2.61% each), BSE Oil & Gas (up 1.53%), BSE Fast Moving Consumer Goods (up 1.09%) and BSE Auto (up 0.99%) were the top sectoral gainers. The losers were BSE Realty (down 1.36%), BSE Metal (down 0.56%), BSE Capital Goods (down 0.47%) and BSE PSU (down 0.37%).
The Sensex toppers were Jindal Steel (up 5.01%), TCS (up 4.01%), Wipro (up 3.98%), Bharti Airtel (up 3.76%) and Bajaj Auto (up 2.85%). Coal India (down 2.91%), Tata Steel (down 2.84%), DLF (down 2.68%), Maruti Suzuki (down2.65%) and Larsen & Toubro (down 0.74%) settled at the bottom of the index.
The key performers on the Nifty were Jindal Steel (up 5.36%), Wipro (up 3.98%), TCS (up 3.87%), Bharti Airtel (up 3.81%) and IDFC (up 3.57%). The major losers on the index were Sesa Goa (down 4.41%), Tata Steel (down 3.57%), DLF (down 3.02%), Coal India (down 2.94%) and Maruti Suzuki (down 2.72%).
Markets in Asia closed mostly lower as Chinese consumer inflation for September remained above the 6% mark at 6.1%. S&P’s downgrade of Spain’s long-term credit rating by one notch also weighed on investors’ sentiments.
The Shanghai Composite fell 0.30%; the Hang Seng declined 1.36%; the Jakarta Composite lost 0.29%; the KLSE Composite slipped 0.17%; the Nikkei 225 fell 0.85% and the Taiwan Weighted closed 0.95% lower. On the other hand, the Straits Times rose 0.37% and the Seoul Composite gained 0.67%.
Back home, foreign institutional investors were net buyers of stocks worth Rs670.08 crore on Thursday while domestic institutional investors were net sellers of shares worth Rs257.36 crore.
Tensions ran high at Maruti Suzuki India’s Manesar plant on Friday with about 1,500 police personnel entering the factory and asking the striking workers to vacate the premises as per the Punjab and Haryana High Court order. The workers, however, said they will not leave the factory unless forcibly evicted. The stock declined 2.72% to settle at Rs1029.50 on the NSE.
Nectar Lifesciences has received European approval for its Cephalosporin APIs manufacturing facility at Derabassi in Punjab. The certificate is accepted by all European Union health authorities besides several other countries, the company said. The stock soared 11.89% to close at Rs24 on the NSE.
The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs5 lakh on retail major Pantaloon for failing to address investor grievances within the stipulated timeframe. SEBI had earlier identified the Kishore Biyani-promoted firm as one of the companies against whom a large number of investor grievances were pending for more than six months as on 30th June last year. Despite the development, the stock gained 1.16% to close at Rs196.80 on the NSE.