Regulations
SEBI tightens exposure norms for mutual funds, provides exit opportunity for dissenting investors
SEBI Board also decided to provide an exit offer to dissenting investors in a listed company, if promoters are found diverting from stated usage of funds raised through public offer
 
Market regulator Security and Exchange Board of India (SEBI) has decided to tighten exposure norms for mutual funds for investments in riskier debt instruments. 
 
The SEBI Board, in its meeting at Mumbai, also decided to provide an exit offer to dissenting investors in a listed company, if promoters are found diverting from stated usage of funds raised through public offer. The Board has also approved new norms for issuance and listing of green bonds.
 
"The Board deliberated the proposals relating to review of prudential limits at issuer and sector level and the need to introduce such limits for group level exposure. It considered that review of single issuer, sector level exposure limit and introduction of group level exposure limits for investment in debt instruments would mitigate risks arising on account of high levels of exposure in the wake of events pertaining to credit downgrades, put mutual funds in a better position to handle adverse credit events and provide mutual fund investors with enhanced diversification benefits," the market regulator said in a release.
 
Here are the decisions taken by SEBI to reduce exposure of MFs...
  1. Amend SEBI (Mutual Funds) Regulations, 1996 to merge credit exposure limits for single issuer of money market instruments and non-money market instruments at the scheme-level.
  2. Amend SEBI (Mutual Funds) Regulations, 1996 so that single issuer limit is reduced to 10% of NAV extendable to 12% of NAV after trustee approval.
  3. Reduce exposure limit to a single sector from the current 30% of NAV to 25% of NAV.
  4. Reduce additional exposure limit provided for Housing Finance Companies (HFCs) in finance sector from 10% of NAV to 5% of NAV.
  5. Introduce group level limits for debt schemes through issuance of appropriate circular and the ceiling be fixed at 20% of NAV extendable to 25% of NAV after trustee approval. A group, for this purpose, refers to group as defined under section 2 (mm) of SEBI (Mutual Funds) Regulations, 1996 and includes an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. All Government owned PSU entities, PFI & PSU banks will be excluded from group level limits.
  6. Trustees to review exposure of a mutual fund, across all its schemes, towards individual issuers, group companies and sectors. Trustee should satisfy themselves on the levels of exposure and confirm the same to SEBI in the half-yearly trustee report.
  7. Applicability
    a. The aforesaid investment restriction shall be applicable to all fresh investments by a new scheme or an existing scheme.  
    b. Appropriate time shall be given for AMC to confirm that such mutual fund schemes confirm to the aforesaid investment restrictions.
 
The SEBI Board decided to provide an exit opportunity to dissenting shareholders under the Companies Act, 2013. The Act provides that a company, which has raised money from public through prospectus and still has any un-utilised amount out of the money so raised, shall not change its objects for which it raised the money through prospectus or vary the terms of a contract referred to in the prospectus unless a special resolution is passed by the company. 
 
The Act also provides that dissenting shareholders, shall be those shareholders who have not agreed to the proposal and they shall be given an exit opportunity by promoters and shareholders having control over the company, in such manner and conditions as may be specified by SEBI by making regulations in this behalf. 
 
Following a consultative process, the Board approved the proposal to amend the SEBI (ICDR) Regulations, 2009 for laying down the framework in this regard, the market regulator said. 
 
SEBI also approved disclosure norms for green bonds. The financing needs of renewable energy space in the country require new channels to be explored, which can provide not only the requisite financing, but may also help in reducing the cost of the capital. Further, India's Intended Nationally Determined Contribution (INDC) document puts forth the stated targets for India's contribution towards climate improvement and following a low carbon path to progress. The document also impresses upon the need of financing needs for achieving the stated goals.
 
The Board considered and approved the proposal for disclosure requirements for issuance and listing of Green Bonds, which have been formalised after consultation with the public, SEBI said. 
 
The SEBI Board also considered and approved a proposal for introduction of primary market debt offering through private placement on electronic book. The key benefits of such an electronic book inter-alia, are improvement in efficiency and transparency of the price discovery mechanism vis-à-vis over-the-telephone market and reduction of cost and time taken for such issuance, SEBI added.

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Shiv Sena Councillor wants reports on study tours to be published
Administrative staff and corporators going on ‘study tours’ at taxpayers’ expense should be asked to submit a report along with a follow up action plan says Prof Jadhav, a nominated councillor from Shiv Sena in a notice of motion submitted to the BMC mayor 
 
Professor Avkash Jadhav, Shiv Sena's nominated councillor in the Municipal Corporation of Greater Mumbai or Brihanmumbai Municipal Corporation (BMC) has moved a notice of motion proposal for publishing reports on study tours by councillors and officials at public expenses and the action taken report. Study tours are a euphemism for fun junkets at government expense.
 
"after the end of such study tours by the administrative staff or by the legislative body, a Report should to be submitted, along with a follow up plan... as this will enable the appropriate utilisation of the taxpayers money and will set some guidelines and accountability to such study tours," Prof Jadhav had said in his proposal submitted to the BMC Mayor.
 
Welcoming the proposal, Shailesh Gandhi, former Central Information Commissioner (CIC) under the Right to Information (RTI) Act, said, "This is indeed a very good proposal for accountability and probity, which should get public support."
 
Citizens have often protested about elected representatives going on pleasure tours within the country and abroad. These tours are mislabelled study tours. There is no outcome of any benefit to citizens, but these are opportunities for fun and frolic at public expense, Mr Gandhi said.
 
According to a report from DNA, out of 227 corporators, over half will be on tour this month onwards. "Roads and pavements. That is what the corporators of the BMC want to study in Andaman and Nicobar Islands, this winter. This is not the only destination where the choice and purpose is bizarre. Exotic locales in Jammu & Kashmir and Kerala too come under the 'study tour' list. While in Kashmir they will study gardens and markets, in Kochi in Kerala, they will study parks and parking system. And all this at the cost of public money," the report says.
 
According to the report, each trip costs about Rs10 lakh and the BMC, one of the richest municipal corporations, could end up spending around Rs1 crore on all the trips put together. It said, "Not just the corporators. Officials will also undertake such trips. While the BMC's improvements committee will head to Jammu, the education committee members are planning a Dehradun visit and the health committee is heading to Sikkim."

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COMMENTS

Shirish Sadanand Shanbhag

10 months ago

All study tours by Councilors is for pleasure. Some councilors went to Andaman & Nicobar islands, to study storm water drains.
It is only at Port Blair, that Island state has Municipality, which has 3,50,000 population. We cannot take any model from that state, except for rainwater harvesting.
Rainwater harvesting is going on for centuries at all the islands, not only in India, but also in other countries. We can study it at Elephanta Islands near Mumbai and other islands near the coast of Maharashtra State.

Meenal Mamdani

1 year ago

High time some one asked pertinent questions about these travel junkets. Surprising though that a SS councilor has proposed this, a party not known for responsible behavior. Pretty sure the Prof will not get nominated again.

Connectivity, digitization to influence auto industry till 2025: KPMG
New Delhi : Connectivity and digitisation are the most important trends which could influence the global automobile industry from 2016 to 2025, said KPMG Global Automotive Executive Survey (GAES) released on Monday.
 
Based on interviews of 800 top auto executives in 38 countries, GAES shed light on business model disruptions, connectivity and digitization, customer data, new products and players in the industry and how data, consumer analytics and informational engineering will play a vital role.
 
According to 82 percent of the respondents, the auto industry will experience major business model disruptions in the next five years.
 
"In order to meet their current needs, becoming a customer-oriented service provider is of utmost importance. One way traditional car makers can add value and offer customised client experiences is by leveraging the massive amount of data that both the car and its drivers produce," said KPMG's global head of automotive, Dieter Beck, in a statement.
 
Nearly 20 percent of the respondents highlighted that by 2025, original equipment manufacturers (OEM) could simply become contractor manufacturers to information and communications technology (ICT) companies.
 
On the evolving situation in India, GAES said that a majority of Indian respondents said the industry will witness disruption in the years ahead.
 
"Connectivity and digitisation are likely to impact all automotive companies in India. Volume and mass market manufacturers are also expected to be affected as they are prone to lose customer relationships in the future to new entrants (likely from the ICT sector) in this space," said KPMG India's automotive sector head Rajeev Singh.
 
However, GAES found the use of data and informational engineering to be at a nascent stage and a change in customer mindset in providing data.
 
"A majority of the customer respondents across all age groups said that monetary benefits for their data is the most attractive benefit, followed by customer incentive schemes, and individualised service and customer experience," added Becker.
 
Other important influencing factors include macroeconomic factors, oil price volatility and fluctuating raw material costs among others.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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