Southern India Regional Council of
The Institute of Chartered Accountants Of India
(Setup by an Act of Parliament)

Professional Updates- August 2017

 


SEBI TO INITIATE ACTION AGAINST NON-COMPLIANT COMPANIES WHICH ARE
EXCLUSIVELY LISTED ON DISSEMINATION BOARD

PRESS RELEASE NO.41/2017, DATED 7-7-2017

SEBI has decided to initiate action against the non -compliant "Exclusively Listed Companies (ELCs) on Dissemination Board (DB)", and its directors/promoters. These companies were earlier listed on non-operational/ derecognised stock exchanges and were required to be placed on DB. The ELCs were required to comply with the directions issued by SEBI vide circular dated October 10, 2016.

SEBI vide circular dated October 10, 2016 provided three months to ELCs on DB to submit a plan of action to the designated stock exchanges ("DSEs") either to list or to provide exit to its shareholders. Further it was also stipulated that failure to comply with the above would attract actions as enumerated below:

  • The company, its directors, its promoters and the companies which are promoted by any of them shall not directly or indirectly associate with the securities market or seek listing for any equity shares for a period of ten years from exit from the DB.
  • Freezing of shares of the promoters/directors.
  • List of the directors, promoters etc. of all non-compliant companies as available from the details of the company with nationwide stock exchanges shall be disseminated on SEBI website and shall also be shared with other agencies.
  • Attachment of bank accounts/other assets of promoters/directors of the companies so as to compensate the investors.

The time to submit the plan of action was subsequently extended till June 30, 2017.
The status of ELCs as on June 30, 2017 is as follows:

 
Description No. of ELCs
ELCs on Dissemination Board as on October 10, 2016 2253
ELCs which have obtained listing on the Main Board of the Exchanges 189
Companies Exited/ Removed from Dissemination Board 64
Companies on the Dissemination Board as on June 30, 2017 2,000
Companies which have submitted the plan of action 376
Companies which are not traceable 1,088
Companies which are traceable and not submitted plan of action 536

Out of 536 ELCs, there are few ELCs which have made representation to SEBI/Stock Exchanges and their representations are under examination. SEBI has extended the time to submit plan of action by such ELCs till September 30, 2017. In line with its circular, SEBI shall now initiate action against the non-compliant companies and its directors/promoters.

With respect to the 1088 companies, which are not traceable, a process has been initiated for their inclusion in the list of companies identified as 'Vanishing' (maintained by Ministry of Corporate Affairs). Once a company is declared as vanishing, SEBI debars the directors and promoters of such companies from accessing the capital market, in addition to actions that may be taken by Registrar of Companies, Ministry of Corporate Affairs, including prosecution against promoters and directors of such companies.

This is issued in the interest of investors in the securities market.


Professional Updates- June 2017

SEBI to operationalize online registration mechanism for securities market intermediaries

ONLINE REGISTRATION MECHANISM FOR SECURITIES MARKET

INTERMEDIARIES

CIRCULAR NO.SEBI/HO/MIRSD1/CIR/P/2017/38, DATED 2-5-2017

  • 1. Hon'ble Minister of Finance, Government of India, in his speech while presenting the Budget for FY 2017-18 on February 01, 2017, announced that the process of registration of financial market intermediaries will be made fully online by SEBI.
  • 2. As you are aware, SEBI had already started development of Enterprise SEBI Portal with various custom applications, including online registration modules for various intermediaries and in this regard, had various rounds of consultation with the market participants and received feedback.
  • 3. It has now been decided to operationalize SEBI Intermediary Portal (https://siportal.sebi.gov.in) for the intermediaries to submit all the registration applications online. The SEBI Intermediary Portal shall include online application for registration, processing of application, grant of final registration, application for surrender/cancellation, submission of periodical reports, requests for change of name/address/other details, etc., Link for SEBI Intermediary Portal is also available on SEBI website - www.sebi.gov.in.
  • 4. SEBI Intermediary Portal is made operational for following intermediaries:

i.  Stock Brokers
ii.  Sub-brokers
iii.  Merchant Bankers (MB)
iv.  Underwriters (UW)
v.  Registrar to an Issue and Share Transfer Agents (RTA)
vi.  Debenture Trustees (DT)
vii.  Bankers To An Issue (BTI)
viii.  Credit Rating Agency (CRA)
  • 5. Further, SEBI Intermediary Portal will be operational for depository participants from May 31, 2017.
  • 6. Henceforth, all applications for registration/surrender/other requests shall be made through SEBI Intermediary Portal only. The applications in respect of stock brokers/sub-broker and depository participants shall continue to be made through the stock exchanges and depositories respectively.
  • 7. The applicants will be separately required to submit relevant documents viz. declarations/undertakings required as a part of application forms prescribed in relevant regulations, in physical form, only for records without impacting the online processing of applications for registration.
  • 8. Where applications are made through the stock exchanges/depositories, the hard copy of the applications made by their members shall be preserved by them and shall be made available to SEBI, as and when called for.
  • 9. In case of any queries and clarifications with regard to the SEBI Intermediary Portal, intermediaries may contact on 022-26449364 or may write at portalhelp@sebi.gov.in.
  • 10. Stock exchanges/clearing corporations and Depositories are directed to:

a. take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations;
b. bring the provisions of this circular to the notice of their members and also disseminate the same on their websites;
  • 11. This circular is issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of and to regulate the securities market.


Professional Updates- May 2017

SEBI increases limit for investment by foreign investors in Govt. securities

INVESTMENTS BY FPIs IN GOVERNMENT SECURITIES

CIRCULAR NO.IMD/FPIC/CIR/P/2017/30, DATED 3-4-2017


  • a. Limit for FPIs in Central Government securities shall be enhanced to INR 184,901 cr.
  • b. Limit for Long Term FPIs (Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks) in Central Government securities shall be revised to INR 46,099 cr.
  • c. The limit for investment by all FPIs in State Development Loans (SDL) shall be enhanced to INR 27,000 cr.
  • 3. Accordingly, the revised FPI debt limits would be as follows:

  • Type of Instrument Upper Cap as on March 31, 2017 (INR cr.) Revised Upper Cap with effect from April 03, 2017 (INR cr.)
    Government Debt 1,52,000 1,84,901
    Government Debt - Long Term 68,000 46,099
    State Development Loans 21,000 27,000
    Total 2,41,000 2,58,000

  • 4. All other existing terms and conditions, including the security-wise limits, investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, shall continue to apply.

    This circular shall come into effect immediately. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992.

    A copy of this circular is available at the web page "Circulars" on our website www.sebi.gov.in. Custodians are requested to bring the contents of this circular to the notice of their FPI clients.


Professional Updates- April 2017

SEBI

Brokers and depository participants to redress investor’s complaint within 15 days: SEBI

REDRESSAL OF COMPLAINTS AGAINST STOCK BROKERS AND DEPOSITORY
PARTICIPANTS THROUGH SEBI COMPLAINTS REDRESS SYSTEM (SCORES)
CIRCULAR NO.SEBI/HO/MIRSD/MIRSD6/CIR/P/2017/20, DATED 10-3-2017


  1. 1. SEBI has commenced processing of complaints through SCORES since June, 2011.

  2. 2. With a view to make the complaint redressal mechanism through SCORES more efficient, all stock brokers and depository participants are directed to address/redress the complaint within a period of 15 days from the receipt of the complaint. In case additional information is required from the complainant, the same shall be sought within 7 days from the receipt of the complaint. In such cases, the period of 15 days shall run from the receipt of additional information.

  3. 3. Stock Exchanges and Depositories are advised to develop a system for execution of the above.

  4. 4. The circular is issued in partial modification of earlier circulars dated August 25, 2011 and September 12, 2011 to the extent as stated above and in exercise of powers conferred upon SEBI under section 11(1) of the Securities and Exchange Board of India Act, 1992.

  5. 5. The circular is available on SEBI website at www.sebi.gov.in under the categories "Legal Framework" and "Circulars".


Professional Updates- March 2017

SEBI issues norms for exchange listing control mechanism

PROCEDURES FOR EXCHANGE LISTING CONTROL MECHANISM

CIRCULAR NO.SEBI/HO/MRD/DS/CIR/P/2017/9, DATED 27-1-2017

  • 1. Regulation 45 of the SECC Regulations provides for listing of stock exchanges on any recognised stock exchange, other than itself and its associated stock exchange. As per Regulation 45(2) of the SECC Regulations, the Board may specify such conditions as it may deem fit in the interest of the securities market.
  • 2. In order to address any conflict arising out of aforesaid provisions of listing of a stock exchange on any recognised stock exchange, other than itself, and also to ensure effective compliance with the applicable laws, it has been decided that:

  • The Listing Department of the listing stock exchange (i.e. a stock exchange on which the listing is done) shall be responsible for monitoring the compliance of the listed stock exchange (i.e. a stock exchange which is getting listed) as in the case of listed companies.
  • The Independent Oversight Committee of the listing stock exchange shall exercise oversight at the second level to deal with the conflicts, if any. The listed stock exchange may appeal to the Independent Oversight Committee of the listing stock exchange, if aggrieved, with the decision on disclosure of the listing stock exchange as referred under para 2 (I).
  • An independent Conflict Resolution Committee (CRC) constituted by SEBI, with an objective for independent oversight and review, shall monitor potential conflicts between listed and listing stock exchange on a regular basis. The listed stock exchange aggrieved by the decision of the Independent Oversight Committee of the listing exchange may appeal to the CRC.
  • 3. This circular is being issued in exercise of powers conferred under section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
  • 4. This circular is also available on SEBI website at www.sebi.gov.in