News Analysis India

Tag: SEBI

  • TRAI Allots New 160 Mobile Phone Series To Key Financial Entities To Curb Spams |

    New Delhi: The government has allocated 160 mobile phone series for making transactional and service voice calls for all entities regulated by RBI, SEBI, IRDAI and PFRDA in the first phase, in order to prevent the duping of citizens from the fraudsters.

    The Telecom Regulatory Authority of India (TRAI) met representatives from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and other financial institutions and all the telecom service providers (TSPs).

    Once the 160 mobile series is implemented, it will help in the easy identification of the calling entity. The meeting provided a platform for the exchange of ideas among the regulators, entities and telecom service providers regarding the effective utilisation of this series, said the Ministry of Communications.

    The operation of the 140 series, at present being used for promotional purposes, is being migrated to distributed ledger technology (DLT) platform and scrubbing of digital consent is also being operationalised, said the Ministry.

    “With the implementation of the above two measures, substantial control on spam calls from 10-digit numbers is expected,” said the Ministry. At the meeting, the regulators, banks and other financial institutions emphasised the need to work collaboratively to curb the menace of spam, particularly through voice calls and assured all cooperation for the implementation of various initiatives by TRAI in a time-bound manner.

  • Adani-Hindenburg row: SC adjourns hearing, asks SEBI to circulate response on expert panel’s advice

    By PTI

    NEW DELHI: The Supreme Court on Tuesday adjourned the hearing on a batch of pleas on the Adani-Hindenburg row and asked the Securities and Exchange Board of India (SEBI) to circulate its response to the recommendations made by the apex court-appointed expert committee.

    Solicitor General Tushar Mehta, appearing for SEBI, told the top court they had on Monday filed their “constructive response” on the suggestions made by the expert committee in its report filed in the court.

    “What is the status of the investigation?” asked a bench comprising Chief Justice D Y Chandrachud and Justices P S Narasimha and Manoj Misra.

    Mehta said the apex court had in May granted the capital markets regulator time till August 14 to complete its probe into the allegations of stock price manipulation by the Adani group and the investigation in the matter is going on.

    “The expert committee have made certain recommendations. We have filed our response. It has nothing to do with the allegations,” he said.

    The bench said it has not received the SEBI’s response and it would be appropriate if it is circulated with the other papers connected to the case.

    ALSO READ | Adani row: SEBI disagrees with expert panel, says will take action if any violation found 

    It said the matter will be taken up for hearing immediately after the conclusion of the hearing on some other pleas that are listed before a constitution bench, which is scheduled to commence the hearing from Wednesday.

    SEBI had, in its application filed on Monday in the apex court, said that it did not agree with the expert committee observation of difficulties in identifying holders of economic interest behind an offshore fund.

    Without making any mention of the status report of its own investigation into allegations against Adani Group, SEBI said its 2019 rule changes do not make it tougher to identify beneficiaries of offshore funds, and action will be taken if any violation is found or established.

    The markets regulator said it has continuously tightened rules concerning beneficial ownership and related-party transactions – key aspects in the allegations of Adani Group manipulating its stock price.

    A Supreme Court-appointed expert committee had in an interim report in May stated that it saw “no evident pattern of manipulation” in billionaire Gautam Adani’s companies and there was no regulatory failure.

    It, however, cited several amendments the SEBI made between 2014-2019 that constrained the regulator’s ability to investigate, and its probe into alleged violation in money flows from offshore entities has “drawn a blank”.

    On May 17, the apex court had directed that copies of the report submitted before it by the top court-appointed Justice (retd) A M Sapre expert committee be made available to the parties to enable them to assist it in further deliberations in the matter.

    Adani Group stocks had taken a beating on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.

    The Adani Group dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

    NEW DELHI: The Supreme Court on Tuesday adjourned the hearing on a batch of pleas on the Adani-Hindenburg row and asked the Securities and Exchange Board of India (SEBI) to circulate its response to the recommendations made by the apex court-appointed expert committee.

    Solicitor General Tushar Mehta, appearing for SEBI, told the top court they had on Monday filed their “constructive response” on the suggestions made by the expert committee in its report filed in the court.

    “What is the status of the investigation?” asked a bench comprising Chief Justice D Y Chandrachud and Justices P S Narasimha and Manoj Misra.googletag.cmd.push(function() {googletag.display(‘div-gpt-ad-8052921-2’); });

    Mehta said the apex court had in May granted the capital markets regulator time till August 14 to complete its probe into the allegations of stock price manipulation by the Adani group and the investigation in the matter is going on.

    “The expert committee have made certain recommendations. We have filed our response. It has nothing to do with the allegations,” he said.

    The bench said it has not received the SEBI’s response and it would be appropriate if it is circulated with the other papers connected to the case.

    ALSO READ | Adani row: SEBI disagrees with expert panel, says will take action if any violation found 

    It said the matter will be taken up for hearing immediately after the conclusion of the hearing on some other pleas that are listed before a constitution bench, which is scheduled to commence the hearing from Wednesday.

    SEBI had, in its application filed on Monday in the apex court, said that it did not agree with the expert committee observation of difficulties in identifying holders of economic interest behind an offshore fund.

    Without making any mention of the status report of its own investigation into allegations against Adani Group, SEBI said its 2019 rule changes do not make it tougher to identify beneficiaries of offshore funds, and action will be taken if any violation is found or established.

    The markets regulator said it has continuously tightened rules concerning beneficial ownership and related-party transactions – key aspects in the allegations of Adani Group manipulating its stock price.

    A Supreme Court-appointed expert committee had in an interim report in May stated that it saw “no evident pattern of manipulation” in billionaire Gautam Adani’s companies and there was no regulatory failure.

    It, however, cited several amendments the SEBI made between 2014-2019 that constrained the regulator’s ability to investigate, and its probe into alleged violation in money flows from offshore entities has “drawn a blank”.

    On May 17, the apex court had directed that copies of the report submitted before it by the top court-appointed Justice (retd) A M Sapre expert committee be made available to the parties to enable them to assist it in further deliberations in the matter.

    Adani Group stocks had taken a beating on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.

    The Adani Group dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

  • Adani-Hindenburg case: ‘Arguments made in court affect share market’, SC tells SEBI

    Express News Service

    NEW DELHI: “Let there be some alacrity,” Supreme Court said while it proposed to grant market regulator SEBI (Securities and Exchange Board) three months for completing the probe in the Adani-Hindenburg saga. 

    A bench of CJI DY Chandrachud, Justices PS Narasimha and JB Pardiwala said that the court would pass orders on SEBI’s application on Monday after perusing the report of the court-appointed expert committee headed by Justice AM Sapre. 

    “To now extend 6 months time may not be appropriate and we will extend the time for three months cause they have a point saying that SEBI was already investigating,” CJI said.

    The CJI during the hearing also rapped a counsel who was levelling allegations against SEBI for regulatory failure. 

    “We have asked the committee to enquire if there is any regulatory failure. How can you say that? Don’t just stand up and levy allegations against the regulator. Whatever you argue here affects the volatility of the stock market,” the CJI said. 

    In an attempt to convince the bench to extend the time for six months, SG Tushar Mehta said, “We have narrated the facts and it requires us 6 months more. We have reached a particular stage and for reaching any conclusion we need 6 months more. 6 months is the minimum time required.” 

    Objecting to the time sought, Advocate Prashant Bhushan said, “SEBI was investigating some of these transactions as far back in 2016 which is more than 6 years ago. SEBI is a partner of an International Corporate organisation on IOSCO (The International Organization of Securities Commissions) under the treaty of this organisation. SEBI is governing board and tax haven countries are members of this organisation. They can seek any information and secrecy will prevent any member country from giving the information sought.

    Laying emphasis on the “complexity involved in the matter,” SEBI in the application had said, “Keeping in view the forgoing circumstances, it would take further time to arrive at verified findings and conclude the investigation referred to herein above. SEBI also respectfully submits that for ascertaining possible violations related to misrepresentation of financials, circumvention of Regulations and/or fraudulent nature of transactions in respect of 12 suspicious transactions given the complexity of the matter, SEBI in the normal course would take at least 15 months for completion of the investigation of these transactions, but is making all reasonable endeavours to conclude the same within six months.” 

    SEBI in respect of 12 suspicious transactions pertaining to misrepresentation of financials, circumvention of Regulations and fraudulent nature of transactions has said that it has noted prima facie that “these are complex” and “have many sub transactions” which thus require rigorous investigation. 

    It has said that investigations into possible violations of related party transactions disclosure, Corporate Governance related matters, Minimum Public Shareholding norms, FPI regulations, ODI norms, insider trading regulations, norms of short selling and share proof manipulation would require further time. 

    SEBI has also told SC that it may require to depose “key managerial persons” from the seven listed Adani companies before the investigation into the allegations made by Hindenburg can be concluded. It has also stated that prima facie findings have been shared with the expert committee.

    “Investigation would also require obtaining bank statements from multiple domestic as well as international banks and as the bank statements would also be for the transactions undertaken more than 10 years ago, this would take time and be challenging. SEBI further submits that this process of seeking bank statements from the offshore banks would entail taking assistance from offshore regulators, which may be time-consuming and challenging,” the application stated.

    NEW DELHI: “Let there be some alacrity,” Supreme Court said while it proposed to grant market regulator SEBI (Securities and Exchange Board) three months for completing the probe in the Adani-Hindenburg saga. 

    A bench of CJI DY Chandrachud, Justices PS Narasimha and JB Pardiwala said that the court would pass orders on SEBI’s application on Monday after perusing the report of the court-appointed expert committee headed by Justice AM Sapre. 

    “To now extend 6 months time may not be appropriate and we will extend the time for three months cause they have a point saying that SEBI was already investigating,” CJI said.googletag.cmd.push(function() {googletag.display(‘div-gpt-ad-8052921-2’); });

    The CJI during the hearing also rapped a counsel who was levelling allegations against SEBI for regulatory failure. 

    “We have asked the committee to enquire if there is any regulatory failure. How can you say that? Don’t just stand up and levy allegations against the regulator. Whatever you argue here affects the volatility of the stock market,” the CJI said. 

    In an attempt to convince the bench to extend the time for six months, SG Tushar Mehta said, “We have narrated the facts and it requires us 6 months more. We have reached a particular stage and for reaching any conclusion we need 6 months more. 6 months is the minimum time required.” 

    Objecting to the time sought, Advocate Prashant Bhushan said, “SEBI was investigating some of these transactions as far back in 2016 which is more than 6 years ago. SEBI is a partner of an International Corporate organisation on IOSCO (The International Organization of Securities Commissions) under the treaty of this organisation. SEBI is governing board and tax haven countries are members of this organisation. They can seek any information and secrecy will prevent any member country from giving the information sought.

    Laying emphasis on the “complexity involved in the matter,” SEBI in the application had said, “Keeping in view the forgoing circumstances, it would take further time to arrive at verified findings and conclude the investigation referred to herein above. SEBI also respectfully submits that for ascertaining possible violations related to misrepresentation of financials, circumvention of Regulations and/or fraudulent nature of transactions in respect of 12 suspicious transactions given the complexity of the matter, SEBI in the normal course would take at least 15 months for completion of the investigation of these transactions, but is making all reasonable endeavours to conclude the same within six months.” 

    SEBI in respect of 12 suspicious transactions pertaining to misrepresentation of financials, circumvention of Regulations and fraudulent nature of transactions has said that it has noted prima facie that “these are complex” and “have many sub transactions” which thus require rigorous investigation. 

    It has said that investigations into possible violations of related party transactions disclosure, Corporate Governance related matters, Minimum Public Shareholding norms, FPI regulations, ODI norms, insider trading regulations, norms of short selling and share proof manipulation would require further time. 

    SEBI has also told SC that it may require to depose “key managerial persons” from the seven listed Adani companies before the investigation into the allegations made by Hindenburg can be concluded. It has also stated that prima facie findings have been shared with the expert committee.

    “Investigation would also require obtaining bank statements from multiple domestic as well as international banks and as the bank statements would also be for the transactions undertaken more than 10 years ago, this would take time and be challenging. SEBI further submits that this process of seeking bank statements from the offshore banks would entail taking assistance from offshore regulators, which may be time-consuming and challenging,” the application stated.

  • Company founded by Mumbai ex-top cop violated SEBI orders in NSE brokers’ audit: CBI

    The CBI has alleged that iSec services had conducted audit of two “high risk brokers” — SMC Global Securities Ltd and Shaastra Securities Trading Private Limited — in a fraudulent manner.

  • Power games: Govt’s Mongolian outreach baffles MEA mandarins

    Express News Service

    Diplomatic StrokesGovt’s Mongolian outreach baffles MEA mandarins

    India’s decision to send four Buddha relics, which are bones of Lord Buddha, to Mongolia for twelve days has become a controversial issue within the government. Union minister Kiren Rijiju had accompanied the relics to Mongolia with a delegation of culture ministry officials. The relic was displayed in the Gandan Monastery, which was visited by Prime Minister Narendra Modi during his Mongolia visit. The government had made an exception by sending the relic abroad. The relic is classified as an AA category antiquity and is kept in controlled climate conditions. The ministry of culture guidelines prohibit transport of AA category relics. They are not even allowed to be shifted within country. The guidelines relating to these rarest antiquities were drafted by the NDA government in 2014. The Union government had earlier turned down requests from Sri Lanka, South Korea and Thailand for the display of this relic in these countries. The question being asked in South Block is how will the country refuse future requests after the relic’s Mongolian outing. The ministry of culture too is wondering what was the point in rating the relic as ‘AA’ when it is being allowed to tour the world. Sources said that the request to send the relic to Mongolia was made by the Prime Minister’s Office. Instead of informing the PMO about the restrictions in AA category, the babus of the ministry of culture readily agreed. The culture ministry’s decision will either cause damage to the relic in the long run or create diplomatic trouble for the country.

    Battle royaleA queer twist in the SEBI-Sahara refund tale

    The long-standing SEBI-Sahara tussle over payment of dues to depositors/bondholders of Sahara companies has come full circle. Stock market regulator SEBI had asked the Supreme Court to direct Sahara to deposit Rs 62,600 crore in a joint SEBI-Sahara refund account for repayment of dues. The Sahara India group claims to have deposited nearly Rs 24,000 crore between 2012-15 in the escrow account following the Supreme Court order in 2012. SEBI was asked to refund this money to Sahara’s investors whose dues were pending. It is now reported that in the last nine years, SEBI has been able to refund only Rs 138 crore out of the Rs 24,000 crore received in its account. The regulator has reportedly spent as much money on advertisement asking investors/depositors to come forth to claimtheir dues as it has spent on actual refunds so far. The money spent by SEBI on advertisement inviting Sahara investors to claim their dues has reportedly been upwards of `100 crore. Sahara claims that the reason why no one is coming forth to claim dues is because it has already paid off most of its investors. It also says that its original liability was nowhere near the figure mentioned by SEBI. The group is now seeking return of its money lying unused in the regulator’s account. It says that since there are no more claims pending with the SEBI, there is no reason for the regulator to withhold its money. The battle that started with SEBI seeking money from Sahara has turned into one where Sahara is claiming money from SEBI.

    Trading BluesRussia mounts pressure for a payment mechanism

    The delay in setting up rupee-rouble payment mechanism has resulted in a big pile-up of dues on account of imports from Russia. Russia is the fourth largest supplier of crude oil to India and is our sixth largest trade partner. India buys from Russia large amounts of fertilisers, coal, edible oil, besides crude oil and spares for the defence forces. The western sanctions against Russia following its invasion of Ukraine had disrupted the existing payment mechanisms. The two sides have since been exploring alternative ways to make payments. The rupee-rouble exchange mechanism was the one preferred by both sides. But in spite of several meetings between the two sides, there has not been much progress on this front. Russia reportedly offered to send its foreign and finance ministers to thrash out the issues preventing the setting up of the mechanism. It had even suggested using the Chinese yuan-based platform for payments until the rupee-rouble deal is worked out. India has outrightly rejected the idea of using the Chinese platform. It has, however, failed to make a concrete proposalon how it plans to make the payments for the Russian imports. Sources said India has to pay billions of dollars for the goods already imported. Meanwhile, private India company UltraTeck Cement has paid in yuan for its import of coal from Russia. There are reports that many other private Indian companies are planning to use yuan to pay for their imports from Russia. Some other Indian companies have started setting up shops abroad with the aim of dealing with the payment issues. The absence of the government-mandated payment mechanism is forcing Indian companies to find their own solutions. Russia, meanwhile, awaits the government’s decision on its preferred mode of payment.

  • CBI questions ex-NSE GOO Anand Subramanian over abuse of co-location facility by broker

    By PTI

    NEW DELHI: The CBI has questioned former National Stock Exchange group operating officer Anand Subramanian in connection with its ongoing probe into alleged irregularities by a stock broker, the ambit of which was expanded after a recent SEBI report cited “governance lapses” at the exchange, officials said on Monday.

    The CBI questioned Subramanian during the last three days in Chennai about his role at the exchange, how he landed as the group operating officer at the NSE, besides his association with then MD and CEO Chitra Ramkrishna, they said.

    A team of CBI officials also visited the SEBI office in Mumbai recently to collect certain documents, they added.

    The CBI had last week questioned former NSE CEOs Ramkrishna and Ravi Narain in connection with “fresh facts” which surfaced in the damning report released by SEBI on February 11.

    The market regulator said Ramkrishna was steered by a yogi dwelling in the Himalayan ranges in the appointment of Subramanian as the exchange’s group operating officer and adviser to the managing director (MD).

    The Securities and Exchange Board of India (SEBI) charged Ramkrishna and others with alleged governance lapses in the appointment of Subramanian as the chief strategic advisor and his re-designation as group operating officer and adviser to the MD.

    SEBI has levied a fine of Rs 3 crore on Ramkrishna, Rs 2 crore each on the National Stock Exchange (NSE), Subramanian, and former NSE MD and CEO Ravi Narain, and Rs 6 lakh on V R Narasimhan, who was the chief regulatory officer and compliance officer.

    The central probe agency had booked stock broker Sanjay Gupta, owner and promoter of Delhi-based OPG Securities Pvt Ltd, in 2018 for allegedly making gains by getting early access to the stock market, the officials said.

    The agency was also probing unidentified officials of SEBI and the NSE, and other unknown persons.

    “It was alleged that the owner and promoter of said private company abused the server architecture of NSE in conspiracy with unknown officials of NSE. It was also alleged that unknown officials of NSE, Mumbai had provided unfair access to said company using the co-location facility during the period 2010-2012 that enabled it to login first to the exchange server of the stock exchange that helped to get the data before any other broker in the market,” the CBI has alleged in the FIR.

    Narain was the MD and CEO of the exchange from April 1994 till March 2013. Thereafter, he was appointed as vice-chairman in the non-executive category on the NSE’s board from April 2013 and remained so till June 2017.

  • Himalayan baba may allegedly be former finance minister Subramaniam, claims source

    Express News Service

    The CBI and tax authorities have swooped down on former MD & CEO of the National Stock Exchange Chitra Ramkrishna. But they have not been able to find the identity of the so-called Himalayan Baba who ran India’s biggest stock exchange from behind the scenes.

    Highly placed sources told TNIE, that this person is no baba and has nothing to do with the Himalayas, and is most likely from the other end of the country. They say he is a former bureaucrat from the Union finance ministry who was in charge of the capital market and is credited with shaping the career of Ramkrishna and helping her reach the top at NSE.

    Strongly rejecting the possibility of NSE’s Chief Strategy Advisor Anand Subramaniam being the Baba, sources said there were some people, who wanted the issue to be closed by making Subramaniam – as the person who was communicating with Ramkrishna using the email id [email protected]. 

    If Subramaniam is established as the Baba, then the serious charge of leaking sensitive information to an outsider would go away. This theory of Subramaniam being the Baba is also being pushed by the NSE board.

    SEBI, however, has rejected this theory after a detailed investigation into the matter. SEBI investigation has also established that the NSE board had full knowledge of Ramkrishna sharing sensitive NSE information with an unknown person who used the email id [email protected].

    Yet, the board allowed her to resign and leave and took no action against her. In fact, the board thanked her for her services. Sources said members of the board are also likely to be probed as investigation widens in the case.

    According to sources, the name of this bureaucrat who used the identity of a baba would come out if the CBI dives deep into the case. “But if the case is investigated like the co-location scam where NSE was allowed to get away with a fine, then the baba will remain a mystery,” sources said.

    They said that NSE’s theory that Subramaniam used the fake id in order to communicate with Ramkrishna and seek favours from her is deliberately misleading. “The person using [email protected] id is known intricate details of NSE’s functioning and hierarchy. Subramanian was a novice. He came from outside. The authoritative tone of the messages from that mail id is a clear giveaway about the seniority and knowledge of the user,” sources said. They said Subramaniam could never have told Ramkrishna, “You will vomit all that is required as always.” This is a communication from a tutor to a pupil. Not from a junior to his senior, they said.

    In a mail, the unknown baba tells Ramkrishna “don’t worry, the straw known when to be a capillary and when not to. Kanchan (Subramaniam) will be the straw and I will be the suction force for this and you will vomit all that is required as always.” Here, the unknown person is telling Ramkrishna to repeat his lines in discussions with SEBI, PMO and finance ministry on the listing of stock exchanges.

    During the course of investigation in the co-location case, SEBI came across certain documentary evidence, which demonstrate that the MD & CEO of NSE had shared certain internal confidential information of NSE viz Organizational Structure, Dividend Scenario, Financial Results, Human Resources Policy and related Issues, Response to Regulator etc with an unknown person by addressing her correspondence to an email id [email protected] during the period 2014 to 2016.

    SEBI investigator Ananta Barua concluded, “I find the allegation that Noticee no. 6 (Subramaniam) has exploited Noticee no. 1 (Ramkrishna) by creating another identity before her in the form of the unknown person having email id [email protected] to guide her perform her duties according to his wish, is not sustainable.”

    SEBI said it was unfortunate that the head of the leading and largest stock exchange in India has had to resort to such attempts to justify her actions of sharing confidential information pertaining to NSE with an unknown person. 

    “I find that it is a bizarre attempt at concealing the identity of the unknown person. Clearly, such an attempt is unacceptable. I note that the Noticee no. 1 (Ramkrishna) herself has stated that – “Who else and whom he would correspond with was outside my purview. He may have corresponded with any others too”, and therefore, Noticee no. 1 has no assurance herself that the confidential information she has passed on to the unknown person is not being passed on to other persons. Therefore, I find that it is a glaring breach of the regulations and laws in place that requires key officials and employees to maintain confidential information of the company, which in this case being NSE, which is the leading and largest stock exchange in India,” the SEBI order said.

  • Brokers want time limit imposed on Sebi to issue show-cause notices; reduction in minimum fine on small investors

    By PTI

    NEW DELHI: Ahead of the Union Budget, stock brokers’ association Anmi has urged the government to prescribe a time limit on Sebi for issuance of show-cause notices and cut down minimum fine on small investors to Rs 1 lakh from Rs 5 lakh at present for market violation rules.

    At present, the Securities and Exchange Board of India Act, 1992 does not prescribe any period of limitation for issuance of a show-cause notice (SCN) or for completion of the adjudication proceeding.

    This results into several proceedings being initiated by the regulator several years after the alleged violation resulting into unnecessary hardship and grave prejudice to market participants and affects their ability to effectively respond to such notice, Anmi said in a statement on Monday.

    In pre-budget proposals for Union Budget 2022-23, the Association of National Exchanges of Members of India (Anmi) on the behalf of its 900 stock brokers, said that time limitation should be imposed upon Sebi in terms of the outer limit for issuance of show-cause notice.

    “Such time limitation being imposed would greatly improve the efficiency of the securities market regulator,” it added.

    Also, the brokers’ association asked the government to bring down the minimum penalty of Rs 5 lakh to Rs 1 lakh for small investors.

    “There is no discretion with the adjudicating officer to apply his mind or consider the gravity or the seriousness of the offence and small investors are suffering on account of minimum penalty of Rs 5 lakh levied even for petty offence,” it added.

    Under the rules, any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of Rs 25 crore or three times the amount of profits made out of such practices, whichever is higher subject to payment of minimum penalty of Rs 5 lakh.

    In addition, stock brokers have sought industry status for Sebi-registered market intermediaries and rationalisation in the goods and services tax (GST) rates for the broking industry.

    The industry status for market intermediaries will remove unwarranted restrictions and cost of funding and raising capital requirements for market intermediaries.

    It has also requested the government to do away with the concept of speculative income and limit income classification arising out of capital market transactions to business income, long-term capital gain, and short-term capital gain.

    Further, the association has urged government to provide tax exemption up to Rs 1 lakh in short term capital gain tax as well as provide tax exemption to senior citizens for dividend earned up to Rs 50,000.

  • SEBI revises eligibility criteria for regulatory sandbox

    By PTI
    NEW DLEHI: Markets regulator Sebi on Monday came out with revised eligibility criteria for the regulatory sandbox, laying down requirements to apply for the two stages of sandbox testing.

    The revision has been done in order to enhance the reach and achieve the desired aim, Sebi said in a circular.

    Besides mentioning that all Sebi-registered entities are eligible for testing in the regulatory sandbox, it added that the entity may apply either on its own or in partnership with any other entity.

    In either scenarios, the registered market participant shall be treated as the principal applicant and will be solely responsible for testing of the solution, it added.

    During the stage-I testing, the applicant would use a limited and identified set of users; while in stage-II, there will be a larger set of identified users.

    In both stages, there will be a maximum cap on users based on the requirement of the applicant duly approved by Sebi.

    For stage-II, an applicant will be eligible after completing minimum of 90 days in the regulatory sandbox testing.

    Laying down the detailed eligibility conditions for stage-I, Sebi said there needs to be a genuine need to tests and a genuine need for relaxation.

    The solution should offer identifiable direct or indirect benefits and the solution should either be a new innovative one or should improve the existing processes or facilitate inclusion.

    Also, the applicant has to demonstrate well-developed testing plans and must have appropriate safeguards to mitigate potential risks to the financial system.

    For an applicant to be eligibile for stage-II, among others, it has to demonstrate adequate progress, present users feedback and also present the intention and ability to deploy the solution on a broader scale. “To this effect, the applicant should share a proposed sandbox exit strategy,” Sebi said.

    The applicant, upon ensuring that the eligibility criteria is satisfied, is required to submit the application form in the format prescribed by Sebi. It also gave a detailed application, approval and evaluation process.

    The total duration of the sandbox testing stage (including Stage-I and Stage-II) will be a maximum of 12 months and extendable upon request of the applicant duly approved by the regulator.

    The applicant is also required to submit exit strategy which would be applicable during successful testing and withdrawal strategy which would be applicable during unsuccessful testing.

    Sebi has also come out with a framework on submission of test-related information and reports.

    “At the end of the Stage-II testing period, the permission granted to the applicant as well as the legal and regulatory requirements relaxed by SEBI, shall expire,” Sebi said. The regulator has also mentioned the conditions under which approval can be revoked.

    “To encourage innovation with minimal regulatory burden, Sebi shall consider exemptions/ relaxations, if any, which could be either in the form of a comprehensive exemption from certain regulatory requirements or selective exemptions on a case-by-case basis, depending on the Innovative solution to be tested,” Sebi said.

    No exemptions would be granted from the extant investor protection framework, Know-Your-Customer and Anti-Money Laundering rules, it further added.

    In June 2020, Sebi had released guidelines for the regulatory sandbox, enabling entities regulated by the watchdog to test their new solutions in a live environment and on a limited set of real customers with necessary safeguards.

    The move, it said, was aimed at encouraging adoption and usage of financial technologies to further develop and maintain a transparent securities market ecosystem.

  • SEBI imposes fine of Rs 25 crore on Reliance promoters, names of all members of Ambani family included

    SEBI means Securities and Exchange Board of India has imposed a fine of Rs 25 crore on the existing and former promoters of Reliance Industries. This fine has been imposed for violating the rules of acquisition. Those who have to pay the fine include Mukesh Ambani, Anil Ambani, his mother Kokilaben, wives, children and other relatives.

    In 2002, SEBI received a complaint about irregularities in issue of shares, following which SEBI started investigating the case. In January 2000, Reliance Industries issued equity shares of Rs 12 crore for 38 units. This allotment was made on the basis of the warrant received in lieu of NCD issued in the year 1994.

    The regulator found that 6.83 per cent of these shares were bought by the promoters of Reliance Industries in the year 2000. This was a violation of the acquisition cap of 5 per cent.

    As per Sebi regulations, if a promoter acquires more than 5 per cent voting rights in a financial year, they will have to make a public announcement. In the same case, SEBI blamed the promoters of Reliance Industries for violating the rules and fined them.