Pages

Monday, 16 April 2012

Weekly Secretarial Updates from April 7, 2012 to April 14, 2012


 
RBI UPDATES
Sr No
Circular/ Notification number
Particulars
Applicability
1 (a)
RBI/2011-12/489 DPSS.CO.OD. 1848 /06.07.003/2011-2012 dated April 9, 2012
Access criteria for payment systems – sub-membership to centralised payment systems
The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks including RRBs/
Urban Co-operative Banks/State Co-operative Banks/
District Central Co-operative Banks
(b)
RBI/2011-12/491 DGBA.CDD.H-6614 /13.01.298/2011-12 dated April 10, 2012
Relief and Savings bonds-Compensation structure for delay in payment of interest and/or principal
All the Banks and Investors involved in the relief and savings bonds.

(c) 
RBI/2011-12/499 DBOD.No.BP.BC 92 /21.06.007/2011-12 dated April 13, 2012
Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital
Adequacy Framework (NCAF) - Eligible Credit Rating Agencies - Brickwork
Ratings India Pvt. Ltd. (Brickwork)
All the Listed Companies

SEBI UPDATES
2(a)
CIR/IMD/FIIC/10/2012 dated April12, 2012
Allocation of debt limits to FIIs
All Foreign Institutional Investors

(b)
-  CIR/MRD/DP/10 /2012 dated April 13, 2012
-  CIR/MRD/DP/ 11 /2012 dated April 13, 2012 
Master Circular for Depositories


All the Depositories, Stock Exchanges and listed companies

(c)
CIR/CFD/DIL/3/ 2012 dated April 13, 2012
Processing of investor complaints against listed companies in SEBI Complaints Redress System (SCORES)
To all the Stock Exchanges and Listed Companies

(d)
CIR/MRD/DMS/ 12 /2012 dated April 13, 2012
Guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR)

All Stock Exchanges / All Depositories

IRDA UPDATES
3 (a)
IRDA/F&I/CIR/EMT/085/04/2012 dated April 12, 2012
Expenses of Management (EOM) under section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939
Life Insurance Companies


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RBI UPDATES:

1(a) Access criteria for payment systems – sub-membership to centralised payment systems

RBI Circular  – April 9, 2012:

We draw your attention to the RBI circular no: RBI/2011-12/489 DPSS.CO.OD. 1848 /06.07.003/2011-2012 dated April 9, 2012.

Applicability:

The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks including RRBs/
Urban Co-operative Banks/State Co-operative Banks/
District Central Co-operative Banks

Crux of the Circular:

Under the overall guidance of the Board for Payment and Settlement Systems, the Reserve Bank over the last few years, has been taking a number of steps to popularise the electronic payment systems in the country. In this connection, liberalised revised access criteria for centralised and decentralised payment systems were announced.

2. The centralised payment systems, viz. Real Time Gross Settlement System (RTGS) and National Electronic Funds transfer (NEFT), currently provide for only direct membership. As an exception, Regional Rural Banks (RRBs) have been given access to the NEFT system through their Sponsor Banks.

3. On a review, it has been decided to expand the sub-membership route to enable all licenced banks to participate in NEFT and RTGS systems. This would be an alternate mechanism to all licenced banks which have the technological capabilities but are not participating in centralised payment systems on account of either not meeting the access criteria or because of cost considerations. This arrangement would be subject to the following conditions:

A) The sub-member/s would participate in the centralised payment systems through their sponsor bank which is a direct member of the centralised payment system.

B) In order to ensure compliance with the timely credit and return discipline which is of utmost importance in centralized payment systems, branches of sub-member/s that are not under core banking system shall be kept out of the centralised payment systems till such time they are brought under core banking.

C) The sponsor banks would be responsible for sending/receiving the transactions/messages on behalf of their sub-member.

D) There are no restrictions on the number of sub-members a sponsor bank could sponsor. Aspects relating to operational feasibility, risk mitigation, fund settlement, collaterals etc., have to be taken care of by the sponsor banks before sponsoring sub-member/s.

E) The sponsor bank should put in place a risk management framework and a system of continuous monitoring of the risk management practices of sub-member/s that they desire to sponsor. The risk management framework should be approved by the Board of the sponsor bank.

F) The settlement of transactions by/on the sub-members would take place in the settlement accounts of the sponsor banks maintained with Reserve Bank of India. The sponsor bank under this arrangement will assume complete responsibility for the settlement of all transactions by/on the sub-members.

G) The sponsor bank at all times should ensure that their sub-member/s adhere to and abide by the rules, regulations, operational requirements, instructions, orders, decisions etc, of the centralised payment systems, as laid down by Reserve Bank of India from time to time.

H) Redressal of all customer complaints / grievance would be the responsibility of the sponsor bank. To aid in this process, the sponsor bank should ensure that the sub-member/s have put in place a transparent and robust mechanism to resolve customer complaints in a quick and efficient manner, as laid down in the procedural guidelines, business rules and regulations of the centralised payment systems.

I) All disputes between the sponsor bank and the sub-member/s will be handled bi-laterally amongst them.

J) The sponsor bank should bring to the immediate notice of the Reserve Bank of India:

(i) any involvement of its sub-member/s in any suspicious transactions, frauds, etc.,
(ii) any of its sub-member/s resorting to any unfair practices relating to their participation in centralised payment systems;
(iii) any of its sub-member/s not adhering to the rules, regulations, operational requirements, instructions etc, of centralised
payment systems;

K) The sponsor bank is not required to take prior approval of the Reserve Bank of India for sponsoring a submember/ s into the centralised payment systems. However, as and when they sponsor sub-member/s, they should immediately inform the Reserve Bank of India, the details of the sub-member/s, IFSC/MICR codes allotted to the branch/branches of sub-member/s, date of commencement of sub-membership etc.

L) The sponsor bank should inform the Reserve Bank of India in case of cessation of sponsorship arrangement between the sponsor bank and sub-member/s immediately.

M) The charges for customer transactions of sub-member/s cannot exceed the charges applicable to customers of sponsor banks/direct members of the centralised payment systems viz., RTGS and NEFT.

4. The scheme of sub-membership for centralised payment systems is effective from the date of this circular.

5. Any further rationalisation / liberalisation of the access criteria norms would be considered at a later stage based on the experience of these measures put in place.

For further details information please follow the below link
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1 (b)  Relief and Savings bonds-Compensation structure for delay in payment of interest and/or principal

RBI Circular  – April 10, 2012:

We draw your attention to the RBI circular no: RBI/2011-12/491 DGBA.CDD.H-6614 /13.01.298/2011-12 dated April 10, 2012.

Applicability:

All the Banks and Investors involved in the relief and savings bonds.

Crux of the Circular:

Earlier it was decided that the agency banks may compensate an investor in Relief/Savings bonds, for the financial loss due to late receipt/delayed credit of interest warrants/maturity value, at their own savings bank rate for respective amounts (i.e. upto ` 1 lakh and over ` 1 lakh) without any discrimination.

However in order to avoid ambiguity and variation in compensation rates across different agency banks, these instructions have been reviewed. It has now been decided that with effect from the date of this circular, an agency bank shall compensate an investor in Relief/Savings bonds, for the financial loss due to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8% per annum.
For further details information please follow the below link
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1 (c)  Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital
Adequacy Framework (NCAF) - Eligible Credit Rating Agencies - Brickwork
Ratings India Pvt. Ltd. (Brickwork)

RBI Circular – April 13, 2012:

We draw your attention to the RBI circular no: RBI/2011-12/499 DBOD.No.BP.BC 92 /21.06.007/2011-12 dated April 13, 2012.

Applicability:

All the Listed Companies

Crux of the Circular:

At present the rating of the Credit rating agencies viz. CARE, CRISIL, FITCH India and ICRA have been accredited for the purpose of risk weighting the banks' claims for capital adequacy purposes. In addition to the rating of the existing rating agencies the rating of Brickwork Ratings India Pvt. Ltd. (Brickwork) may also be used for the same purpose.

For further details information please follow the below link
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SEBI UPDATES:

2(a) Allocation of debt limits to FIIs

SEBI Circular – April 12, 2012:

We draw your attention to the SEBI circular no. CIR/IMD/FIIC/10/2012 dated April12, 2012.


All Foreign Institutional Investors

Crux of the Circular:

1. Based on the assessment of the utilization of the limits to FIIs for investments in Government Debt Old, corporate Debt Old and Government Debt Long Term category, it has been decided by the government to allocate the unutilized limits. The bidding for this limit shall be done on the NSE from 15:30 hrs to 17:30 hrs, on April 23, 2012.

2. Allocation of limits under Government Debt- Old category:

INR 1,203 crore shall be auctioned through electronic bidding process, in terms of SEBI circular IMD/FII&C/37/2009 dated February 06, 2009, subject to the modifications stated below:-

a) In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/37/2009, no single entity shall be allocated more than INR 120 cr. of the investment limit. Where a single entity bids on behalf of multiple entities, in terms of para 7 of SEBI circular CIR/IMD/FIIC/18 /2010 dated November 26, 2010, then such bid would be limited to INR 120 cr. for every such single entity.

b) In partial amendment to clause 3 (c) and 3(d) of the aforesaid circular IMD/FII &C/37/2009, the minimum amount which can be bid for shall be INR 1 cr.

3. Allocation of limits under Government Debt- Long Term category:

INR 1,410 crore shall be auctioned through electronic bidding process, in terms of SEBI circular IMD/FII&C/37/2009 dated February 06, 2009, subject to the modifications stated below:-

a) In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/37/2009, no single entity shall be allocated more than INR 140 cr. of the investment limit. Where a single entity bids on behalf of multiple entities, in terms of para 7 of SEBI circular CIR/IMD/FIIC/18 /2010 dated November 26, 2010, then such bid would be limited to INR 140 cr. for every such single entity.

b) In partial amendment to clause 3 (c) and 3(d) of the aforesaid circular IMD/FII &C/37/2009, the minimum amount which can be bid for shall be INR 1 cr.

4. Allocation of limits under Corporate Debt- Old category:

INR 4,547 crore shall be auctioned through electronic bidding process, in terms of SEBI circular IMD/FII&C/37/2009 dated February 06, 2009, subject to the modifications stated below:-

a) In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/37/2009, no single entity shall be allocated more than INR 450 cr. of the investment limit. Where a single entity bids on behalf of multiple entities, in terms of para 7 of SEBI circular CIR/IMD/FIIC/18 /2010 dated November 26, 2010, then such bid would be limited to INR 450 cr. for every such single entity.

b) In partial amendment to clause 3 (c) and 3(d) of the aforesaid circular IMD/FII &C/37/2009, the minimum amount which can be bid for shall be INR 1 cr

For further information please follow the below mentioned MCA circular:
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2(b) Master Circular for Depositories

SEBI Circular – April 13, 2012:

We draw your attention to the SEBI circular no.

Sr No
Name of the Circular
Circular No
1
Master Circular for Depositories
CIR/MRD/DP/10 /2012 dated April 13, 2012
2
Master Circular for Stock Exchange / Cash Market
CIR/MRD/DP/ 11 /2012 dated April 13, 2012

Applicability:

All the Depositories, Stock Exchanges and listed companies

Crux of the Circular:

The above mentioned Master circular have been prepared and shall come into force from the date of its issue.


For further information please follow the link:


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2(c)  Processing of investor complaints against listed companies in SEBI Complaints Redress System (SCORES)

SEBI Circular  – April 13, 2012:
We draw your attention to the SEBI circular no:  CIR/CFD/DIL/3/ 2012 dated April 13, 2012
Applicability:

To all the Stock Exchanges and Listed Companies

Crux of the Circular:

SEBI has commenced processing of investor complaints in a centralized web based complaints redress system ‘SCORES’. Pursuant to SEBI Circular no. CIR/OIAE/2/2011 dated June 03, 2011 on the captioned subject, all listed companies are required to obtain authentication on SCORES.

2. With a view to facilitate the online movement of complaints, it has been decided to mandate that companies desirous of getting their equity shares listed on the stock exchanges should also obtain authentication on SCORES, before Listing Approval is granted by your stock exchange.

3. You are, therefore, advised to ensure compliance of this requirement before Listing Approval is granted by your stock exchange.

4. This Circular is 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.

For further information please follow the below link:

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2(d) Guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR)

SEBI Circular – April 13, 2012:

We draw your attention to the SEBI circular no. CIR/MRD/DMS/ 12 /2012 dated April 13, 2012.

Applicability:

All Stock Exchanges / All Depositories

Crux of the Circular:

In the event of disaster, the disruption in trading system of stock exchanges / depository system may not only affect the market integrity but also the  confidence of investors. In order to address this issue, the current BCP - DR setups of some of the stock exchanges having nation-wide terminals and depositories were examined by the Technical Advisory Committee of SEBI (TAC). Based on the recommendations of TAC, the broad guidelines for BCP - DR have been drafted.

For further information please follow the link:

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IRDA UPDATES:

3(a) Expenses of Management (EOM) under section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939

IRDA Circular – April 12, 2012:

We draw your attention to the IRDA circular no. IRDA/F&I/CIR/EMT/085/04/2012 dated April 12, 2012.

Applicability:

Life Insurance Companies

Crux of the Circular:

1.    Introduction:

As per Section 40B of the Insurance Act, 1938, every insurer transacting life insurance business in India is required to furnish to the Authority, the statement of Expenses of Management (EoM), in the prescribed form within the prescribed time. The detailed computation of EoM under Section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939 are to be filed on an annual basis.

2.    Divergent Practices Observed:

On detailed review of the statements filed by the insurers, it is observed that divergent practices are being followed in interpretation of some of the applicable provisions. These divergences are mainly observed in the interpretation of the terms ‘charges’ and ‘expenses capitalised’ under Section 40B.

3.    Clarifications:

With a view to facilitatea uniform approach by all companies the following clarifications are provided:

i)     For the purposes of explanation (b) of Section 40B

a)   ‘Charges’: Includes all charges levied directly or indirectly in respect of the insurance business but excludes taxes which are a charge against profits e.g., income tax, wealth tax. However, taxes like Service Tax borne by the insurer and Fringe Benefit Tax, which are not charged against profits, shall be included.

The share of head office expenses in respect of life insurance business transacted by the insurer outside India shall,however, be excluded.

b)   ‘Expenses Capitalized’: Shall be such expenses like administration and other general overhead expenses, which are otherwise considered as revenue expenses, are added to the cost of fixed assets where they are attributable to the construction/acquisition of fixed assets or bringing it to its working condition. Depreciation on such capitalised expenses should be excluded for the purposes of these computations in the subsequent years to avoid double count.

ii)    For the purposes of computation of expenses of management under Rule 17D the following shall be considered:

a)    Income/expenditure accounted on accrual basis;

b)    Pension business shall be treated as immediate/deferred annuity business, as applicable;

c)    Group Insurance:

-          Regular Premium plans with limited premium payment term and/or pre-determined policy term shall be treated as regular business with due classification into first year premium and renewal premium.

-          Plans other than those quoted above shall be treated as Single Premium plans.
                                     
      iii)      Insurers are advised to strictly adhere to the following:

a)    Apply the percentages of allowable expenses as specified under Rule 17D on:

-    ‘Premium net of reinsurance’ in case of first year premium and renewal premium under life insurance business; and
-    ‘Premium received’ in case of annuity business and single premium business.

b)   Ensure that computations are in accordance withIRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, especially in terms of classification of business lines and segments.

4.   In the event of differences in the data furnished in the Statement under Rule 17D with that of the Financial Statements, reconciliation between the two shall be filed as part of the statement under this Circular.

5.   The statement of expenses of management as prescribed in the format annexed to this Circular shall be placed along with the Financial Statements prepared under IRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002 for consideration by the Audit Committee prior to being placed for approval by the Board of the Company.

6.   The statement of expenses of management and the Financial Statements, along with the Auditors Report, duly adopted by the Board, shall be filed with the Authority as directed vide IRDA Circular Ref: IRDA/F&A/013/2005-06 dated 9th June 2005.

7.   This Circular is effective from the financial year 2011-12.


For further information please follow the link:

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Tuesday, 10 April 2012

Weekly Secretarial Update for the period from March 31, 2012 to April 6, 2012



Weekly Secretarial Updates



March 31, 2012 to April 6, 2012
                  

RBI UPDATE

Sr No
Circular/ Notification number
Particulars
Applicability
1 (a)
RBI/2011-12/102 A. P. (DIR Series) Circular No.102
Use of International Debit Cards/Store Value Cards/Charge Cards/Smart
Cards by Resident Indians while on a visit outside India

All the persons

(b)
RBI/2011-12/481 A. P. (DIR Series) Circular No.101 dated April 2, 2012
Overseas Direct Investments – Liberalisation / Rationalisation

All the individuals

(c) 
RBI/2011-12/484 A. P. (DIR Series) Circular No.103 dated April 3, 2012.
Data on import of Gold – Statements – Modification

Dealers of the Gold Market

(d)
RBI/2011-12/483 DGBA.CDD. No. H- 6506 /15.02.001/2011-12 dated April 3, 2012
Public Provident Fund Scheme, 1968 (PPF, 1968) and
Senior Citizens Savings Scheme, 2004 (SCSS, 2004) - Revision of interest rates
Persons and departments covered under the PPF and Senior Citizens Savings Scheme

(e)
RBI/2011-12/488 A. P. (DIR Series) Circular No. 104 dated April 4, 2012
Authorised Dealer Category II – Permission for
additional activity and opening of Nostro account
Persons in Foreign Exchange

IRDA UPDATES

2 (a)
IRDA/F&A/CIR/ACTS/083/03/2012 dated March 30, 2012.
Declaration of Bonus under Section 49 of the Insurance Act, 1938

Applicable to all the Life Insurance Companies

SEBI UPDATES

3(a)
CIR/MRD/DP/ 09 /2012 dated March 30, 2012.
Broad Guidelines on Algorithmic Trading
All Stock Exchanges

LEGAL WORLD

4(a)
SEBI’s (Order)
Promact Plastics Limited

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RBI UPDATES:

1 (a)  Use of International Debit Cards/Store Value Cards/Charge Cards/Smart
Cards by Resident Indians while on a visit outside India

RBI Circular  April 2, 2012:

We draw your attention to the RBI circular no: RBI/2011-12/102 A. P. (DIR Series) Circular No.102 dated April 2, 2012
Applicability:

All the persons

Crux of the Circular:
As per the present practice the unutilised foreign exchange balance on the travel cards purchased by resident Indians are permitted to be refunded only after 10 days from the date of last transaction.  
However this circular facilitates the redemption of the the unutilized balance outstanding in the cards immediately upon request by the resident Indians to whom the cards are issued subject to retention of:-.
a.       The amounts that are authorised and remain unclaimed/ not settled by the acquirers as of the date of redemption till the completion of the respective settlement cycle;
b.       A small balance not exceeding US$ 100, for meeting any pipeline transactions till the completion of the respective settlement cycle; and
c.       Transaction fees/service tax payable in India in Rupees.
For the amounts that are authorised but unclaimed/ not settled by the acquirer, the issuer of such cards can hold such amounts until such transactions are processed/ settled by the acquirers within the prescribed settlement timeframe.
For further details information please follow the below link
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1(b) Overseas Direct Investments – Liberalisation / Rationalisation

RBI Circular – April 2, 2012:

We draw your attention to the RBI circular no. RBI/2011-12/481 A. P. (DIR Series) Circular No.101 dated April 2, 2012.


All the individuals

Crux of the Circular:

As per the present law when an Indian party wants to open, hold and maintain Foreign Currency Account in a foreign country for the purpose of overseas direct investments in that country, in case the regulation of the host country requires that the investment in the country is to be made through a particular account to be opened with the commercial bank of the country then Prior Permission of the RBI is required.

However inorder to provide operational flexibility to the Indian party, this current circular liberalises the regulations pertaining to opening / holding / maintaining the Foreign Currency Account by Indian party outside India.

In this regard an Indian party will now be allowed to open, hold and maintain Foreign Currency Account (FCA) abroad for the purpose of overseas direct investments subject to few terms and conditions specified in the circular.

For further information please follow the below mentioned MCA circular:
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7105&Mode=0

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1(c) Data on import of Gold – Statements – Modification

RBI Circular – April 3, 2012:

We draw your attention to the RBI circular no RBI/2011-12/484 A. P. (DIR Series) Circular No.103 dated April 3, 2012.
Applicability:

Dealers of the Gold Market

Crux of the Circular:

As a process of rationalizing the entire reporting system on import of gold the following statements are to be submitted to the RBI, Foreign Exchange Department by the AD Category I banks.

Statements to be submitted are as follows:

-          on half yearly basis (end March / end September) showing the quantity and value of gold imported by the nominated banks/ agencies/ EOUs/ SEZs in Gem & Jewellery sector, mode of payment-wise

-          on monthly basis showing the quantity and value of gold imports by the nominated agencies (other than the nominated banks)/ EOUs/ SEZs in Gem & Jewellery sector during the month under report as well as the cumulative position as at the end of the said month beginning from the 1st month of the Financial Year

The statements shall be submitted, even if there is 'Nil' position and they should reach the aforesaid office of RBI by the 10th of the following month / half year to which it relates. This statement can be submitted even by way of email. 


For further information please follow the link:


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1(d)  Public Provident Fund Scheme, 1968 (PPF, 1968) and
Senior Citizens Savings Scheme, 2004 (SCSS, 2004) - Revision of interest rates


RBI Circular  – April 3, 2012:
We draw your attention to the RBI circular no:  RBI/2011-12/483 DGBA.CDD. No. H- 6506 /15.02.001/2011-12 dated April 3, 2012
Applicability:

Persons and departments covered under the PPF and Senior Citizens Savings Scheme

Crux of the Circular:

The Government of India have revised the rate of interest of senior citizens savings schemes and public provident fund schemes for the FY 2012-13.

The details of the revision are as follows:

Scheme
Rate of interest w.e.f. 01.12.2011
Rate of interest w.e.f. 01.04.2012
5 year SCSS, 2004
9.0% p.a
9.3% p.a
PPF, 1968
8.6% p.a
8.8% p.a
           

For further information please follow the below link:


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1 (e) Authorised Dealer Category II – Permission for
additional activity and opening of Nostro account

RBI Circular  – April 4, 2012:
We draw your attention to the RBI circular no:  RBI/2011-12/488 A. P. (DIR Series) Circular No. 104 dated April 4, 2012
Applicability:

Persons in Foreign Exchange

Crux of the Circular:

The crux of the circular are as follows:

  1. In addition to the Authorised Dealer Category – I (AD Category-I) banks the Authorised Dealer Category – II  banks as also authorized to issue forex pre-paid cards to residents travelling on private/business visits abroad, subject to adherence to KYC / AML / CFT requirements. However, the settlement in respect of forex pre-paid cards may be effected through AD Category-I banks.

  1. In order to ensure greater flexibility in sending remittances, the Authorised Dealers Category-II are authorized to open Nostro accounts subject to few terms and conditions as follows:
i) Only one Nostro account for each currency may be opened;
ii) Balances in the account should be utilized only for the settlement of remittances sent for permissible purposes and not for the settlement in respect of forex prepaid cards;
iii) No idle balance shall be maintained in the said account; and
iv) They will be subject to reporting requirements as prescribed from time to time.
  • A nostro is our account of our money, held by you
  • A vostro is your account of your money, held by us
For further information please follow the below link:


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IRDA UPDATES:

2. (a) Declaration of Bonus under Section 49 of the Insurance Act, 1938

IRDA Circular  – March 30, 2012:

We draw your attention to the IRDA circular no: IRDA/F&A/CIR/ACTS/083/03/2012 dated March 30, 2012.

Applicability:

Applicable to all the Life Insurance Companies

Crux of the Circular:
At present with a view to facilitating declaration of bonus by an insurance company, where the Life Fund is in deficit, the Authority has laid down the manner of funding of the bonus subject to specified conditions to be strictly complied with. This special dispensation was available to the insurers for the first ten financial years, beginning from the year in which the life insurance company commences operations. 
Now as per this current circular the Authority has decided to allow the life insurers in the private sector to declare bonus to policyholders where the Life Fund is in deficit for a further period of 2 years i.e., upto the twelfth year of operations commencing from the year in which the life insurance business operations are started. 
The insurers should comply strictly with all the conditions as stipulated in the Circulars under reference in case they would like to avail of this dispensation.
For further details information please follow the below link

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SEBI UPDATES:

3 (a)  Broad Guidelines on Algorithmic Trading

SEBI Circular  – March 30, 2012:

We draw your attention to the SEBI circular no: CIR/MRD/DP/ 09 /2012 dated March 30, 2012.

Applicability:

All Stock Exchanges

Crux of the Circular:

It has been observed that adoption of technology for the purpose of trading in financial instruments has been on a rise over the past few years. Stock brokers as well as their clients are now making increased usage of trading algorithm (hereinafter referred to as “algo”).

Based on recommendations of Technical Advisory Committee (TAC) and Secondary Market Advisory Committee (SMAC), it has been decided to put in place the broad guidelines for algorithmic trading in the securities market.

In this regard Guidelines to the stock exchanges and the stock brokers have been prepared and published.

Algorithmic Trading – Any order that is generated using automated execution logic shall be known as algorithmic trading.
For further details information please follow the below link
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4 (a) Legal World:
Promact Plastics Limited
BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA
ORDER
Section and Law relating to the case:
Under Sections 11, 11(4) and 11B of the SEBI Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003
Crux of the Case:
As investigation was held by the department for the period from February 11, 2005 to July 27, 2005.  During the investigation it was noticed that  Promact Plastic Limited (notice) has reported higher profits in the unaudited financial results disclosed to the Bombay Stock Exchange.

SEBI noticed that entities related to the noticee dealt in the scrip of the company, during the same period, when the trading window should have been closed.

As per Law:

The Model Code of Conduct under Clause 3 of Schedule I of the PIT Regulations for Prevention of Insider Trading mandates that trading window should be specified by the listed company and kept closed for 24 hours after the corporate announcements. It

Application of Law in the above case:

Although as per the above mentioned regulation the trading window should be specified by the listed company and kept closed for 24 hours after the corporate announcements is pertinent to note that the directors of noticee had traded when the trading window had to be closed in terms of the said Code of Conduct. Further, the noticee did not provide the details of closure and opening of trading window, copy of the Code of Internal Procedures and Conduct and the Code of Corporate Disclosure Practices framed by the company.

Hence, there is no evidence on record to show that noticee had laid down policies, procedures, implementation of trading window, monitoring of trades and the implementation of the Code of Conduct as provided under Regulations 12(1) and 12(3) read with Clause 3 of the Model Code of Conduct in Schedule I of the PIT Regulations.

Decision of SEBI:

M/s. Promact Plastic Ltd.  is prohibited from buying, selling or dealing in securities in any manner, or accessing the securities market directly or indirectly in any manner whatsoever for a period of one year from the date of the order.

For further details please follow the below link:


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