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FPIs Urge Sebi to Ensure Ease of Doing Investment

Foreign portfolio investors (FPIs) — the largest investor group in the Indian stock market — want the regulator to make life easier for them. At a meeting with the Sebi chairman this week, about 30 officials and custodians of some of the large offshore funds appealed to the stock market regulator to do away with the rule that requires most offshore funds to be broad-based — having at least 20 investors with each holding not more than 49%. They have also voiced their concern about the practice where copies of passport, social security numbers, and other national identification documents such driver’s licence of senior management officials and directors of many foreign funds are shared with brokers and intermediaries. The regulator has typically preferred ‘broad-based’ funds to minimise round-tripping of money and trades where FPI vehicles are used by a small club of investors to manipulate stock price. “However, it was argued that since Sebi has directed funds to disclose their ultimate…
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Banks Cash in on Gilt Price Surge as RBI Move Sparks Rate Cut Hopes

Reserve Bank of India’s projection of lower inflation and assurance on enough liquidity would be positive for banks’ treasury operation which could well boost earnings of many stressed governmentowned lenders, two people familiar with the matter said. These banks sold a net of ?12,036 crore of debt securities on Wednesday, this year’s largest single day sale, capturing gains from falling bond yields. On the same day, the benchmark yield dipped 13 basis points as prices rose. The benchmark paper Thursday yielded 7.43%, the lowest since April 10. The sovereign gauge plunged about 57 basis points past two months. Bond prices are yield move in opposite direction. “It seems, India is heading towards a comparatively lower interest rate scenario,” said Kamal Mahajan, head of treasury and global markets at Bank of Baroda. Banks are likely to post higher profits because of the fact that the hefty provisions against treasury losses made between March and June will now get a scope of reversal a…

RBI to inject Rs 10,000 cr through open market operations on Thursday

The Reserve Bank of India (RBI) Tuesday said it would inject Rs 10,000 crore into the system through purchase of government securities on December 6 to increase liquidity.The purchase will be made through open market operations (OMOs). "Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the Reserve Bank has decided to conduct purchase of ... government securities under open market operations for an aggregate amount of Rs 100 billion on December 6, 2018 (Thursday)," the central bank said. The OMO operation will help ease tight liquidity situation triggered by a series of defaults by group companies of IL&FS. The eligible participants should submit their offers in electronic format on the RBI Core Banking Solution (E-Kuber) system on December 6. The result of the auction will be announced on the same day and payment to successful participants will be made on the following day The RBI also announced auction of a 1…

SEBI panel proposes direct listing of Indian firms on foreign bourses

An expert committee set up by the Securities and Exchange Board of India (SEBI) on Tuesday recommended that the market regulator allow listing of Indian companies on foreign exchanges even without getting listed in India. Such a framework would help Indian companies to access foreign capital at lower cost, said the report. Under the current regulations, any company incorporated in India but not listed on an Indian exchange is not permitted to list its shares on a foreign stock exchange. Similarly, companies incorporated outside India cannot directly list their equity shares on Indian stock exchanges. The committee in its 29-page report also advised the security markets regulator to allow foreign companies to get directly listed in Indian stock exchanges. SEBI has sought comments on the report by December 24 "Listing may be allowed only on specified stock exchanges in 'permissible jurisdictions'," read the report submitted to SEBI. A "permissible jurisdiction"…

Sebi starts probe against Sun Pharma, to also reopen insider trading case

The Securities and Exchange Board of India (Sebi) has initiated an inquiry into the affairs of pharma major Sun Pharmaceutical Industries on the basis of a whistle-blower complaint, said regulatory sources. The sources said the market regulator was in receipt of a 150-page letter in which the whistle-blower accused the company of committing corporate governance and tax-related lapses, besides other securities market-related violations. When contacted, a Sun Pharma spokesperson said, “We have not been contacted by Sebi in this regard.” Sebi, according to sources, also plans to reopen an insider trading case against the company and its promoters that was settled through the consent mechanism. Sun Pharma, its Managing Director Dilip Shanghvi, and nine others had settled the insider trading probe, paying Rs 1.8 million against the settlement charges in 2017. While Sebi had not disclosed details of the case, it was probably linked to the acquisition of Ranbaxy by Sun Pharma from Japanese dr…

RBI Autonomy — With Accountability

It is in the interest of the government and the nation to respect RBI’s functional autonomy, as happened at the last RBI board meeting. RBI autonomy came up when RBI governor Urjit Patel testified before Parliament’s standing committee on finance. It is important for all stakeholders to view and appreciate institutional autonomy in the right spirit. When the financial crisis struck in 2008, central bank autonomy, whether statutory or traditional, did not come in the way of governments, central banks and regulators of companies, insurance and stock markets working together to bail out banks, insurers and large companies, in several mature economies. Even when crisis is absent, the interconnected global economy, with its ability to send trillions of dollars of liquidity sloshing this unpredictable way or that, makes constant consultation and cooperation among the multiple nodes of fiscal and regulatory decision-making essential.  India has a partially open capital account, and large amou…

Govt Plans Database of Drugs to Prevent Use of Similar Brand Names

The government is considering a databank for all medicine brands to prevent pharmaceutical companies from using the same or similar looking and sounding brand names for drugs, especially those used to treat different conditions, senior officials close to the development said. The Drugs Technical Advisory Board (DTAB), the country’s highest drug advisory body, will discuss a mechanism to this effect at its meeting on Thursday because the problem is extensive and spread across the country, they told ET. A 2013 study published in the Indian Journal of Clinical Practice had found that more than 10,000 medicine brands in India were either similar looking or similar sounding. What is even more alarming, an industry insider said, is that in some instances, the same brand name has even been used to market formulations used to treat different conditions altogether. For instance, the brand ‘Medzole’ has been used to market at least four different kinds of medications, including an antifungal, an…