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Showing posts from January 11, 2017

Operational issues in new central KYC trip MFs

The Association of Mutual Funds in India (AMFI) has said it expects a significant spike in Know Your Customer (KYC) rejections and failures in opening accounts till fund houses adapt to the new Central Know Your Customer (CKYC) system. The sector body recently wrote to the Ministry of Finance saying the CKYC data requirements and uploading processes are far more stringent and complicated compared with the current Securities and Exchange Board of India KYC Registration Agency (KRA) Regulations. Switching over to the new system would require extensive training for investors, distributors and staff in all mutual funds and their registrar and transfer agents (RTAs). Regulators have instructed all financial institutions to use the CKYC registry, managed by the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) for new customers. The new KYC record-keeping agency is jointly promoted by the government and public sector banks. The CKYC registry will n…

No extension of deadline to implementnew bilateral investment treaty framework

India will not extend the March 31 deadline for other countries to renegotiate their investment agreements and align them to a new investment framework, commerce and industry minister Nirmala Sitharaman said on Tuesday. Further, investments from countries that fail to renegotiate investment protection agreement by April 1will not get complete benefit under any treaty
With only three months left for India’s Bilateral Investment Treaty (BIT) to come into force, not many countries have approached the government to renegotiate their existing investment pacts based on the model BIT text. “We had given one year’s time for countries with whom we have investment agreements to come and renegotiate them… We are waiting for them to come and talk,” the minister said There will be a hiatus between the expiry of old pacts and the inking of new ones during which investors will not get the same level of treaty protection. The European Commission (EC) has raised concerns over negotiations for a fresh BIT.

Bond market expects Centre to allow huge tax-free bond issues

With bond yields falling to multi-year lows,a section of the bond market says it could be time the government enables in t he Budget state-owned infrastructure and in rafinance companies to raise enormous amounts of tax-free bonds.

The government doesn’t  raise tax-free bonds directly.It instead allows state-owned institutions to raise these bonds.The bonds raised by these companies are over and above the government’s borrowings.The government is committed to borrowing with in a particular limit.For 2016-17, the borrowing was limited to 3.5 percent oft h e gross domestic product,which was later reduced byRs.18,000crore in the firstweek of January this year.

“The government for goes only asmall amount on taxes on tax-free bonds,but it largely helps the infrastructure sector. Given the government has good taxbuoyancy,whatwith direct and indirect taxes expected to be good after demonetisation,itmay allowafairamountof tax-freebondsthistime around,”saidJoydeep Sen,anindependent financialadv…

GST enrolment driveled by 4 BJP-ruled states

Four  Bharatiya Janata Party- ruled states— MadhyaPradesh,Gujarat and Chhattisgarhand Rajasthan —are leading the race ins hifting those who pay the value-added tax(VAT) to the goods and services tax network (GSTN),with more than 70 percent of the dealers enrolled. Despite the uncertainty over the GSTroll-out,theGSTN,which stands for the platform aswellas the body administering it,is in the process of being made ready on April1. The GSTN plans to move most of  the eight million tax payers to the portal by the end of January. Withtheenrolmentdrivestartinginall statesandUnionterritoriesinphases fromNovember8,roughlyhalftheVAT dealersinthecountryhaveregistered withtheGSTNportal.Of5.8million uniqueVATpayers,2.6millionhave listedthemselveswiththeGSTN. “Our idea is to complete the enrolment process by end-January.We are on course to providing backend support by April1,” said a GSTN executive. MadhyaPradesh and Gujarat have reported the most robust response,with78.3percent and 78.1percent of the p…