Skip to main content

SEBI plans safeguards for overseas investors taking private bank route

By
SEBI plans safeguards for overseas investors taking private bank route
The Securities and Exchange Board of India (Sebi) is planning checks and balances on overseas investors taking the ‘private bank route’ to invest in domestic markets. The move comes after several industry players expressed concerns that the new route allowed by the Sebi could be misused by investors, such as participatory notes (p-notes).
Last week, the Sebi – through a circular titled “Easing of access norms for investment by foreign portfolio investors – allowed clients of private banks to trade in the Indian equities without having to register with the market regulator. While the Sebi has only given an in-principle nod to the proposal, regulatory sources said a fine print of the framework will be released by Sebi in the next one month.
“I want to assure that the Sebi will put enough safeguards so that the route is not exploited. Only the banks which are ready to forego their client confidentiality agreements will be allowed to use the route,” said a Sebi official. It is also learnt that the Sebi will keep the investment structure tight — a stark difference from p-notes. Sources said the Sebi will only permit omnibus structures for the route.

In such a structure, a private bank will be allowed to have only a single portfolio and all the investments will be channelled through the same. “We will not allow segregated portfolio for the framework as it could be misused. Only fund structures will be permitted and there will be a common portfolio,” the official cited above said. On a positive note, the Sebi is planning to keep the route open for all classes of investors, including institutions and individuals.
Interestingly, there seems to be a stark departure in the Sebi’s view on indirect participation of foreign investors in Indian markets. “Indirect participation is not a concern for us as long as we have information of the end beneficial owner,” a Sebi official said.
Among other developments, the regulator seems to have taken a final call on issuance of p-notes from international financial services centres (IFSCs), such as the GIFT City in Gujarat. It is learnt that the Sebi is not inclined to allow p-note issuances from the GIFT City. The proposal has been under the regulator's consideration for the past one year as some of the big-ticket foreign institutions were keen on having such a framework.
It could be very useful especially in the current circumstances where foreign funds have been stripped of p-notes and the Singapore Stock Exchange (SGX) route to invest in the Indian futures market.
The Business Standard, New Delhi, 23rd February 2018

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more