CA Online

After NRI investments in domestic market, foreign funds on Sebi radar Regulator asks custodians to provide end-beneficiary data of foreign funds with Indian ownership A fortnight after the market regulator tightened rules around non-resident Indian (NRI) investments in the domestic market, several foreign funds have come under the scrutiny of the Securities and Exchange Board of India (Sebi) According to sources, the regulator has sought investment and end-beneficiary-related information of foreign portfolio investors (FPIs) from their custodians. Sebi wants to crack down on those NRI-managed funds that are also used to channel money belonging to persons of Indian origin (PIO) Sebi’s FPI regulations prohibit any foreign fund from being controlled by a PIO or NRI. Such entities are allowed to obtain an FPI licence on condition that they act only as investment advisors and do not invest their money. However, global funds typically ask fund managers to put up some seed capital...

 MFIs see slowdown in bank funding despite a fall in the cost of funds The average cost of funds for MFIs is 12-15 per cent, depending on their size Despite a fall in the cost of funds over the past year, banks remain shy of lending to microfinance institutions (MFIs), especially mid-size and small-size ones. In general, about 60 per cent of funding for MFIs come from banks. The rest was met through instruments such as securitisation (the marke t for which had dried after demonetisation) and debentures, among others. However, most banks have now restricted their funding to large MFIs, said entities in the segment. “In the past year, the cost of funds for MFIs has gone down by 60-70 basis points. However, banks have remained cautious in lending, due to their own problems. As a result, a lot of MFIs are looking at options like non-convertible debentures, which is long-term lending; the amount is also bigger,” said Rakesh Dubey, president, Micro Finance Institutions Network. ...

SEBI bans 28 entities for fraudulent trade with fake SMSes Markets regulator Sebi has barred 28 entities from the capital markets for sending out unauthenticated SMSes in bulk with misleading 'buy' recommendations to pump up trading volumes in the shares of Kalpa Commercial. The order comes after Sebi received complaints from intermediaries alleging that some unknown entities are sending guaranteed return SMSes, thereby misguiding the investors with unauthenticated SMSes. Following this, Sebi conducted a preliminary probe into the share trading of Kalpa Commercial Ltd (KCL) during October 10-18, 2017, specifically in relation to bulk Short Message Services (SMSes) circulated with questionable recommendations with respect to trading in the firm's shares. The probe found that 28 'connected entities' (group) had employed a scheme for offloading a large number of shares of KCL in a manipulative manner. They participated in the larger scheme of sending misleadi...

 GST revenue target set at Rs12 trillion for FY19 Economic recovery, anti-tax evasion measures seen boosting tax revenue The GST Council has set Rs12 trillion as the target for goods and services tax collections for the current financial year, buoyed by rising tax compliance in the first year of the new indirect tax regime. The federal indirect tax body noted that the average monthly receipts in the last fiscal year, despite several disruptions, were Rs89,885 crore, marginally below the Rs91,000 crore target. “GST receipts in FY18 have not been bad. The revised monthly revenue target for FY19 takes into account a 14% increase in states’ revenue growth estimate for compensation,” said a finance ministry official, requesting anonymity. Policymakers’ confidence in generating higher revenue from GST stems from the anti-tax evasion measures being put in place and the ongoing economic recovery. The positive impact of the e-way bill, which tracks goods movement electronically an...