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Showing posts from August 3, 2019

RBI tightens fit-and-proper criteria for directors on PSB boards

The Reserve Bank of India (RBI) has tightened the fit-and-proper criteria for directors on the boards of state-run banks, and said the Centre’s nominee director shall not be part of the nomination and remuneration committee (NRC). The revised criteria also, for the first time, laid down an exhaustive list for the disqualification of directors. The terms with regard to the NRC and the manner of the appointment of directors have been aligned with the practice in private banks, the recommendations made by the Banks Board Bureau, and with the provisions in the Companies Act. While the revised norms are applicable only to public sector banks (PSBs), separate guidelines for private banks and non-banking financial companies (NBFCs) may be in the offing. The NRC will have a minimum of three non-executive directors from amongst the board of directors. Of this, not less than one-half shall be independent directors and should include at least one member from the risk management committee of the b…

Sebi likely to tighten regulatory framework for portfolio managers

The Securities and Exchange Board of India (Sebi) has received a string of recommendations from its working group on tightening the regulatory framework for the portfolio management service (PMS) industry. One of the proposals pertains to increasing net worth requirement of PMS players to Rs 50 million. Some of the other proposals involve improving the reporting disclosures, high exit-loads in PMS products and improving the overall industry standards. The working group commissioned by the Sebi said higher net worth requirement would deter non-serious players while seeking registration and also put pressure on the fringe players. It observed that it has been over 10 years since the net worth requirement was last revised from Rs 5 million to Rs 20 million. However, the focus of the working group’s recommendations was to improve disclosures in the PMS industry, make it more investor-friendly and less expensive for investors. The working group also took representations from the CFA Instit…

Sebi slaps Rs 94.5-lakh fine on 17 entities for fraudulent trade practices

Capital markets regulator Sebi slapped Rs 94.5 lakh penalty on 17 entities for indulging in fraudulent trade practices in illiquid stock options segment on the BSE. The regulator, during the course of investigation between April 2015 and September 2015, found that 81.38 per cent of all the trades executed in the stock options segment involved reversal of buy and sell positions by the clients and counter-parties in a contract on the same day. These entities were among those "whose reversal trades involved squaring off transactions with significant difference in sell value and buy value of the transactions," Sebi said in similarly worded separate orders on Friday. It further said trades of the entities are non-genuine as they are not executed in normal course of trading, lack basic trading rationale, lead to misleading appearance of trading in terms of generation of artificial volumes, and are hence deceptive & manipulative. By indulging in such trades, the entities have v…