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The Securities and Exchange Board of India ( Sebi) plans to introduce within two months new norms to regulate algorithmic trading. “Algorithm- based trade or high frequency trades are prone to high risks. We are examining a number of options to bring down these risks,” said Sebi Chairman U KSinha on Thursday. These are trading systems that utilise advanced mathematical models for transaction decisions in financial markets. As of May, 15.1 per cent of the BSE turnover came through the algo route. These trades account for 19.8 per cent of the total on the National Stock Exchange, with an additional 24.3 per cent of volumes coming through co- located servers. The Reserve Bank of India had recently cautioned against these trades. “ The increased complexities of algo coding and reduction in latency due to faster communication platforms need focused monitoring, as they may pose risks in the form of increased possibilities of error trades and market manipulation,” it had said in June. S...

SIT on black money seeks details of probe by Sebi; investigation into 100 entities underway The crackdown on tax manipulation by listed entities using the stock exchange platform has picked up steam, as regulatory bodies and investigative agencies have intensified their scrutiny of the companies involved. According to sources, the Special Investigative Team (SIT) on unaccounted ( black) money has sought a probe report from the Securities and Exchange Board of India ( Sebi), which has so far been leading this probe. “SIT has sought a probe report on these listed companies that are using the stock exchange platform to evade taxes by way of misusing longterm capital gains tax ( LTCG) provision,” said a source. Over the past six months, under whole- time member Rajeev Kumar Agarwal, Sebi passed orders related to around 10 companies; 36 companies involved in irregular trades were suspended and 900 entities were banned. According to estimates, the money involved in these orders adds ...

Employees’ Provident Fund Organisation is likely to launch online PF withdrawals in three months for its 60 million subscribers. Business Standard, New Delhi, 23rd July 2015

Factories with up to 300 workers can fire without government approval After failing to get the Centre’s approval to the ordinance route, the Madhya Pradesh Assembly on Wednesday passed a single Bill to amend eight major labour laws; seven other laws would be changed through compounding provisions, etc. With this, Madhya Pradesh became the third state in a year, after Rajasthan and Gujarat, to pass its own labour law amendments in Assembly. After the amendments, those companies in Madhya Pradesh that employ up to 300 people will be allowed to retrench workers or shut shop without government approval ( the current provision is for those employing up to 100 to do so). To be able to do so, employers will have to give a higher compensation package —workers will get a threemonth notice and at least three months’ salary in the event of retrenchment. At present, either of two is provided; and employees are paid 15 days of wages for every year worked. Also, in case of a dispute, a worke...

A select committee of the Rajya Sabha has observed that the standard Goods and Services Tax ( GST) rate should be within 20 per cent, while the lower one should not cross 14 per cent. These rates are quite lower than the Revenue Neutral Rate (RNR) of around 27 per cent, arrived at by the sub- panel of the Empowered Committee of State Finance Ministers on GST, earlier. Besides, the panel suggested changes in the two important provisions of the Constitution Amendment Bill on GST — one per cent additional tax over GST on interstate supply of goods to help the producing states, and reduction in compensation to states in the fourth and fifth years. In its crucial report on the Constitution Amendment Bill on GST, submitted to the Rajya Sabha on Wednesday, the committee recommended that the proposed GST council may opt for a broad- based and moderate rate as the high rate will surely erode the confidence of the consumers badly and may lead to high inflation. In its dissent note, the Congr...

1. The advance amount received by the assessee towards transfer of development rights could not be treated as sale consideration. [CIT v/s. DLF Commercial Project Corporation, High Court of Delhi]. 2. CBDT released java utility for e-filing Form 6 to declare black money. Taxpayers are requested to e-file Form 6 during the compliance window which ends on 30.09.2015. 3. Levy of VAT on sale of goods in an agreement to sale of flat, and further held that states are not empowered to levy VAT on transfer of immovable property. [Punjab and Haryana High Court in CHD Developers v/s. State of Haryana and Others]. 4. Company holding a general meeting after giving a shorter notice u/s 101 of Companies Act, 2013 may also circulate financial statements (to be laid/considered in the same general meeting) at such shorter notice. General Circular No. I / /2015 dated 21.07.15. 5. The Delhi Government has directed all collector of stamps to collect the stamp duty through e-stamp only and verif...

Govt needs broad-based support for GST to stick to implementation date of Apr 1, '16 The government is looking to take the sting out of the contentious 1% compensation for manufacturing states that Congress has been citing to oppose the goods and service tax (GST), calling it an imperfect law.This compensation is proposed at up to 1% and in effect could be a lot less, said a senior government official. The government needs to get broadbased support for GST across parties in order to stick to the implementation date of April 1 next year. “If the concerned states do not face any revenue loss once the tax is rolled out, there will be no pressure on them to levy the tax,“ the official said. “Also, 1% is the upper limit and at a very low level it will not have the feared cascading effect.“ The government hopes this clarification will help ease the bill's passage when it's taken up for discussion in the Upper House. The government is also willing to offer states full comp...

Bonus payments to be doubled, gratuity to be made portable The Narendra Modiled NDA government is looking to enhance maternity leave for working women from three months to six months, virtually double bonus payments to employees and make gratuity portable between jobs. These proposed changes in employment laws could buttress the Modi government's credentials with the working class while it attempts to push through more ambitious reforms in labour rules that are blamed for hampering investment and job creation in the country. “The changes in the Payment of Bonus Act would raise the salary limit for getting a bonus from Rs 10,000 per month to Rs 19,000, and are at an advanced stage with a draft Cabinet note being moved earlier this month for comments from ministries,“ said a senior labour ministry official. Separately, the government is initiating stakeholder consultations to amend the Maternity Benefits Act of 1961 and the Payment of Gratuity Act of 1972, the official added....

The income tax department has launched an e- filing link on its official website for declaring illegal foreign assets and black money using the one- time compliance window notified recently by government. “ The link has been provided on the official efiling portal of the departmenthttps:// incometaxindiaefiling.gov. in,” an official said. Business Standard, New Delhi, 22nd July 2015

No consecsus as yet on social security code Even though the Indian Labour Conference ( ILC) could not build a consensus on forming a labour code on social security schemes, it recommended aslew of measures to broaden their coverage. The two- day conference, atri- partite platform of trade unions, industry and the government, concluded here on Tuesday with a series of recommendations. It recommended that Employees’ State Insurance Corporation ( ESIC) coverage be expanded to include the unorganised workers by reducing the threshold of coverage. At present, firms with 10 workers are covered under this law and the Union labour ministry will reduce this threshold limit. On- site construction workers will soon become a part of the ESIC Act. At present, construction workers directly hired by a factory, those who work on the premises of a factory, and technical workers such as engineers get health benefits from ESIC. However, workers hired through agencies or those working on a const...

The government is considering deregulation of forward contracts, or put and call options for equity, in an attempt to boost merger and acquisition ( M& A) activity in India. Companies agreeing to joint ventures ( JVs) usually enter into forward contracts where one company can buy the other’s shares and sell them back at a predetermined price. Restrictions on such put and call options have been revised a number of times. Since the passage of the Finance Bill 2015, oversight of such instruments has shifted from the Reserve Bank of India ( RBI) to the finance ministry. The government is looking at relaxing rules governing forward contracts for companies, and one option is complete deregulation. Business Standard, New Delhi, 22nd July 2015