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Physical shares to demat — the hurdles Signature mismatch to death of the owner are some of the problems. Here are ways to deal with them Did you find a bunch of yellow certificates while cleaning your parent’s or grandparent’s cupboard? It’s quite possible that those are share certificates, still in the physical form, purchased way back in the seventies or eighties. You need to brace yourself for problems while trying to convert these physical shares into electronic (demat) form. To start with, the beneficiary (owner of the physical share certificate) should have an active account with a depository institution. Otherwise, he has to open a new account in the name of the beneficiary. This can be done through banks or stock brokerages. Depository participants (DP) from banks and stock brokerages form the interface between beneficiary and depository institutions (National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL)), hand-holding the benef

Physical settlement of stock derivatives on the cards The Securities and Exchange Board of India (Sebi) on Thursday sought market feedback on moving to a physical settlement system in stock derivatives.Currently, all derivatives contracts are cashsettled. “Market participants are requested to provide their comments on whether there is a need to have compulsory physical settlement in stock derivatives contracts, and whether physical settlement should be done inaphased manner starting with stock options followed by stock futures,” the capital markets regulator said inadiscussion paper. In the past, Sebi, through various committees, and even stock exchanges, has tried implementation of physical settlement in stock derivatives.However, cash settlement has proved to be more popular. Most exchanges across the world use cash settlement. Some exchanges offer both options, while a few offer physical settlement. Under physical settlement, the trader gets delivery of the underlying security.

Jewellery sales halve in four weeks on PMLA extension Jewellery sales have declined by around 50 per cent over the past four weeks, due to consumers’ deferring of orders amid fear of future action against them under the Prevention of Money Laundering Act (PMLA). The government recently extended PMLA to the jewellery sector. This restricts cash transactions beyond Rs 50,000 without a Know Your Customer (KYC) declaration. This regulation, however, contradicts the income tax rule which permits cash transactions up to Rs 2,00,000 without a KYC requirement. A delegation comprising bullion dealers and jewellers across the country is scheduled to meet commerce ministry officials on Friday to apprise them of the massive impact on their industry. In past years, jewellers had 30-40 per cent of annual sales during the ongoing festive season, beginning from Raksha Bandhan to the new year. “Sales have declined by 50-60 per cent in the past few weeks,” said Surendra Mehta, secretary, India Bulli

Maharashtra tops in GST migration, fresh registrations Maharashtra is on the top, among other states in the country when it comes to migration of existing traders and fresh registrations under the Goods and Service Tax Network (GSTN). “Of the 916,000 existing taxpaying traders in Maharashtra, who had registered themselves under central excise, service tax and value-added tax (VAT), around 800,000 have migrated to the GSTN as on August-end,” Subhash Varshney, principal chief commissioner, GST and central excise, Mumbai zone, told PTI. “So far, 286,000 traders have already gone for fresh registrations in the state,” he said. Uttar Pradesh (593,000) claimed the second spot followed by Tamil Nadu (523,000), he said. Nationally, he said, 5.8 million traders of 7.2 million have migrated to the GSTN so far. For fresh registrations, Maharashtra is followed by Uttar Pradesh ( 254,000) and Gujarat (116,000). A significant increase in taxpayers’ base is expected in Maharashtra, he said. The B

Composition scheme under GST may return Only 1 mn entities opted for the scheme, meant for specific small businesses The composition scheme, which is applicable to specific categories of small businesses whose turnover is Rs 75 lakh and below and had been closed on August 16, may return soon. With just aboutamillion taxpayers opting for the scheme, the goods and services tax (GST) Council will consider reopening the window in its meeting on Saturday in Hyderabad, giving another opportunity to small players to avail of it. “Smaller players reportedly faced challenges with respect to registration. Some wanted more time to evaluate their business models to comply with the requirements of the composition scheme.So, we want to give them another chance,” saidasenior government official. The popularity of the scheme was increasing, when the scheme ended, with 9,80,000 entities registering for it by August 16, compared to just about 100,000 as of July 21, the earlier deadline. In other w

Irdai approves new broking consultancy norms The Insurance Regulatory and Development Authority of India (Irdai) will soon allow insurance brokers to offer consultancy for claims not exceeding  Rs 10 crore without the need for regulatory approvals. For claims exceeding Rs10 crore, the brokers will have to seek prior approval from the regulator. The last Irdai board meeting held in August cleared changes to the Brokers Regulations, said Sanjay Kedia, president, Insurance Brokers Association of India, adding that a formal notification is expected to be out soon. For the past one decade, the association’s stand has been that policyholders should have a choice to decide their service provider with regard to claims. Kedia said the broker represented the policyholder, and not allowing a policyholder to access the services of a qualified licensed broker in a completely free manner was denying him/her the right to exercise claim settlement. The Business Standard, New Delhi, 07th September

Startups, unlisted companies on black money radar, probe on 200 entities Startups and unlisted subsidiaries of some major Indian companies and multinationals find themselves in the crosshairs of the income tax department for raising funds through preference shares in excess of what it considers the fair market value. The investigation arm of the income tax department has sent notices to about 200 entities under Section 56(2)(vii)(b) of the Income Tax Act, 1961, in August, two people with direct knowledge of the matter told ET. Fair market value is assessed by the tax department based on past transactions and the record of similar, comparable companies. The Section is often applied when it’s suspected that companies may be issuing shares at a premium over the fair value for laundering unaccounted cash. “In cases where deals have been done at valuations higher than the fair value arrived at by tax authorities, queries have been raised,” said Abhishek Goenka, partner, corporate and in