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MSCI to Consult Fund Managers Before Decision on India Weightage To assess whether decision by Indian bourses would hinder access to domestic markets Rajesh Mascarenhas & Reena Zachariah MSCI will check with global fund managers before deciding on whether to cut India’s weight in its indices in the wake of the move by domestic exchanges to bar the use of local derivative products on overseas bourses. The USbased index provider, said a senior executive, will start the process of getting feedback from international investors on this matter as the exchanges and authorities get into a huddle to decide their next step. The US-based index provider said late last week that the joint decision by Indian exchanges to stop providing licences and data to foreign bourses was “anticompetitive.” It warned that this could impact India’s weightage in the indices, which are used by overseas asset managers to construct exchangetraded funds (ETFs) and benchmark portfolios. A reduction in the c

Higher MSPs could spur inflation in FY19: Nomura Higher MSPs and increased food-linked fiscal costs are an upside risk to the inflation outlook, due to which RBI is likely to keep policy rates on hold through 2018, Nomura says Widespread rural discontent and its electoral implications prompted the government to promise higher support prices to farmers in the Union budget, which could push up retail inflation by 0.6% year-on-year in 2018-19, Nomura research said in a note on Monday. Nomura estimated that the weighted average hike in kharif minimum support prices (MSPs) could double to 12.9% year-on-year in 2018-19, while the rise in rabi (winter crop) MSP could be lower at 6.6%. The one-time upward adjustment to MSPs could add 0.6% to headline consumer price inflation in 2018-19, the report said. While MSP for paddy could rise 11.6%, that of wheat is likely to rise by 3.2% year-on- year in 2018-19, the report said. In his budget speech, finance minister Arun Jaitley had promis

Bill to ban unregulated deposit schemes could get Cabinet nod today The Union Cabinet on Tuesday is likely to approve a Bill that seeks to ban all unregulated deposit schemes including Ponzi schemes and the ones accepting cryptocurrencies. Officials said the Bill — ‘Banning of Unregulated Deposit Schemes’ 2018 — was expected to be introduced as soon as the Budget session of Parliament resumed after recess next month. Earlier, the finance ministry had warned investors of investing in cryptocurrencies, saying those were like ponzi schemes. The legislation comes at a time when the financial world has been hit by frauds and misappropriation of funds Many are reported to have bought cryptocurrencies during the demonetisation period.There are many deposit schemes, which are still unregulated in India, even as the market regulator, the Securities and Exchange Board of India (Sebi), regulates what is called the "collective investment scheme" (CIS) The CIS is an investment s

Closed end funds lose sheen on LTCG tax With the tax disadvantage almost gone, more investors may be willing to venture into international funds to diversify their portfolios Closedend funds have always been a less attractive investment category than openend ones.The imposition of the longterm capital gains tax (LTCG) of 10 per cent is set to reduce their attractiveness further.Earlier, many retail investors avoided international funds because of their inferior tax treatment visàvis domestic equity funds. With the tax arbitrage almost gone, most of them can venture into these funds now.In recent times, the number of new closedend funds being launched by fund houses has far exceeded openend funds.When marketing these funds, mutual fund houses highlight two points.One, exiting these funds in the middle of their tenure is difficult. Though they are listed on the exchanges, these have to be sold atasteep discount.This, fund houses say, deters investors who lack the will power to

Bankruptcy rules for individuals may be delayed due to workload of DRTs The government planned to notify the bankruptcy provisions last year itself Bankruptcy provisions for individuals and proprietorship firms, among others, under the Insolvency and Bankruptcy Code (IBC), are unlikely to be put into effect anytime soon due to a heavy workload on debt recovery tribunals (DRTs). Also, the notification of the rules on cross-border insolvency could be delayed further in the absence of e-courts, according to official sources. The government planned to notify the bankruptcy provisions last year itself. Among the issues being examined by a high-power committee on the IBC is whether or not to notify the bankruptcy and cross-border insolvency regulations. A senior official of the Ministry of Corporate Affairs told Business Standard the crucial issue was how DRTs would manage the load of bankruptcy petitions in addition to the cases already pending with it. “There are around 100,000 c

  GST rules set to be simplified further GST Council likely to make compliance easier, revamp tax returns filing process soon Federal indirect tax body Goods and Services Tax (GST) Council is set to revamp the return filing process and further liberalize rules to make compliance easier for taxpayers and boost government revenues. A meeting of central and state government officials in the capital on 27 February will give final shape to the proposal before the council takes it up on 1 March for approval, a person familiar with the development said on condition of anonymity. The 26th meeting of the council will be held through a video conference. The council is expected to take measures that will make compliance easier for small businesses and traders, which account for the majority of taxpayers, based on recommendations from a panel led by M. Vinod Kumar, GST chief commissioner for Karnataka. It is also expected to do away with the requirement of filing tax returns relating t

SEBI asks banks to compensate retail investors if they fail to allot shares in an IPO Markets regulator Sebi today said retail investors applying for shares in IPOs would need to be compensated if bankers fail to make the allotment despite their eligibility. Besides, the public issue banker would need to pay an interest amount of 15 per cent to the investors for failing to resolve the grievance within 15 days, while they may also face Sebi's action for such failures. Putting in place a framework to compensate retail investors who fail to get securities in an IPO, Sebi said there should be a uniform policy for calculation of minimum compensation payable to investors. While calculating minimum compensation, several factors need to be taken into account like opportunity loss suffered by the investor due to non-allotment of shares; number of times the issue was oversubscribed in the relevant category; probability of allotment; and listing gains if any on the day of listing. &qu