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Market watchdog SEBI has come out with a consultation paper in a bid to ease the functioning of <keyword id="22476006" type="General" weightage="100" keywordseo="ESG-Rating-Providers" source="keywords">ESG Rating Providers</keyword> (ERPs), pushing for the development of a <keyword id="23760035" type="General" weightage="20" keywordseo="subscriber-pays-model" source="keywords">subscriber-pays model</keyword>. As of July 2024, nine ERPs are registered with SEBI to operate in the country. These include <keyword id="23760037" type="General" weightage="20" keywordseo="CRISIL-ESG-Ratings" source="keywords">CRISIL ESG Ratings</keyword> &amp; Analytics, ESG Risk Assessments and Ratings, GlobeTrend Climate Impact Institutional Investor Advisory Services, <keyword id="23760038" type="General" weightage="20" keywordseo="NSE-Sustainability-Ratings" source="keywords">NSE Sustainability Ratings</keyword> and Analytics, PGS Impact, Pragati Development Consulting, CARE ESG Ratings, and SES ESG Research. Per the paper's proposal, ERPs won't be required to disclose ESG (environmental, social, and governance) ratings to the bourses, provided they confirm that there is no non-public information that could potentially affect the rating. Another proposal was the simultaneous sharing of the ESG rating reports both to the rated companies and to the subscribers who pay to access these reports. ERPs should ensure that rated entities, their group companies, or associates cannot subscribe to their own ESG ratings, SEBI said in its consultation paper. Some of the other suggestions put forth by SEBI include: 1. Companies will have a specific timeframe to respond to the ESG report, and any such comments should be included in the report as an addendum. 2. In case the ERP does not agree with the remarks issued by the rated company, they can add their comments to the report as well. 3. ERPs can rate unlisted issuers or other products, provided they meet specific guidelines from relevant regulators. SEBI is receiving public comment on these proposals until November 15, 2024. <h2>Steady returns </h2>Of the 11 ESG mutual fund schemes available to Indian mutual fund investors, the Quant ESG Equity fund has generated the highest returns of about 45.44% over one year, data from ValueResearch showed. Simply put, had you invested Rs 10,000 every month in this fund for three years, you would have accumulated a corpus of Rs 5,47,525. Over three years, the returns on this fund come to around 26%. This was followed by the ICICI Pru ESG Exclusionary Strategy fund, which yielded 44.73% returns over the same period. However, over ultra-short terms, i.e., 1-3 months, ESG funds have largely delivered negative returns, underscoring their suitability only as a long-term investment avenue. Only the SBI ESG Exclusionary Strategy Direct Fund and Quantum ESG Best In Class Strategy Direct Fund have been around for 5 years, during which they have generated returns of about 16.67% and 18.7%, respectively. <keyword id="23760036" type="General" weightage="20" keywordseo="ESG-mutual-funds" source="keywords">ESG mutual funds</keyword> typically select and invest in companies that are ESG-compliant, i.e., who weave in environmental conversation, social welfare, and robust <keyword id="20392393" type="General" weightage="20" keywordseo="corporate-governance" source="keywords">corporate governance</keyword> practices into their working philosophy and work ethos, while simultaneously generating decent financial returns for stakeholders as well.

SEBI mulls measures to facilitate ease of doing business for ESG Rating Providers (ERPs)

<div type="image" title="For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire" height="900" width="1200" msid="114064202" hostid="261" caption="&amp;lt;p&amp;gt;For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire&amp;lt;/p&amp;gt;"></div> Once upon a time, there thrived a wild, wild land. Here, it was all about super high monetary stakes, lightning-fast trade deals, and bucketloads of money shifting hands every single second. This wilderness lured millions of individuals with the promise of super duper high returns. But, at what cost? Welcome to the unforgiving, ultra-risky wild west of <keyword id="19991165" type="General" weightage="20" keywordseo="Indian-equity-markets" source="keywords">Indian equity markets</keyword> called the <keyword id="145718" type="General" weightage="100" keywordseo="Futures-and-Options" source="Orion">futures and options</keyword>. Here, everyone seems to just fly right through the bright red-flagged warnings of financial risks to earn even a fraction of these promised returns. Most burn themselves in the process, but carry on nevertheless, as if nothing ever happened. <h2>Chasing the cloudy profits</h2>The data conclusively proves that every 9 out of 10 individuals only lost their hard-earned money in this land. But hey, what do the numbers know? Some hide their losses out of shame, some out of fear. The proponents, meanwhile, proudly boast unusually high returns on their investments, some open social media channels while others encourage their friends and family to take the plunge. Naturally, news of this unstoppable and humongous en-masse migration to the F&amp;O (futures and options) town has reached sheriff <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, galvanising them into action. After all, it was time to put a leash on this madness and save the common man. The inhabitants of this town doubled in the last 2 years, from 51 lakh in FY22 to 96 lakh in FY24—99.8% of whom were small and mid-income traders. But profits? Well, that's a different, rather completely absent story. <h2>Que Sera Sera, much?</h2>A recent report by SEBI (Securities and Exchange Board of India) that studied profits and losses made by traders in the equity derivatives segment between FY22-24 exposed the mad mania of futures and options trading in India, especially since the pandemic. Per the report, 91.1% of individual traders, or about 73 lakh traders had only lost money trading in futures and options in FY24. Between FY 22-24, over 1 crore traders, or about 92.8% of individual traders, had lost Rs 2 lakh each. But once bitten, twice shy? Well, not in this case. More than 75% of individuals, who had only made losses trading in F&amp;O in FY22 and FY23, continued to trade vigorously in FY24 as well, without any changes in the bottom line, which remained deep in red and negative. So, then all these traders must be uber-rich, with tons of cash and not much care to spare? Nope. 76% of traders in the F&amp;O space in FY24 had an annual income of less than Rs 5 lakh. 2 years ago, their share stood at 71%. And their choice of poison? Options! In FY24, 60% of traders made losses trading in futures, but a whopping 91.5% burnt their funds trading in options. Mind you, futures are riskier than options. With futures, which require significant capital investment, the buyer and seller both are contractually bound to adhere to the pre-determined strike price of the futures or options contract, irrespective of whether the prevailing prices are higher or lower (and thus, resulting in losses for either the buyer or seller). With options, since this adherence ain't necessary, individuals end up taking debt to take highly leveraged positions while trading here. <h2>Scale of the explosion</h2>Anyone who trades even infrequently will tell you that a demat account is the mitochondria or powerhouse of the trading cell. As of August 2024, India had over 17.1 crore <keyword id="20957284" type="General" weightage="20" keywordseo="demat-accounts" source="keywords">demat accounts</keyword>, which are a prerequisite for trading in the markets. India is the 9th biggest country in the world, in terms of total demat accounts. Did you know that our demat accounts are at par with the entire population of Bangladesh? Talk about scale! Just 4 years ago, in March 2020, this number was a mere 4 crore. Naturally, the total F&amp;O turnover on both <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and BSE has hit the roof, and also broken it. As of October 4, 2024, the total futures and options turnover on NSE stood at a massive Rs 4,78,27,27,750.30 crore. Good luck counting the thousands! <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total Turnover (Both Futures and Options) (In Rs Crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020-21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">64,36,03,951.51 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021-22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,69,52,33,134.47 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2022-23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,82,23,26,468.06 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2023-24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7,99,27,67,152.43 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source : NSE Another metric that underlines the meteoric growth of trading in India is the collection of STT or <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword>. As of September 2024, India's STT mop-up had gone past Rs 26,000 crore. Traders have to pay STT whenever they buy or sell any security in the market. So, more trading brings in more STT, and hence, more revenue for the government, so they're not really complaining. After all, this is certainly what they'd call enviable growth. As of August 2023, our STT collection stood at about Rs 21,599 crores. And in FY20-21, India's STT collection had been Rs 16,000 crore. If only our salaries also managed to grow at this rate! <h2>So, what's happening?</h2>Two things. One, it's the big bulls who are raking in all the moolah. And it's the younger lot (those aged under 30) who are propping them up for this. In FY24, 43% of individual traders in the market were less than 30 years of age. In just one year, this number has swelled by 12 percentage points from just 31% of individual traders. But who says ageing is bad? Wrinkles and silver hair seemingly have a propensity of incurring lesser losses in the market. In FY24, only 79% of traders aged above 60 years made losses, as compared to 93% of those aged below 30. Small and mid-income traders, which make up 98% of the total trader base, witnessed average losses per person of Rs 65,000 and Rs 1.5 lakh in FY24 in futures and options, respectively. The winner here? Clearly, the big bulls, who declared an annual income of over Rs 1 crore, ended up with average profits of Rs 96,000 per person this year. <h2>What’s the sheriff up to?</h2>The government has finally swung into action, hiking the STT rate for F&amp;O during this year’s budget. Effective October 1, 2024, the STT on futures stands at 0.02%, up from 0.0125%. For options, it was upped to 0.1% versus 0.0625% previously. Small margins, but huge impact oncoming. Says Puneet Sharma- CEO and Fund Manager at Whitespace Alpha, “SEBI aims to enhance market stability while safeguarding investor interests, reflecting the regulator's intent to balance risk management with market participation”. But this might come with its own share of challenges, too. “Stricter norms around leverage, transparency, and capital adequacy could limit the ability of investors to determine their own risk appetite, thereby stifling innovation in trading strategies. Over-regulation in an environment that thrives on strategic flexibility and creativity could dampen the market’s dynamism, affecting India's competitiveness in the global derivatives landscape”, he observes. SEBI recently came out with a set of guidelines that aim to thwart <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword>' participation in futures and options and hinder them from taking undue risks. Here's a quick recap of what's to come for the residents of the F&amp;O town Margin Requirements: To battle the high volatility and chaos which is generally seen on expiry days(i.e the last mandated date, post which an option becomes invalid), SEBI will put in place an extreme loss margin (ELM) of 2% for all open short options on the day of expiry. Translation? Traders will need to pony up more cash upfront, leaving them with fewer funds to take on risky bets. It ain't a choice: No more of one expiry every single day! Going ahead, an exchange like BSE or NSE will just be able to offer weekly expiries, that too, only on one benchmark index, as opposed to an entire buffet it currently offers. At present, NSE offers weekly options contracts for its financial index, bank and midcap indices. But say goodbye to this, and hello to derivatives on only 1 index per exchange. Raising the bar: Effective November 30, 2024, the minimum contract value for index derivatives will be upped to Rs 15 lakh, from the present Rs 5-10 lakh. The hope is that by making it ultra-expensive to enter these trades, investors will be dissuaded from taking on risky trades. Pay upfront: Starting February 2025, those trading in options will have to pay the entire options premium upfront, even before their trades are executed. This is because options generally carry very high leverage, and paying a significant sum upfront can force traders to think twice. Invigilation Pro Max: Starting April 1 2025, to make sure that the number of positions for equity index derivatives does not slyly slip over the mandated limit, especially on expiry days when trade volumes are huge, the exchanges will have to take a minimum of 4 position snapshots randomly. The question is, will these injections of sobriety be enough to calm down the steroid-fed bull of the futures and options market in India? Well, only time and market turnover will tell! For more insights into the financial markets and business news, stay tuned to our site and social media handles. And don’t forget to subscribe to Business Insider India’s newsletters for your weekly dose of Simply Put! Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

New Delhi: Life Insurance Corporation of India (<keyword id="19903588" type="General" weightage="100" keywordseo="LIC" source="keywords">LIC</keyword>) has increased its stake in <keyword id="19984004" type="General" weightage="20" keywordseo="Bank-of-Maharashtra" source="keywords" meta.keywordsubtype="org" meta.entityname="Bank of Maharashtra" meta.hostid="83" meta.entityid="Bank of Maharashtra">Bank of Maharashtra</keyword>, the company informed the exchange in a filing. In an official statement on Saturday, LIC announced that it has raised its shareholding in the bank from 4.05 per cent to 7.10 per cent following a <keyword id="19984002" type="General" weightage="20" keywordseo="Qualified-Institutional-Placement" source="keywords">Qualified Institutional Placement</keyword> (<keyword id="19984001" type="General" weightage="20" keywordseo="QIP" source="keywords">QIP</keyword>). "..the Life Insurance Corporation of India ("the Corporation") has increased its shareholding in Bank of Maharashtra ("Company") from 4.05 per cent (pre-allotment) to 7.10 per cent (post allotment)" said LIC. The increased shareholding comes after LIC was allotted 25.96 crore equity shares as part of the QIP issued by the Bank of Maharashtra. Prior to this allotment, LIC held a 4.05 per cent stake in the bank. With the new shares, LIC now owns a 7.10 per cent stake, marking a significant rise in its ownership. The allotment was made under the guidelines of Regulation 30 of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations. LIC noted that it has complied with the regulatory requirements, including the details stipulated under the SEBI circular issued in July 2023, which governs disclosure obligations for listed entities. A Qualified Institutional Placement is a way for listed companies to raise capital by issuing equity shares to institutional investors, and this transaction indicates LIC's confidence in the growth potential of Bank of Maharashtra. Bank of Maharashtra is one of the public sector banks, and this infusion of capital through QIP will help strengthen its balance sheet and support its expansion plans.

LIC increases stake in Bank of Maharashtra from 4.05 percent to 7.1 percent through QIP

Indian financial services firm <keyword id="19913826" type="General" weightage="100" keywordseo="Zerodha" source="keywords" meta.keywordsubtype="org" meta.entityname="Zerodha" meta.hostid="261" meta.entityid="Zerodha">Zerodha</keyword> made headlines recently for hitting ₹8,320 crore revenue in FY24. However, its CEO and co-founder <keyword id="19923447" type="General" weightage="20" keywordseo="Nithin-Kamath" source="keywords">Nithin Kamath</keyword> says that the company is preparing for a decline in revenue as several regulatory changes are expected to take effect later this year. Kamath, in a blog post, outlined the challenges ahead, which could result in a <keyword id="20168027" type="General" weightage="20" keywordseo="revenue-drop" source="keywords">revenue drop</keyword> of up to 50% as Zerodha faces a combination of stricter regulations and shifting market conditions. <h2>Zerodha braces for revenue drop</h2>One of the main concerns for Zerodha is the new Securities and Exchange Board of India (SEBI) regulation, which will be implemented on October 1, 2024. Kamath expects a 10% dip in revenue as the "true-to-label" circular is enforced. This change will impose stricter guidelines on brokers like Zerodha regarding the kind of financial products they offer, potentially limiting some of their key revenue-generating activities. Another significant factor affecting Zerodha’s future revenue is the ongoing review of index derivatives regulations. Index derivatives, which are a crucial part of Zerodha's business model, could soon face changes that might severely impact the company’s earnings. Kamath estimates that such modifications could reduce earnings by 30-50%. Additionally, with the <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword> (STT) set to rise in October 2024, the costs of futures trading could further impact Zerodha’s profitability, though the effect on options trading may be limited. Zerodha is also set to face revenue pressures due to changes in Annual Maintenance Charges (AMC) under the new Basic Services Demat Account (BSDA) thresholds. From October 2024, brokers will only be able to charge full AMC fees from customers with holdings of ₹10 lakhs or more, up from ₹4 lakhs currently. Combined with Zerodha's removal of account opening fees, this is expected to significantly impact their revenue. Yet another challenge comes from Zerodha’s decision to halt payouts from its referral program. The program, which incentivised customers to refer others to the platform, will now only allow payouts to Authorised Persons (AP) registered with exchanges. This new regulation limits the number of people who can refer customers, slowing the firm's growth. <h2>Zerodha's financial results</h2>Despite these looming challenges, Zerodha posted strong financial results for the fiscal year 2024. The firm recorded a 62% increase in profits, reaching ₹4,700 crore, with revenue climbing by 21% to ₹8,320 crore. Traders using Zerodha's platform are also sitting on over ₹1 lakh crore in unrealised profits, largely driven by strong market performance and increased retail participation. However, Kamath also cautioned that the profitability boost in recent years has been fuelled by a bull market, which could reverse at any time. If the market turns, Zerodha, like many other financial service providers, may face significant challenges. To prepare for such an eventuality, the company has built up a strong financial position, with Kamath stating that their net worth now stands at nearly 40% of the customer funds they manage.

Zerodha co-founder Nithin Kamath says bracing for a huge revenue hit even as the company hits ₹8,320 crore revenue in FY24

<ul><li><keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> has introduced new investment criteria to mitigate risks associated with <keyword id="509133" type="General" weightage="20" keywordseo="fractional-ownership" source="Orion">fractional ownership</keyword> of <keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">real estate</keyword>. </li><li>You should research the <keyword id="6354516" type="General" weightage="20" keywordseo="property" source="Orion">property</keyword>, its location, market trends, and potential risks before investing. </li><li>Fractional ownership platforms operate by purchasing pre-leased commercial properties and dividing the ownership among investors. </li></ul>Owning real estate is not just a financial decision, in many cases, it’s a deep-rooted emotional one for many households. Buying commercial real estate, on the other hand, has always been touted as a wise economic decision. But how can one own such an asset if you can’t afford it given that the price of commercial properties is often too high for most individuals? You can still invest to avail a slice of real estate through fractional ownership! Minimum investment required Previously, the minimum investment required for fractional ownership of real estate varied, typically ranging from ₹10 to ₹25 lakhs. However, most platforms standardised the minimum investment at ₹25 lakhs. With the introduction of new regulations from SEBI, this threshold has been lowered to ₹10 lakhs making it more accessible to a broader range of investors. Fractional ownership options in India are still limited. However, while the concept is relatively new, it has quickly garnered <keyword id="6368449" type="General" weightage="20" keywordseo="investor" source="Orion">investor</keyword> interest. The fractional ownership industry is currently estimated to have ₹4,000 crores AUM and is expected to experience substantial growth, with projections suggesting it could reach a size of $5 Bn+ AUM by 2030, as per a JLL report. The number of platforms offering these investment opportunities is still limited, reflecting the industry's early stage of development. However, there were no defined rules on fractional ownership until SEBI stepped in recently. What SEBI says regarding fractional ownership To safeguard investor interests and foster growth in the Real Estate Investment Trusts (REIT) and fractional ownership market, SEBI has implemented a distinct framework tailored for small and medium (SM) (REITs). “SM REITs are structures that pool funds ranging from at least ₹50 crore to less than ₹500 crore, with the aim of issuing units to a minimum of 200 investors. These funds are utilised to acquire real estate assets, ensuring investors receive income generated from such assets. Going forward, any firm offering product (FOP) intending to establish an SM REIT must seek SM REIT registration from SEBI,” says Sudeep Chandran, Founder and COO of YOURS, a platform for Fractional Ownership of Luxury Second Homes. SEBI has also introduced new investment criteria to mitigate risks associated with fractional ownership. “It mandates that at least 95% of a scheme's assets must be invested in completed and income-generating properties, while the remaining 5% can be allocated to liquid assets. Furthermore, SEBI has issued additional rules and guidelines aimed at enhancing the sector's performance and safeguarding investors' interests," says Aryaman Vir, CEO of WiseX, a real estate investment platform that facilitates fractional ownership. Fractional ownership platforms Fractional ownership platforms operate by purchasing pre-leased commercial properties and then dividing the ownership among investors using a special purpose vehicle (SPV) structure. An SPV is a distinct legal entity set up for the sole purpose of acquiring a specific real estate asset, allowing for a clear separation of this investment from other financial engagements. Investors participate by acquiring securities issued by the SPV, effectively gaining a fractional share in the property. “The costs associated with the acquisition and maintenance of the property are distributed among the investors in the SPV, and these investors then share in the profits and returns from the asset. This sharing takes into account the management and maintenance fees that are levied by the FOP or by appointed third parties. Such a structure provides investors with an accessible route to earn from real estate, offering benefits like rental yields and potential asset appreciation,” says Vir. This model of investment significantly reduces the financial burden on individual investors, allowing them to attain steady income streams and long-term financial returns. Furthermore, it enables investors to diversify their investment portfolios by engaging in various real estate projects located in different areas, with each project having its own SPV. What you should keep in mind Before you enter into an agreement, review the agreement thoroughly to understand your rights, responsibilities, and any potential limitations or restrictions associated with the fractional ownership arrangement. “Like traditional property investment, due diligence is a must. You should research the property, its location, market trends, and potential risks before investing. Consider factors such as property valuation, maintenance costs, and resale prospects,” says Chandran. Also, when you co-own a property through a platform, credibility, reputation, and track record of the fractional ownership platform facilitating the investment also become important. Look for platforms that have a reliable track record of adhering to regulatory guidelines, providing transparent information, and offering robust investor protection mechanisms.

You can own a fraction of a real estate property, but it pays to keep the following in mind

The <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>) has approved <keyword id="19895995" type="General" weightage="20" keywordseo="hdfc-bank" source="keywords">HDFC Bank</keyword>'s proposal to acquire an up to 9.5% stake in <keyword id="19901053" type="General" weightage="100" keywordseo="indusind-bank" source="keywords">IndusInd Bank</keyword>. "Pursuant to Regulation 30 of the <keyword id="35210" type="General" weightage="20" keywordseo="SEBI" source="Orion">SEBI</keyword> Listing Regulations, we would like to inform you that the Reserve Bank of India vide its letter dated February 5, 2024 has accorded its approval to HDFC Bank Limited ("applicant") for acquiring "aggregate holding" of up to 9.50% of the paid-up share capital or voting rights in IndusInd Bank Limited. The aforesaid RBI approval has been granted with reference to the application made by the applicant to the RBI," IndusInd Bank said in a stock exchange filing. The approval also stipulates that if the "aggregate holding" of HDFC Bank falls below 5%, prior approval of the RBI will be required to increase it to 5% or more of the paid-up share capital or voting rights. The RBI approval is subject to compliance with the <keyword id="19976511" type="General" weightage="20" keywordseo="banking-regulation-act" source="keywords">Banking Regulation Act</keyword>, 1949, RBI's Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies dated January 16, 2023 (as amended), provisions of the Foreign Exchange Management Act, 1999, regulations by the Securities and Exchange Board of India (SEBI), and other applicable statutes, regulations, and guidelines, the filing noted. --IANS sps/dpb

HDFC gets RBI nod to acquire 9.5% stake in IndusInd Bank

New Delhi, The Finance Ministry has notified 21 countries, including the US, UK and France, from where non-resident investment in unlisted Indian startups will not attract angel tax. The list, however, excludes investment from countries like Singapore, Netherlands and <keyword id="56022" type="General" weightage="50" keywordseo="mauritius" source="Orion">Mauritius</keyword>. The government had in the <keyword id="6358021" type="General" weightage="50" keywordseo="budget" source="Orion">Budget</keyword> brought overseas investment in unlisted closely held companies, except DPIIT recognised startups, under the Angel Tax net. Following that, the startup and venture capital industry sought exemption for certain overseas investor classes. The <keyword id="121964" type="General" weightage="50" keywordseo="central-board-of-direct-taxes" source="Orion">Central Board of Direct Taxes</keyword> (<keyword id="128665" type="General" weightage="100" keywordseo="cbdt" source="Orion">CBDT</keyword>) on May 24 notified classes of investors who would not come under the Angel Tax provision. Excluded entities include those registered with <keyword id="35210" type="General" weightage="50" keywordseo="sebi" source="Orion">Sebi</keyword> as Category-I FPI, Endowment Funds, <keyword id="148003" type="General" weightage="50" keywordseo="pension-funds" source="Orion">Pension Funds</keyword> and broad-based pooled investment vehicles, which are residents of 21 specified nations, including the US, UK, Australia, Germany and Spain, as per the notification. The other nations mentioned in the notification are Austria, Canada, Czech Republic, Belgium, Denmark, Finland, Israel, Italy, Iceland, Japan, Korea, Russia, Norway, New Zealand and Sweden. The CBDT notification comes into effect on April 1. Nangia Andersen India Chairman Rakesh Nangia said by explicitly mentioning this list of countries, the government aims to attract more foreign investment (FDI) into India from countries that have robust regulatory frameworks. "Surprisingly, countries such as Singapore, Ireland, Netherlands, Mauritius etc from where the majority of inbound FDI is channelised into India, do not find a mention in this notification," Nangia said. Stakeholders may still have to hold their horses on a formal notification on the valuation guidelines as rules on the same are proposed to be released after a stakeholder consultation process, he added. The CBDT is expected to come out with valuation guidelines for valuing non-resident investment in unrecognised startups for the purpose of levying income tax. Under the existing norms, only investments by domestic investors or residents in closely held companies were taxed over and above the fair market value. This was commonly referred to as an angel tax. The Finance Act, 2023, has said that such investments over and above the FMV will be taxed irrespective of whether the investor is a resident or non-resident. Post the amendments proposed in the Finance Bill, concerns have been raised over the methodology of calculation of fair market value under two different laws.

CBDT exempts startup investments from 21 nations including US, UK from angel tax

With an aim to recover fines from elusive offenders, capital markets regulator SEBI on Thursday introduced a reward system for up to Rs 20 lakh to informants for sharing information about the assets of defaulters. The reward may be granted in two stages - interim and final. While the interim reward amount will not exceed two and a half per cent of the reserve price of the asset regarding which tips were provided or Rs 5 lakh, whichever is less and the final reward amount will not exceed 10 per cent of the dues recovered or Rs 20 lakh, whichever is less. Coming out with guidelines on the grant of reward to an informant who provides credible information about the assets of the defaulter under recovery proceedings, SEBI said, "information and the identity provided by the informant or the reward paid to him shall be held in confidence." As per SEBI, a person will be considered to be an informant eligible for a reward if he or she furnishes original information in relation to the asset of a defaulter concerning the dues which are certified as 'Difficult to Recover'. The difficult-to-recover dues are the ones which could not be recovered even after exhausting all the modes of recovery. Also, the regulator issued a list of 515 defaulters, where information can be provided by any informant. In addition, for the purpose of recommending the eligibility of reward, SEBI will set up an informant reward committee comprising the chief general manager of the <keyword id="14394652" type="General" weightage="80" keywordseo="recovery-and-refund-department" source="Orion">Recovery and Refund Department</keyword>, the concerned recovery officer having jurisdiction in the matter, another recovery officer nominated by the chief general manager and an officer in the grade of deputy general manager or higher, of the <keyword id="16745560" type="General" weightage="80" keywordseo="office-of-investor-assistance-and-education" source="Orion">Office of Investor Assistance and Education</keyword> nominated by the chief general manager in charge of <keyword id="135031" type="General" weightage="80" keywordseo="investor-protection-and-education-fund" source="Orion">Investor Protection and Education Fund</keyword> (<keyword id="277906" type="General" weightage="80" keywordseo="ipef" source="Orion">IPEF</keyword>). The informant reward committee will give its recommendations to the competent authority on the matters pertaining to the eligibility of informants for reward and the determination of the amount of reward payable to informants. SEBI said that the amount reward granted to the informant will be paid from the Investor Protection and Education Fund. The new guidelines have become effective from March 8, the <keyword id="6355630" type="General" weightage="80" keywordseo="securities-and-exchange-board-of-india" source="Orion">Securities and Exchange Board of India</keyword> (SEBI) said. According to SEBI's annual report for 2021-22, the markets regulator segregated dues to the tune of Rs 67,228 crore under "difficult to recover" (DTR) category at the end of March 2022. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/one-patient-succumbs-to-brain-stroke-every-four-minutes-in-india-says-expert/articleshow/98520040.cms">One patient succumbs to brain stroke every four minutes in India says expert</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/elon-musk-run-tesla-faces-probe-as-reports-of-steering-wheels-falling-off-while-driving-emerge/articleshow/98519867.cms">Elon Musk-run Tesla faces probe as reports of steering wheels falling off while driving, emerge</a>

SEBI introduces reward mechanism for informants providing tips on defaulters

New Delhi, Feb 27 () Markets regulator Sebi on Thursday amended the guidelines for intermediaries operating at the International Financial Services Centre (IFSC), wherein such entities will be permitted to carry out operations without forming a separate company.The facility - subject to various conditions, including Sebi nod - would not be applicable for trading and clearing members.Besides, the watchdog has changed the guidelines for reporting of financial statements by issuers listing their debt securities at IFSC. The regulator said the changes are being made to "further streamline the operations at IFSC, based on the internal discussions and consultations held with the stakeholders".In this regard, amendments have been made to the Sebi (International Financial Services Centres) Guidelines, 2015.Currently, Gujarat International Finance Tec-City (GIFT) is the lone IFSC in the country.Sebi-registered intermediaries or its international associates may provide financial services relating to securities market in IFSC, without forming a separate company subject to the regulator's prior approval, according to a circular."In case such financial services are offered exclusively to institutional investors, prior permission of the board is not required," it said.Further, the circular said a non Sebi-registered intermediary providing financial services exclusively to institutional investors would not require Sebi's approval. This is subject to the condition that it is a recognised entity in a foreign jurisdiction.Issuers of debt securities at IFSC have to prepare their statement of accounts in accordance with IFRS/ US GAAP/ Ind AS or accounting standards as applicable to them in their place of incorporation.In other cases, Sebi said, "a quantitative summary of significant differences between national accounting standards and IFRS shall be prepared by such entity and incorporated in the relevant disclosure documents to be filed with the exchange". International Financial Reporting Standards (IFRS), US Generally Accepted Accounting Principles (GAAP) and Indian Accounting Standards (Ind AS) are among the various accounting standards.An IFSC enables to bring back to India the financial services and transactions that are currently carried out in offshore financial centers by Indian corporate entities and overseas branches or subsidiaries of financial institutions. SRS ANUANU

Sebi amends guidelines for intermediaries at IFSC

New Delhi, Feb 13 () Markets watchdog Sebi on Thursday issued guidelines for portfolio managers and said they cannot charge upfront fee from clients. Sebi (Portfolio Managers) Regulations, 2020, were notified on January 16. In addition, certain changes to the regulatory framework for portfolio managers have been mandated, "As provided in Regulation 22 (11) of the PMS Regulations, no upfront fees shall be charged by the portfolio managers, either directly or indirectly, to the clients," Sebi said. According to the regulator, brokerage at actuals should be charged to clients as expense. "Operating expenses excluding brokerage, over and above the fees charged for Portfolio Management Service, shall not exceed 0.50 per cent per annum of the client's average daily Assets under Management (AUM)," it added. RAM MRMR

Sebi issues guidelines for portfolio managers

New Delhi, Feb 6 () Markets watchdog Sebi on Thursday came out with guidelines for compulsory performance benchmarking for Alternative Investment Funds (AIFs) as part of efforts to streamline disclosure standards. A template for Private Placement Memorandum (PPM) in the case of these funds, which have been classified into three categories, has also been issued. The PPM would have two parts -- a section for minimum disclosures and a supplementary section to provide any additional information. In a circular, the regulator said it has been decided to introduce the template for PPM, subject to certain exemptions, as well as put in place mandatory performance benchmarking for AIFs. Besides, there are provisions for additional customised performance reporting requirements. Sebi has also given operational guidelines for mandatory performance benchmarking of AIFs, including venture capital funds and the AIF industry. The performance benchmarking guidelines "shall not apply to Angel Funds registered under sub-category of Venture Capital Fund under Category I-AIF," the circular said. AIFs would have to carry out an annual audit of compliance with PPM terms. It can be done by either an internal or external auditor or a legal professional. Sections in the PPM pertaining to risk factors, legal, regulatory and tax considerations, among others, would be optional when it comes to audit. "Performance Benchmarking shall be done on a half-yearly basis based on the data as on September 30 and March 31 of each year," the regulator said. The findings of the audit, along with corrective steps, if any, should be communicated to the trustee of board or designated partners of the AIF, board of the manager and Sebi. These requirements would be effective from March 1. Angel funds as well as AIFs or schemes in which each investor commits a minimum capital contribution of Rs 70 crore or USD 10 million would be exempted from complying with the requirement of PPM as well as audit. Any association of AIFs that represents at least 51 per cent of the number of such funds, have to notify one or more benchmarking agencies, with whom each AIF needs to enter into an agreement for carrying out the benchmarking process. AIFs, for all their schemes which have completed at least one year from the date of "first close", should report all the necessary information, including scheme-wise valuation and cash flow data, to the benchmarking agencies in a timely manner. "If an applicant claims a track-record on the basis of India performance of funds incorporated overseas, it shall also provide the data of the investments of the said funds in Indian companies to the benchmarking agencies, when they seek registration as an AIF," Sebi said. In any marketing or promotional material as well as PPM, where past performance of the AIF is mentioned, the performance versus benchmark report provided by the benchmarking agencies should be provided, as per the circular. "As a first step, association will appoint benchmarking agencies and thereafter will set timeline for reporting of requisite data to benchmarking agencies by all the registered AIFs. "In this regard, association and benchmarking agencies will ensure that the first industry benchmark and AIF level performance versus benchmark reports are available latest by July 1, 2020, for the performance up to September 30, 2019," Sebi said. On a monthly basis, an association has to submit a progress report in this regard to Sebi till the creation of the first industry benchmark. In December, the regulator proposed introduction of minimum benchmarks for disclosure of performance history of AIFs and standardisation of draft document issued to investors by them. SRS RAM

Sebi issues performance benchmarking guidelines for AIFs

<ul><li>SEBI is planning to tag defaulters as 'difficult to recover' if it's virtually impossible for them to pay back their loan.</li><li>The tag will also be used for individuals found be 'untraceable' and with cases in multiple courts.</li><li>The proposal will be presented at SEBI's next board meeting in the coming week.</li></ul> Capital market regulator SEBI is planning to attach a 'difficult to recover' tag for individual defaulters who are found to be 'untraceable' as also for cases facing parallel proceedings by other agencies or in various courts and tribunals. The proposal, likely to be discussed at SEBI's board meeting next week, is aimed at better utilisation of resources towards cases with higher chances of recovery, a senior official said. This separate 'difficult to recover' category is for cases where recovery of penalties and other dues from defaulters proves to be virtually impossible and the amount involved is not found to be worth an attempt beyond a point. However, SEBI can initiate or continue its prosecution proceedings against the defaulters even after such a segregation and recovery procedure can be reopened in case there is any change in the prevailing parameters regarding the defaulter. The regulator is now considering a modification to its policy on 'difficult to recover' dues to include the criteria of 'untraceable' for individuals and 'parallel proceeding barring recovery', the official said. In case of individuals, the existing policy provides for this classification for a person who has died leaving behind no assets and those who are alive but have no attachable assets or have become insolvent. However, the income tax department rules for 'difficult to recover' cases has two more categories -- individuals who are untraceable and those who have left India. The official said that SEBI did not include these categories earlier as it did not have enough data with respect to the cases involving untraceable individuals, while the final category became redundant after promulgation of the Fugitive Economic Offenders Act. However, its analysis of pending recovery cases has now shown that many cases involving untraceable individual defaulters are fit for being declared 'difficult to recover'. In case of companies, this classification applies to those having gone into liquidation or insolvency proceedings or are defunct, as also entities whose directors, promoters, partners or representatives have no attachable assets. Regarding foreign companies, this category includes those having no presence, place of business, management, representative or attachable assets in India. The Securities and Exchange Board of India (SEBI) has got powers to recover money from various entities by way of passing orders for refund of money to investors, disgorgement of funds to be distributed to investors, and also collect fees and penalties levied by it. Since getting the recovery powers in 2013, SEBI has initiated recovery proceedings against a large number of defaulters, but it has experienced difficulties during the execution of these proceedings in certain cases. According to officials, difficulties mainly arise due to the defaulter being insolvent or financially unsound without having any attachable assets, or being a company whose assets or directors/ promoters are not traceable, as also individual defaulters being untraceable. In some cases, the dues remain unrecovered even after executing all modes of recovery. Earlier, SEBI norms did not provide for declaring any unrecovered dues as 'difficult to recover' and therefore all the proceedings used to remain in force along with other recoverable cases, thus hindering optimal utilisation of resources for cases with better chances of recovery, officials said. In 2018, SEBI had formulated this policy, after taking cues from the procedure followed by the income tax department, following extensive consultations with the Finance Ministry, the Reserve Bank of India and the Corporate Affairs Ministry, but it has always been made clear that it should not be seen as "scaling down or writing off" of the dues. Out of 2,500 recovery orders passed by SEBI so far, as many as 1,790 recovery certificates were pending (at end of November 2019). Out of these, 136 were found fit to be declared 'difficult to recover', though not a single case has been put in that category as yet because the final verification of the steps are being carried out by newly appointed recovery officers prior to any such categorisation. Out of the total 1,790 pending cases, the maximum number of 1,308 cases are pending at a stage after attachments of bank, demat and mutual fund accounts as the funds or securities available are not sufficient. Also, 301 of them are 'defunct' (17 per cent) and 254 have been found to be 'untraceable' (14 per cent). Besides, the 136 cases that are fit to be treated as 'difficult to recover', as many as 97 are 'untraceable' for reasons including of failure to serve demand notice despite best efforts, non-availability of demat or bank account details, non-existence of right address and even PAN details being unavailable. Besides, SEBI is also proposing a 'difficult to recover' tag for cases facing 'parallel proceedings' before various judicial and quasi-judicial fora such as National Company Law Tribunal, special courts, debt recovery tribunals, as also cases where stay on recovery has been granted by high courts or the supreme court, or where parallel attachment has been done by agencies like ED, Tax Department, EPFIO etc. Out of the total 1,790 pending recovery cases, SEBI found that parallel proceedings were pending in 90 cases with some facing multiple litigations. In cases where insolvency and bankruptcy proceedings have commenced, SEBI has no scope of recovery as the Insolvency and Bankruptcy Code prevails over the SEBI Act. See also: <a href="https://www.businessinsider.in/you-may-earn-up-to-1-crore-with-a-tip-off-on-insider-trading-sent-to-sebi-conditions-apply/articleshow/69729976.cms">You may earn up to ₹1 crore with a tip-off on insider trading sent to SEBI — conditions apply</a> <a href="https://www.businessinsider.in/india/news/indian-stock-market-regulator-wants-to-use-ai-to-curb-manipulation/articleshow/73570976.cms">Indian stock market regulator wants to use AI to curb manipulation</a> <a href="https://www.businessinsider.in/business/news/sebi-to-hire-independent-agencies-to-dispose-of-attached-assets/articleshow/73517907.cms">SEBI to hire independent agencies to dispose of attached assets</a>

You Searched For "Sebi guidelines" and got 12 results

SEBI mulls measures to facilitate ease of doing business for ESG Rating Providers (ERPs)

Ira Alok Puranik

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

Ira Alok Puranik

LIC increases stake in Bank of Maharashtra from 4.05 percent to 7.1 percent through QIP

ANI

Zerodha co-founder Nithin Kamath says bracing for a huge revenue hit even as the company hits ₹8,320 crore revenue in FY24

BI India Bureau

You can own a fraction of a real estate property, but it pays to keep the following in mind

Anagh Pal

HDFC gets RBI nod to acquire 9.5% stake in IndusInd Bank

IANS

CBDT exempts startup investments from 21 nations including US, UK from angel tax

PTI

SEBI introduces reward mechanism for informants providing tips on defaulters

PTI

Sebi amends guidelines for intermediaries at IFSC

PTI

Sebi issues guidelines for portfolio managers

PTI

Sebi issues performance benchmarking guidelines for AIFs

PTI

SEBI wants to tag defaulters as "difficult to recover" where recovery is virtually impossible

PTI

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