MF distributors may subscribe to gold bonds

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BSE has decided to permit mutual fund distributors to subscribe to sovereign gold bonds issue for their respective clients, through the bourse’s mutual fund platform. The 5th tranche of sovereign gold bonds will open from today to September 9. “Sovereign gold bond scheme (SGB) will be open for subscription on BSE StAR MF Platform from tomorrow September 1, 2016, to Friday September 9, 2016 for mutual fund distributors (MFDs) to subscribe to the issue for their client,” BSE said in a circular today.“The facility shall be available only on BSE StAR MF Web Portal and shall be available for transaction in demat mode,” it added. The Finance Ministry had on Tuesday said that applications for the bonds will be accepted from September 1 for nine days and the bonds will be issued on September 23. — PTI

Investment norms for insurance firms revised

CHENNAI, March 9, 2013

SPECIAL CORRESPONDENT

IRDA sets limit for investment in infra bonds

The Insurance Regulatory and Development Authority (IRDA) has re-worked the investment norms for insurance companies.

The regulator has now mandated that a life insurance company should invest not less than 25 per cent of its total corpus in Central government securities. The total investment of such a company in Central and State government securities and other approved securities — all put together — should not be less than 50 per cent.

The IRDA has also prescribed the investment limit for life insurance firms in housing and infrastructure bonds. While permitting them to invest in these bonds, the regulator has made it clear that a life insurance company’s total exposure to these bonds should not be less than 15 per cent of its corpus. However, the IRDA has prescribed that a double ‘A’ rating of bonds is a must for insurance firms to consider investment.

For companies carrying on pension funds, annuity and group business, the new IRDA guidelines have prescribed that not less than 40 per cent of their total funds should be invested in the government bonds and approved securities. In the case of unit-linked insurance business, the IRDA notification made it clear that “the investment in approved investments shall not be less than 75 per cent of such fund(s) in each such segregated funds.”

The regulator also prescribed floor limits for general insurers, including health insurers, to invest in government securities and other approved housing bonds.

http://www.thehindu.com/todays-paper/tp-business/investment-norms-for-insurance-firms-revised/article4490177.ece

SEBI unveils norms for listing preference shares

 NEW DELHI, March 9, 2013

With an aim to bring in more transparency in raising of funds through non-convertible preference shares, market regulator SEBI, on Friday, announced a new set of regulations to govern issuance and listing of such securities.

To safeguard the interest of small investors from such high-risk securities, SEBI also said the listing of privately placed non-convertible redeemable preference shares would require a minimum application size of Rs.10 lakh for each investor.

Besides, the public issuance of such shares would require a minimum three-year tenure for the instruments and a minimum rating of ‘AA—’ or equivalent investment grade, the market regulator SEBI said in a statement after its board meeting here on Friday.

There have been many instances of public investors being taken for a ride through sale of such shares, as there has been ambiguity about regulations governing them.

At the same time, a defined framework for issuance and listing of such shares would also make it easier for banks and infrastructure companies to garner funds through this route.

A preference share is an equity security with properties of both an equity and a debt instrument. It usually carries no voting rights, but may carry a dividend.

SEBI said that its board had approved the SEBI (Issue and Listing of Non-convertible Redeemable Preference Shares) Regulations, 2013, to provide a comprehensive regulatory framework for issuance and listing of non-convertible redeemable preference shares.

SEBI said the new regulations would be applicable to issuances by banks of non-equity instruments such as perpetual non-cumulative preference shares and innovative perpetual debt instruments, which are in compliance with the specified criteria for inclusion in additional Tier I capital.

Such instruments can be issued by banks to meet Basel III norms. Indian companies have raised over Rs.25,000 crore through preference share issuance in the last three years. — PTI

http://www.thehindu.com/todays-paper/tp-business/sebi-unveils-norms-for-listing-preference-shares/article4490169.ece

BSE adds S&P brand to Sensex, other indices

MUMBAI, February 20, 2013

Ashish Chauhan (left), MD and CEO of BSE, and Alexander Matturri, CEO of S&P Dow Jones Indices at a press conference in Mumbai on Tuesday. —PHOTO: PTI

Premier bourse BSE has roped in S&P Dow Jones Indices to use the S&P brand for Sensex and other indices such as BSE 200 and BSE 100, a week after expiry of the global financial major’s pact with rival exchange NSE.

BSE benchmark index Sensex will now be managed and operated by the new joint venture to be known as S&P BSE Sensex and effective Tuesday, all the BSE indices, including BSE 100 and BSE 200, will be co-branded ‘S&P’.

Besides, these indices would join S&P Dow Jones Indices’ other iconic financial market indicators such as the S&P 500, the Dow Jones Industrial Average, the S&P/TSX 60, and the S&P/ASX 200.

“We expect our partnership with S&P Dow Jones Indices will help BSE raise the global acceptance of the Sensex and other index benchmarks, and help BSE achieve a leadership position in the index derivatives space,” BSE MD and CEO Ashish Chauhan told reporters here. “We have entered into a long-term strategic partnership with S&P Dow Jones Indices and will share revenues on 50:50 basis,” Mr. Chauhan said.

Established in 1875, 137 years ago, BSE Ltd. (formerly Bombay Stock Exchange Ltd.) is Asia’s first stock exchange.

As of December 31, 2011, more than $1.5 trillion was directly indexed to S&P Dow Jones Indices’ family of stock market indices. “This partnership expands BSE and S&P Dow Jones Indices’ presence in India and in South Asia, while providing a springboard for our efforts in the ASEAN region with an important exchange partner that understands this critical segment of the market,” S&P Dow Jones Indices Chief Executive Officer Alexander Matturri said. — PTI

SEBI unveils IDR conversion norms

MUMBAI, March 2, 2013

  

Mr. U.K. Sinha, Chairman, SEBI

To attract more foreign cos to get listed on domestic bourses

Enabling partial two-way fungibility of Indian Depository Receipts (IDRs), the Securities and Exchange Board of India (SEBI) on Friday issued detailed guidelines allowing shareholders to convert their depository receipts into equity shares of the issuer company and vice-versa.

IDRs are generally instruments denominated in rupees and allow overseas companies to raise funds from the Indian market.

It stipulated that IDRs would be redeemable into underlying equity shares after completion of one year period from the date of listing them and the issuer will provide two-way fungibility of IDRs.

This move is expected to attract more foreign companies to be listed on Indian bourses.

So far only the UK-based banking major Standard Chartered PLC was listed as an IDR.

“In order to encourage more number of foreign companies to issue IDRs in the Indian market and also to enable the investors to take informed investment decision, it has been decided to provide a detailed roadmap and guidelines for the future IDR issuances as well as for the existing listed IDRs,” SEBI said in a notification.

SEBI said that IDR fungibility would be provided on a continuous basis.

The issuer could provide fungibility to IDR holders by converting IDRs into underlying shares; or converting IDRs into underlying shares and selling the underlying shares in the foreign market where the shares of the issuer are listed and providing the sale proceeds to the IDR holders.

Total number of IDRs available for fungibility during one fungibility window would be fixed before the opening of the window.

Fungibility window for this purpose refers to the time period during which IDR holders can apply for conversion of IDRs into underlying equity shares.

A reservation of 20 per cent of the IDRs made available for redemption / conversion into underlying equity shares would be provided to retail investors.

In case of option of converting IDRs into underlying shares and providing the sale proceeds to the IDR holders, the issuer shall disclose the range of fixed / variable costs in percentage terms upfront and all the cost together shall not exceed 5 per cent of the sale proceeds, SEBI said.

PTI reports:

In the 2012-13 budget, the government had proposed to allow two-way fungibility of IDRs to encourage greater foreign participation in the Indian capital market. SEBI said the IDR fungibility would be available at least once every quarter, and the window would be open for at least seven days.

Existing IDR issuers can follow the new framework, and have to provide the option of redemption/conversion within three months from the date of completing a year of listing.

All the IDRs applied for conversion into equity shares would be transferred to redemption account at the time of application and in case of unsuccessful bids the balance would be transferred back to the applicant’s account.

According to SEBI, existing issuers would provide the option of redemption/conversion within three months from anniversary of the date of listing of their IDRs.

http://www.thehindu.com/business/markets/sebi-unveils-idr-conversion-norms/article4466062.ece

MCX-SX to commence operations from Feb 11

MUMBAI, January 29, 2013

SPECIAL CORRESPONDENT

The equity and equity derivative segment of MCX-SX will be inaugurated on February 9 by the Union Finance Minister, P. Chidambaram.

The new stock exchange, MCX Stock Exchange (MCX-SX), will become operational from February 11.

The equity and equity derivative segment of MCX-SX will be inaugurated on February 9 by the Union Finance Minister, P. Chidambaram. Live trading in this segment will commence from February 11,” said MCX-SX in a release.

“Our exchange adds a new dimension to the exchange evolution by embedding growth and inclusion that are so critical for a country like India,” said Jignesh Shah, Vice-Chairman of the new stock exchange in the release.

http://www.thehindu.com/business/markets/mcxsx-to-commence-operations-from-feb-11/article4354322.ece

Reserve Bank eases rules for FII investment in debt

MUMBAI, January 24, 2013

SPECIAL CORRESPONDENT

The Reserve Bank of India (RBI), on Thursday, notified the enhanced limit of investing in government securities (G-Secs) by foreign institutional investors (FIIs) and long-term investors by $5 billion to $25 billion from $20 billion.

It also hiked the investment limit in corporate bonds by these entities by $5 billion $50 billion from $45 billion.

Long-term investors include SEBI-registered sovereign wealth funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks.

The RBI also relaxed some investment rules by removing the maturity restrictions for first time foreign investors on dated G-Secs. Earlier it was mandated that the first time foreign investors of G-Secs must buy securities with at least three-year residual maturity. “But such investments will not be allowed in short-term paper like Treasury Bills,” the RBI added.

Further, the central bank has also restricted foreign investors from buying certificates of deposits and commercial paper.

In the total corporate debt limit of $50 billion, the RBI stipulated a sub-limit of $25 billion each for infrastructure and other than infrastructure sector bonds. In addition, qualified foreign investors (QFIs) would continue to be eligible to invest in corporate debt securities (without any lock-in or residual maturity clause) and mutual fund debt schemes, subject to a total overall ceiling of $1 billion.

“This limit of $1 billion shall continue to be over and above the revised limit of $50 billion for investment in corporate debt,” the RBI added.

As a measure of further relaxation, it has been decided to dispense with the condition of one year lock-in period for the limit of $22 billion (comprising the limits of infrastructure bonds of $12 billion and $10 billion for non-resident investment in IDFs) within the overall limit of $25 billion for foreign investment in infrastructure corporate bond.

The residual maturity period (at the time of first purchase) requirement for the entire limit of $22 billion for foreign investment in the infrastructure sector has been uniformly kept at 15 months. The five-year residual maturity requirement for investments by QFIs within the $3 billion limit has been modified to three years original maturity.

Maturity restrictions for first time foreign investors on dated G-Secs removed

Removal of rules requiring FIIs to hold infrastructure debt for at least one year

http://www.thehindu.com/business/rbi-hikes-fii-limit-in-govt-securities/article4340307.ece