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Harshal Patel

Quant Mutual Fund’s CFO Resigns Amid SEBI Probe

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Harshal Patel steps down amidst SEBI investigation; Shashi Kataria takes over as Quant Mutual Fund’s new CFO

Harshal Patel, Chief Financial Officer (CFO), Quant Mutual Fund, has resigned amidst ongoing scrutiny from the Securities and Exchange Board of India (SEBI) regarding potential front-running activities. The fund house recently notified investors of Patel’s departure, citing personal reasons. This development comes as Quant Mutual Fund continues to navigate through SEBI’s investigation, which has brought increased regulatory attention to the organisation.

In conjunction with Patel’s resignation, Quant Mutual Fund has appointed Shashi Kataria as the new CFO, effective from July 1. Kataria brings a wealth of experience to the role, encompassing over 20 years in accounting, audit, direct and indirect taxation, financial reporting and compliance. Notably, Kataria has spent 13 years within the Indian mutual fund industry, contributing significantly to various aspects of financial management and regulatory adherence.

Punjabi Canva

J&K Bank CFO Resigns

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J&K Bank Chief Financial Officer (CFO) Pratik D Punjabi has resigned, effective April 5, 2024

Pratik D. Punjabi, CFO, Jammu and Kashmir Bank, submitted his resignation. The resignation has been made public in compliance with SEBI regulations. Fayaz Ahmad Ganai has been named as the interim CFO.

Punjabi with 24 years of experience, has worked in varied cultures and geographies covering all facets of finance functions like Strategy, Financial Performance, Investor Relations, Capital Raising, Fund Raising, Financial Control & Compliance, MIS, Business Finance, Setting up systems, evaluation of projects and viability studies.

sebi

MCX Gets Sebi Approval For New Commodity Derivatives Platform After Delays

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The nod comes after a series of delays and concerns raised by Sebi, eventually culminating in Sebi’s temporary hold on the platform’s launch

 
 
 

 

The Multi Commodity Exchange of India (MCX) has received the green light from the Securities and Exchange Board of India (Sebi) to launch its long-awaited web-based commodity derivatives platform (CDP).

The nod comes after a series of delays and concerns raised by Sebi, eventually culminating in Sebi’s temporary hold on the platform’s launch.

The approval is a significant milestone for MCX, which had originally planned to go live with the CDP in the first week of October. However, Sebi had asked MCX to postpone its launch, citing concerns over the readiness and technical support for the platform. The regulatory body has now withdrawn its “abeyance” order and requested that MCX propose a new launch date.

The decision by Sebi’s technical advisory committee to approve the CDP marks a turning point for MCX, prompting a surge in the company’s stock price. Over the past month, MCX’s stock has climbed 18 per cent, notably outperforming the benchmark Sensex index. On 6 October, MCX’s stock price jumped by 5.06 per cent, closing at Rs 2,047.95 per share.

The investor group Chennai Financial Markets and Accountability (CFMA) played a pivotal role in bringing the concerns over the CDP to Sebi’s attention. Their request for Sebi to ensure that MCX had the necessary technical support for the platform triggered Sebi’s intervention and the subsequent delay.

legal

SAT Quashes Sebi Order Against Former NDTV Promoters

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A Sebi investigation showed that the complainants’ promoters, Prannoy Roy and Radhika Roy, engaged in insider trading in NDTV stock during the time of the probe

 

The Securities Appellate Tribunal (SAT) quashed Securities and Exchange Board of India’s (Sebi) order which restricted former NDTV promoters Prannoy Roy and Radhika Roy from the capital markets for 2 years accusing insider trading.

“The learned WTM reasoned that SEBI came to know of the insider trading when it received complaints from NDTV. Thereafter, SEBI was required to make investigation. It was further held that no period of limitation is provided,” The SAT presiding officer justice Tarun Agarwala and technical member Meera Swarup said in order.
 

It added that support from many agencies to demonstrate that not all cases of delay creating prejudice will occur when a complicated subject and multiple violators are involved. The well-informed WTM additionally found that SEBI was needed to initiate an investigation after receiving the allegations, which is why there was a delay.

A Sebi investigation showed that the complainants’ promoters, Prannoy Roy and Radhika Roy, engaged in insider trading in NDTV stock during the time of the probe. Vikramaditya Chandra, group chief executive officer, director of finance and group chief financial officer at NDTV, was also found to have traded during the inquiry period while in possession of price-sensitive information, according to the investigation. The investigation turned up evidence that the Company, NDTV specifically, had submitted six price-sensitive disclosure requests during the investigation period.

sebi

Sebi Constitutes Working Group To Ease Regulations

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This move by Sebi is followed by one of the budget announcements in the Union Budget FY2023-24 stating, “to simplify, ease and reduce cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations

 

Security and Exchange Board of India (SEBI) constituted working groups to recommend simplification of various regulations. It has also invited suggestions towards simplifying, easing and reducing cost of compliance from the public and regulated entities.

There are 16 working groups currently reviewing the compliance requirements under various Sebi Regulations that apply to various regulated entities, such as equity and debt listed companies, mutual funds, stock brokers, alternative investment funds, REITs/InvITs, portfolio managers, custodians, investment advisers, research analysts, etc., under the auspices of its standing advisory committees.

This move by Sebi is followed by one of the budget announcements in the Union Budget FY2023-24 stating, “to simplify, ease and reduce cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For this, they will consider suggestions from public and regulated entities.”

MCX

MCX Sheds 6% After Sebi Finds Glitches In TCS Supported New Platform

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Multi Commodity Exchange stocks, that touched new highs on Thursday amid the launch of its commodity platform lost more than 6 per cent following Sebi disapproval

Stocks of Multi Commodity Exchange (MCX) paraded during Friday’s trade, after the market regulator Securities and Exchange Board of India (SEBI) directed MCX to postpone the launch of the Commodity Derivative Platform (CDP). 

MCX shares saw huge sell-off pressure during the early morning trading session. The stock opened lower at Rs 1,970 per share and touched an intraday low of Rs 1,913.25 per share after hitting all time high on Thursday.

Following the declaration of the launch date for the new CDP by MCX, the market turned bullish in support of firm stocks. MCX share price rose to Rs 1,971 per share and went on to an intraday lifetime high of Rs 2,104.15 per share on Thursday.

However, on Friday morning, market regulator SEBI urged MCX to halt the CDP launch. SEBI ordered a halt to MCX’s CDP launch, citing a ‘technical fault’ with the CDP launch.

It may be mentioned here that MCX had planned to launch CDP on 3 October 2023. The commodities exchange of India, founded in 2003, has issued an official statement, stating that a mock session prior to the introduction of the commodity derivative platform has been scheduled for 2 October 2023.

The exchange also intended to conduct a mock trading session on 2 October 2023, to allow members to participate, validate setup, and connect during the mock trading session.

The MCX has announced the introduction of its new commodities derivative platform, which will be supported by Tata Consultancy Services (TCS). However, the mock session is still likely to be conducted as scheduled.

MCX has attempted to adapt new technological platforms in the past as well. However, previous MCX initiatives were obstructed by technological challenges leading to the renewal of their arrangement with 63 Moons, an IT Company. 

MCX’s deal with 63 Moons was extended in June of this year. MCX has extended its contract with 63 Moons until December 2023. This renewal comes at a quarterly cost of Rs 125 crore, which is equivalent to Rs 250 crore for the July-December period of 2023.

 

 

SEBI

Borrowing Restrictions On Large Corporations Eased By Sebi

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The Securities and Exchange Board of India (Sebi) increased the amount needed to qualify as a large corporation (LC) while also relaxing the requirements where the latter must raise 25 per cent of any further borrowings through debt instruments.

The Board agreed to the proposal to give LCs flexibility in the framework so they can achieve their debt market funding needs. In light of the rising cost of borrowing, Sebi created a flexible structure for large corporations seeking to raise money.

The Board also resolved to keep the condition that compliance with the framework shall be met over a continuous block of three years in order to encourage ease of compliance and ease of doing business. The requirement that LCs file a statement identifying themselves as LCs and a statement regarding conformity with the framework will also no longer apply.

The board has approved amendments to various regulations, including the Investor Protection and Education Fund (IPEF) Regulations, Listing Obligations and Disclosure Requirements (LODR) Regulations, Real Estate Investment Trusts (REIT) Regulations, and Infrastructure Investment Trusts (InvIT) Regulations. These changes aim to establish a consistent and simplified process for claiming unclaimed amounts, making it easier and more convenient for investors. In addition, the amendments are designed to enhance the efficiency of crediting unclaimed amounts and facilitate their claims.

The statement emphasised that investors can now directly contact the debt-listed entity, REIT, or InvIT to reclaim their unclaimed funds. This approach aims to minimise delays for investors during the claims process and establish a clear legal framework for segregating investor unclaimed amounts within the IPEF. This framework will facilitate the utilisation and handling of these amounts in accordance with the guidelines set by the Board.

“Based on representations received from various stakeholders and in view of the emerging landscape of the domain of investment advice, it has been decided to allow time up to 30 September 2025 to comply with these requirements,” said Sebi.

Sebi

Decoding The SEBI Circular

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While the circular covers a plethora of topics, one of the key issues is the registration of FPI entities and the role of DDPs in the same

The stock market watchdog, the Securities and Exchange Board of India (SEBI)  has been strengthening its governance reforms, earlier having tightened the noose on REITs (Real Estate Investment Trust) and InVITs (Infrastructure Investment Funds). The caution has increased even further after the National Stock Exchange episode which involved its former CEO Chitra Ramkrishna and former Group Operating Officer-cum advisor Anand Subramanian. The CEO has been accused of providing Ramakrishna with disproportionate assets.

In lieu of incidents like these, SEBI has issued a master circular clarifying the registration of Foreign Portfolio Investors (FPI), Designated Depository Participants (DDPs), and custodians, the depositories, all recognised stock exchanges and clearing corporations including those in international financial services center. While the circular covers a plethora of topics, one of the key issues is the registration of FPI entities and the role of DDPs in the same.

“FPI applicant shall submit duly filled prescribed application form–CAF and ‘Annexure to CAF’(Annexure B) supported by required documents and applicable fees for SEBI registration and the issuance of   PAN.” Says the circular. Annexure B includes information over and above individual declarations like separate registration for the purposes of hedging the ODIs with derivatives as underlying in India or if the segregated portfolio is maintained for each sub-fund or share classes/ equivalent structures of the applicant, names of such sub-funds or share classes/ equivalent structures that intend to invest in India. The in-depth verification will be carried out by DPP (Designated Depository Participants) and will be clarified under country verification, NRI status verification, etc. 

The second aspect is registration of banking and financial institutes, for which the circular says “In case an applicant/ its group entity is (i) bank or its subsidiary and has a bank branch/representative office in India or (ii) a central bank or its subsidiary, the respective DDP shall forward the application form to SEBI.” Additionally, there are also guidelines for insurance entities, pension funds, and other entities investing on behalf of other entities. For multiple investment managers, the entity can obtain multiple FPI registrations mentioning the name of the investment manager for each such registration. To continue the existing registration of FPIs, they have to pay fees to their DPPs and inform any changes if any. The application of FPI can be rejected with reason by DPP. Also, the change in the ownership of the FPI will also be in the hands of the DPP. The body does not have a free pass, they have to regularly submit their monthly activities to SEBI. FPIs are also required to provide KYC-related documents based on the category under which it is registered. 

economy

Sebi To Create Separate Window On Stock Exchanges To Conduct Buybacks

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SEBI chairperson Madhabi Puri Buch told the media that the purpose of amendments is to streamline the process of buyback, enhance the ways of doing business and to boost the level-playing ground for the investors

India’s market regulator body Securities and Exchange Board of India (SEBI) has said that a separate window will be initiated to conduct buybacks till the time it will gradually eliminates the share buybacks through stock exchanges before April 2025.

This will help to create a more impartial process for the shareholders. Also, Sebi has increased the funds allocated for the minimum utilisation for the buybacks through the stock exchanges from 50 per cent to 75 per cent. 

Sebi chairperson Madhabi Puri Buch told the media that the purpose of amendments is to streamline the process of buyback, enhance the ways of doing business and boost the level-playing ground for the investors.

Sebi also notified about the reduction in the timeline by 18 days for the completion of buybacks through the tender offer. 

Partner and head of capital markets of Cyril Amarchand Mangaldas, Yash J Ashar said that with time more and more firms will have to resort to the tender offer route. This will lead to allowing all shareholders to take part in it.

The constricting of regulations by the market regulator come forward after witnessing the strong increase in frauds and underperforming initial public offerings that have harmed minority shareholders.

The market regulator also approved the recommendations for the improvement of governance at market infrastructure institutions including depositories, corporation clearances, and stock exchanges after noticing the vital past failures and disagreements pertaining to National Stock Exchange (NSE) and Multi Commodity Exchange (MCX).

Sebi

SEBI Forms 20 Members Committee To Review Corporate Takeover Rules

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The new panel will be responsible to review the current rules in the light of past judicial pronouncements and various informal guidelines, which have been issued by SEBI till date. The committee having representatives from stock exchanges and law firms will also have to make suggestions and measures to facilitate ease of doing business.

The capital markets regulator of India, Securities Exchange Board of India (SEBI), has formed a high-level panel to review corporate takeover rules. This comes after the Asia’s third-biggest economy seeking establishment of contemporary M&A regime that that is burning followed by the Global Financial Crisis and the emergence of new buyout modes undergirded by private-equity financing. Such move may be the first anticipated overhaul in more than a decade.

The committee formed, will consist of 20 member which will be headed by former Chief Justice of Punjab and Haryana High Court, Shiavax Jal Vazifdar. The Achuthan committee reviewed the takeover code last in 2009.

The new panel will be responsible to review the current rules in the light of past judicial pronouncements and various informal guidelines, which have been issued by SEBI till date.

Out of all members of the committee, some others include Ankur Verma, senior vice president, Tata Sons; professor Umakanth Varottil, faculty of law, National University of Singapore; Sudhir Kumar Jha, head of legal, HDFC, Sunil Sanghai, founder of NovaDhruva Capital and Sundareswaran S, managing director, Morgan Stanley Financial Advisors.

The regulator will be receiving advises and suggestions from the panel on simplifying and strengthening the current norms by adopting appropriate global practices. The committee having representatives from stock exchanges and law firms will also have to make suggestions and measures to facilitate ease of doing business.

SEBI, in 2011, had retained and continued the inherent and basic objectives of control highlighted by Justice PN Bhagwati, when takeover regulations were overhauled considering the recommendations made by the late C Achuthan, former presiding officer of the Securities Appellate Tribunal (SAT). Justice Bhagwati had chaired the committee that reviewed the takeover code of 1997.

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