It’s now time for the Securities & Exchange Board of India (Sebi) to focus on key reforms in the mutual fund (MF) sector. Sebi will call a rare meeting of all MF trustees, possibly by the end of this month, to discuss their role in detail and areas of conflict, if any. The regulator sees the role of trustees as critical to the proper functioning of MFs.
Sebi has also appointed SA Dave, former chairman of Unit Trust of India and a highly regarded personality in the financial sector, as chairman of its mutual funds advisory committee. The panel will comprise leading names from the funds industry and investor associations. The first meeting of the panel will also be held soon, sources in Sebi said. The MF panel will be the third of Sebi’s advisory committees, after those for the primary and secondary markets.
The meeting between Sebi and the MF trustees is the latest step by Sebi chairman CB Bhave to push through further reform in the capital markets. In a volatile market environment, MFs are seen as critical to getting retail investors into the capital market.
The role of trustees is akin to that of independent directors on company boards, and Sebi regulations on MFs places enormous emphasis on trustees to ensure the proper and orderly functioning of asset management companies (AMCs). A trustee company and AMC are expected to be at arm’s length, and trust-ees are meant to keep close watch on the AMC’s functioning. Sebi’s MF regulations specify that trustees must be people of “ability, integrity and standing”.
However, of late, sections of the market and MF industry itself have said there are cases where the independence of trustees is being severely diluted and that they have been reduced to mere figureheads or rubber stamps, endangering the functioning of AMCs. Sebi sources admitted there were cases that needed to be examined. Even MF chiefs agree that in cases, trustees may not have discharged their duties properly.
UK Sinha, chairman of UTI Mutual Fund, which is owned by four state-run institutions, said: “In the case of some fund houses, the trustees have no role at all, and are there merely as a formality. In some cases, the AMC and trustee boards even hold joint meetings, which is wrong and undermines the role of the trustees. Trustees often clear the AMC’s plans without the necessary due diligence.”
However, AP Kurian, chairman of the Association...
of Mutual Funds in India, denied there were any problems relating to the role of trustees and said they were performing their role diligently. “Trustees meet once in two months, do their due diligence before signing off the reports. We see trustees as first-level regulators. Schemes are approved by them, and the AMCs report to them,” Kurian added.
Sebi’s MF regulations clearly lay down the eligibility criteria for trustees. According to regulations, trustees “shall have a right to obtain from the asset management company such information as is considered necessary by the trustees”. The trustees must also ensure that before any scheme is launched, the AMC has the necessary systems in place; appointed all key personnel, auditors, a compliance officer and registrars; as well as prepared a compliance manual and designed internal control & audit mechanisms. They are also expected to ensure that specified norms for the empanelment of brokers and marketing agents have been complied with.
“The trustees shall ensure that an asset management company has been diligent in empanelling the brokers, in monitoring securities transactions with brokers and avoiding undue concentration of business with any broker. The trustees shall ensure that the asset management company has not given any undue or unfair advantage to any associates or dealt with any of the associates of the asset management company in any manner detrimental to interest of the unit holders,” state the Sebi regulations. The trustees have to ensure that the AMC has managed the MF schemes independently of other activities and taken adequate steps to ensure that the interests of investors of one scheme are not compromised by those of any other scheme or by other activities of the AMC....
Monday, August 11, 2008
Saturday, August 09, 2008
STOCKS IN BSE
LIST OF 30 STOCKS IN THE BOMBAY STOCK EXCHANGE
1. acc
2. bharti airtel
3. bhel
4. dlf
5. grasim
6. hdfc ltd
7. hdfc bank
8. hindalco
9. hul
10. icici bank
11. infosys
12. itc
13. jp associate
14. l&t
15. m&m
16. maruti suzuki
17. ntpc
18. ongc
19. ranbaxy
20. rcom
21. reliance industries
22. reliance infrastructure
23. satyam
24. sbi
25. sterlite
26. tata power
27. tata steel
28. tata motors
29. tcs
30. wipro
--
CA. VIKAS KAPAHI
TREASURER
JAB WE MET CA
REDEFINING PROFESSIONALISM
BE POSITIVE IN YOUR THINKING
just read the following story:
Father : "I want you to marry a girl of my choice"
Son : "I will choose my own bride!"
Father : "But the girl is Bill Gates's daughter."
Son : "Well, in that case...ok"
Next - Father approaches Bill Gates.
Father : "I have a husband for your daughter."
Bill Gates : "But my daughter is too young to marry!"
Father : "But this young man is a vice-president of the World Bank."
Bill Gates : "Ah, in that case...ok"
Finally Father goes to see the president of the World Bank.
Father : "I have a young man to be recommended as a vice-president."
President : "But I already have more vice- presidents than I need!"
Father : "But this young man is Bill Gates's son-in-law."
President : "Ah, in that case...ok"
This is how business is done!!
Moral: Even If you have nothing,You can get Anything. But your attitude
should be positive
Think +++++++ve
--
CA. VIKAS KAPAHI
TREASURER
JAB WE MET CA
REDEFINING PROFESSIONALISM
Friday, August 08, 2008
ATTENTION CA/CS/ICWA STUDENTS..........
WANT MAY/JUNE 2008 FINAL AND INTER PAPERS
CLICK ON THE LINK BELOW::::
http://dateyvs.com/indexs.htm
WANT MAY/JUNE 2008 FINAL AND INTER PAPERS
CLICK ON THE LINK BELOW::::
http://dateyvs.com/indexs.htm
Wednesday, August 06, 2008
PENSION REFORMS BILL LIKELY
NEW DELHI: Finance Ministry sources said The Pension Reforms Bill is likely to be adopted in the monsoon session. - PTI
PFRDA bill likely in monsoon session of Parliament
NEW DELHI: The pension reforms bill to set up a regulator and give more freedom to subscribers for investing their retirement money is likely to be tabled in the monsoon session of Parliament, Finance Ministry sources said on Tuesday.
“Amendments are ready. Hopefully, it would be tabled in the upcoming monsoon session of Parliament,” the sources said.
The Pension Fund Regulatory and Development Authority Bill (PFRDA) was introduced by the Finance Minister Mr P Chidambaram way back in 2005 to replace the ordinance promulgated in 2004 for setting up the regulator.
The bill was referred to the Parliamentary Standing Committee after the Left parties opposed the legislation. The standing committee recommended the bill with some modifications.
But the amended bill could not be tabled in Parliament due to persistent opposition from the Left. - PTI
PFRDA bill likely in monsoon session of Parliament
NEW DELHI: The pension reforms bill to set up a regulator and give more freedom to subscribers for investing their retirement money is likely to be tabled in the monsoon session of Parliament, Finance Ministry sources said on Tuesday.
“Amendments are ready. Hopefully, it would be tabled in the upcoming monsoon session of Parliament,” the sources said.
The Pension Fund Regulatory and Development Authority Bill (PFRDA) was introduced by the Finance Minister Mr P Chidambaram way back in 2005 to replace the ordinance promulgated in 2004 for setting up the regulator.
The bill was referred to the Parliamentary Standing Committee after the Left parties opposed the legislation. The standing committee recommended the bill with some modifications.
But the amended bill could not be tabled in Parliament due to persistent opposition from the Left. - PTI
SEBI OPENS ESOPS TO NOMINEE DIRECTORS
The Securities and Exchange Board of India (Sebi) on Tuesday made this amendment after it received several cases after a grey area in the regulation led to institutions forbidding nominee-directors from receiving Esops.
However, the joy of the nominee-directors could be short-lived as sources in Life Insurance Corporation (LIC) and General Insurance Corporation (GIC), which have a substantial shareholding in many large Indian companies, said they would not allow nominee-directors to accept Esops since they were government-owned bodies.
A GIC official said no government institution will allow nominee-directors to take Esops. “There will be a clamour to be on the boards of good companies if we allow this,” he said.
Before the amendment to the Sebi (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999, Esops were meant for whole-time directors, employees and officers of an organisation. Exempt categories were promoters or directors with over 10 per cent holding in the company.
Last year, there was a two-month face-off between LIC and GIC and their nominee directors, B P Deshmukh and Kranti Sinha, on the board of Larsen and Toubro (L&T) after the nominee-directors refused to return shares allotted to them by the construction major in spite of directions by both the institutions that its nominees should not accept any Esops. Sinha and Deshmukh held 20,000 and 30,000 L&T shares, the market price of which was Rs 3.5 crore and Rs 5 crore, respectively, at the time.
The two financial institutions moved the Bombay High Court to bar their nominee directors from dealing in these shares. Both directors lost their jobs on the L&T board. The matter was later settled out of court after the former directors returned their employee stock option shares to the company. After this, all financial institutions that hold equity stakes in various companies had written to them asking them not to issue Esops to their representatives to avoid a similar situation.
“Granting Esops is important for companies in terms of incentivising directors since companies are trying to create good governance on the board. Companies also need to look at shareholder interest and shareholder expectation. Obviously, the institution nominating the individual to the board should be comfortable with this,” said Jamil Khatri, executive director at KPMG.
-->
However, the joy of the nominee-directors could be short-lived as sources in Life Insurance Corporation (LIC) and General Insurance Corporation (GIC), which have a substantial shareholding in many large Indian companies, said they would not allow nominee-directors to accept Esops since they were government-owned bodies.
A GIC official said no government institution will allow nominee-directors to take Esops. “There will be a clamour to be on the boards of good companies if we allow this,” he said.
Before the amendment to the Sebi (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999, Esops were meant for whole-time directors, employees and officers of an organisation. Exempt categories were promoters or directors with over 10 per cent holding in the company.
Last year, there was a two-month face-off between LIC and GIC and their nominee directors, B P Deshmukh and Kranti Sinha, on the board of Larsen and Toubro (L&T) after the nominee-directors refused to return shares allotted to them by the construction major in spite of directions by both the institutions that its nominees should not accept any Esops. Sinha and Deshmukh held 20,000 and 30,000 L&T shares, the market price of which was Rs 3.5 crore and Rs 5 crore, respectively, at the time.
The two financial institutions moved the Bombay High Court to bar their nominee directors from dealing in these shares. Both directors lost their jobs on the L&T board. The matter was later settled out of court after the former directors returned their employee stock option shares to the company. After this, all financial institutions that hold equity stakes in various companies had written to them asking them not to issue Esops to their representatives to avoid a similar situation.
“Granting Esops is important for companies in terms of incentivising directors since companies are trying to create good governance on the board. Companies also need to look at shareholder interest and shareholder expectation. Obviously, the institution nominating the individual to the board should be comfortable with this,” said Jamil Khatri, executive director at KPMG.
-->
INDIA TO CONVERGE WITH IFRS BUT NOT TO ADOPT IT
‘India to converge with IFRS but not adopt it’
Indications are that the country would retain the right to remain sensitive to local conditions. .
Our Bureau
New Delhi, Aug. 2
India will go in for convergence with the International Financial Reporting Standards (IFRS) in an organised manner though it will not “adopt” this numero-uno accounting framework, a top Government official said here today.
Indications are that the country would retain the right to remain sensitive to local conditions. Currently, India does not follow IFRS, but its national GAAP (Generally Accepted Accounting Principles) is inspired by IFRS. More than 100 countries require or permit IFRS.
IFRS, which is principles-based, has now been required or permitted in more than 100 countries across the world. The application of IFRS requires increased use of fair value for measurement of assets and liabilities.
“The issue of full convergence with IFRS is closely followed by Ministry of Corporate Affairs (MCA). We are however distinguishing between full convergence and outright adoption. Yes we are doing it (converging) but we will not adopt. Because the moment you adopt IFRS, it is not question of adopting as it is today. It is a question of accepting any changes which would come. This is something that is not acceptable to us,” Mr Anurag Goel, Secretary, MCA, told at a seminar organised by PHD Chamber of Commerce and Industry (PHDCCI).‘Full convergence’
Mr Goel highlighted that “full convergence” was not a simple job and that there were hurdles and impediments in achieving it.
The MCA official said there was a need to ensure that the process of convergence took into account consistency with the legal and regulatory requirements. This complex task of convergence called for partnership among all stakeholders, Mr Goel noted.
While stressing the need to frame and revise laws in consultation with National Advisory Committee on Accounting Standards (NACAS), Mr Goel said company managements should be educated about the importance of impending transition.
In the light of the impending convergence with IFRS, Mr Goel urged various regulators – RBI, SEBI and IRDA – to develop their respective regulatory requirements for preparation and disclosure of financial statements of the entities regulated by them.
Indications are that the country would retain the right to remain sensitive to local conditions. .
Our Bureau
New Delhi, Aug. 2
India will go in for convergence with the International Financial Reporting Standards (IFRS) in an organised manner though it will not “adopt” this numero-uno accounting framework, a top Government official said here today.
Indications are that the country would retain the right to remain sensitive to local conditions. Currently, India does not follow IFRS, but its national GAAP (Generally Accepted Accounting Principles) is inspired by IFRS. More than 100 countries require or permit IFRS.
IFRS, which is principles-based, has now been required or permitted in more than 100 countries across the world. The application of IFRS requires increased use of fair value for measurement of assets and liabilities.
“The issue of full convergence with IFRS is closely followed by Ministry of Corporate Affairs (MCA). We are however distinguishing between full convergence and outright adoption. Yes we are doing it (converging) but we will not adopt. Because the moment you adopt IFRS, it is not question of adopting as it is today. It is a question of accepting any changes which would come. This is something that is not acceptable to us,” Mr Anurag Goel, Secretary, MCA, told at a seminar organised by PHD Chamber of Commerce and Industry (PHDCCI).‘Full convergence’
Mr Goel highlighted that “full convergence” was not a simple job and that there were hurdles and impediments in achieving it.
The MCA official said there was a need to ensure that the process of convergence took into account consistency with the legal and regulatory requirements. This complex task of convergence called for partnership among all stakeholders, Mr Goel noted.
While stressing the need to frame and revise laws in consultation with National Advisory Committee on Accounting Standards (NACAS), Mr Goel said company managements should be educated about the importance of impending transition.
In the light of the impending convergence with IFRS, Mr Goel urged various regulators – RBI, SEBI and IRDA – to develop their respective regulatory requirements for preparation and disclosure of financial statements of the entities regulated by them.
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