SEBI Current Affairs: October, 2018 (Part – II)

Relevant for SEBI Grade A 2018 Examination

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 Sebi revises norms for recovery of investors' money

• In case an entity is not traceable or is not

complying with Sebi directions, the
recovery officer can appoint an
administrator for the purpose of selling
the properties attached.
• Only an entity registered with the IBBI as
insolvency resolution professional would be The new regulations Sebi
considered eligible for appointment as (Appointment of
administrator. Administrator and Procedure
• Insolvency and Bankruptcy Board of India for Refunding to the
(IBBI) is implementing the Insolvency and Investors) has come into
Bankruptcy Code. effect from October 3.

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Sebi asks suspected shell cos to cooperate in forensic audits

• Sebi has asked over a dozen

suspected shell companies to
extend cooperation to ensure
completion of forensic audits in a
time-bound manner, failing which
they would face stringent trading
curbs.
Shell companies are dubious
entities that are mainly used
• The forensic audit is being for illegal money laundering.
conducted by independent auditors However, the term 'shell
appointed by stock exchange on the company' is not defined
direction of SEBI. under the Companies Act.

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MDs at stock exchanges, depositories, clearing corporations to
have 2 terms of 5 years each
• Sebi recently approved changes to
regulations governing Market
Infrastructure Institutions (MIIs)

• wherein the first term in stock

exchanges, depositories and SEBI also modified the
clearing corporations may be definition and norms
extendable by another term, relating to disclosure of
subject to satisfactory performance the compensation of the
review. key management
personnel.

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 More about reforms
• Besides, a cooling-off period of one year should be applicable prior
to nomination as a public interest director (PID) in another MII,
while that of three years for a director to become a shareholder
director in the same institution or a director in its subsidiary.
• A person shall be nominated as a public interest director for a
maximum of three terms across a depository/a recognised stock
exchange / a recognised clearing corporation, subject to a maximum
age limit of 75 years.
• According to the regulator, the number of PIDs, on the governing
board and the committees of the MIIs, should be at least equal to
the number of shareholder directors (including the managing
director).

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 Sebi eases cost, compliance burden on issuer of debt securities

• To ease the cost and compliance burden on the

issuer of securities, Sebi has done away with
the requirement of 1 per cent security
deposits with exchanges for public issuance of
debt securities.
• Currently, 1 per cent of the amount offered for
subscription to the public is required to be
deposited with the stock exchanges The decision comes
• so that complaints relating to refund of after the board of Sebi
approved a proposal in
application money, allotment of securities and
this regard in its
dispatch of certificates among others can be
meeting recently.
resolved speedily.

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 Sebi asks DPs to report FPI registration on monthly basis

• With an aim to bring transparency in

processing of applications for FPI registration,
• Sebi recently asked depository participants to
inform on monthly basis about the average
time taken by them in dealing such requests.
• The designated depository participants (DDPs)
will have to provide the number of foreign DDP will have to endeavour
portfolio investors (FPI) applications received to dispose of the application
and the average time taken in processing them for grant of registration as
soon as possible but not later
during the immediate preceding month to
than 30 days after receipt of
Sebi by fifth working day of every month, in a such application
prescribed format.

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 Sebi cautions investors against dealing with foreign trading portals

• SEBI recently cautioned investors

against dealing with foreign trading
portals or platforms.
• It said domestic investors are being
drawn into online trading by overseas
websites and platforms.
• Sebi said as these websites are not Sebi said investors dealing with
being supervised by any regulatory recognised stock exchanges in
body in India, investors need to be India have options such as
cautious when it comes to dealing dispute resolution mechanism
with them. and investor grievance redressal
mechanism.

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 SEBI & Investor Dispute Redressal

• SEBI has a comprehensive mechanism to facilitate redressal of

investor grievances against intermediaries and listed companies.
• It follows up with the companies and intermediaries who do not
redress investors' grievances, by sending reminders to them and
having meetings with them.
• It takes appropriate enforcement actions as provided under the law
where progress in redressal of investor grievances is not satisfactory.
• It has set up a comprehensive arbitration mechanism in stock
exchanges and depositories for resolution disputes of the investors.
• The stock exchanges have investor protection funds to compensate
investors when a broker is declared a defaulter.

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Sebi to levy Rs 1 lakh per exchange on agri-commodity derivatives turnover

• Sebi has drawn up a framework to levy nominal

regulatory fee of Rs 1 lakh per exchange on
turnover arising from agricultural commodity
derivatives, instead of levying charges based on
turnover slab rates, a move that is expected to
benefit farmers.
• In order to pass on the desired benefits from
reduction of regulatory fees, Sebi board last Sebi has amended Sebi's
month said exchanges dealing with agricultural (Regulatory Fee on Stock
commodities derivatives will create a separate Exchanges) Regulations,
fund earmarked for the benefit of farmers or which came into effect from
FPOs (Farmer Producer Organisations). April 1, 2018.

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 Sebi rejigs primary market advisory panel

• Sebi has reconstituted its Primary Market

Advisory Committee (PMAC) which advises
it on issues related to the regulation and
development of IPOs and other such
segments.

• The terms of reference of the committee

include advising Sebi on matters to be The 24-member panel is
taken up for changes in the legal chaired by T V Mohandas
framework to introduce simplification and Pai, Chairman of the
transparency in systems and procedures in Manipal Global Education
the primary market. Services.

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Sebi proposes measures to strengthen framework for debenture trustees

• To secure the interests of debenture holders of

listed debt issues, Sebi proposed a slew of
measures to strengthen the regulatory
framework for debenture trustees,

• including raising minimum net worth

requirement for registration of such entities to
Rs 10 crore from the current Rs 2 crore.
Issuing a consultation paper,
the regulator has suggested
• The new criteria will help in restricting three years time period for
registration of debenture trustees (DTs) to attaining the networth
financially sound entities. requirement.

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 What are Debenture Trustees ?
• A debenture trustee, in market parlance, is a
person or entity that serves as the holder of
debenture stock for the benefit of another
party.

• The debenture trustee serves are the official

representative for the debenture investors and

• is responsible for liquidating the collateral of

the trust in the event that the company
defaults on its debentures.

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 Debenture Trustee

Debenture -
Company Trustee holders

• A debenture trustee means a trustee of a trust deed for securing any

issue of debentures of a body corporate.
• The trustee serves as a liaison (the person who keeps in contact with
different groups) between the company that issued the debentures
and the debenture holders.

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 More about Proposals

• Further, the regulator proposed that there should be no requirement

of calling for a meeting of debenture holders in the event of default
by the issuer in case of public issues.
• The DT can directly enforce the security without obtaining any
consent from the debenture holders.
• According to Sebi, there have been cases of delay in enforcing the
security in the event of default, which is detrimental to the interests
of the investors.
• SEBI has proposed various measures and sought comments from
public till November 16 on the same.

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 BSE, Sebi organise awareness program for SMEs, Startups

• BSE along with regulator Sebi

organised an awareness programme
in Shimla for small and medium scale
enterprises, startups to help them
know the benefits of listing and
eligibility criteria.

A recently listed company on

• The event was focused on clarifying
the eligibility criteria to the SMEs and
start-ups and the explaining them
several benefits of getting their
company listed.
BSE's SME platform, Inflame
appliance Ltd also shared its
experience on how the
company benefited from the
BSE's platform.

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 BSE and NSE SME Platform

• BSE Ltd has set up the BSE SME

Platform as per the rules and
regulations laid down by SEBI.
• Similarly, NSE has setup Emerge
Platform for SMEs.
• These Platforms offers an
entrepreneur and investor friendly
environment, which enables the
listing of SMEs from the unorganized
sector scattered throughout India,
into a regulated and organized sector

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 MCQ’s

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1. The new regulations Sebi (Appointment of Administrator and Procedure for Refunding to the Investors) has
come into effect from:
a) 7th Sept. 2018
b) 3rd Oct. 2018
c) 1st Nov. 2018
d) None of the above

2. Sebi recently asked depository participants to inform on _________ basis about the average time taken by
them in dealing with requests of FPI registration?
a) monthly
b) quarterly
c) Half-yearly
d) yearly

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3. Primary Market Advisory Committee (PMAC) of SEBI is chaired by:
a) T V Mohandas Pai
b) Naryan Murthy
c) TK Vishwanathan
d) YV Reddy

4. Emerge is SME platform of:

a) BSE
b) NSE
c) OTCEI
d) None of the above

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 ANSWERS
1. B
2. A
3. A
4. B

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SEBI Current Affairs - Oct. 2018

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Thank You! Happy Learning!

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