Financial Daily from THE HINDU group of publications
Saturday, Dec 31, 2005
Financial Daily from THE HINDU group of publications Saturday, Dec 31, 2005 |
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Mutual Funds Markets - Regulatory Bodies & Rulings SEBI allows MFs to launch gold exchange-traded funds — Repetitive disclosures for follow-on public offerings go Our Bureau
Mumbai , Dec 30 THE Securities and Exchange Board of India (SEBI) on Friday announced key decisions, including introduction of optional grading of IPOs to provide "additional comfort" to investors and allowing mutual funds to launch gold exchange-traded funds, which would aid small investors to own gold through mutual fund units. The SEBI has also decided to do away with repetitive disclosures for follow-on public offerings and rights issues by companies with satisfactory track records in their filings with stock exchanges. Announcing the decisions after the SEBI board meeting today, Mr M. Damodaran, Chairman, said that it has decided to extend the facility of public issue refunds through ECS. To begin with, ECS as a mode for refunds will initially be done through 15 centres across India where clearing is done by the Reserve Bank of India. This will be extended to other centres later. The SEBI has also decided to resume fresh registration for obtaining unique identification number (UIN). However, UIN will be mandatory only for investors with trade value of over Rs 5 lakh. Another key decision by the SEBI relates to the amendment in takeover regulations to enable corporate restructuring. Mr Damodaran said that restrictions on market purchases and preferential allotments under the takeover regulations have been removed. The SEBI has also hiked the position limit for stock-based derivatives of trading members, based on the recommendation of the Secondary Market Advisory Committee. Explaining the rationale for allowing optional grading of IPOs, Mr Damodaran said that this would give "additional comfort" for first-time investors in the capital markets. The expenditure for such grading would be borne by outside agencies like the Investors Protection Fund or the exchanges themselves, he added. However, once the companies decide to go for grading, the results have to be publicised. The rating agencies have agreed to undertake this task. "Grading will help investors in taking informed decisions in the years ahead." On allowing mutual funds to launch gold exchange-traded funds, Mr Damodaran said that an expert committee under the SEBI had recommended that mutual funds follow two models - mutual fund custodian bank integrated model and mutual fund warehouse receipt model. In the first model, gold is physically held by a custodian bank on behalf of a mutual fund; in the second, gold warehouse receipts are held by a custodian bank on behalf of the fund. Clause 49 regime from Monday Ruling out any extension of the deadline for the Clause 49 regime, Mr Damodaran said that the SEBI board has made certain clarifications in the clause. As per this, the maximum time gap between two board meetings in companies has been increased from three months to four months. Secondly, the sitting fees paid to non-executive directors as authorised by Companies Act, 1956 would not require the approval of shareholders.
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