Thursday, June 19, 2014

Sebi unveils slew of reforms; PSUs to have 25% public holding
[Editor: It is now amply clear that, SEBI's so called reform, under the NDA Regime is based on the "Mantra": 'Sell Family Jewels to run the country'. This is just a replication of what P Chiddambaram & Co did, but in a more aggressive way.. Selling of PSUs to the retail investors is a reform? Or it is a way of Survival, to reduce the Fiscal Deficits? Really what to say!! I feel too many retail investor cannot be brought in this way. What is now needed is to encourage investments in small and mid cap counter, where the interest of most of the retail investors are focused. 
Moreover, SEBI wold do well to abolish the T-group, which serves no purpose other than penalizing the shareholders. It is because this section is misused by the vested group of bureaucrats to the hilt.  I feel this is a new form of SCAM which the SEBI is promoting through official route. Those employees who have prior knowledge on which stock will be put in the T-group exits (or sells) before-hand along with his/her friends (and may be clients, who knows?) or enters the scrip when they know that, certain stock will come out of the T-group. It is all clandestine affair, which is going on in Dalal Street, in the name of surveillance. 
Moreover, stocks are allowed to languish in T-group not only for days but for weeks and months even though they do not have much volume or most traders  have lost interest in the stock. I feel, as of  now , around half the companies, which trade in the BSE and the NSE are in the T-group as of now, starting from IVRCL Ltd to SBTL. Everything has to put in the T-group, so that SCAM can continue in a more simple way. What an irony!! While high level of speculation is allowed in all the Large Cap (and select mid cap counters) Counters, by popularizing Option Trading......!! I  have become tried writing on this topic again and again and  again during the last 5-6 years, but all my efforts  have perhaps, fallen on the deaf years of the government of India and the SCAM continues, unabated, now with OFFICIAL STAMP. The self serving Indian Media would continue to take the policy of "Running with the hare and hunting with the hound".
Anyway, if they are  not able to do away with the T-group (due to some vested interests) then, SEBI should at least start the practice of not keeping stocks for days and months in the group, without any valid reason. Moreover, there is no scope to popularize small caps, as most of them lacks volume. Besides, most small cap companies come up with annual report almost at the middle of year or near the end of  the calender year, doing just lip service. The companies neither come up with suitable disclosures nor they are pulled up for presenting fictitious balance sheets. I again reiterate if the small investor are to be brought to the corridors  of Indian stock market, then investing in the small and mid caps should be popularized. Therefore, I find there is NO HOPE in SEBI, as long as the present team is not replaced by a more pragmatic one]
June 19, 2014: Capital markets regulator Sebi today cleared a slew of reforms including a proposal to hike public holding in all PSUs to a minimum 25 per cent besides new norms for research analysts and ESOPs given by listed firms.

Besides, Offer for Sale mechanism will be revamped to allow non promoters to use this route for selling shares and a provision of 10 per cent reservation will be provided to retail investors.

The decisions were taken at a board meeting of Sebi here and included many reform measures to boost primary markets.

The Sebi board has made it mandatory for all listed PSUs to have at least 25 per cent public shareholding within three years. The move is expected to help the government raise close to Rs 60,000 crore through sale of excess shares in 38 state-run firms.

Another proposal approved by the board today included easing of the Offer For Sale (OFS) norms wherein retail investors would be provided with 10 per cent reservation and sellers of shares may also give discounts to retail investors.

Besides, non-promoters with more than 10 per cent stake in the company would also be allowed to tap the OFS route.

According to the new approved proposals, OFS would be made available for shareholders of top 200 companies based on market capitalisation.

OFS route was introduced in February 2012 as a fast-track mode for sale of shares by promoters. Since then more than 100 companies have sold shares through this mechanism to mop-up close to Rs 50,000 crore.

The Sebi board has also finalised elaborate norms for ‘research analysts’ to ward off any conflict of interest in their activities.

As part of its efforts to revive primary markets, Sebi has also relaxed restrictions on sale of bonus shares held by promoters or other investors during an Initial Public Offer of a company, even if these shares have been held for less than a year.

As per the existing regulations, shares that have been held for a period of less than a year are not eligible to be offered for sale in an IPO. This restriction applies to all classes of shares, including bonus shares or equity granted to existing shareholders on the basis of their prevailing stake.

Besides, Sebi announced new set of norms to govern Employee Stock Options (ESOP) Schemes.

The board also approved sharing of KYC (Know your Client) information with entities regulated by other financial sector watchdogs.

Courtesy: Indian Express
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