02 April 2012

SEBI Board meeting and DIPP circular on FDI

Major announcements are expected today. First from SEBI which is holding a board meeting and is expected to take a call on Alternative Investment Funds and Bimal Jalan Committee report amongst other issues. Also arriving today is the FDI Circular1 of 2012 issued by DIPP (no update still till 3rd Apr). I will link to both as they become available.

Here is the SEBI Press Release on the governance of market infrastructure institutions and the revised format of regulation of Alternative Investment Funds. Both are quite positive. Here is the super quick view:
Existing ownership norms retained (not so good) for exchanges, but 3 year time given to divest including of warrants/options (good). Specific shareholding recommended for clearing corporation and depository (ok, perhaps not necessary). Listing permitted (great), for profit is allowed (great avoidance of reversing the parliament's will). Minimum 3 year from recognition to list an exchange (not a problem, as there is light at the end of the tunnel). No self listing (ok). Governance checks and balances for exchanges (good). No cap on compensation, but checks and balances introduced (good). Transfer of 25% of profits of exchange to Settlement Guarantee Funds (not particularly required).  Depositories to transfer 25% profit to Investor Protection Fund (totally wrong - the IPF does no work). Method for exit of defunct exchanges (great).

1 comment:

Anonymous said...

May be, DIPP has forgotten that, issuance of FDI policy is now a half-yearly feature.