sebi current affairs: july, 2018 (part i) - edutapb) securities and exchange board of india (mutual...
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SEBI Current Affairs: July, 2018 (Part – I)
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Relevant for SEBI Grade A 2018 Examination
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YES Bank gets Sebi nod to launch mutual fund business
• Yes Bank has received final regulatoryapproval from the Securities &Exchange Board of India (Sebi) tostart mutual fund business.
• YES Asset Management (India)Limited ('YAMIL') will leverage YESBANK's knowledge banking expertiseand relationship capital across retail,corporate and institutional investors;
• to effectively channelize their assetsin equity and debt capital markets.
This approval issubsequent to theReserve Bank of India's(RBI) approval.
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How SEBI regulates Mutual Funds ?
• As far as Mutual funds are concerned,SEBI makes the policies for mutualfunds and also regulates the industry.
• It lays guidelines for the mutual fundsto safeguard the investors’ interest.
• Securities and Exchange Board OfIndia (Mutual Funds) Regulations,1996 is a set of regulations in Indiathat govern mutual funds.
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Sebi seeks comments on fresh norms for fiduciaries
• To check financial frauds, regulatorSebi has proposed a new set ofnorms for auditors and otherfiduciaries working with listed firms.
• The proposed move assumessignificance as the role of auditorsand valuers has come underscanner in a number of high-profilecases such as the Satyam andKingfisher frauds, as also the PNBscam.
Sebi is looking to enhance the regulatory oversight to check such frauds in future with the
new regulations for fiduciaries in the securities markets.
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SEBI & Fiduciaries
• While entities such as merchant bankers, rating agencies, custodians,debenture trustees and registrar to public issues are registered withthe capital markets regulator under specific regulations,
• some other fiduciaries like practising chartered accountants andcompany secretaries, cost accountants, valuers and monitoringagencies are not registered with Sebi.
• SEBI clarified that if after an inquiry or investigation, it is satisfied thatthe fiduciary has submitted false certificate or report or has violatedany of the provisions, it may take appropriate action under theconcerned securities laws.
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Sebi, Singapore's MAS discuss on various issues of Cooperation
• Sebi and Monetary Authority ofSingapore (MAS) recently helddiscussions on "various issues ofcooperation".
• The regulators agreed that thecollaboration between theauthorities would be furtherstrengthened so as to derivebenefits for capital markets ofboth the countries
SGX and NSE announced that they have resumed discussion on a
potential collaboration in Gujarat International Finance Tec (GIFT) City.
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Gujarat International Finance Tec (GIFT) City
• The International Financial ServicesCentre at Gujarat InternationalFinancial Tec-City near Ahmedabadis Prime Minister Narendra Modi’sidea to create a finance hub likeSingapore or Hong Kong.
• The city will provide variousincentives to foreign investors likeno taxes, fiscal incentives, lesscompliance requirements etc.
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Sebi paper soon on large firms tapping bond market
• Securities and Exchange Board ofIndia (Sebi) will soon come out witha consultation paper on making itmandatory for large corporates tomeet one-fourth of their financingneeds from bond markets.
• The move follows the Budget 2018proposal in this regard, and is aimedat part-funding the hugeinvestments needed in theinfrastructure space.
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Companies issue corporate bonds to raise money for a variety ofpurposes, such as building a new plant, purchasing equipment.
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Key Terms associated with Corporate Bonds
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Bond Market in India
• The bond market has a huge potential to grow, which will need arobust secondary market.
• The corporate bond market is valued at around $290 billion, around17% of the GDP, way lower than the equity market at 80%.
• Stress in the banking sector has helped many corporates raise fundsfrom debt and this is one of the reasons for the increased volume inthe bonds market in the recent years.
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Sebi to soon frame guidelines to allow mutual funds in commodity
• To increase the institutionalparticipation in the commoditysegment, Sebi said it will soonfinalise the guidelines to allowmutual funds to invest incommodity derivatives segment.
• SEBI said that commodity derivativesmarket is still faced with challengeseven though the trading volumeshave risen up to Rs 100 lakh crore.
The 'option' trading in commodity derivatives market has already been allowed with
MCX launching it in five commodities.
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SEBI writes to AMFI, mutual funds against 25 violations
• SEBI's letter to AMCs stated,Members of AMFI may be advisedto take corrective actions inrespect of the observations listed.
• Further members may be advisedto ensure strict compliance withthe SEBI (Mutual Funds)Regulations 1996 and all thecirculars issued by SEBI from timeto time.
SEBI has indicated that theregulator is closely monitoringall the decisions and practicesof the 42-player mutual fundindustry.
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Sebi raises overseas investment limit of AIFs, VCFs to $750 million
• Markets regulator Sebi recentlyenhanced the overseas investmentlimit of alternative investmentfunds and venture capital funds toUSD 750 million from the currentUSD 500 million.
• In order to monitor the utilisation ofoverseas investment limits, Sebi hasasked AIFs and VCFs to mandatorilydisclose the utilisation of the suchlimits within 5 working days.
The decision has beentaken in consultation withthe Reserve Bank of India.
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Alternate Investment Funds
• Defined in Regulation 2(1) (b) of Securities and Exchange Board ofIndia (Alternative Investment Funds) Regulations, 2012.
• AIFs are funds established or incorporated in India for the purpose ofpooling in capital from Indian and foreign investors for investing asper a pre-decided policy.
Established or incorporated in India for pooling in capital
from Indian and foreign investors
Investing as per a pre-decided
policy.
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Venture Capital Funds
VCFs are investment funds that manage the money of investors whoseek private equity stakes in startups.
MCQ’s
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1. _______________ is a set of regulations in India that govern mutual funds.
a) Securities and Exchange Board Of India (Mutual Funds) Regulations, 1996
b) Securities and Exchange Board Of India (Mutual Funds) Regulations, 2000
c) Securities and Exchange Board Of India (Mutual Funds) Regulations, 2006
d) None of the above
2. Which among the following is not required to be registered with SEBI?
a) Merchant bankers
b) Rating agencies
c) Practising chartered accountants
d) Registrar to public issues
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3. GIFT city is proposed to be setup in:
a) Madhya Pradesh
b) Maharashtra
c) Gujarat
d) None of the above
4. Association of Mutual Funds of India (AMFI) was incorporated in:
a) 1992
b) 1995
c) 2000
d) 2003
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ANSWERS1. A2. C3. C4. B
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SEBI Current Affairs - July 2018
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Thank You! Happy Learning!
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