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Saturday, May 29, 2010

Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs: Notification in Official Gazette as on 24th May 2010

As you are aware Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing Rs.3,50,000

The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18th May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10 lakhs.

The said Act shall come into force with effect from 24th May 2010 as per the Notification S.O. 1217(E) published in the Official Gazette.

Tuesday, May 25, 2010

Money laundering transaction records & definition of beneficial owner in Amendment Rules 2010 - RBI

Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Amendment Rules, 2010 - Obligation of banks/All India Financial institutions

 

Government of India vide its Notification No. 7/2010-E.S.F.No.6/8/2009-E.S dated February 12, 2010 has amended the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. A copy of the Notification is enclosed for ready reference in DBOD. AML.BC. No. 95 /14.01.001/2009-10 dated 23rd April 2010.

The salient features of the amendment inter alia require banks and All India
Financial Institutions:
• to maintain the records of all transactions including the records of transactions detailed in rule 3 sub-rule (1).
• the records referred to in rule 3 should contain all necessary information specified by the Regulator to permit reconstruction of individual transactions including the information detailed in rule 4.

Further, in rule 9 in sub-rule (1A) an explanation of 'beneficial owner' has been inserted in terms of which " ' Beneficial Owner' shall mean the natural person who ultimately owns or controls a client and or the person on whose behalf a transaction is being conducted, and includes a person who exercise ultimate effective control over a juridical person".

Monday, May 24, 2010

NBFC investment in Joint Venture or subsidiary abroad shall 'No Objection' (NoC) of the Department of Non-Banking Supervision of RBI

Overseas Investment by NBFCs- No Objection (NoC) from DNBS, RBI
Please refer to Regulation No. 7 of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Amendment) Regulations, 2004, dated July 07, 2004, in terms of which an Indian party requires prior approval of the concerned regulatory authorities both in India and abroad, to make an investment in an entity outside India engaged in financial services activities. Further in terms of para B.5.3 of the Master Circular on Direct Investment in Joint Venture (JV) / Wholly owned subsidiary (WOS) abroad dated July 01, 2009 issued by Foreign Exchange Department, RBI, regulated entities in the financial sector making investments in any activity overseas are required to comply with the above regulation.
2. Instances have been observed where NBFCs have made overseas investments without regulatory clearance of the Department of Non-Banking Supervision, Reserve Bank of India. Any investments made by NBFCs without regulatory clearance is a violation of FEMA 2004 and attracts penal provisions.
3. In this regard, it is emphasised that all Non Banking Finance Companies desirous of making any overseas investment must obtain 'No Objection' (NoC) of the Department of Non-Banking Supervision of RBI before making such investment, from the Regional Office in whose jurisdiction the head office of the company is registered.
4. Applications in this regard shall clearly state the activities intended to be undertaken by the overseas entity. NBFCs may also note that in terms of the Regulations ibid, they are not permitted to make direct investment in a foreign entity engaged in activities not approved under FEMA.

Source: DNBS (PD).CC. No.173/03.10.01 /2009-10 dated 3rd May 2010

ECB by IFC now under Automatic route UPTO 50% of owned funds, RBI

As a measure of liberalisation of the existing procedures, it has been decided to permit the IFCs to avail of ECBs, including the outstanding ECBs,

Source: A. P. (DIR Series) Circular No. 51 dated 11th May 2010

Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing Rs.3,50,000

The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18th May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10 lakhs. Whereas the date of effect of the revised ceiling may be decided by the Central Government through Official Gazette as per THE PAYMENT OF GRATUITY (AMENDMENT) ACT 2010

Notification in Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs: Notification in Official Gazette as on 24th May 2010

Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals

Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the definition of employee includes clerical employees & casual employees also.  Further,

  • the minimum compensation limits on no-fault basis are increased to Rs.1,20,000 & 1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
  • under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is removed. hence, the maximum compensation can go UPTO 50% of Total Monthly Wages now, irrespective of limits [now a new ceiling of Rs.8000/- is introduced].
  • Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
  • The employee shall be reimbursed the actual (full) medical expenditure incurred by him for treatment of injuries caused during the course of employment.
  • Time limit for disposal of cases relating to compensation introduced- The Commissioner shall dispose of the matter relating to compensation within 3 months of reference.

Old definition: "workman" means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is….

New definition: Section 2

“(dd) “employee” means a person, who is—

(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989), not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or

(ii) (a) a master, seaman or other members of the crew of a ship,

(b) a captain or other member of the crew of an aircraft,

(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle.

(d) a person recruited for work abroad by a company,

and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or

(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been” injured shall, where the employee is dead, include a reference to his dependants or any of them;’;

Source: The Workmen’s Compensation (Amendment) Act, 2009

Employees definition under Gratuity Act amended to included all types of works irrespective of salary limits

The Payment of Gratuity Act, 1972 definition of the term “employee” under Section 2 got widened.  It is no more the old definition of persons employed in administrative or managerial capacity.

 

The new definition is as follows,

Employees means any persons [NOT being an Apprentice] employed for wages in any kind of work (manual or otherwise) or in connection with work of factory, mine, plantation, oilfield, railway company, port or other establishment.

So, even teachers are eligible for gratuity now overriding the famous Ahmedabad Private Primary Teachers Association case.

Source: Payment of Gratuity (Amendment) Act, 2009

Revised ESI limit Rs.15000 (not Rs.10000) for employees/workers w.e.f 1st May 2010 - as amended by the Act [extended]

Ministry of Labour & Employment vide G.S.R. 394(E), dated 20th April, 2010 has made Employees State Insurance Act, 1948 read with ESI (Central) (Amendment) Rules, 2010 applicable to employees whose wages does not exceed Rs. 15,000/- (Fifteen Thousand Only).

 

The said notification shall come into effect from 1st May 2010.

Sunday, May 23, 2010

Old SEBI circular on revised Trading hours in Stock Exchanges

Sub: Trading Hours on Stock Exchanges
In consultation with the Stock Exchanges and other market participants, it has been decided to permit the Stock Exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that

a. The trading hours are between 9 AM and 5 PM, and
b. The Exchange has in place risk management system and infrastructure
commensurate to the trading hours.

Source: SEBI/DNPD/Cir-47/2009 dated 23rd October 2009

SEBI master ciruclar on Stock Exchange, Depository, etc...updated as on 31st March 2010

SEBI Master Circulars on Stock Exchange/Depositories

Annexure 1 – Master Circular for Stock Exchange/ Cash Market – Trading Part- I. It contains the following,

SECTION – 1: BULK DEALS AND BLOCK DEALS ............................................... 5
1.1 Bulk Deal ............................................................................................................. 5
1.2 Block Deal ........................................................................................................... 5
SECTION – 2: CIRCUIT FILTER / PRICE BANDS ................................................. 7
2.1 Index based Market wide circuit filter ................................................................. 7
2.2 Scrip wise price bands ......................................................................................... 7
SECTION – 3 : IMPLEMENTATION OF UNIFORM SECURITY SPECIFIC
ACTION IN STOCK EXCHANGES........................................................................... 8
3.1 Uniform security specific measure ...................................................................... 8
SECTION – 4 : MARGIN TRADING.......................................................................... 9
4.1 Margin trading ..................................................................................................... 9
4.2 Securities eligible for margin trading .................................................................. 9
4.3 Eligibility requirements for brokers to provide margin trading facility to clients9
4.4 No-objection certificate .................................................................................. 10
4.5 Agreement.......................................................................................................... 10
4.6 Source of Funds for the broker for providing margin trading facility to his
clients and maximum permissible borrowing by any broker............................. 10
4.7 Margin requirements.......................................................................................... 11
4.8 Liquidation of securities by the broker in case of default by the client............. 11
4.9 Maintenance of Records .................................................................................... 12
4.10 Disclosure of exposure to the Margin Trading Facility ..................................... 12
4.11 Arbitration.......................................................................................................... 13
4.12 Usage of Investor Protection Fund and Trade/Settlement Guarantee Fund ...... 13
4.13 General provisions ............................................................................................. 13
SECTION – 5 : MARKET MAKER............................................................................ 15
5.1 Guidelines for Market Maker............................................................................. 15
5.1.1 Criterion for selection of scrips for Market Making.......................................... 16
5.1.2 Exclusivity of Market Makers ........................................................................... 16
5.1.3 Number of Market Makers for each share ......................................................... 17
5.1.4 Qualifications for a registered Market Maker.................................................... 17
5.1.5 The obligations and responsibilities of Market Makers..................................... 17
5.1.6 Rights of the Market Maker............................................................................... 18
5.1.7 Voluntary De-registration .................................................................................. 18
5.1.8 Compulsory De-registration............................................................................... 18
5.1.9 Dissemination of Information ............................................................................ 18
5.1.10 Number of Shares per Market Maker ................................................................ 18
5.1.11 Risk Containment Measures and monitoring for Market Makers ..................... 18
SECTION – 6: NEGOTIATED DEALS..................................................................... 20
6.1 Negotiated Deals................................................................................................ 20
SECTION – 7 : ODD LOT .......................................................................................... 21
7.1 Trading and Settlement of trades in dematerialised securities ................ 21
SECTION – 8: PERMANENT ACCOUNT NUMBER ........................................... 22
8.1 Mandatory PAN requirement for transaction in Cash Market........................... 22
8.2 PAN as a sole identification number for all transactions in the securities market
………………………………………………………………………………….22
8.3 Incase of Central and State Govt., and officials appointed by courts ................ 22
8.4. Exemptions for Investors in Sikkim .................................................................. 23
8.5 Incase of FIIs/Institutional Clients..................................................................... 23
8.6 Incase of UN entities and multilateral agencies which are exempted from paying
taxes/ filling tax returns in India ........................................................................ 23
8.7 Incase of HUF, Association of Persons (AoP), Partnership Firm, unregistered
Trust, Registered Trust, Corporate Bodies, minors, etc..................................... 24
8.8 Incase of Slight mismatch in PAN card details as well as difference in maiden
name and current name (predominantly in the case of married women) of the
investors.............................................................................................................24
8.9 Incase of NRI/PIOs ............................................................................................ 24
8.10 PAN requirement for transfer of shares in physical form.................................. 24
SECTION – 9: PROPRIETARY TRADING.............................................................. 26
9.1 Disclosure of Proprietary Trading by Broker to Client ..................................... 26

9.2 Pro-account Trading Terminal........................................................................... 26
SECTION – 10 : SHORT SELLING AND SECURITIES LENDING AND
BORROWING SCHEME............................................................................................ 28
10.1 Broad Framework for Short Selling and Securities Lending and Borrowing.... 28
10.2 Annexure 1 – Broad framework for short selling .............................................. 28
10.3 Annexure 2 - Broad framework for securities lending and borrowing .. 29
SECTION – 11: SPOT AND OFF-THE-FLOOR TRANSACTIONS..................... 34
SECTION – 12: SECURITIES TRANSACTION TAX............................................. 35
12.1 Implementation of Securities Transaction Tax .................................................. 35
SECTION – 13 : TIME STAMPING OF ORDERS................................................... 35
13.1 Time Stamping of Orders................................................................................... 35
SECTION – 14 : TRADING IN GOVERNMENT SECURITIES............................ 36
14.1 Government Securities....................................................................................... 36
SECTION – 15: UNIQUE CLIENT CODE............................................................... 37
SECTION - 16: TRANSACTION CHARGES BY THE STOCK EXCHANGES.. 38
SECTION 17 - PRESERVATION OF RECORDS .................................................... 39
SECTION 18 - DISCLOSURE OF INVESTOR COMPLAINTS AND
ARBITRATION DETAILS ON STOCK EXCHANGE WEBSITE......................... 40

Annexure 2 – Master Circular for Stock Exchange/ Cash Market – Trading Part- II

Annexure 3 – Master Circular for Stock Exchange/ Cash Market – Settlement

Annexure 4 – Master Circular for Stock Exchange/ Cash Market – Comprehensive Risk Management

Annexure 5 – Master Circular for Stock Exchange - Companies shifted from Trade for trade to Rolling Settlement

Annexure 6 – Master Circular on allotment of codes to Stock Exchanges, Subsidiary management by Stock Exchanges, Governance of recognised Stock Exchanges and Arbitration in recognised Stock Exchanges.

Annexure 7 - Master Circular for Depositories:

It contains the following,

Section-1 - Beneficial Owner (BO) Accounts
1.1 Opening of BO Account by non-body corporates
1.1.1 Proof of Identity (PoI)
1.1.2 Proof of Address (PoA)
1.2 Exemptions from and clarifications relating to mandatory requirement
of PAN
1.3 Fees/Charges to be paid by BO
1.4 Transfer of funds and securities from Clearing Member pool account to
BO Account
1.5 Printing of Grievances Redressal Mechanism on Delivery Instruction
Form Book
1.6 Exemption to Depository Participants (DPs) from providing hard
copies of transaction statements to BOs
1.7 Safeguards on transfer of securities in dematerialized mode
Section-2 - Issuer related
2.1 Charges to be paid by Issuers
2.2 Activation of International Securities Identification Number (ISIN) in
case of IPO
2.3 Registrar and Transfer Agents
2.4 Mandatory admission of debt instruments on both the Depositories
2.5 American Depository Receipts (ADRs)/Global Depository Receipts
(GDRs)
2.6 Electronic Clearing System (ECS) facility
2.6.1 Dividend Distribution
2.6.2 Refund in public/rights issues
Section-3 – Depositories/ Depository Participant (DP) Related
3.1 Designated e-mail ID for redressal of investor complaints
3.2 Approval of amendments to Bye Laws / Rules of Stock Exchanges and
Depositories
3.3 Preservation of Records
3.4 Foreign investments in infrastructure companies in securities markets
3.5 Activity schedule for depositories for T+2 rolling Settlement
3.6 Settlement of transactions in case of holidays
3.7 Supervision of branches of depository participants
3.8 Designated e-mail ID for regulatory communication with SEBI
3.9 Disclosure of investor complaints and arbitration details on Depository
website

Friday, May 21, 2010

Learnlabz Promotional Videos on Company Secretary (CS) Executive & Professional Programme Coaching Classes & Only This Much books released on Youtube today to make learning an interesting experience!!! [can also fetch you UPTO 50 marks in exams]

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Tuesday, May 18, 2010

Professional Misconduct for CS,CA & CWA: Don't talk when your Client Drives (& viceversa) - if its true!!!

Many road safety campaigns targets the drivers and the passengers. But Bangalore Traffic police is different (Hats off)!!!

Bangalore-traffic-police-blood-house-wife

Bangalore-traffic-police-blood-girl-friend

Bangalore-traffic-police-blood-friend

Believe, atleast if our Profession makes this as a Misconduct, everyone's Conduct will change! see Yes.

CS Updatin...

See Yes -> Yes, ACS

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