With rising instances of non-compliance with rules, the country's top depository National Securities Depository Ltd (NSDL) has revised the penalty imposed on erring market participants, which came into effect from May 1.
Stockbrokers who have been taking advantage of the ambiguity in the Income Tax Act rules to reduce their tax payouts could be in for a rude shock.
In a notice sent to all its members on March 20, BSE has listed nine types of violation for which penalty norms have been revised. These are circular trading, fictitious trading, creating artificial volumes, price manipulation (rigging), manipulation of order book, placing of orders at unrealistic prices when circuit filters are open, placing orders that result in rogue trades, late submissions of details or submission of wrong information.
Share transfer agents have come under the Securities and Exchange Board of India's scanner after the market regulator received several complaints about their misconduct.
The Income Tax Department has moved the Bombay High Court to recover nearly Rs 500 crore from top stock brokers, who have managed to avoid paying income tax on the pretext of claiming depreciation on their Bombay Stock Exchange membership card.
Though the government in 2005 put an end to dividend stripping by enacting a law, disallowing the sale of mutual fund units within nine months if they were purchased three months prior to the dividend record date, the I-T department has been trying to recover taxes from several assessees, who exploited this loophole prior to the enactment of the new law and evaded tax.
The Securities and Exchange Board of India is considering its Primary Market Advisory Committee's recommendation to introduce a uniform face value system for all listed companies. At present, companies decide their individual face value between Rs 1 and Rs 100.
Eight years after it was indicted by the market regulator for 'profiting from advance knowledge' of news website Tehelka's market-moving exposs, brokerage house First Global says it has procured documents under the Right to Information Act that show how the regulator fabricated a case against it.
Rules governing short-selling in various jurisdictions continue to generate controversy among regulators, lawmakers and market participants. While the US capital market regulator Securities and Exchange Commission has banned short-selling of financial shares after it was blamed for the collapse of Lehman Brothers, in India, the practice had come under the scanner as foreign institutional investors were lending stocks overseas to facilitate short-selling.
As per Sebi's new guideline, all companies will have to disclose information about shares pledged by promoters within a period of seven days after the promoters give the companies an intimation. Analysts are of the view that most of the promoters were hesitating to disclose this information as there is a fear among investors that the pledging of shares would cost promoters dear.
The Prevention of Money Laundering Act, 2002, requires all financial institutions, banks and intermediaries like merchant bankers, FIIs and stock brokers to submit reports on suspicious transactions above Rs 1 million in Indian or foreign currency. According to FIU's annual report for 2007-8, while the agency received 2.2 million such cash transaction reports from banks, other financial intermediaries put together have submitted only 2,500 suspicious transaction reports.
On the last day of Satyam's stint in India's benchmark indices - the Bombay Stock Exchange Sensex and the National Stock Exchange S&P CNX Nifty - its shares turned out to be a punter's delight.
Former economic affairs secretary E A S Sarma has written to the Securities and Exchange Board of India questioning the delay in investigating Satyam Computer even after he had alerted the regulator 'well in advance' about certain irregularities in the company's books of accounts after the Maytas deal was called off last month.
"I wrote nearly eight letters to Sebi alerting them about Satyam's fraudulent practices and the company's connivance with local politicians but none of the letters elicited any response from the regulator. Sebi remained silent about the issue even while I mentioned to them that MCA launched a fact-finding probe. But the fact is that the MCA probe too was very slow and only on paper," Sarma said.
When it comes to the average assets under management among the top five mutual funds, there has been a shuffle in positions. While Reliance Mutual Fund has been able to maintain the number one position at Rs 700 billion, ICICI Prudential has been pushed to number four from second spot by HDFC Mutual Fund. ICICI Prudential was above HDFC by Rs 73 billion in January-end 2008. But at the end of December, HDFC's assets were up by Rs 48.79 billion over that of ICICI Prudential.
The October 2008 landslide in stock prices, which caused a nearly 90 per cent drop in India's equity derivatives business, has dealt a severe blow to Asia's oldest bourse, the Bombay Stock Exchange.
The Securities and Exchange Board of India is conducting inspection of stockbrokers, who act as depository participants (DPs) and are also into margin-funding business, as there have been instances of client-account mismanagement.
People are also spending more on travels and education. Compared to $160 million spent on travel and education last year, $207 million has already flown out of the country from April to August, 2008.
However, the regulator dealt with the FIIs on expected lines and the meeting was over without Sebi spelling out any action against 'dubious' short sellers. Earlier on October 17, Sebi had written to all the PN-issuing FIIs to submit the data for stocks lent overseas in 2008 so far by October 23.
Collateral stocks sold at huge losses as defaults mount.
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