Notifications & Circulars
Securities and Exchange Board of India
13.02.2020
Capital Market
SEBI develops an online system for detecting misuse of clients' securities by brokers
MANU/SPRL/0006/2020
In the recent past years, it has been observed that some brokers have misused clients' securities received as collateral to meet their own settlement obligation or obligations of other clients. Some brokers have also misused clients' securities by pledging them with the banks and NBFCs to raise funds for their own use. Though the Depositories Act provides for acceptance of client securities as collateral by way of pledge, the collateral of securities is accepted by way of title transfer of securities by brokers. The client providing collateral in the form of securities needs to transfer his securities in the name of the broker and once the securities move out of the demat account of the client, it is not possible for him to keep a track of use/misuse of those securities by the broker.
A few brokers have been declared defaulter by the Exchange not on account of failure to meet settlement obligation but in failing to meet liabilities/dues to the clients. The available assets of the broker were found short to meet the clients' funds and securities obligations. In order to prevent the misuse of clients' securities by broker, SEBI has taken a number of policy measures including laying down early warning mechanism to detect diversion of clients' funds and securities, restricting broker to pledge clients' securities even with the consent of the client, securities to be transferred to Client account or Client Unpaid Securities Account (CUSA) within 24 hours of payout, mapping of Unique Client Code with demat account of the client to detect diversion of payout of securities. SEBI has also directed Clearing Corporations to share client level pay-in and pay-out obligations with Depositories, and Depositories are required to check the corresponding debit or credit in the demat account of client and report mismatches to the Exchanges. This has detected the diversion of clients' securities received in payout.
SEBI has developed an in - house online system by which it would be able to prepare client level securities holding register of the brokers. SEBI collects the details of the clients' securities submitted in weekly report filed by brokers with the Exchanges and updates the same with trades conducted in the accounts of said clients using the data available with SEBI in DWBIS as well as data provided by Exchanges, Clearing Corporations and Depositories pertaining to auction trades, corporate actions, SLBM transfers, off market trades etc. The securities holding balance computed is matched with the actual clients' securities holding in the demat account and submission made by the broker for the next day. Any mismatch in data is flagged as an alert for Exchanges.
As such, SEBI has developed the in - house capabilities to online track the movement of client securities collected by broker as collateral and raise alerts with Exchanges if diversion of clients' securities is noticed. These reports are being generated by SEBI on a weekly basis and three such mismatch reports have already been forwarded to Exchanges for reconciliation with members. This system is likely to timely detect the misuse of clients' securities collected by brokers as collateral or received in pay-out of securities.
Tags : SEBI Online system Brokers
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Press Information Bureau
12.02.2020
Civil
FASTag to be available free of charge for 15 days
MANU/PIBU/0400/2020
In order to further increase digital collection of user fee via FASTag at NH fee plazas, National Highways Authority of India (NHAI) has decided to waive off the FASTag cost of Rs.100/- for NHAI FASTag between 15th and 29th February, 2020. Road users can visit any authorised physical point-of-sale locations with a valid Registration Certificate (RC) of the vehicle and get a NHAI FASTag free of cost. NHAI FASTag may be purchased from all NH fee plazas, RTOs, Common Service Centres, transport hubs, petrol pumps, etc. To search for the nearest NHAI FASTag point-of-sale locations, one may download MyFASTag App, or visit www.ihmcl.com or Call 1033 NH Helpline number.
The applicable security deposit and minimum balance amount for FASTag wallet shall, however, remain unchanged. NHAI had earlier announced for Free NHAI FASTag from 22 Nov to 15 December 2019 to encourage people to adopt FASTag.
Tags : FASTag Availability Charge free
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Press Information Bureau
12.02.2020
Direct Taxation
Cabinet approves protocol amending the Agreement between India and Sri Lanka for avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income
MANU/PIBU/0398/2020
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Signing and Ratification of the Protocol amending the Agreement between India and Sri Lanka for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
Impact:
Updation of preamble text and inclusion of Principal Purpose Test, a general anti abuse provision in the Double Taxation Avoidance Agreement (DTAA) will result in curbing of tax planning strategies which exploit gaps and mismatches in tax rules.
Details:
The existing DTAA between India and Sri Lanka was signed on 22nd January, 2013 and entered into force on 22nd October, 2013.
India and Sri Lanka are members of the Inclusive Framework and as such are required to implement the minimum standards under G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive Framework countries. Minimum standards under BEPS Action 6 can be met through the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) or through agreement bilaterally.
India is a signatory to the MLI. However, Sri Lanka is not a signatory to the MLI as of now. Therefore, amendment of the India-Sri Lanka DTAA bilaterally is required to update the Preamble and also to insert Principal Purpose Test (PPT) provisions to meet the minimum standards on treaty abuse under Action 6 of G-20 OECD Base Erosion & Profit Shifting (BEPS) Project.
Background:
The existing Double Taxation Avoidance Agreement (DTAA) between India and Sri Lanka was signed on 22nd January, 2013 and entered into force on 22nd October, 2013. India and Sri Lanka are members of the Inclusive Framework and as such are required to implement the minimum standards under G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive Framework countries. Minimum standards under BEPS Action 6 can be met through the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) or through agreement bilaterally. India is a signatory to the MLI.
Tags : Agreement Amendment Double taxation
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Press Information Bureau
10.02.2020
Motor Vehicles
Measures for comprehensive development of auto sector
MANU/PIBU/0348/2020
There are multiple regulations arising due to requirement of meeting internal Standard of Safety, fuel economy and environment across various sectors including Automobile Sector. These are statutory regulations and cannot be termed as over regulation. Moreover, current problems being faced by Auto Industry cannot be attributed to regulatory issue.
The Government, as a policymaker, always attempts to keep and improve momentum of the economy through a package of measure through stakeholder consultations for comprehensive and continued development of the auto sector as and when required. Some of the steps taken by the Government to counter automotive slowdown can be summarized as under:
Corporate Tax has been reduced to 22% resulting into more savings for the Manufacturing Companies. This move will help in uplifting the market and promote future investments in turn providing a boost to the economy.
Government has clearly indicated that Internal Combustion Engine (ICE) and Electrical vehicles (EVs) will be continued to registering future. This clarification will clear doubts among the end consumers and hence will help in boosting the sale of ICE and EVs.
Government is working on a Scrap page Policy. Ministry of Road, Transport & Highways (MoRTH) being the nodal ministry has almost finalized the Scheme. This policy would help to get unfit vehicles off the roads and thus increase the demand for new vehicles.
Government has announced that funds worth Rs. 70,000 crores will be released for PSU banks' recapitalization. This would improve the liquidity situation of the banks resulting into more finances available for dealers and end- consumers hence increasing demand for new vehicles.
RBI has announced that the interest charged for vehicle purchased has to be linked to the Repo rate announced by the Central Bank. This will mean that banks will have to reprice the interest rates on loans every three months resulting in lesser burden for consumer.
Tags : Measures Development Auto Sector
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Press Information Bureau
10.02.2020
Civil
DGT Proposes to Issue Digital 'E-Credentials/E-Certificates'
MANU/PIBU/0355/2020
Directorate General of Training (DGT), Ministry of Skill Development and Entrepreneurship proposes to issue digital 'e-Credentials / e-Certificates' which are freely portable for candidates and easily verifiable at scale by employers and job matching platforms but continue to allow print and other visual forms for human consumption. This would enable candidates to verifiably state their skill levels with a high degree of trust in authenticity to aggregators, matchers, and employers. Now in the DGT ecosystem, all the certificates are 'e-Certificates', digitally signed.
E-Credentials are an electronic scheme-based standard for describing credentials data in a machine-readable format (JSON-LDrepresentation of RDFa- Resource Description Framework, a web standard) along with its printable human-friendly version to make credential exchange between digital agents open and reliable. Certificates issued according to this specification can be aligned to one or more educational standards. They are secured using digital signatures. These will also be pushed in DigiLocker. This standard is an open standard, free to use, and does not cost anything extra to the Government or the student.
Tags : Issuance Digital E-Certificates Proposal
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Reserve Bank of India
10.02.2020
Banking
Incentivising bank credit to specific sectors - Exemption from CRR maintenance
MANU/RMIC/0017/2020
It has been announced in paragraph 3 of the Statement on Developmental and Regulatory Policies of February 6, 2020, that the Reserve Bank is actively engaged in revitalising the flow of bank credit to productive sectors having multiplier effects to support growth impulses. Accordingly, banks are allowed to deduct the equivalent amount of incremental credit disbursed by them as retail loans to automobiles, residential housing, and loans to micro, small and medium enterprises (MSMEs), over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their net demand and time liabilities (NDTL) for maintenance of the cash reserve ratio (CRR).
Banks are advised that they can claim the first such deduction from the NDTL of February 14, 2020 for the amount equivalent to the incremental credit extended to the sectors indicated above over the outstanding level of credit as at the end of the fortnight ended January 31, 2020.
An amount equivalent to the incremental credit outstanding from the fortnight beginning January 31, 2020 and up to the fortnight ending July 31, 2020 will be eligible for deduction from NDTL for the purpose of computing the CRR for a period of five years from the date of origination of the loan or the tenure of the loan, whichever is earlier.
Banks are required to report the exemption availed at the end of a fortnight under "exemptions/others" in the Section-42 return, prescribed in Annex A to Form A as per Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) dated July 1, 2015. Proper fortnightly records of net incremental credit extended to the select sectors/NDTL exemption claimed, duly certified by the Chief Financial Officer (CFO) or an equivalent level officer, must be maintained by banks for supervisory review.
Tags : Bank credit Exemption CRR Maintenance
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