27 July 2020

Notifications & Circulars

Securities and Exchange Board of India


Capital Market

Reporting to Stock Exchanges regarding violations under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 relating to the Code of Conduct


1. Vide Gazette Notification No. SEBI/LAD-NRO/GN/2020/23 dated July 17, 2020, Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) have been further amended.

2. In terms of clause 13 of Schedule B (in case of listed companies) and clause 11 of Schedule C (in case of intermediaries and fiduciaries) read with Regulation 9 of the PIT Regulations, the listed companies, intermediaries and fiduciaries shall promptly inform the Stock Exchange(s) where the concerned securities are traded, regarding violations relating to CoC under PIT Regulations in such form and manner as may be specified by the Board from time to time.

3. SEBI, vide Circular No. SEBI/HO/ISD/ISD/CIR/P/2019/82 dated July 19, 2019, had specified the standard format for reporting of violations related to CoC. The said format has been suitably modified and placed at Annexure A. The listed companies, intermediaries and fiduciaries shall inform the violations of PIT Regulations relating to CoC as per the revised format to the Stock Exchange(s).

4. Further, in terms of clause 12 of Schedule B and clause 10 of Schedule C read with Regulation 9 of the PIT Regulations, any amount collected by the listed companies, intermediaries and fiduciaries under these clauses for violation(s) of CoC shall be remitted to the Board for credit to the Investor Protection and Education Fund (IPEF) administered by the Board under the Securities and Exchange Board of India Act, 1992.

5. As per Regulation 4(2) of SEBI (Investor Protection and Education Fund) Regulations, 2009, such amounts shall be credited to the IPEF through the online mode or by way of a demand draft (DD) in favour of the Board (i.e. SEBI-IPEF) payable at Mumbai.

6. This circular is issued in supersession of Circular No. SEBI/HO/ISD/ISD/CIR/P/2019/82 dated July 19, 2019.

7. This circular is issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 read with regulations 4(3) and 11 of the PIT Regulations and to protect the interests of investors in securities and to promote the development of and to regulate the securities market and shall come into force with immediate effect.

Tags : Reporting Stock Exchanges Violations

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Press Information Bureau



Restrictions on Public Procurement from certain countries


The Government of India today amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from countries which share a land border with India on grounds of defence of India, or matters directly or indirectly related thereto including national security. The Department of Expenditure has, under the said Rules, issued a detailed Order on public procurement to strengthen the defence of India and national security.

As per the Order any bidder from such countries sharing a land border with India will be eligible to bid in any procurement whether of goods, services (including consultancy services and non-consultancy services) or works (including turnkey projects) only if the bidder is registered with the Competent Authority. The Competent Authority for registration will be the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT). Political and security clearance from the Ministries of External and Home Affairs respectively will be mandatory.

The Order takes into its ambit public sector banks and financial institutions, Autonomous Bodies, Central Public Sector Enterprises (CPSEs) and Public Private Partnership projects receiving financial support from the Government or its undertakings.

State Governments too play a vital role in national security and defence of India. The Government of India has written to the Chief Secretaries of the State Governments invoking the provisions of Article 257(1) of the Constitution of India for the implementation of this Order in procurement by State Governments and state undertakings etc. For State Government procurement, the Competent Authority will be constituted by the states but political and security clearance will remain necessary.

Relaxation has been provided in certain limited cases, including for procurement of medical supplies for containment of COVID-19 global pandemic till 31st December 2020. By a separate Order, countries to which Government of India extends lines of credit or provides development assistance have been exempted from the requirement of prior registration.

The new provisions will apply to all new tenders. In respect of tenders already invited, if the first stage of evaluation of qualifications has not been completed, bidders who are not registered under the new Order will be treated as not qualified. If this stage has been crossed, ordinarily the tenders will be cancelled and the process started de novo. The Order will also apply to other forms of public procurement. It does not apply to procurement by the private sector.

Tags : Restrictions Public Procurement Countries

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Reserve Bank of India



RBI releases 'Report of the Committee for Analysis of QR Code' for public comments


The Reserve Bank of India has today placed on its website the 'Report of the Committee for Analysis of QR (Quick Response) Code'. The Committee was constituted by RBI on December 23, 2019 under the Chairmanship of Prof. D.B. Phatak (Professor Emeritus, IIT-Bombay) to review the prevalent system of QR Codes in India for facilitating digital payments and submit recommendations. The Reserve Bank invites comments / suggestions on the report from all stakeholders and members of public which may be forwarded by email on / before August 10, 2020.

Tags : Report Analysis QR Code

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Securities and Exchange Board of India


Capital Market

Transaction in Corporate Bonds/Commercial Papers through RFQ platform and enhancing transparency pertaining to debt schemes


1. In order to enhance the transparency and disclosure pertaining to debt schemes and investments by mutual funds in Corporate Bonds/Commercial Papers, SEBI based on the recommendation of Mutual Fund Advisory Committee (MFAC) has decided the following:

A. In order to increase the liquidity on exchange platform,

i. On monthly basis, Mutual Funds shall undertake at least 10% of their total secondary market trades by value (excluding Inter Scheme Transfer trades) in the Corporate Bonds by placing/seeking quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock exchanges. The percentage as specified shall be reckoned on the average of secondary trades by value in immediate preceding three months on rolling basis.

For example, for the month of October 2020, Mutual Funds shall undertake 10% (by value) of their average secondary market trades (excluding IST) done in immediate preceding three months i.e. July 2020, August 2020 and September 2020 for Corporate Bonds by placing / seeking quotes through RFQ platform of stock exchanges.

ii. All transactions in Corporate Bonds and Commercial Papers wherein Mutual Fund is on both sides of the trade shall be executed through RFQ platform of stock exchanges in one-to-one mode.

iii. Any transaction entered by mutual fund in Corporate Bonds in one to many mode and gets executed with another mutual fund shall also be counted for the aforesaid 10% requirement.

B. In partial modification of SEBI circular no. CIR/IMD/DF/21/2012 dated September 13, 2012 it is decided for debt schemes that, such disclosure shall be done on fortnightly basis within 5 days of every fortnight. In addition to the current portfolio disclosure, yield of the instrument shall also be disclosed. The disclosure shall be made in the format mentioned in the aforementioned circular.

2. The above shall come into force with effect from October 1, 2020.

3. This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Regulation 77 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Tags : Transaction Corporate Bonds Transparency

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Press Information Bureau


Goods and Services Tax

DGGI busts racket for tax evasion worth more than Rs. 72 crore of clandestine clearance of cigarettes


Acting on specific intelligence the Directorate General of Goods and Service Tax Intelligence, Headquarters (DGGI, Hqrs) has unveiled a racket of clandestine clearance of cigarettes through a factory run in Kota.

Searches were conducted at various places in Kota and Nagaur on 17.07.2020, including the factory, trading firms, godowns, secret offices and residences of beneficiaries. During the search, incriminating documents and electronic devices pertaining to the supply of cigarettes without payment of taxes and duties were recovered. Preliminary investigation in the case has revealed the evasion of tax of more than Rs. 72 crores till now. The data from the seized documents has revealed that the supply of cigarettes was being carrying even during the lockdown period. One person in this regard has been arrested on 20.07.2020 under the provisions of CGST Act, 2017. Further investigation, in the case, is still under process.

Tags : Tax evasion clandestine clearance Cigarettes

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Ministry of Commerce and Industry



Allocation of quantity for export of preferential quota sugar to EU under CXL quota


1.In exercise of the powers conferred under Paragraphs 2.04 of the Foreign Trade Policy, 2015-2020, the Director General of Foreign Trade hereby allocates a quantity of 10,000 MT (Ten Thousand Metric Ton) of sugar (raw and/or white sugar) under CXL concessions to European Union (EU) for the period 01.10.2020 to 30.09.2021.

2. As per Notification No. 3/2015-20 dated 20.04.2015, export of sugar (HS Code 17010000) to EU under CXL Quota is 'Free' subject to the conditions notified in the 'Nature of Restrictions' in the above notification. The reporting requirement to APEDA as notified in the said Notification would continue to be followed.

3. As per Article 10 of European Union Regulation (EC) No. 891/2009 of 25.9.2009 "release for free circulation for the quotas of CXL concession sugar with Order No. 09.4321 shall be subject to the presentation of a Certificate of Origin issued by the competent authority of the third country concerned in accordance with Articles 55 to 65 of Regulation (EEC) No. 2454/93". Accordingly, the entries to be made in the export authorization document EUR and GSP are as follows:-

(i) CXL Concessions Sugar

"[Application of Regulation (EC) No. 891/2009 under Schedule CXL (European Communities). CXL Concessions Sugar Serial No. 09.4321]".

4. Certificate of Origin as per details given in para (3) above shall be issued by the Additional Director General of Foreign Trade, Mumbai and EUR Form is to be endorsed by Customs at the Port of Shipment. Further, Shipments of sugar under CXL quota for 2020-21 shall be allowed to consignee European Union Countries from date of notification of this Public Notice.

5. Effect of this Public Notice:

The quantity of 10000 MT sugar (raw and/or white sugar) to be exported to EU under CXL Quota from 01.10.2020 to 30.09.2021 has been notified.

Tags : Allocation Quantity Export Quota

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Press Information Bureau


Direct Taxation

CBIC and CBDT sign MoU to facilitate smoother bilateral exchange of data


A Memorandum of Understanding (MoU) was signed between the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) today, for data exchange between the two organisations. The MoU was signed by Shri Pramod Chandra Mody, Chairman, CBDT, and Shri M. Ajit Kumar, Chairman, CBIC, in the presence of senior officers from both the organizations.

This MoU supersedes the MoU signed between CBDT and the erstwhile Central Board of Excise and Customs (CBEC) in the year 2015. Significant developments have taken place since the signing of earlier MoU in 2015 including introduction of GST, incorporation of GSTN and change in the nomenclature of Central Board of Excise and Customs (CBEC) to Central Board of Indirect Taxes and Customs (CBIC). Changed circumstances, including advancements in technology, are duly incorporated in the MoU signed today.

This MoU will facilitate the sharing of data and information between CBDT and CBIC on an automatic and regular basis. In addition to regular exchange of data, CBDT and CBIC will also exchange with each other, on request and spontaneous basis, any information available in their respective databases which may have utility for the other organisation.

The MoU comes into force from the date it was signed and is an ongoing initiative of CBDT and CBIC, who are already collaborating through various existing mechanisms. A Data Exchange Steering Group has also been constituted for the initiative, which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the data sharing mechanism.

The MoU marks the beginning of a new era of cooperation and synergy between the CBDT and CBIC.

Tags : MOU Signing of Bilateral exchange Data

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Securities and Exchange Board of India


Capital Market

Framework to Enable Verification of Upfront Collection of Margins from Clients in Cash and Derivatives segments


1 With respect to equity derivatives and currency derivatives segments, Stock Exchanges/Clearing Corporations have mandated clearing members/trading members to collect applicable margins from their clients/constituents on an upfront basis. Similarly, SEBI Circulars CIR/CDMRD/DRMP/01/2015 dated October 01, 2015 and SEBI/HO/CDMRD/DRMP/CIR/P/2016/80 dated September 07, 2016 directed to National Commodity Derivatives Exchanges, inter alia, require members to collect Initial Margin and ELM upfront from their clients as applicable at the time of the trade.

2 In order to align and streamline the risk management framework of both cash and derivatives segments, with respect to collection of margins from the clients and reporting of short-collection/non-collection of margins, SEBI, vide Circular no. CIR/HO/MIRSD/DOP/CIR/P/2019/139 dated November 19, 2019, inter alia, required the Trading Members (TMs)/Clearing Members (CMs) in cash segment as well to mandatorily collect upfront VaR margins and ELM from their clients.

3 Subsequent to the aforesaid Circular dated November 19, 2019, representations were received from the market participants raising issues in operationalization of collection of upfront margin from clients. SEBI held detailed discussions with the market participants so as to evolve a monitoring mechanism for verification of upfront collection of margin from clients.

4 Based on deliberations with the market participants, with an objective to enable uniform verification of upfront collection of margins from clients by TM/CM and levy of penalty across segments, it has been decided that the Stock Exchanges/Clearing Corporations shall adopt the framework specified in the Annexure, for the purpose of 'Mechanism for regular monitoring of and penalty for short-collection/non-collection of margins from clients' in Cash and Derivatives segments.

5 It is reiterated that the applicable upfront margins are required to be collected from the clients in advance of the trade. The aforesaid framework prescribed in the Annexure is only for the purpose of verification of upfront collection of margin and levy of penalty.

6 The provisions of the Circular SEBI/HO/CDMRD/DRMP/CIR/P/2019/149 dated November 29, 2019 shall, accordingly, be amended to the extent mentioned above. All other provisions/conditions specified in the Circular dated November 29, 2019 shall remain unchanged.

7 The provisions of this Circular shall come into effect from December 01, 2020.

8 Stock Exchanges and Clearing Corporations are directed to:

a) take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations;

b) bring the provisions of this circular to the notice of their members and also disseminate the same on their websites; and

c) communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Development Report.

9 This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Tags : Verification Margins Clients

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