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Securities and Exchange Board of India (SEBI) is considering&nbsp;reviewing adjustment rules for dividend in Futures and Options (F&amp;O) scrips. In a recent meeting of a SEBI committee, the issue was discussed and finally a consensus emerged, to review and bring it down, to 2 percent and above.&nbsp;

Currently, dividends that are below 5 per cent of the market value of the underlying stock are deemed ordinary dividends and no adjustment in the strike price is made.&nbsp;As per sources aware of the development the “The report of the working group was presented, and it came out that majority of the dividends were less than or equal to 2 percent of the market price of the scrip, so the committee agreed to bring it down to 2 percent and above".&nbsp;

Experts believe that such move will be good for F&amp;O position holders.&nbsp;Vikas Sethi of Sethi Finmart says that” This is a welcome step and there is no justification for not passing benefits of the corporate action to F&amp;O position holders, in cases where the dividend is less than 5 percent of market price of scrip.” &nbsp;&nbsp;

The committee also discussed to bring it further up to zero, but the issue will be taken later.&nbsp;SEBI may come up with revised circular on the issue. SEBI may also consider forming a working group for reviewing adjustments of all corporate actions in the F&amp;O shares.&nbsp;To decide if the dividend is extraordinary, the closing price of the share on the previous day is taken. But when announcement of dividend is made post market hours, the same day’s closing price is considered as the market price. &nbsp;

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Impact of dividend on F&amp;O Position&nbsp;&nbsp;

Declaration of dividend results in adjustment in the F&amp;O contracts of the underlying stock. The basis for any adjustment for corporate actions is usually such that the value of the position of the trader on the cum and ex-date of the dividend, continue to remain the same as much as possible. The adjustments for dividend will be on all open positions.&nbsp;

Watch Video Here:

<blockquote class="twitter-tweet">
<a href="https://twitter.com/hashtag/ZBizExclusive?src=hash&amp;ref_src=twsrc%5Etfw">#ZBizExclusive</a> 
 
F&amp;O शेयरों में डिविडेंड पर बड़ी खबर.. 
 
F&amp;O शेयरों में डिविडेंड पर प्राइस एडजस्टमेंट नियम जल्द बदल सकते हैं। 5% के बदले अब 2% या अधिक पर भी एडजस्टमेंट की तैयारी। पूरी खबर बता रहे हैं ब्रजेश कुमार। <a href="https://twitter.com/NSEIndia?ref_src=twsrc%5Etfw">@NSEIndia</a> <a href="https://twitter.com/BSEIndia?ref_src=twsrc%5Etfw">@BSEIndia</a> <a href="https://twitter.com/BrajeshKMZee?ref_src=twsrc%5Etfw">@BrajeshKMZee</a> <a href="https://twitter.com/AnilSinghvi_?ref_src=twsrc%5Etfw">@AnilSinghvi_</a> <a href="https://t.co/HFxqYZiZdD">pic.twitter.com/HFxqYZiZdD</a>
— Zee Business (@ZeeBusiness) <a href="https://twitter.com/ZeeBusiness/status/1529758911837851648?ref_src=twsrc%5Etfw">May 26, 2022</a></blockquote>
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How the dividend gets adjusted?&nbsp;

Adjustments for F&amp;O Contracts, usually base price of the Futures Contract on ex-date acts as a reference rate minus aggregate amount of dividend. The reference rate to be reckoned for this purpose is the daily mark to market settlement price of the relevant futures contract. In case of adjustments for Options Contracts, the full value of dividend is deducted from all the cum-dividend strike prices on the ex-dividend date.&nbsp;&nbsp;

SEBI&nbsp;is considering&nbsp;reviewing adjustment rules for dividend in F&amp;O&nbsp;scrips. In a recent meeting of a SEBI committee, the issue was discussed and finally a consensus emerged, to review and bring it down, to 2% and above


Good News coming for F&O Shareholders: 2% and above dividend to get adjusted

Companies having surplus cash may get chance to reward investors more than once in a year through buyback if&nbsp;Securities and Exchange Board of India (SEBI) committees' recommendations are accepted. In the recent meeting of SEBI’s&nbsp;Primary Market Advisory Committee (PMAC), broader proposals for discussion paper have been finalised, and soon the discussion paper will be floated and views of stakeholders will be sought.&nbsp; SEBI’s policy making process is mostly through discussion papers.&nbsp;&nbsp;

As per the people aware of the development “SEBIs PMAC has agreed to seek views on proposal to allow companies for more than one buyback in a year”. Based on the feedback&nbsp;received&nbsp;the recommendation will be made to the Ministry of Corporate Affairs.&nbsp;&nbsp;

As per sources “Another issue to which PMAC has agreed is to seek views on, increasing the quantum of buyback”. Currently companies are allowed only up to 25% of free reserves and&nbsp;paid up&nbsp;capital. The discussion paper may seek views on this too. As IT companies association NASSCOM has pitched for increase in the limit, feedback from industry also favoured the same. Many IT companies generate huge surplus and wish to reward investors through buyback of share more often, but due to regulatory limits they are unable to do so. &nbsp;&nbsp;&nbsp;

Discussion paper may seek views on other process and time limit&nbsp;related issues, like the reduction of timeline for open market offer method. Currently the time limit is up to six months while in tender open offer method its limited to 10 working days.&nbsp;&nbsp;

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<blockquote class="twitter-tweet">
<a href="https://twitter.com/hashtag/ZBizExclusive?src=hash&amp;ref_src=twsrc%5Etfw">#ZBizExclusive</a> 
 
शेयर बायबैक नियमों में बदलाव के लिए जल्द ही सेबी का डिस्कशन पेपर आएगा 
 
साल में एक से ज्यादा बायबैक की छूट के पक्ष में SEBI कमेटी 
 
ओपन मार्केट ऑफर की मियाद 6 महीने से कम की जा सकती है 
 
जानिए पूरी खबर ब्रजेश कुमार से<a href="https://twitter.com/BrajeshKMZee?ref_src=twsrc%5Etfw">@BrajeshKMZee</a> <a href="https://twitter.com/AnilSinghvi_?ref_src=twsrc%5Etfw">@AnilSinghvi_</a> <a href="https://twitter.com/SEBI_India?ref_src=twsrc%5Etfw">@SEBI_India</a> <a href="https://t.co/o4wxUMKz0u">pic.twitter.com/o4wxUMKz0u</a>
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SEBIs is reviewing many regulations based on the feedback of stakeholders and need of the market, buyback regulation is one among the rest. The issue was first brough before the PMAC and then a working group was formed under the Chairmanship of HDFC Limited’s Vice Chairman &amp;CEO, Keki Mistry. The said committee submitted its report recently,&nbsp; based on it PMAC deliberated on proposals to be covered in the discussion paper.&nbsp;

Companies having surplus cash may get chance to reward investors more than once in a year through buyback if&nbsp;Securities and Exchange Board of India (SEBI) committees' recommendations are accepted


EXCLUSIVE: SEBI discussion paper soon to review Buyback Regulations; PMAC favours more than 1 buyback in a year

Banks have tightened intraday funding after a penalty was imposed on a private bank. Zee Business'&nbsp; Brajesh Kumar brings this report.

Rules tightened on intraday funding:&nbsp;&nbsp;

- the tightening in rules has resulted in the increase in cost of institutional trades: Sources&nbsp;

- Banks have ended expoure of intraday trade of 80 per cent of the the brokers: Source&nbsp; &nbsp;

- The impact of tightening in intraday funding rules is likely to have an impact in Futures &amp; Options (F&amp;O) trades: Source

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- At least 50 per cent margin mandatory on intraday trade funding:&nbsp;Source&nbsp;

- The tightening in rules have been implemented after a Reserve Bank of India (RBI) penalty on Axis Bank: Source&nbsp;

- Many banks were indulging in intraday funding in violation of RBI rules:&nbsp;Source&nbsp;

- Certain banks were indulging in intraday funding by giving unlimited shares in the margin:&nbsp;Source&nbsp;

- The rule is that a bank can give intraday funding against liquid assets: Source

Banks have tightened intraday funding after a penalty was imposed on a private bank. Zee Business'&nbsp; Brajesh Kumar brings this report


Banks tighten intraday funding for brokers; cost of institutional trades goes up: Sources

Check Bounce: The Supreme Court is very serious about the speedy disposal of check-bounce cases. The SC has sought answers from the Centre, States and High Courts on the recommendations of the Expert Committee formed on the same matter. The expert committee recommended that special courts should be set up for this and if needed, retired judges should be appointed for hearing.

Zee Business had launched a campaign on the settlement of check bounce cases. The court has sought answers from the Centre, states, and HCs on the suggestions of the Expert Committee. The committee suggested that separate courts should be set up to check bounce cases. It has also been said that if need be, retired judicial officers should be appointed.

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According to the Expert Committee, about Rs 127 crore will be spent on the new court. Along with this, 1826 judicial officers will also have to be recruited for creating a separate court.

Earlier, some high courts had started evening court on check bounces. As of April 13, 2022, 33.44 lakh check bounce cases are pending in the country. There are pilot special courts in Maharashtra, Gujarat, Rajasthan, Delhi, and UP regarding this.

Top 5 states in check bounce cases

state&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; - cases pending 
Maharashtra&nbsp; &nbsp; - 5,60,914 
Rajasthan&nbsp; &nbsp; &nbsp; - 4,79,774 
Gujarat&nbsp; &nbsp; &nbsp; &nbsp; - 4,37,979 
Delhi&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; - 4,08,992 
Uttar Pradesh&nbsp; -&nbsp; 2,66,777 
(till 13th April 2022)

While there are more cases of check bounces, special courts have been suggested in 5 districts of those 5 states. The Expert Committee has also suggested that there should be a national portal for information on summons. It has been seen that people often refuse to take summons, which delays the trial. It has been suggested that before issuing summons, a way of mutual reconciliation should be found. There is also a suggestion to amend the Negotiable Act for the path of conciliation. Opinion was sought from IBA on whether such cases can be closed where the amount is very less.

Provision of punishment on check bounce 
There is a provision of punishment for non-payment even after 15 days' notice of check bounce. In this, there is a provision of imprisonment up to a maximum of two years or a fine of twice the amount or both. The Finance Ministry had earlier sought suggestions on de-criminalization. In this case, there was opposition from a large number of business classes to do non-criminal.

The expert committee recommended that special courts should be set up for this and if needed, retired judges should be appointed for hearing.


Check Bounce: SC seeks response from Centre, States, High Courts; Maharashtra has maximum pending cases | check state-wise number of cases list 

New ITR Filing Rules: If the amount of TDS and TCS exceeds Rs 25000 in a year then Income Tax Return (ITR) has to be filed, said the new ITR filing rule. The government has expanded the scope of income tax filing to bring more people into the tax bracket. According to the notification issued by the Ministry of Finance, now more income groups and people with income will have to file income tax returns. With the new changes, more people will be brought under the tax net. The new rules have come into effect on 21 April 2022.

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According to the new notification, if the sales, turnover, or income in the business is more than 60 lakhs, then the return will have to be filed. ITR has to be filed even if the income of the professional is more than Rs 10 lakh per annum. Apart from this, an income tax return will have to be filed even if the amount of TDS and TCS exceeds Rs 25000 in a year. However, the limit of TDS + TCS has been kept at Rs 50,000 for taxpayers who are 60 years or more.

The new notification also said that if the amount deposited in the bank savings account is 50 lakh or more in 1 year, then such depositors will also have to file their tax returns.

The government believes that with the new changes, the scope of income tax filing will increase and more and more people will be able to come into the tax net.

If the amount of TDS and TCS exceeds Rs 25000 in a year then Income Tax Return (ITR) has to be filed, said the new ITR filing rule.&nbsp;


ITR Filing Rules: Now, Income tax filing made mandatory if TDS, TCS amount exceeds Rs 25000 in year- Check other major changes 

RBI: The Reserve Bank of India (RBI) on Tuesday announced several rules for Non-Banking Financial Company (NBFC). RBI is going to tighten the loan approval norms for NBFCs distributing loans to its directors and their relatives. This strict rule for loans has been implemented for directors of large and medium NBFCs.

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RBI said that loans of Rs 5 crore or more would be possible only after the approval of the board. The bank further said that if a director is a partner in a firm, strictness will apply to him as well. Apart from this, builders will get the loan only when the project gets all the government approvals.

These rules of strictness in giving loans will be applicable from October 1, 2022.

RBI&nbsp;on Tuesday announced several rules for Non-Banking Financial Company.


RBI tightens loan approval norms for NBFCs, rules to come into effect from October 1

Do not Exercise (DNE) facility for stock option traders is finally back. NSE (National Stock Exchange) clearing in a circular issued on Monday had announced that DNE will be available from April 28, 2022. NSE clearing circular said, “It may be noted that facility to specify ‘Do Not Exercise’ instruction on expiry day will be re-introduced in the Stock Option contracts with effect from April 28”.

As per sources aware of the development, SEBIs (Securities and Exchange Board of India) Risk Management and Review Committee in its meeting in January this year had recommended for re-introduction of DNE. DNE will be allowed up to 3 strike prices of the stock option.

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As per the circular for Call Options, 3 ITM (In the money) options strike immediately below the final settlement price shall be considered as ‘CTM’ (Close to the Money)&nbsp; and for Put Options, 3 ITM options strike immediately above the final settlement price shall be considered as ‘CTM’.

Zee Business had reported in January that the DNE facility will be brought back and on Friday reported that circular may come soon as SEBI has given a green signal.&nbsp;

In the December expiry contract, one incident in Hindalco shares led to the concern of big risk for traders and brokers, many traders, who could not sell their position in Hindalco Put, suffered huge losses, due to the non-availability of DNE.

Traders, earlier had the maximum risk of losing only their premium money, were forced to buy the shares in the auction and settle the trade. The concern post Hindalco episode was discussed in the Risk Management and Review Committee, stakeholders pointed to the huge risk for brokers and the system in case traders’ default is high.

Thereafter a subgroup was formed to study the international practices and suggest measures. SEBI suggested Exchanges and Clearing Corporations to re-introduce the DNE facility after consulting with all the stakeholders.&nbsp;

Brokers and market participants had been demanding to the SEBI to re-introduce DNE option in Close to the Money (CTM) Option contracts. After the removal of Do Not Exercise it was obligatory for all the options holders to compulsorily take or give delivery of their options even if they were slightly in the money.

Thus, the holder of the Put option which was slightly in the money was forced to give the delivery of the underlying share, while the holder of the call option which was slightly in the money was forced to cough up the entire purchase consideration and compulsorily take delivery.

DNE was introduced in August 2017 by exchanges option contracts, but NSE Clearing Limited had issued a circular on September 29, 2021, alerting its members that the DNE option will not be available from October 14, 2021, but many traders were not aware of the new circular and assumed that DNE was available to them.

The October circular mandated that from November expiry, if the spot price of a share closes below the strike price, then the trader holding the Put option of stock will have to either sell his position before expiry or arrange shares from the auction.&nbsp;

In layman’s language, an Option is a contract that gives a trader the right but not the obligation to buy or sell a share at a particular date at a specified price. In the Call option, the trader gets the right but not the obligation to buy the stock at a specified date and price.

Buyer of a Call Option profits when the price of the stock goes up and loses when the stock price goes down. Similarly, the Put Option gives the right but not the obligation to sell a particular stock at a specified date and price.

The pre-decided price at which the buyer of the Put option can sell the underlying security is termed as the strike price. To buy the Option, there is a price to be paid which is called a premium. It is the income received by the seller of an option contract.

DNE was earlier removed for two reasons, one was to give a level playing field for option writers who could be left with unplanned overnight exposure when the option holder chooses to not exercise the option, and secondly the fact that the DNE was introduced to resolve the anomaly of excessive STT in the era where all the derivatives contracts were cash-settled.

Operational issues were also there, the extra processing due to DNE used to delay the Clearing Corporations process leading to complaints from participants.

Zee Business had reported in January that the DNE facility will be brought back and on Friday reported that circular may come soon as SEBI has given a green signal.&nbsp;


Good News for Option traders, finally Do Not Exercise facility is back

The Securities and Exchange Board of India (SEBI) on Monday said that the risk-o-meter will also be applicable in mutual funds schemes investing in commodities. The market regulator&nbsp;said in its circular that new rules will be applicable with immediate effect.

The risk-o-meter will be implemented on the basis of 15-year volatility in the benchmark of the commodity, SEBI said.

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How will the calculation be done? 
SEBI said that if the volatility in these commodities is less than 10 percent, then the risk will be moderate. Whereas, if there is a fluctuation of 10% - 15%, there will be moderately high risk and if there is a volatility of 15 to 20 percent, there will be a high-risk category. If the volatility is more than 20 percent, it will be kept in the very high-risk category.

Explaining with an example, Sebi said if the price of gold has annualized volatility of 18 percent based on the price of gold of the past 15 years, then gold and gold related instruments will have a risk value of 5 (high) on risk-o-meter, as reported by PTI.

According to PTI, the regulator had said in October 2020 that investment in gold and gold-related instruments by schemes will be valued at 4 from risk perspective. This new framework will come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said.&nbsp;

In a circular, the markets regulator said it has been decided that investment in such commodities by the mutual fund schemes will be assigned a risk score corresponding to the annualized volatility of the price of such commodities.


Risk-O-Meter to be applicable on mutual funds investing in commodities; new rules come into force with immediate effect

Securities and Appellate Tribunal (SAT) began hearing on an appeal filed by former NSE Managing Director and Chief Executive Officer Securities Chitra Ramkrishna on Monday. The appeal is against Market Regulator Securities and Exchange Board of India (SEBI).

In her appeal, Ramkrishna said that the market watchdog did not give her opportunity to put her side before giving a final order.

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In her appeal, she has alleged that a penalty was imposed on her after changing a law while the allegations of lapses in corporate governances against her were old.

Argument – The NSE decision to stop leave encashment and deferred bonus amounts to an interference in the internal matters of the exchanges.

It was also argued that no investor had to bear any loss and yet there are allegations against her.

The demand is to put bonus and leave encashment amount in a separate account instead of investor protection fund.

The former MD &amp; CEO has challenged the February 11 order of the SEBi before the SAT.

&nbsp;SEBI had imposed a penalty of Rs 3 cr against Ramkrishna

It had also ordered putting Rs 4.37cr amount related to leave encashment and deferred bonus in investor protection fund.

&nbsp;In the Chitra Ramakrishna case, SAT has stayed conditional stay on SEBI order.

Chitra Ramakrishna has to deposit Rs 2 cr.

Securities and Appellate Tribunal (SAT) began hearing on an appeal filed by former NSE MD &amp; CEO Chitra Ramkrishna. The appeal is against market regulator SEBI


NSE Chitra Ramkrishna news: SAT puts conditional stay on SEBI’s February 11 order against former MD & CEO; know full story here!

The National Company Law Tribunal (NCLT) on Friday initiated insolvency proceedings against real estate firm Supertech Ltd, one of the companies of Supertech group.

This is the second major setback for Noida-based developer in the last one year.

On August 31 last year, the Supreme Court had ordered the demolition of Supertech Ltd's twin 40-storeyed towers, which are part of the under construction Emerald Court project in Noida for violation of building norms.

A NCLT bench on Friday allowed the plea filed by Union Bank of India, a financial creditor, claiming default against Supertech Ltd, and appointed an interim resolution professional superseding the board of the company.

The order was passed orally in the court and a detailed order in this regard is awaited.

While confirming the development, Supertech Group said it would challenge the order before the National Company Law Appellate Tribunal (NCLAT).

"In the matter of appointment of IRP (Interim Resolution Professional) in one of the Supertech Group companies by the NCLT, management of the company stated that the company will be approaching NCLAT in an appeal against the order," Supertech Group said in a statement.

However, it also added the NCLT order will not affect operations of other companies of the Supertech Group.

The NCLT order will not impact the construction at all ongoing projects or operation of the company and "we are committed to giving delivery of units to allottees," it said.

When contacted, Supertech Group Managing Director Mohit Arora said, "there are around 11-12 housing projects in the Supertech Ltd against which insolvency proceedings have been initiated. Around 90 per cent of these projects are completed."

The debt of Supertech Ltd is around Rs 1,200 crore, including nearly Rs 150 crore loans from Union Bank of India, he added.

According to Arora, there are three-four other companies in the group that are developing many projects across Delhi-NCR, including luxury project Supernova.

This is the second major setback for Noida-based developer in the last one year.


NCLT initiates insolvency proceedings against Supertech Ltd

Special court of Central Bureau of Investigation (CBI) has given seven days of custody of Chitra Ramakrishna to CBI. CBI apprised court that Chitra Ramakrishna former Managing director &amp; Chief Executive Officer of National Stock Exchange (NSE) did not recognise Anand Subramanian in first meeting. CBI sought two weeks of custodial interrogation. Chitra was arrested by CBI late night on Sunday, earlier Anand Subramanian ex Group Operating Officer of NSE was arrested by CBI in Chennai.&nbsp;&nbsp;

CBI mentioned in the court during seeking custody of Chitra Ramakrishnan that “Chitra did not even recognise Anand Subramanium in first meeting”.&nbsp;

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CBI told court that there are around 2500 emails exchanged between Chitra and Anand Subramanian and others, which needs to be investigated.&nbsp;

However, Chitra’s lawyer Trideep Pais argued that Chitra was the person who stopped co-location scam in NSE. He further added that other accused who were named in FIR have not been arrested including economist Ajay Shah. Pais informed the court that Ajay Shah was called by CBI for questioning&nbsp; and he is the person who created “Chanakya” software for using co-location data.&nbsp;

Pais further added that CBI did not arrest Ravi Narain who was Managing Director before the Chitra Ramakrishna.&nbsp;

CBI informed the court that Chitra has submitted all electronic devices to the agency.

CBI court special judge also asked CBI why they have not taken any action in last four years. CBI court observed that SEBI should have registered the case as they are empowered under Section 24 of SEBI Act.&nbsp; &nbsp;

CBI lawyer VK Pathak said in court that she was evasive in answering the questions. Around 2500 incriminating mails between Anand and others which needs to be confronted.&nbsp;&nbsp;

CBI had registered FIR in May 2018 in NSE co-location case. Where it was alleged that some brokers were given preferential access of NSE tick by tick rates to execute trades and they benefitted from it.&nbsp; Agencies become active again in the case after SEBI passed an order last month. The SEBI order created hype as it mentioned replies of Chitra where she allegedly admitted sharing confidential data and info of NSE with an unknown Siddha Purush/Yogi.

Special court of Central Bureau of Investigation (CBI) has given seven days of custody of Chitra Ramakrishna to CBI. CBI apprised court that Chitra Ramakrishna former Managing director &amp; Chief Executive Officer of National Stock Exchange (NSE) did not recognise Anand Subramanian in first meeting


Chitra Ramakrishna fails to recognise Anand Subramanian when confronted by CBI; sent to 7 days CBI custody

Reserve Bank of India (RBI) has cancelled the registration of PC Financials the parent company of digital lending application Cashbean. RBI in a press note said “The CoR of the company has been cancelled on account of supervisory concerns such as gross violations of RBI directions on outsourcing and Know Your Customer norms”. RBI further added that the company has been found to be charging usurious rate of interest and other charges to its borrowers in an opaque manner apart from indulging in unauthorized use of logos of Reserve Bank and Central Bureau of Investigation for recovery from the borrowers in gross violation of the Fair Practices Code.&nbsp;

Zee Business had first raised the issue of exploitative practices adopted by digital lending companies in April 2020. Zee Business launched a campaign against such practices under “Operation Hafta Vasooli”. Zee Business investigated around 250 digital lending applications and their parent companies, where it was found that many companies were charging 36-40% rate of interest for short-term loans (with 15-30 days maturity) with the exorbitant processing fee and heavy penalty. The worst part was the method of recovery adopted by third party agents, which included calling customers at odd hours, humiliating on social media by abusive posts, creating WhatsApp group of friends and relatives using contact data extracted through the app and posting abusive stuff, threating to post private photographs on social media if dues with heavy penalty and interest were not cleared as per their whims. Zee Business also exposed how the Chinese Investors were misusing Indian NBFCs and earning&nbsp;huge returns.&nbsp;&nbsp;

WATCH: Anil Singhvi के साथ देखिए लोन रिकवरी पर सबसे बड़ा स्टिंग ऑपरेशन | Operation Hafta Vasooli

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/NMQdKi_zVJQ" title="YouTube video player" width="100%"></iframe>

 
&nbsp; 
An extensive investigation by Enforcement Directorate played a crucial role in RBIs action against such companies. ED started investigation under PMLA post filing of FIRs after few borrowers committed suicide in Telangana. ED investigation established that some of the NBFCs were just lending their names, had no actual role in disbursal, underwriting of risk and selection of customers. In some cases, ED found that there was neither infrastructure nor staff to do lending business.&nbsp;&nbsp; 
&nbsp; 
ED investigation also established the Chinese connection, Which Zee Business had indicated in its special shows. ED found that Chinese nationals were using Indians as dummy directors. As the Chinese companies were not getting licenses from RBI directly, so they signed agreements with mostly smaller and few big Indian NBFCs and started lending businesses.&nbsp; After PC Financial RBI is expected to act against more such NBFCs who were flouting RBIs norms and were recommended by ED for suitable action. ED had also found that many companies were giving loans above the prescribed limit of their net owned funds&nbsp; 
&nbsp; 
RBI initially warned such NBFCs about following Fair Practice Code and later formed a committee to suggest ways to regulate and develop the digital lending practices.&nbsp;&nbsp; 
&nbsp; 
The RBI working group recommended steps for customer protection including, verification for digital lending apps by a nodal agency, setting up of Self-Regulatory Organisation (SRO) and introducing separate legislation to prevent illegal digital lending activities.&nbsp;&nbsp; 
&nbsp; 
RBI has sought comments from stakeholders on the Working groups report and is expected to finalise the guidelines soon.&nbsp;&nbsp;

Zee Business had first raised the issue of exploitative practices adopted by digital lending companies in April 2020.


RBI cancels registration of PC Financials, the parent company of Cashbean app - Know what led to this big move

The divestment process of Balmer Lawrie &amp; Co Ltd’s logistics arm is likely to be expedited. It is one of the 8 subsidiaries of the state-run company. The government intends to start selling the subsidiaries one-by-one. Zee Business’ Brajesh Kumar Mishra brings this exclusive report.

In December, SBI Capital Markets presented a report on this company. The government is likely to appoint a transaction advisor soon.

See Zee Business Live TV Streaming Below:<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" src="https://www.zeebiz.com/live-tv/embed" width="100%"></iframe>

The government wants to exit from all the businesses which do not have any strategic importance and it is not important for the government to run those businesses.

The government plans to start divestment of its logistics subsidiary first.

Zee Business Managing Editor called it an important step towards the divestment of Balmer Lawrie. He also explained how the process of divestment will happen.

The logistics business will first get separated from other businesses and then the divestment will follow for all the 8 subsidiaries.

Department of Investment and Public Asset Management (DIPAM) has a special focus on the divestment of this company.

Balmer Lawrie is a Miniratna - I Public Sector Enterprise under the Ministry of Petroleum and Natural Gas, Government of India, with a turnover of Rs. 1593&nbsp;crores and a profit of Rs 157&nbsp;crores according to the company website.

The company claims to be a market leader in Steel Barrels, Industrial Greases &amp; Specialty Lubricants, Corporate Travel and Logistics Services.&nbsp;

The shares of Balmer Lawrie today ended at Rs 127.30 on the NSE, up almost 4 per cent from the Thursday closing price.

Watch Zee Business Tweet Video Below:

<blockquote class="twitter-tweet">
<a href="https://twitter.com/hashtag/BreakingNews?src=hash&amp;ref_src=twsrc%5Etfw">#BreakingNews</a> | सूत्रों के हवाले से खबर 
 
Balmer Lawrie के विनिवेश में तेजी 
पहले लॉजिस्टिक्स यूनिट का विनिवेश किया जाएगा 
DIPAM का Balmer Lawrie के विनिवेश पर खास फोकस 
SBI कैपिटल ने विनिवेश पर अपनी रिपोर्ट सौंपी 
 
जानिए पूरी खबर ब्रजेश कुमार से...<a href="https://twitter.com/BrajeshKMZee?ref_src=twsrc%5Etfw">@BrajeshKMZee</a> <a href="https://t.co/tBNsHmz04N">pic.twitter.com/tBNsHmz04N</a>
— Zee Business (@ZeeBusiness) <a href="https://twitter.com/ZeeBusiness/status/1494524562931056644?ref_src=twsrc%5Etfw">February 18, 2022</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

This stock has been recommended many times previously by Analyst Sandeep Jain on Zee Business. He said that the stock has not appreciated as much as it should have. The company pays significant dividends to its investors. He said that it is a strong PSU and talks of its demerger and value unlocking augurs well for the company. &nbsp;

The divestment process of Balmer Lawrie &amp; Co Ltd’s logistics arm is likely to be expedited. It is one of the 8 subsidiaries of the state-run company. The government intends to start selling the subsidiaries one-by-one. Zee Business’ Brajesh Kumar Mishra brings this exclusive report


Exclusive: Balmer Lawrie’s logistics arm likely to be divested first; government to expedite process

Market regulator Securities and Exchange Board of India (SEBI) is considering reintroduction of Do Not Exercise (DNE) option for option traders. SEBI’s Risk Management and Review Committee (RMRC) headed by Prof JR Verma met on last Thursday and discussed about the issue with the stakeholders.&nbsp;

As per the sources privy to this development, “RMRC considered the issue and favoured the reintroduction of the DNE. To review the regulation a subgroup has been formed with the mandate to suggest DNE option after studying the international markets best practices. The sub-group will suggest if DNE be allowed up to 3 strike price or more”. The source further added that “Once sub- group submits its report, RMRC will finalise the regulations and will be communicated to exchanges and clearing corporations.” The revised regulations may be out within 1-2 months.

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Brokers and market participants have been demanding to the regulator to re-introduce DNE option in Close to the Money (CTM) Option contracts. After removal of Do Not Exercise, it became obligatory for all the options holders to compulsorily take or give delivery of their options even if there are slightly in the money. Thus, the holder of the put option, which is slightly in the money would be forced to give the delivery of the underlying share, while the holder of the call option, which is slightly in the money would be forced to cough up the entire purchase consideration and compulsorily take delivery.

DNE was removed for two conceptual reasons, one was to give a level playing field for option writers who could be left with unplanned overnight exposure when the option holder choose to not exercise the option, and secondly the fact that the DNE was introduced to resolve the anomaly of excessive STT in the era where all the derivatives contracts were cash settled. Operationally, the extra processing due to DNE used to delay the Clearing Corporations process leading to complains from market participants.

NSE Clearing Limited had issued a circular on September 29, 2021, alerting its members that Do Not Exercise option will not be available from October 14, 2021, but many traders were not updated or aware of the new circular and assumed that DNE is available to them as was earlier. The new rules mandated that from November expiry, if spot price of a share closes below strike price, then trader holding put option of stock will have to either sell his position before expiry or arrange shares from auction.&nbsp;

In December expiry contract, many traders who could not sell their position in Hindalco Put, suffered huge losses, due to non-availability of DNE. Traders, earlier had the maximum risk of losing only their premium money, were forced to buy the shares in the auction and settle the trade. The concerns post Hindalco episode was discussed in the Risk Management and Review Committee, stake holders pointed to the huge risk for brokers and system in case traders default is high.

In layman language Option is a contract which gives trader the right, but not the obligation to buy or sell a share at a particular date on a specified price. In Call option, the trader gets the right but not the obligation to buy stock at a specified date and price. Buyer of a Call Option profits, when the price of stock goes up and loses when stock price goes down. Similarly, the Put Option gives the right but not the obligation to sell a particular stock at a specified date and price. The pre-decided price at which the buyer of the Put option can sell the underlying security is termed as strike price. To buy the Option, there is a price to be paid which is called as premium. Premium is the income received by the seller of an option contract.

Market regulator Securities and Exchange Board of India (SEBI) is considering reintroduction of Do Not Exercise (DNE) option for option traders.&nbsp;


Zee Business Exclusive: Option traders may get back their 'Do Not Exercise' option soon 

by Brajesh Kumar &amp; Tarun Sharma&nbsp;

Capital and commodities market regulator, Securities and Exchange Board of India (SEBI) board is meeting next week to discuss major issues related to Initial Public Offer (IPO) reforms, enhance brokers and trading members net worth criteria. Apart from this SEBI board may discuss amendment in settlement regulations. &nbsp;

Big reforms related to IPOs&nbsp;

This&nbsp; meeting could be the last meeting before Union Budget and meeting is held on December 28th. SEBI had issued discussion paper on October 4th&nbsp;this year on removing discrepancy in IPO price bands, as per the sources told Zee Business &nbsp;“SEBI board may discuss minimum 5% gap in price band of IPOs and dedicated quota for smaller Non Institutional Investors (NIIs)”, Source further said “ The idea is to ensure that smaller HNIs are not crowded out in issues”.&nbsp;

Watch Zee Business Tweet Video Below

<blockquote class="twitter-tweet">
<a href="https://twitter.com/hashtag/ZBizExclusive?src=hash&amp;ref_src=twsrc%5Etfw">#ZBizExclusive</a> 
 
SEBI बोर्ड की इस महीने के आखिर में होगी बैठक, IPO से जुड़े कई नियमों में अहम बदलाव की तैयारी और किन किन मुद्दों पर हो सकती है चर्चा बता रहे हैं ब्रजेश कुमार। <a href="https://twitter.com/SEBI_India?ref_src=twsrc%5Etfw">@SEBI_India</a> | <a href="https://twitter.com/BrajeshKMZee?ref_src=twsrc%5Etfw">@BrajeshKMZee</a> | <a href="https://twitter.com/AnilSinghvi_?ref_src=twsrc%5Etfw">@AnilSinghvi_</a> | <a href="https://twitter.com/SwatiKJain?ref_src=twsrc%5Etfw">@SwatiKJain</a> <a href="https://t.co/B3kqYyOBGG">pic.twitter.com/B3kqYyOBGG</a>
— Zee Business (@ZeeBusiness) <a href="https://twitter.com/ZeeBusiness/status/1473579890913857538?ref_src=twsrc%5Etfw">December 22, 2021</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

SEBI consultation paper proposed 33% reservation for such smaller HNIs and 67% for those who bid above Rs 10 lakhs, this quota will be within the NIIs quota.

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Another major issue which is expected to be discussed in the board is putting some restrictions on sale of shares by significant investors (who have 20% or more stake) through OFS (Offer for sale) on listing, specially seeing exit in many new age technology companies, where there are no identifiable promoters. &nbsp;

As per the SEBI regulations Issuer companies with&nbsp; promoters&nbsp; are&nbsp; required&nbsp; to&nbsp; maintain&nbsp; Minimum&nbsp; Promoter Contribution (MPC), up to at least 20% of post issue capital as MPC which is locked – in for 18 months post listing.&nbsp;

Monitoring of funds of General Corporate Purpose and higher lock for Anchor investors &nbsp;

Board is also expected to deliberate the issue of uncertainty/ ambiguity&nbsp; in&nbsp; the&nbsp; IPO&nbsp; objects. SEBI may cap a combined limit of up to 35% of the fresh issue size for deployment on such objects of inorganic growth initiatives and general corporate purpose. Many new age technology companies disclose objects in their offer documents under such heads as 'Funding of Inorganic Growth Initiatives’ without identifying the target&nbsp; acquisition&nbsp; or&nbsp; specific&nbsp; investments&nbsp; proposed&nbsp; to&nbsp; be&nbsp; deployed&nbsp; out&nbsp; of&nbsp; issue proceeds, at the time of filing offer document. &nbsp;

To inspire confidence and avoid uncertainty, SEBI is also considering for increasing the lock in of anchor investors. The board may consider the lock in from existing 30 days to 90 days post allotment of issue. Or allotment of more shares to those anchors who agree for a 90 days or longer lock in. SEBI is of the view that a longer lock-in for Anchor Investors will provide more&nbsp; confidence to&nbsp; other&nbsp; investors.&nbsp;

Revamping Preferential issue guidelines post PNB HFC case &nbsp;

SEBI board is also likely to discuss and approve the preferential issue guidelines. SEBI had floated a consultation paper on the issue post PNB Housing Finance controversy. Consultation paper suggested to replace the existing formula of weekly high and low of&nbsp;volume weighted&nbsp; average&nbsp; price&nbsp;(VWAP) of 26 weeks with VWAP of 60 trading days and replace average of weekly high and low VWAP of 2 weeks with VWAP of 10 trading days. SEBI had received representations suggesting the norm of 26&nbsp; weeks is very long for price determination considering&nbsp; market&nbsp; volatility. &nbsp;

The board is also expected to make it mandatory for valuation report in cases where preferential issue allotment may result in change in control or allotment of more than 5% shares. Also companies will have to consider stricter provisions of pricing of preferential issue, if provided, under the Article of Association of the Issuer company, in addition to pricing&nbsp; guidelines&nbsp; under&nbsp; ICDR Regulations for the purpose of making any preferential issue. &nbsp;

PMAC suggested, in case of any proposed preferential allotment results in change in control, the valuation&nbsp; report/certificate&nbsp; from registered valuer should also cover guidance on control premium. Valuation report shall be hosted on the company’s&nbsp; website&nbsp; and a reference&nbsp; to&nbsp; the&nbsp; same&nbsp; shall&nbsp; be&nbsp; made in&nbsp; the&nbsp; notice&nbsp; for calling&nbsp; a general meeting of the shareholders. &nbsp;

It suggested that any&nbsp; preferential&nbsp; issue allotment resulting in change&nbsp; in&nbsp; control can be done only after a reasoned recommendation from a committee of independent&nbsp; directors. &nbsp;

Lock in for promoters is also expected to be reduced. SEBIs PMAC has suggested a reduction in lock-in&nbsp; for&nbsp; preferential&nbsp; issuance&nbsp; to&nbsp; promoters/&nbsp; promoter&nbsp; group from&nbsp; 3&nbsp; years&nbsp; to&nbsp; 18&nbsp; months&nbsp; and&nbsp; for non promoters to be reduced from&nbsp; 1 year&nbsp; to&nbsp; 6&nbsp; months. Securities allotted to promoters under preferential issue and which are under lock-in, may be permitted to be pledged to lenders. &nbsp;&nbsp;&nbsp;

Limiting time frame for settlement applications&nbsp;

SEBI board &nbsp;is also expected to take up the issue of tightening time frame for settlement applications. Currently parties are allowed to settle case within 60 days from the receipt of show cause notice or supplementary notice but additional time period of 120 days may be availed subject to the payment of &nbsp;an additional sum of 25% over and above the regular settlement amount. SEBI is of the view that extending the time frame delays the enforcement process. SEBI is also in favour of reducing the revised settlement terms by fixing it to 15 days. Time frame for&nbsp;remittance of settlement amount&nbsp;be fixed to maximum 30 days. &nbsp;

Review of Brokers Net Worth &nbsp;

SEBI board is also expected to clear the new net worth regulations for brokers and clearing members. SEBI is of the view that with considerable increase in turnover in various segments of the exchanges over the years and that the significant increase in number of investors participating in the securities market, it is appropriate to review net worth of the members in different segments of the exchanges. SEBI has suggested that for a base net worth of&nbsp; Rs 1 Cr for trading member (TM, 5 Cr for Trading Member-Self clearing member (TM-SCM), 15 Cr for Trading Member Clearing Member (TM CM) and 50 Cr for professional clearing member ( PCM) or 10%&nbsp; of&nbsp; average&nbsp; daily&nbsp; cash balance&nbsp; of&nbsp; clients&nbsp; retained with&nbsp; the&nbsp; member&nbsp; across segments/exchanges&nbsp; in&nbsp; the previous 6 months. The said net worth requirement is suggested to be complied by October 2023.&nbsp;

SEBI) could take a call on the issue of the price band of shares offered by the companies in their Initial Public Offering (IPO). The market regulator may make it mandatory for the companies to keep at least a 5 per cent difference in the price band between the floor price and ceiling price of the share


Brajesh Kumar