| 1 |
SEBI (Collective Investment Schemes) (Amendment) Regulations, 1999 |
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1.1 |
As per amendment brought in the definition of Collective Investment Schemes (“CISâ€). Now any pool of above INR 100 crores shall be “deemed to CISâ€. Bringing this into effect, the existing SEBI (CIS) Regulation have been amended wherein the provisions of “Application for grant of certificate†have been extended to even for “deemed CISâ€.
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1.2 |
Likewise, taking the same into consideration a New Chapter IXA has been added wherein the provisions for existing deemed CIS have been provided i.e. to say that existing pool of funds above INR 100 Crores (earlier not coming under the definition of CIS) have also been mandated to get themselves registered under the Regulation. It is also provided that no new scheme to be launched unless registered. |
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1.3 |
Further, additional requirement have been mandated for CIS when registered namely:
- Collective Investment Management company will now be required to enter into an agreement with a depository for dematerialization of the units of the scheme proposed to be issued i.e. now units to be issued in Demat form;
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all the monies payable towards the collective investment scheme shall be paid through cheque or demand draft and not by cash, this is intended to check mobilization of black money;
- comply with the KYC norms i.e. to say that the investee identity to be well defined;
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Thus the changes brought in are definitely more stringent and furthermore will ensure transparency as well as authenticity of the inflow and outflow of the funds. |
| 2 |
SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014 |
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2.1 |
Before this Regulation was notified there was consent mechanism guideline governing the procedure and the manner in which the applicant can make a consent application for settling the matter. However these guidelines have now been framed and notified as SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014. |
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2.2 |
The Regulation so notified is precisely an adoption of the existing SEBI consent circular dated 25th May, 2012. The New Regulation broadly covers the following:
- The manner for making application and prescribed time limit;
- Cases where matter will not be considered for settlement;
- Manner of withdrawing an application once applied, the said provision is slightly different from the guidelines. Previously an application could be withdrawn only once, at any stage prior to consideration of the application by High Powered Advisory Committee however now the application can be withdrawn at any time prior to the communication of the decision of the panel of Whole Time Members;
- Terms of settlement including monetary as well as non-monetary terms;
- List out the factors that are to be considered to arrive at settlement terms;
- Composition of High Powered Advisory Committee and Internal Committee;
- Details of procedure as well as settlement order.
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As stated above, all the aforesaid provisions included in the Regulation are similar to that of the existing guidelines with very minor changes here and there. |
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The rationale behind converting these consent guidelines into Regulation is the working of consent order mechanism in an ad hoc manner when it was first introduced in the year 2007. Also the legal basis of these consent guidelines relating to consent order was challenged before the Delhi High Court. Pursuant to which the Ordinance inserted a new Section 15JB in the SEBI Act to specifically sanction and authorize consent orders and settlements entered into by the SEBI with persons charged under the SEBI Act. However this section gives reference to Regulations interestingly which were not framed. Therefore, SEBI finally notified the Regulation to give more binding effect to the consent orders pronounced. |
| 3 |
SEBI (Procedure for Search and Seizure) Regulations, 2014 |
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3.1 |
These Regulations have been notified to provide for detailed procedure and the manner in which the search and seizures operations shall be carried in accordance to power vested upon SEBI by the Ordinance, the Regulation requires the Investigating Officer to obtain warrant of authority from SEBI Chairman to conduct search and seizure of:
- persons;
- enterprise;
- places and buildings;
- computer or any other data storage device; and
- vessel, vehicle or aircraft
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3.2 |
Further the New Regulation broadly provides for the following: |
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| 3.2.1 |
The detailed procedure relating to Search and Seizure; |
| 3.2.2 |
The powers of Investigating Authority (who is authorized by warrant of authority) at time of search and seizure including:
- Power of inspection;
- Power of seizure;
- Power to place identification mark;
- Power to make copy;
- Power to record statement
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| 3.2.3 |
The rights and obligations of persons being searched and other person in charge; |
| 3.2.4 |
Requirement to keep the seized documents in safe custody and requirement of return of documents seized and maintenance of confidentiality. |
| 3.2.5 |
Penal provisions etc. |
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| 4. |
SEBI (Investor Protection and Education Fund) (Amendment) Regulations, 2009 |
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4.1 |
Apart from minor clarificatory amendments, the important amendment brought out through these Regulation is that in case of amount disgorged and credited to fund (including interest) SEBI wherever deem fit, shall use the sum of amount primarily for restitution of identifiable and eligible investor who have suffered loss (this amount to be used only for this purpose) however the remaining amount if any may be used for purposes already laid in the Regulation. |
| 5. |
SEBI (Foreign Portfolio Investors) Regulations, 2014 |
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5.1 |
These New Regulations have been notified and had replaced SEBI (Foreign Institutional Investors) Regulations, 1995. The New Regulations provides for the framework for Foreign Portfolio Investors (“FPIâ€) and Designated Depository Participant (“DDPâ€). The Regulation further provides for the following: |
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| 5.1.1 |
FPI to be of three category:
- Category I which shall include Government and Government related investors such as central banks, Governmental agencies, sovereign wealth funds and international or multilateral organizations or agencies;
- Category II shall broadly include the following:
- funds such as mutual funds, investment trusts, insurance/reinsurance companies;
- regulated persons such as banks, asset management companies, investment managers/ advisors, portfolio managers;
- funds that are not appropriately regulated but whose investment manager is appropriately regulated:
- university funds and pension funds; and
- university related endowments already registered with the Board as foreign institutional investors or sub-accounts
- Category III shall include all others not eligible under Category I and II foreign portfolio investors such as endowments, charitable societies, charitable trusts, foundations, corporate bodies, trusts, individuals and family offices.
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| 5.2 |
The Regulation further broadly provides for the procedure for making application for obtaining certificate as FPI and DDP; |
| 5.3 |
Eligibility criteria of FPI and DDPs; |
| 5.4 |
Continued compliance by FPI and DDPs; |
| 5.5 |
Investment conditions and restrictions for FPI; |
| 5.6 |
General obligations and responsibilities of FPI and DPP; and |
| 5.7 |
Powers of SEBI and Penal provisions in case of defaults. |
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