Archive for the ‘Depository Participant’ Category


CIRCULAR- CIR/ IMD/ FII&C/ 13/ 2012, dated June 07, 2012

All SEBI registered Intermediaries/ Recognized Stock Exchanges/ Depositories/Mutual Fund/ qualified Depository Participants (DP)

Vide SEBI circulars Cir/IMD/DF/14/2011 and Cir/IMD/FII&C/3/2012 dated August 09, 2011 and January 13, 2012, respectively, Qualified Foreign Investors (QFI) were allowed to invest in schemes of Indian mutual funds and Indian equity shares subject to terms and conditions mentioned therein. Subsequently, vide SEBI circular CIR/IMD/FII&C/4/2012 dated January 25, 2012, the eligibility criteria for a qualified DP was revised.

2. On a review and in consultation with the Government of India (GoI) and RBI, it has been decided to revise the definition of QFI as under:

QFI shall mean a person who fulfils the following criteria:

(i) Resident in a country that is a member of Financial Action Task Force (FATF) or a member of a group which is a member of FATF; and

(ii) Resident in a country that is a signatory to IOSCO’s MMOU (Appendix A Signatories) or a signatory of a bilateral MOU with SEBI:

Provided that the person is not resident in a country listed in the public statements issued by FATF from time to time on-(i) jurisdictions having a strategic Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) deficiencies to which counter measures apply, (ii) jurisdictions that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies:

Provided further such person is not resident in India:

Provided further that such person is not registered with SEBI as Foreign Institutional Investor or Sub-account or Foreign Venture Capital Investor.

Explanation.-For the purposes of this clause:

(1)The term “Person” shall carry the same meaning under Foreign Exchange Management Act (FEMA), 1999 and section 2(31) of the Income Tax Act, 1961;

(2) The phrase “resident in India” shall carry the same meaning as in the FEMA 1999, and Income Tax Act, 1961;

(3) “Resident” in a country, other than India, shall mean resident as per the direct tax laws of that country.

(4) “Bilateral MoU with SEBI” shall mean a bilateral MoU between SEBI and the overseas regulator that inter alia provides for information sharing arrangements.

(5) Member of FATF shall not mean an Associate member of FATF.

The definition of QFI, as provided in the circulars Cir/IMD/DF/14/2011 and Cir/IMD/FII&C/3/2012 dated August 09, 2011 and January 13, 2012, respectively, stands amended as above.

3. The word “Purchase” used in clause 6.1.4 of circular Cir/IMD/FII&C/3/2012 dated January 13, 2012 shall be substituted with the word “Subscription”.

4. Between clauses 8.6 and 8.7 of Circular dated January 13, 2012, clause 8.6.1 is inserted to read as under:

“8.6.1. In case a person invests in the same company through both QFI route and FDI route, the aggregate holding of the person in such company shall not exceed five percent of paid up equity capital of the company at any point of time. This investment limit shall be applicable to each class of equity shares having separate and distinct ISIN. This shall be subject to guidelines on FDI as prescribed by GoI and RBI from time to time.”

5. It has been decided to allow QFIs to make fresh purchases of eligible securities, out of the sale/ redemption/ dividend proceeds of any of the eligible securities. Further, it is clarified that all the eligible securities shall be held in a single demat account of the QFI. Eligible securities shall mean mutual fund units (under both direct and indirect route), equity shares, corporate debt and any other security which is permitted for investment by QFI from time to time by GoI, RBI and SEBI.

Clause 4.7.7 of circular Cir/IMD/DF/14/2011 dated August 09, 2011 and Clause 9.2.2 of circular Cir/IMD/FII&C/3/2012 dated January 13, 2012 stand amended, accordingly.

6. It has been further decided to extend the option of appointment of custodian of securities by the QFI. The QFI, if it so desires, may appoint a custodian of securities, who would be obligated to perform clearing and settlement of securities on behalf of the QFI client. However, no person shall be appointed as custodian by the QFI unless it is itself the qualified DP of the QFI and is also registered as custodian with SEBI under SEBI (Custodian of Securities) Regulations, 1996.

7. A QFI shall open a single non-interest bearing Rupee Account with an AD Category- I bank in India, for routing the receipt and payment for transactions relating to purchase and sale of eligible securities subject to the conditions as may be prescribed by RBI from time to time. Accordingly, it is clarified that henceforth there is no more requirement for opening and maintenance of a single rupee pool bank account by the qualified DP. QFIs, shall, henceforth invest in all eligible securities through this single non- interest bearing Rupee Account.

Circulars dated August 9, 2011, January 13, 2012, and January 25, 2012 respectively, stand amended as above.

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

Yours faithfully,

S MADHUSUDHANAN

Deputy General Manager

Tel No.: 022-26449614

Email: smadhu@sebi.gov.in

Click here to download the complete text of the above Circular in PDF Format- CIRCULAR- CIR/ IMD/ FII&C/ 13/ 2012, dated June 07, 2012.

Source: Securities and Exchange Board of India.

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CIRCULAR- MIRSD/ Cir-5 /2012- dated April 13, 2012

SEBI Registered Intermediaries –

KYC Registration Agencies (KRAs),

Stock Brokers through Stock Exchanges,

Depository Participants (DPs) through Depositories,

Mutual Funds (MFs)

Portfolio Managers (PMs)

Venture Capital Funds (VCFs)

Collective Investment Schemes (CIS),

Association of Mutual Funds in India (AMFI)

Please refer to SEBI circular no. CIR/MIRSD/16/2011 dated August 22, 2011, MIRSD/SE/Cir-21/2011 dated October 5, 2011, MIRSD/Cir-23/2011 dated December 2, 2011 and MIRSD/Cir- 26 /2011 dated December 23, 2011 on KYC related issues.

1. SEBI simplified the account opening process for investors and made it uniform across intermediaries in the securities markets vide aforementioned circulars. Further, to avoid duplication of KYC process with every intermediary, KRA system was developed for centralization of the KYC records in the securities markets. The system was made applicable for new clients who opened accounts with the intermediaries from January 1, 2012.

2. Now, for convenience of the clients registered prior to January 1, 2012 (hereinafter referred to as ‘existing clients’) and to expand the centralized database of the KYC records of the entire securities market, it is decided to upload the KYC details of the existing clients of the intermediaries in the current KRA system, in a phased manner.

3. The following guidelines for uploading the KYC data of the existing clients are being issued in consultation with the major Stock Exchanges, Depositories, KRAs, AMFI Brokers’ Associations and market participants:

a. For existing clients who trade / invest / deal with the intermediary anytime during the time period specified in the table given below starting from April 16, 2012, the intermediaries shall forthwith upload their KYC details in the KRA system. They shall also send original KYC documents to the KRA on continuous basis and complete the process within the prescribed time limits.

Considering the representations made by the intermediaries, they may send print outs of scanned documents to the KRAs instead of original documents in accordance with the schedule, certifying that they have retained the originals.

However, they must complete the process of sending the original documents to the KRA by March 31, 2013.

The KRAs shall update their systems and send letters to the clients for the receipt of the initial / updated KYC documents from intermediary in accordance with the time schedule.

The intermediaries shall maintain electronic records of the KYCs of their clients and keeping physical records would not be necessary.

Schedule for implementation (For the year 2012-13):

Existing clients of intermediary who trade/ invest/ deal with it during the below mentioned time

period

Timeline for intermediary to upload existing client’s KYC data on KRA system & send KYC documents to KRA

Timeline for KRA to update the record in their system & send acknowledgement to the existing client

April 16, 2012 – June

15, 2012

August 31, 2012

September 30, 2012

June 16, 2012 – August

31, 2012

October 31, 2012

November 30, 2012

September 1, 2012 –

October 31, 2012

November 30, 2012

December 31, 2012

November 1, 2012 –

December 31, 2012

January 31, 2013

February 28, 2013

January 1, 2013 –

February 28, 2013

March 15, 2013

March 31, 2013

 

The KYC data of the existing clients, who trade / invest or deal after the above mentioned schedule, shall be uploaded on a continuous basis.

b. While uploading the existing clients’ KYC details in the KRA system, the intermediary shall indicate the date of account opening / activation / updation of information. Necessary provisions shall be made by the KRAs in their systems. In case the KRA system indicates that the client’s KYC data already exists, the other intermediary shall upload the modifications, if any, after the aforesaid date so that the latest information about the client is available on the KRA system.

c. The intermediary shall highlight the KYC details about the existing client which is missing / not available, as per the KYC requirements specified vide circular dated October 5, 2011, only if it was not mandated earlier, when the client’s account was opened. KRAs shall make necessary provisions in their systems to categorize the KYC of such clients under the category of existing clients and highlight the information which is missing / not available.

d. When the existing client approaches another intermediary, it shall be the responsibility of that intermediary which downloads the data of that client from the KRA system, to update the missing information, do IPV as per requirements (if not done already) and send the relevant supporting documents, if any, to the KRA. Thereafter, the KRA system shall indicate the records as updated.

4. It is clarified that timelines mentioned in the schedule are the minimum requirements and the KYC data of the remaining existing clients can also be uploaded on the KRA system.

5. The Stock Exchanges and Depositories are directed to:

a. bring the provisions of this circular to the notice of the Stock Brokers and DPs, as the case may be, and also disseminate the same on their websites;

b. make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision in co-ordination with one another, as considered necessary;

c. monitor the compliance of this circular through half-yearly internal audits and inspections; and

d. communicate to SEBI, the status of the implementation of the provisions of this circular.

6. in case of mutual funds, compliance of this circular shall be monitored by the Boards of Asset Management Companies and the Trustees and in case of other intermediaries by their the Board of Directors.

7. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 17 of the SEBI (KYC (Know Your Client) Registration Agency) Regulations, 2011 to protect the interests of investors in securities and to promote the development of and to regulate the securities markets.

Click here to download the complete text of the above Circular in PDF Format- CIRCULAR- MIRSD/ Cir-5 /2012- dated April 13, 2012.

Source: Securities and Exchange Board of India.


CIRCULAR- Cir. /IMD/DF/8/2012 dated March 05, 2012

All Intermediaries registered with SEBI under Section 12 of the SEBI Act.

(Through the stock exchanges for stock brokers, sub brokers, depositories for depository participants, custodians for FIIs and FVCIs, AMFI for Asset Management Companies.)

1. SEBI vide circular No. CIR/IMD/DF/6/2010 dated July 30, 2010 made it mandatory for that all SEBI Regulated entities shall report their OTC transactions in CDs and CPs on the FIMMDA reporting platform within 15 minutes of the trade for online dissemination of market information with effect from August 16, 2010.

2. It has now been decided that all SEBI regulated entities shall settle their OTC trades in CDs and CPs on the lines of already existing process for settlement of OTC trades in corporate bonds, through National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL) with effect from April 01, 2012.

3. All transactions cleared and settled in terms of this circular will be subject to such norms as may be specified by NSCCL and ICCL.

4. This circular is issued in exercise of powers conferred by sub-section (1) of section 11 and section 11A of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

5. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Corp Debt Market”.

Click here to download the complete text of the above Circular- Clearing and Settlement of OTC trades in Commercial Paper (CPs) & Certificates of Deposit (CDs) – Mar 05, 2012.

Source: Securities and Exchange Board of India


CIRCULAR- CIR/ IMD/ FII&C/ 4/ 2012- dated January 25, 2012

Vide SEBI circulars Cir/IMD/DF/14/2011 and Cir/IMD/FII&C/3/2012 dated August 09, 2011 and January 13, 2012 respectively, Qualified Foreign Investors (QFI) were allowed to invest in schemes of Indian mutual funds and Indian equity shares subject to terms and conditions mentioned therein, including opening a demat account with qualified Depository Participant. The eligibility criteria for a SEBI registered Depository Participant (DP) to act as qualified Depository Participant were provided in the aforementioned circulars.

2. On a review, it has been decided to amend the eligibility criteria for a SEBI registered DP to act as a qualified Depository Participant. The revised eligibility criteria to act as qualified Depository Participants are as follows:

To become a qualified Depository Participant, a SEBI registered DP shall fulfill the following:

2.1. DP shall have net worth of Rs. 50 crore or more;

2.2. DP shall be either a clearing bank or clearing member of any of the clearing corporations;

2.3. DP shall have appropriate arrangements for receipt and remittance of money with a designated Authorised Dealer (AD) Category – I bank;

2.4. DP shall demonstrate that it has systems and procedures to comply with the FATF Standards, Prevention of Money Laundering (PML) Act, Rules and SEBI circulars issued from time to time; and

2.5. DP shall obtain prior approval of SEBI before commencing the activities relating to opening of accounts of QFI.

The eligibility criteria for qualified Depository Participant as contained in SEBI circulars dated August 9, 2011 and January 13, 2012 stands amended as above.

3. In order to maintain consistency in the maximum retention period of QFI’s fund in the single rupee pool bank account for investments/ re-investment out of redemption or dividend in schemes of Indian mutual funds vis-à-vis equity shares, it has been decided to amend clause(s) 4.7.5 and 4.7.7 of circular Cir/IMD/DF/14/2011 dated August 9, 2011.

4. Accordingly, the maximum retention period of QFI’s funds in the single rupee pooled account with the qualified depository participant as envisaged in clause(s) 4.7.5 and 4.7.7 of circular dated August 9, 2011 stands revised to five working days (including the date of receipt of foreign inward remittance through normal banking channels from the designated overseas bank account of the QFI into the single rupee pool bank account) for both investment as well as re-investment out of redemption proceeds in schemes of Indian mutual funds.

5. Further, in partial amendment to clause 4.7.8, it has been decided to allow credit of dividend payments to QFIs on account of investment in schemes of Indian mutual funds held by them to the single rupee pool bank account subject to the condition that in case dividend payments are credited to the single rupee pool bank account, they shall be remitted to the designated overseas bank accounts of the QFIs within five working days (including the day of credit of such funds to the single rupee pool bank account). Within these five working days, the dividend payments can be also utilized for fresh purchases in schemes of Indian mutual funds, if so instructed by the QFI

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

Click here to download the above Circular- Jan 25, 2012- Eligibility Criteria for Qualified Depository Participant.

Source: Securities and Exchange Board of India.