Day Trading Stocks & Futures
- Thread starter TraderRavi
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https://www.business-standard.com/a...o-be-applicable-from-fy20-119120201427_1.html
FM Sitharaman ends MAT confusion: Reduced rate to be applicable from FY20
Reduced rate applicable from current FY; final call on fiscal deficit will be taken at Revised Estimate stage
FM Sitharaman ends MAT confusion: Reduced rate to be applicable from FY20
Reduced rate applicable from current FY; final call on fiscal deficit will be taken at Revised Estimate stage
Karvy case: Bajaj Fin moves SAT to challenge Sebi order
Bajaj Finance on Monday approached the Securities Appellate Tribunal (SAT) to challenge a Sebi order of November that had directed depositories to transfer shares back to the original shareholders’ demat accounts after the Karvy Stock Broking scandal broke out. The tribunal has reserved its orders for Tuesday.
The Sebi ex-parte (without hearing the other side) order had directed that the securities, which Karvy Broking was alleged to have illegally pledged to raise money, be returned to the broker’s clients. Bajaj Finance’s counsel Janak Dwarkadas argued that the company had done its due diligence and hence was not at fault at lending against the pledged securities. He added that the lending was based on a declaration made by Karvy Broking that the shares did not belong to its clients.
Dwarkadas said Bajaj Finance would be unsecured to up to Rs 344 crore due to the Sebi order. He also said that the order will have “serious repercussions” on the financial sector as there are other banks and NBFCs in a similar situation.
Sebi counsel Rafique Dada had said that Karvy Broking’s demat account was categorised as a client account since 2000 and that both Karvy and Bajaj Finance ought to have known that the shares belonged to clients.
He also cited a June 2019 Sebi circular, which had required separation of securities of clients from that of Karvy’s. Karvy Broking counsel Vikram Nankani said it would submit to the tribunal’s order. Six other financial entities, including banks, also approached SAT against the Sebi order on Monday and their matters are likely to be heard on Tuesday.
Read more at:
http://timesofindia.indiatimes.com/...ofinterest&utm_medium=text&utm_campaign=cppst
Bajaj Finance on Monday approached the Securities Appellate Tribunal (SAT) to challenge a Sebi order of November that had directed depositories to transfer shares back to the original shareholders’ demat accounts after the Karvy Stock Broking scandal broke out. The tribunal has reserved its orders for Tuesday.
The Sebi ex-parte (without hearing the other side) order had directed that the securities, which Karvy Broking was alleged to have illegally pledged to raise money, be returned to the broker’s clients. Bajaj Finance’s counsel Janak Dwarkadas argued that the company had done its due diligence and hence was not at fault at lending against the pledged securities. He added that the lending was based on a declaration made by Karvy Broking that the shares did not belong to its clients.
Dwarkadas said Bajaj Finance would be unsecured to up to Rs 344 crore due to the Sebi order. He also said that the order will have “serious repercussions” on the financial sector as there are other banks and NBFCs in a similar situation.
Sebi counsel Rafique Dada had said that Karvy Broking’s demat account was categorised as a client account since 2000 and that both Karvy and Bajaj Finance ought to have known that the shares belonged to clients.
He also cited a June 2019 Sebi circular, which had required separation of securities of clients from that of Karvy’s. Karvy Broking counsel Vikram Nankani said it would submit to the tribunal’s order. Six other financial entities, including banks, also approached SAT against the Sebi order on Monday and their matters are likely to be heard on Tuesday.
Read more at:
http://timesofindia.indiatimes.com/...ofinterest&utm_medium=text&utm_campaign=cppst
Lenders on thin ice as Karvy mess may expose due diligence failure
Also, norms for brokers and banks laid down by their respective regulators do not seem to be on the same page.
While lenders are facing chances of huge write-offs due to fraudulent activities of Karvy, it also likely that they skipped a few check-boxes themselves while lending against third party shares. Also, norms for brokers and banks laid down by their respective regulators do not seem to be on the same page.
While the Securities and Exchange Board of India (SEBI) has, on several occasions, tweaked norms to deal with misuse of clients' shares by brokers, lenders are still following the set of norms on extending loans against shares and debentures that were last revised in 2015.
"There seem to be clear lapses on part of banks as far as due diligence is concerned. SEBI had barred brokers from raising funds by pledging clients' shares this year and banking norms are also in place if such a facility was availed in the past. It's not clear whether banks followed these rules while lending and so their position seems to be problematic," said Bharat Chugh, Partner, L&L Partners.
On June 20, SEBI issued circular barring brokers from raising funds from banks as well as non-banks by pledging clients’ shares and ordered segregation and reporting of clients stocks and funds. Also, clients’ securities that are already pledged shall be unpledged by August 31, 2019, and returned to the clients after fulfilment of a pay-in obligation. These norms came into effect on September 1.
According to RBI's Master Circular that was last updated in July 2015, lenders can provide need-based overdraft facilities or lines of credit to brokers against shares and debentures held by them as stock-in-trade.
The RBI stated that banks should make a "careful assessment" of need-based requirements for such finance. This should be done by taking into account the financial position of the borrower, operations on his own account and on behalf of clients, income earned, the average turnover period of stocks and shares and the extent to which the broker's funds are required to be involved in the business operations.
Also, large scale investment in shares and debentures on own account by stock and share brokers with bank finance, should not be encouraged. RBI norms also stated that the securities lodged as collateral should be easily marketable.
"If it is prior to SEBI regulation kicking in, and banks have followed due diligence and registered charges on these shares with the depository, then they may have a right to these shares. But in a case where there are innocent investors on one side, it is likely that the judgement will be in their favour," Chugh added.
On December 2, nearly 90 percent of Karvy's clients got back their securities after National Securities Depository Ltd (NSDL) transferred the shares under directions from SEBI. Meanwhile, Karvy is under forensic audit initiated by NSE.
Bajaj Finance, which is one of the lenders, has moved the Securities Appellate Tribunal (SAT) contesting SEBI's decision to return the pledged shares to Karvy's clients. The matter is due to be heard on December 3.
https://www.moneycontrol.com/news/b...may-expose-due-diligence-failure-4693991.html
Also, norms for brokers and banks laid down by their respective regulators do not seem to be on the same page.
While lenders are facing chances of huge write-offs due to fraudulent activities of Karvy, it also likely that they skipped a few check-boxes themselves while lending against third party shares. Also, norms for brokers and banks laid down by their respective regulators do not seem to be on the same page.
While the Securities and Exchange Board of India (SEBI) has, on several occasions, tweaked norms to deal with misuse of clients' shares by brokers, lenders are still following the set of norms on extending loans against shares and debentures that were last revised in 2015.
"There seem to be clear lapses on part of banks as far as due diligence is concerned. SEBI had barred brokers from raising funds by pledging clients' shares this year and banking norms are also in place if such a facility was availed in the past. It's not clear whether banks followed these rules while lending and so their position seems to be problematic," said Bharat Chugh, Partner, L&L Partners.
On June 20, SEBI issued circular barring brokers from raising funds from banks as well as non-banks by pledging clients’ shares and ordered segregation and reporting of clients stocks and funds. Also, clients’ securities that are already pledged shall be unpledged by August 31, 2019, and returned to the clients after fulfilment of a pay-in obligation. These norms came into effect on September 1.
According to RBI's Master Circular that was last updated in July 2015, lenders can provide need-based overdraft facilities or lines of credit to brokers against shares and debentures held by them as stock-in-trade.
The RBI stated that banks should make a "careful assessment" of need-based requirements for such finance. This should be done by taking into account the financial position of the borrower, operations on his own account and on behalf of clients, income earned, the average turnover period of stocks and shares and the extent to which the broker's funds are required to be involved in the business operations.
Also, large scale investment in shares and debentures on own account by stock and share brokers with bank finance, should not be encouraged. RBI norms also stated that the securities lodged as collateral should be easily marketable.
"If it is prior to SEBI regulation kicking in, and banks have followed due diligence and registered charges on these shares with the depository, then they may have a right to these shares. But in a case where there are innocent investors on one side, it is likely that the judgement will be in their favour," Chugh added.
On December 2, nearly 90 percent of Karvy's clients got back their securities after National Securities Depository Ltd (NSDL) transferred the shares under directions from SEBI. Meanwhile, Karvy is under forensic audit initiated by NSE.
Bajaj Finance, which is one of the lenders, has moved the Securities Appellate Tribunal (SAT) contesting SEBI's decision to return the pledged shares to Karvy's clients. The matter is due to be heard on December 3.
https://www.moneycontrol.com/news/b...may-expose-due-diligence-failure-4693991.html
It is Karvy who is at fault. They have fraudulently transfered clients' shares to its own account and pledged these shares to get loan from Bajaj Finance and few banks.
It is high time that SEBI comes down on stock brokers and stop the practice of giving a POA to the brokers....NSDL as well as CDSL has facility of transferring shares on internet and clients can transfer the shares against the settlement obligations on internet...SEBI will take some such decision soon.
This POA issue bothers all investors but brokers insist on POA.....In one of the brokers I deal with , I can transfer the shares sold using speed e of NSDL on internet from outside the broking house DP ,so they cannot transfer my shares on their own.......
Smart_trade
It is high time that SEBI comes down on stock brokers and stop the practice of giving a POA to the brokers....NSDL as well as CDSL has facility of transferring shares on internet and clients can transfer the shares against the settlement obligations on internet...SEBI will take some such decision soon.
This POA issue bothers all investors but brokers insist on POA.....In one of the brokers I deal with , I can transfer the shares sold using speed e of NSDL on internet from outside the broking house DP ,so they cannot transfer my shares on their own.......
Smart_trade
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Was just checking the orderbooks of stocks.
Around 0.1 % around the current market price. Order books of fno stocks like ambujacem have 15-20 lacs on lower side. Tata global, brittania all have in this range 15-20 lacs. SBI and other liquid stocks have order book size of in excess of 50 lacs.
So I think one should be able to reach a size of 15 lacs trade size in stocks of fno category without worrying too much about slippage. Now offcourse there could be orders competing to eat that liquidity as well.
So any comments on this one are you guys able to fill orders of 15 lacs without high slippage I mean market orders for SL-M when a SL hits slippage should on an average not be very high.
Around 0.1 % around the current market price. Order books of fno stocks like ambujacem have 15-20 lacs on lower side. Tata global, brittania all have in this range 15-20 lacs. SBI and other liquid stocks have order book size of in excess of 50 lacs.
So I think one should be able to reach a size of 15 lacs trade size in stocks of fno category without worrying too much about slippage. Now offcourse there could be orders competing to eat that liquidity as well.
So any comments on this one are you guys able to fill orders of 15 lacs without high slippage I mean market orders for SL-M when a SL hits slippage should on an average not be very high.
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