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29/04/2020

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04/01/2017

14/08/2013

http://www.business-standard.com/article/pf/lessons-from-nsel-s-fiasco-113081400197_1.html

The National Spot Exchange fiasco is another lesson for retail investors - don't invest in products that offer exceptional returns. According to industry sources, there are around 8,000 - 15,000 retail customers (with exposure of Rs 10 lakh or less)

09/08/2013

Ten things you wanted to know about the new Companies Bill

The Companies Bill 2012 has been tabled in the Rajya Sabha and is expected to be passed in the monsoon session.

Why do we need a new company law?

When the existing company law - The Companies Act, 1956 was passed, Bill Gates was a few months old. Many of our own corporate leaders were toddlers. Sachin Pilot, the corporate Affairs minister, was not even born. It is a relic of an era bygone. The law, though amended 25 times, is perceived to be not in sync with the new corporate world. Hence, the new bill.

How long has it taken to change the law?

An entire term of the government. It was first introduced as Companies bill 2009 in Loksabha on August 3, 2009. It was referred to standing committee on finance a month later. It came back to the house as Companies Bill 2011. But was referred to the standing committee again.

What is the course the latest version of the bill took?

More than 7 months have passed since Lok Sabha passed the Bill. More than 12 months have passed since the submission of second report on Companies Bill by Parliamentary Standing Committee on Finance.

What happens if the Rajya Sabha does not pass it in this session?

With the elections looming large, the bill may not get another chance. If it is not passed in the upper house, being a finance bill it will lapse with this Lok Sabha and has to reintroduced in the lower house all over again.

What are the key changes?

The law has been rewritten extensively with several new provisions for investor protection, better corporate governance and corporate social responsibility etc. It defines a number of new terms that have come into vogue in recent times.

What are the new corporate terms defined in the bill?

The Bill prescribes 33 new definitions. Some of these are:

Associate Company
Small Company
Employee Stock Option
Promoter
Related Party
Turnover
Chief Executive Officer
Chief Financial Officer
Global Depository Receipt

What are the investor protection measures?

The bill provides for class action suit, which is key weapon for individual shareholders to take collective action against errant companies. Better disclosure requirements in financial statements and disclosure of interests of directors etc. It has also streamlined procedures relating to disclosure of transactions with parties related to directors, promoters etc.

What are the anti-fraud measures?

It provides for prohibition on forward dealings in securities of company by key managerial personnel, insider trading rules and restriction on non-cash transactions involving directors.

How does it help ease of doing business?

It provides for new concepts such as a single person company. Cap on number of persons in a private company raised to 200. E-voting has been recognized.

What happens after Rajya Sabha passes the bill?

The bill goes for presidential assent. The draft rules on the companies act will then be made public and the act comes into effect with notification by Ministry of Corporate Affairs.

05/08/2013

FAQs on NSEL payment crisis10 things you should know about the NSEL payment crisis

The Rs 5500 crore payment crisis faced by the Financial technologies controlled, National spot exchange ltd has raised several questions. While there are several aspects to the crisis and the players affected are battling along with the exchange promoters to settle the crisis, we bring you 10 frequently asked questions on the NSEL payment crisis.

1) What is a Spot Exchange?
A spot exchange is an electronic version of the age-old mandi, where buyers and sellers meet to exchange goods and money.

2) How many spot exchanges are there in India?
National Spot Exchange floated by Financial technologies, NCDEX Spot floated by the NSE group and R-Next floated by Reliance Capital are the three main spot exchanges

3) What was the origin of trouble in NSEL?
NSEL offered a pair of contracts, one where settlement happens in two days and a second where the settlement is deferred by 25-50 days. This allowed speculators to make financial returns without actually taking physical possession of commodities

4) What happens to the underlying commodity?
The commodity is required to be delivered physically under the contract specifications. But the exchange facilitated use of electronic warehouse receipts thereby enabling financial investors to make use of the arbitrage without taking physical possession of goods. For example, the goods which are delivered in the first contract, which is a buy lies in the warehouse itself till the delivery is due on the reverse leg, which is a sell, helping speculators run amok.

5) Did NSEL try to stop this round tripping?
Not really. In fact, it made it easier in some contracts. For example, the contract specifications said "Storage Charges are waived off for those members and their constituents, who sell Jeera on JEERUNJH25 out of the delivery receivable against the purchase position of JEERAUNJH2 contracts."

6) What did the government do?
The government asked NSEL to stop this and asked it to wind up. The direction came on July 12.

7) What was NSEL’s response?
Exchange gave an undertaking saying it would do so but asked for 15 days time.

8) Why the sudden suspension?
The exchange was directed by the government to close out the contracts and settle it immediately on July 31. But NSEL cited "grave emergency" and market "disequilibrium" and deferred the settlement by further 15 days. It later said it wants another five months to settle.

9) Why is NSEL not settling?
There is a fear that the underlying stock is insufficient to cover the liabilities. While the exchange claimed that it had stock worth Rs 6200 crore, independent analysis shows there may be shortfalls. Business Standard visits to godowns also did not show satisfactory results.

10) Who is affected?
All people who have exposure to the exchange, brokers, high net worth investors and FAQs on NSEL payment crisis10 things you should know about the NSEL payment crisis

04/07/2013

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KINDLY NOTE our New Number : 8080484001 for all admission related query at Vantage Institute.