RBI should cut interest rate by at least 100 bps, says Yashwant Sinha

Earlier Yashwant Sinha stated that Reserve Bank of India could have been less negative in its recent monetary policy review.

Former Finance minister Yashwant Sinha said that RBI should cut interest rate by at least 100 bps.

Earlier Yashwant Sinha stated that Reserve Bank of India (RBI) could have been less negative in its recent monetary policy review.

There is a very good case for banks to pass on the benefit of rate cut to the consumers, added Sinha.

Block deal on BHEL

Around 7.5 lakh shares were traded in a multiple block at Rs. 249.15 on the NSE.

Shares of BHEL Ltd were trading higher 3.1% at Rs. 251.35 on NSE today. Around 7.5 lakh shares were traded in a multiple block at Rs. 249.15 on the NSE.

On Tuesday, the company has achieved one more milestone by successfully commissioning a 250 MW coal-based thermal plant in Assam. The unit has been commissioned at the upcoming Bongaigaon Thermal Power Station (TPS) in Assam.

The stock opened at Rs. 244 as against the previous close of Rs. 243.80 on NSE. It has hit a high of Rs. 252 and a low of Rs. 243.20 on NSE today.

Total traded quantity on the counter stood at over 25.57 lk shares on NSE.

Meanwhile, the NSE Nifty is up 26 points at 8,407.

Expect a wave of consolidation in the oil industry

With Wall Street unwilling to lend anymore and prospects of fall credit line redeterminations looming, further reducing liquidity, it is likely small E&P operators will turn to either mature producing asset sales or, more likely, to undeveloped assets which require more capital spending.

As stated previously, asset monetization by small E&P operators will start in earnest in the second half of this year out of cash flow necessity. Most, if not all, smaller market capitalization companies, public or private, are still free cash flow negative (operating cash flow less capital expenditure) and only a few of the larger ones are now, or will be, based on guidance. The point is, with volumes languishing (and probably poised to decline) tied to a flat oil futures price curve and with economics marginal at $60 per barrel, many E&P operators find themselves running through hedges in 2015 and still in need to finance their already reduced capital spending. 

With Wall Street unwilling to lend anymore and prospects of fall credit line redeterminations looming, further reducing liquidity, it is likely small E&P operators will turn to either mature producing asset sales or, more likely, to undeveloped assets which require more capital spending. We are seeing this being factored into stock prices as we speak, as small cap E&P valuations have collapsed to 4-6 times the Enterprise Value/Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA) from 6-8X EV/EBITDA. This not only reflects solvency risk but also the natural course of bringing assets to a price more in line with their underlying sale value. 

Wall Street is famous for getting public prices at levels that magically make deals happen and, with better funded E&P companies trading at substantial premiums vs. the leveraged ones, this is what is occurring. Take the collapse of Goodrich Petroleum (GDP) as a prime example as to what is now taking place and what will continue through the latter half of this year. Here is a company with $100million in liquidity but who continues to be free cash flow negative on current strip pricing in 2015 & 2016. However, it has a capital spending budget of $100 million for 2015 and 2016 and a free cash deficit of $60 million-$80 million in each of 2015 and 2016 depending on asset price assumptions. To plug the hole it hopes to sell its Eagle Ford assets this year. 

This isn't intended to make a case on GDP but to demonstrate the quantifiable ongoing stupidity of perpetuating models that aren't self-funded which were being fueled by easy money from the Federal Reserve. This also demonstrates how the OPEC strategy of maintaining an oil price ceiling is affecting U.S. E&P companies, forcing a consolidation which I believe will be unprecedented in size and scope. This will eventually improve the industry cash flow break even points, based on improved cost and scale and, as a result, cast doubt over the long term viability of the OPEC strategy. It appears the Saudis, despite being educated here in the US, have neglected their capital market & economic classes as we are witnessing the E&P model self-correcting itself. State run oil companies don't do this very well and usually fail to adjust to price movements while free market capital-based societies do. 

The revival of the US oil industry will occur after the upcoming consolidation and will reduce the number of cost inefficient players as well as the short selling in group while ultimately, self-healing the industry by improving cash flows, given the likelihood of oil remaining below $100. I fully expect valuations to expand in 2016, once the wave of asset sales starts in the months ahead. These operators with plenty of cash will be the biggest beneficiaries. 

On a final note, listening to the Federal Reserve yesterday it was clear that the pressure on the dollar rise is being lifted as they now realize that, despite attempts to fudge economic statistics, the US economy is in recession and rate hikes are a farce based on hope and little else. Expect the dollar to weaken considerably, breaching the 2015 lows thus supporting oil prices now and into 2016. This reality is not baked into expectations and the 1-2 percent dollar correction which took many by surprise is only the beginning.  

Standard & Poor’s launches "ASEAN Credit Spotlight"

With a GDP of about US$2.4 trillion and a young and growing population of 625 million, ASEAN is the fifth-largest global heavyweight when it comes to real GDP, and second only to China in terms of real GDP growth.

Standard & Poor’s Ratings Services published the first edition of the “ASEAN Credit Spotlight” e-newsletter, a publication that provides S&P Ratings' insights into the economies and credit markets of the Association of Southeast Asian Nations.

With a GDP of about US$2.4 trillion and a young and growing population of 625 million, ASEAN is the fifth-largest global heavyweight when it comes to real GDP, and second only to China in terms of real GDP growth. S&P Ratings estimates that GDP growth in ASEAN will increase by almost 5.5% in 2016, from 4.9% in 2014.

“More and more international investors are keen to participate in ASEAN’s growing financial markets,” said Matt Bosrock, Head of Asia-Pacific at S&P Ratings. “With ASEAN transitioning to a new phase of economic integration, there is increasing investor demand for our insights into the region’s changing economic landscape and credit trends.”

Integration of capital markets has intensified, with local and foreign bank and bond markets of ASEAN countries providing necessary funds for growth. These developments have broadened and deepened access to liquidity in the region, but financial market integration remains a work in progress. Indeed, a robust institutional and regulatory framework for financial markets is a key requirement to meet the region's growth potential. 

“Stable access to competitively-priced finance remains a top constraint for ASEAN companies to do business and attract investors. Standard & Poor’s is dedicated to helping investors assess their credit risk via independent credit research, including our new ASEAN Credit Spotlight e-newsletter,” Mr. Bosrock added.

The first edition of the ASEAN Credit Spotlight e-newsletter outlines challenges facing banks in the Philippines and Indonesia, recent rating actions on ASEAN corporates, credit trends affecting Indonesia’s property sector, and implications of potential structural reforms in Vietnam.

The publication also provides a snapshot of ASEAN’s economic and credit conditions via a selection of charts, including country-by-country GDP growth and nonperforming loan ratios. A ratings list of ASEAN issuers is also available.

Carry Forward! Rupee trades weak on Wednesday

The rupee is currently trading at 63.69/$, weaker by 10 paise from its previous close of 63.59/$ on Monday. 

Indian rupee, carrying over previous sessions’ weakness was trading weak against dollar on Wednesday due to weakness of other Asian counterparts. Besides, fresh demand for the American unit from importers in view of strength of dollar index against the basket of other currency also weighed on the sentiment. However, gains in local equities restricted further slide of Indian currency. On the global front, dollar hovered near its highest mark ​in over a week as the market's focus shifted from Greece to prospects ​regarding US interest rates.

The rupee is currently trading at 63.69/$, weaker by 10 paise from its previous close of 63.59/$ on Monday. The currency touched a high and low of 63.63/$ and 63.70/$ b respectively.    The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 63.64​​ and for Euro stood at 71.62 on June 23, 2015. While, the RBI’s reference rate for the Yen stood at 51.46, the reference rate for the Great Britain Pound (GBP) stood at 100.4121. 

Lupin gains after securing board's nod for fund raising

The company's board at their meeting on June 22, 2015, approved in principle the raising of funds up to Rs. 75,000 million through issue of securities. 

Lupin is trading higher on the BSE after the company's board at their meeting on June 22, 2015, approved in principle the raising of funds up to Rs. 75,000 million through issue of securities.

The stock is now up 1.8 percent at Rs. 1,806, with trades of around 15,000 shares on the BSE counter, as against two-week daily average volume of 75,000 shares.

Meanwhile, the Sensex has added 86 points at 27,891. 

Crompton and SOGO partner to widen consumer appliances portfolio

This alliance enables Crompton to offer a new range of high performance Kitchen Appliances to the Indian consumer. 

India’s most trusted electrical brand has entered into a long term alliance with SOGO, a European player in consumer appliances. The Spanish consumer appliances company is engaged in the marketing and worldwide sales of kitchen and home appliances and personal care products under the brand name SOGO since 1981. This alliance enables Crompton to offer a new range of high performance Kitchen Appliances to the Indian consumer.

Through this alliance Crompton will leverage SOGO’s robust cost effective supply chain to introduce the new range of products through its well established distribution network with a target of reaching 9000 premium retail counters. The high volume procurement projected will enable both Crompton and SOGO to achieve higher competitiveness.

Crompton has invested in building trust and delivering an engaging customer experience over a span of 77+ years and bears the advantage of developing consumer electricals adapted to the Indian market and its discerning consumer base for generations.  By enhancing its portfolio to appeal to the new generation audience and most importantly reach out to its loyal customers in India, Crompton is widening its lead with this move. The kitchen appliances segment has been growing at 14% in the past 3 years and we expect it to grow faster in the future.

SOGO will provide market intelligence and access to its international design houses to develop unique products for the Indian consumer. With increasingly complex and time-pressured lifestyles the demand for easy-to-use products and services with uncomplicated designs and clear value-benefit, is on the rise. Crompton is focused on consistently increasing its suite of consumer appliances that are elegantly designed, functional and smart to help discerning consumers enhance their home's efficiency and style.

Chairman and CEO, SOGO GROUP, Satish Raisinghani, said “It is our proud privilege to partner with India’s iconic brand Crompton.  SOGO has vision, honesty, devotion and strives to increase every customer’s overall satisfaction and trust”.

Commenting on this strategic alliance, Avantha Group Company CG’s CEO and Managing Director Mr. Laurent Demortier said, “We are excited to collaborate with SOGO. Crompton has a long-standing heritage of delivering high performance consumer appliances for the Indian market and is always seeking technologies to better serve our customers. This partnership with SOGO was a natural fit to support our strategy in providing new generation consumer appliances that affect a comfortable lifestyle.” 

Government of India announce the sale of four dated securities for Rs.15,000 crore on June 26

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on June 26. 

The Government of India has announced the sale (re-issue) of four dated securities as per the following details:

Sr. No.	Security	Notified Amount (₹ Crore)	Auction Date	Settlement date
1.	7.35% GS 2024	3,000	June 26, 2015 (Friday)	June 29, 2015 (Monday)
2.	7.88% GS 2030	6,000
3.	7.95% GS 2032	3,000
4.	8.17% GS 2044	3,000

Auctions will be conducted using multiple price method. Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on June 26, 2015. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon. The result of the auctions will be announced on June 26, 2015.

The stocks will qualify for the ready forward facility.

The underwriting of the Government Securities under auctions by the ‘Primary Dealers’ will be as per the “Revised Scheme of Underwriting Commitment and Liquidity Support” announced by the Reserve Bank vide circular RBI/2007-08/186 dated November 14, 2007. Bids for underwriting of the Additional Competitive Underwriting (ACU) portion can be submitted by ‘Primary Dealers’ from 10:30 AM up to 12.00 noon on June 25, 2015 (Thursday) on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

The Stocks will be eligible for “When Issued” trading for a period commencing from June 23, 2015 to June 26, 2015 in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI /2006-07/178 dated November 16, 2006 as amended from time to time.

Rupee opens at 63.64/$

The local unit hit a low of 63.68 and a high of 63.66 against the US dollar. 

The rupee today opened at 63.64 against the US dollar. The local unit hit a low of 63.68  and a high of 63.66 against the US dollar.

On Tuesday,  rupee ended at 63.53 against the US dollar. Global cues are positive for now. US indices ended with slight gains even as the Nasdaq saw a record close. The Greece issue remains on investors mind while progress remains slow here. Crude oil price saw some firming up and appreciation of the US dollar against major other currencies kept gains in check.

Federal Reserve Governor Jerome Powell on Tuesday said he was prepared to raise interest rates twice this year, once in September and once in December, as long as the economy performs as expected.

Asian market is in the green for now. China’s Shanghai index is up over a percent after some choppiness on Tuesday. The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index (PMI) edged up to 49.6, a three-month high, from 49.2, but remained below the 50 mark which separates contraction from expansion. 

Indices choppy; banking, capital goods stocks drag

Some buying activity is seen in pharma, metal, fmcg, IT and oil & gas sectors, while banking and capital goods sectors are showing weakness on BSE. 

The market after starting the day on a positive note - with the BSE Sensex up 48-odd points at 27,852 and the NSE Nifty up 18 points at 8,399, soon slipped a wee bit into red on the back of profit-taking in PSU Bank, finance, bank nifty and auto indices.

At 9:32 AM, the S&P BSE Sensex is trading at 27,835 up 30 points, while NSE Nifty is trading at 8,391 up mere nine points.

The BSE Mid-cap Index is trading up 0.45% at 10,699, whereas BSE Small-cap Index is trading up 0.31% at 11,180.

Some buying activity is seen in pharma, metal, fmcg, IT and oil & gas sectors, while banking and capital goods sectors are showing weakness on BSE.

ONGC, HUL, Coal India, Lupin, Sun Pharma, NTPC and Bhel are among the gainers, whereas Maruti Suzuki, Bajaj- Auto, SBI, TCS, HDFC and Axis Bank are losing sheen on BSE.

Asian market is in the green for now. China’s Shanghai index is up over a percent after some choppiness on Tuesday. The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index (PMI) edged up to 49.6, a three-month high, from 49.2, but remained below the 50 mark which separates contraction from expansion.

The Securities & Exchange Board of India announced relaxed listing norms on Tuesday aimed at encouraging the booming startup industry to tap the local market, thus opening up investor access to the dramatic growth opportunities offered by such firms. Sebi has also made the Application Supported by Blocked Amount (Asba) system mandatory for retail investors. Asba ensures the money needed to pay for shares will remain in the buyer's account until these are allotted.

Sebi board also approved re-classification of promoters as public shareholders under certain circumstances. This includes the new promoter replacing the previous one following an open offer or any other business recast such as an M&A. Stocks like Infosys could be a beneficiary, reports state.

Manpasand Beverages has finalized the allocation of 5,625,000 equity shares at Rs. 320 per equity share (upper end of the Price Band) aggregating to Rs. 180 crore (45% of the total Issue size of Rs. 400 crore) to 11 anchor investors. These include Goldman Sachs, Birla Sun Life Insurance, ICICI Prudential MF, Morgan Stanley, Bharti AXA Life, SBI MF, UTI MF, BNP Paribas, Shinhan BNPP, Amundi Funds & Ashoka Pte.

Among sectors, the CNX Pharma and Metal indices have advanced nearly a percent each at 12,003 and 2,342, respectively.

The FMCG, IT and Energy indices are the other notable gainers.

The PSU Bank index is the only loser, down 0.4 percent at 3,325.

In the Nifty space - UltraTech Cement has jumped almost 2 percent at Rs. 2,953. Lupin, NMDC, Idea Cellular, Zee Entertainment, Hindustan Unilever and Grasim Industries have also spurted a percent each.

On the losing side, Asian Paints has slipped 1.5 percent at Rs. 741. Tech Mahindra has shed over a percent at Rs. 547.

SBI, Punjab National Bank and HDFC have shed almost a percent each. 

SEBI Board Meeting: Key highlights and decisions taken

The market regulator announced easier listing norms for start-ups, new framework for promoters in listed companies to be reclassified as public shareholders, made electronic IPOs mandatory for companies listing from January 1, 2016, and reduced the minimum public holding requirement for listed companies wishing to raise further capital from the markets. 

The SEBI Board met at Mumbai on June 23, 2015.  Highlights of the decisions taken are as follows:
 
1. Streamlining process of public issues- Obviating the need to issue cheques:
Initial Public Offering (IPO) process streamlined to, reduce time period for listing of issues from T+12 days to T+6 days, increase reach of retail investors to access the IPO and reduce the cost of public issues. With this issuers will have faster access to the capital raised and investors will have early liquidity.
 
2. Simplified framework for capital raising by technological start-ups and other companies.
 
Enabling provisions approved for capital raising by technological start-ups and other companies through Institutional Trading Platform.
 
3. Fast Track Issuances through FPOs or Rights Issue:
Requirement of market capitalization of public shareholding of the issuer for Fast Track Issues (FTI) reduced to Rs. 1000 crore in case of Follow on public offering (FPO) and Rs. 250 crore in case of rights issue. This will help more listed companies to raise further capital using fast track route.
 
4. Review of Offer for Sale (OFS) through stock exchange mechanism
Changes proposed to encourage greater retail participation in OFS.
 
5. Reclassification of Promoters as Public:
A rationalised, simple framework put in place for reclassification of promoters as public. The proposed framework will bring in consistency and also enable investors to take informed decisions based on any such move by the company / promoters
 
6. Annual Report for 2014-15
Annual Report for 2014-15 approved by the Board.
 
The details of some of the decisions taken are as follows:
 
1. Streamlining the Process of Public Issues - Obviating the need to issue cheques
In order to reduce the post-issue timeline for listing from existing T+12 days to T+6 days, increase the reach of retail investors and reduce the costs involved in public issue of equity shares and convertibles, Board took the following decisions:

• Presently more than 99.5 % applications are received from centres where ASBA facility is available. Based on an analysis of a few public issues, in terms of amount, ASBA applications account for 99.90% of the total bid amount received from all investors. Considering the reach and advantages of ASBA, it shall now be mandatory for all investors to make ASBA applications. Amongst many other significant advantages, ASBA enables investors to give the mandate for payment of application money in the application form itself without suffering loss of interest for the intervening period. It also obviates the hassle of refund of money by the issuer as per the difference in application amount and the amount for which shares are finally allotted.
• 
  
• In order to substantially enhance the points for submission of applications, Registrar and Share Transfer Agents (RTAs) and Depository Participants (DPs) shall also be allowed to accept application forms (both physical as well as online) and make bids on the stock exchange platform. This will be over and above the stock brokers and banks where such facilities are presently available.
• 
  
• To help intermediaries and banks to modify their existing systems and train their staff and also enable the investors to adapt to the new system, there will be a phase-in period of 6 months. Accordingly, a public issue which opens on or after January 01, 2016 will have to follow the new system.

 
2. Simplified Framework for Capital Raising by technological start ups and other companies on Institutional Trading Platform.
The Board undertook a review of the extant regulatory framework in the primary market and noted the suggestions of market participants on making the existing avenues for capital raising amenable for accommodating a larger number of start-up companies. Based on the same, the Board approved the following proposals to amend the regulations concerning the ITP Platform:

• The platform shall now be called as Institutional Trading Platform (ITP) and shall facilitate capital raising as well.

 
The said platform will be made accessible to:

• companies which are intensive in their use of technology, information technology, intellectual property, data analytics, bio-technology, nano-technology to provide products, services or business platforms with substantial value addition and with at least 25% of the pre-issue capital being held by QIBs (as defined in SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009), or
• Any other company in which at least 50% of the pre-issue capital is held by QIBs.
• No person (individually or collectively with persons acting in concert) in such a company shall hold 25% or more of the post-issue share capital. 
• 
  
• Considering the nature of business of companies which may list on the said platform, disclosure may contain only broad objects of the issue and there shall be no cap on amount raised for General Corporate Purposes. Further, the lock in of the entire pre-issue capital shall be for a period of 6 months from the date of allotment uniformly for all shareholders. 
• 
  
• As the standard valuation parameters such as P/E, EPS, etc. may not be relevant in case of many of such companies, the basis of issue price may include other disclosures, except projections, as deemed fit by the issuers. 
• 
  
• Companies intending to list on the proposed ITP, shall be required to file draft offer document with SEBI for observations, as provided in SEBI (ICDR) Regulations, 2009. 

Only two categories of investors, i.e.

1. Institutional Investors (QIB as defined in SEBI (ICDR) Regulations, 2009 along with family trusts, systematically important NBFCs registered with RBI and the intermediaries registered with SEBI, all with net-worth of more than Rs. 500 crore) and
2. Non-Institutional Investors (NIIs) other than retail individual investors can access the proposed ITP. 
3. In case of public offer, allotment to institutional investors may be on a discretionary basis whereas to NIIs it shall be on proportionate basis. Allocation between the said two categories shall be in the ratio of 75% and 25%, respectively. 
4. 
   
5. In case of discretionary allotment to institutional investors, no institutional investor shall be allotted more than 10% of the issue size. All shares allotted on discretionary basis shall be locked-in in line with requirements for lock-in by Anchor Investors i.e. 30 days at present. 
6. 
   
7. The minimum application size in case of such issues shall be Rs. 10 lakhs and the minimum trading lot shall be of Rs. 10 lakhs. 
8. 
   
9. The number of allottees in case of a public offer shall be 200 or more. 
10. The company will have the option to migrate to main board after 3 years subject to compliance with eligibility requirements of the stock exchanges. 
11. 
    
12. For Category I and II AIFs, which are required under the SEBI (Alternative Investment Funds) Regulations, 2012 to invest a certain minimum amount in unlisted securities, investment in shares of companies listed on this platform may be treated as investment in 'unlisted securities' for the purpose of calculation of the investment limits.

Grandfathering of existing companies listed on SME-ITP:
xiv. The existing companies listed on SME-ITP may continue to be guided by the existing regulatory framework for them including applicable relaxations from compliance with corporate governance requirements.
 
Rationalisation of disclosures for proposed ITP as well as main board:
xv. Further, in order to rationalize the disclosures requirements for all issuers whether intending to list on the main board or the proposed ITP, it has been decided that the disclosures in offer document with respect to group companies, litigations and creditors shall be in accordance with policy on materiality as defined by the issuer. However, all relevant disclosures shall be available on the website of the issuer. Also, the product advertisements of an issuer will not be required to give details of public/rights issue.
 
3. Fast Track Issuances - Follow on Public Offerings and Rights Issues
In order to enable more number of listed companies to raise further capital using fast-track route, Board approved the proposal to reduce the minimum public holding requirement from Rs. 3000 crore to Rs. 1000 crore in case of FPO and to Rs. 250 crore in case of rights issue, subject to compliance with following additional conditions:

• In case of rights issue, promoters shall not renounce their rights, except to the extent of renunciations within the promoter group, or for the purposes of complying with minimum public shareholding norms;
• Annualized delivery based trading turnover requirement of 10% of the total paid up capital;
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• No conflict of interest between the lead manager and the issuer or its group or associate company in accordance with applicable SEBI Regulations;
• 
  
• Shares of the company should not have been suspended from trading as a disciplinary measure in past 3 years;
• 
  
• &Issuer, promoter group and directors of the issuer should not have settled any alleged violation of securities laws through the consent mechanism with the Board in last 3 years. This is in addition to the existing condition that no show-cause notices should have been issued or prosecution proceedings initiated by SEBI or pending against the issuer or its promoters or whole time directors.

 
4. Review of Offer for Sale (OFS) of Shares through stock exchange mechanism
A discussion paper was floated on the review of Offer for Sale of Shares (OFS) through Stock Exchange mechanism. The Board considered the comments / suggestions received on the discussion paper and approved the following changes to the present OFS framework:

• To ensure increased retail participation in the OFS process, OFS notice shall be continued as per present practice i.e. latest by T-2 days, however, T-2 day shall be reckoned from banking day instead of trading day.
• 
  
• To simplify the bidding process for retail investors, it would be mandatory for the seller to provide the option to retail investors to place their bids at cut off price (default option) in addition to placing price bids.

 
5. Re-classification of Promoters as Public
In order to put in place a policy framework with respect to re-classification of promoters in listed companies as public shareholders under various circumstances, the Board has approved the proposal for putting in place a regulatory framework for the purpose.
 
Existing promoter of a listed entity may cease to be a promoter and/or re-classify itself as public in the following circumstances, on compliance with conditions stated thereunder:
 
Pursuant to change in promoter

• When a new promoter replaces the previous promoter subsequent to an open offer or in any other manner, re-classification shall be permitted subject to approval of shareholders in the general meeting.
• Shareholders need to specifically approve whether the outgoing promoter can hold any Key Management Personnel (“KMP”) position in the company. In any case, the outgoing promoter may not act as KMP for a period of more than 3 years from the date of shareholders’ approval.
• The outgoing promoter can’t hold more than 10% shares of the company.

 
Inheritance

• In case of transmission/succession/inheritance, the inheritor shall be classified as promoter.

Company not having any identifiable promoter
Existing promoters may be re-classified as public in case the company becomes professionally managed and does not have any identifiable promoter. A company will be considered as professionally managed for this purpose, if:

• No person or group along with Persons Acting in Concert (PACs) taken together holds more than 1% shares of the company (including any convertibles/outstanding warrants/ADR/GDR Holding).
• Mutual Funds/Banks/Insurance Companies/Financial Institutions/FPIs can each hold up to 10% shares of the company (including any convertibles/outstanding warrants/ADR/GDR Holding).
• Erstwhile promoters and their relatives may hold KMP position in the company only subject to shareholders’ approval and for a period not exceeding 3 years from the date of shareholders’ approval.
•   The following conditions shall also be applicable:
• 
  
• The outgoing promoter shall not have any special rights through any formal or informal arrangements.
• The outgoing promoter shall not, directly or indirectly, exercise control over the affairs of the company.
• Increase in public shareholding pursuant to re-classification of promoters may not be counted towards achieving compliance with minimum public shareholding (MPS) requirement under clause 40A of equity listing agreement read with rule 19A of the Securities Contracts (Regulations) Rules, 1957 (SCRR).
• If any public shareholder seeks to re-classify itself as promoter, it shall be required to make an open offer to the shareholders and would not be eligible for exemption from the said obligation.
• The event of re-classification may be disclosed as a material event in accordance with the listing agreement/regulations.
• 
  
• In order to remove difficulties in specific cases the Board authorized the Chairman, SEBI to take required measures on a case to case basis.

 
6. SEBI Annual Report: 2014-15
The Board considered and approved the SEBI Annual Report: 2014-15. In compliance with Section 18(2) of SEBI Act, 1992, the same Annual Report would be submitted to the Central Government.
 
7. FMC- SEBI merger
The Board also discussed operational issues relating to the merger of Forward Markets Commission (FMC) with SEBI.
 
8. Recommendations of the Depository System Review Committee (DSRC)
An expert committee was constituted by SEBI, to inter-alia review and assess the depository system on the basis of CPSS-IOSCO principles so as to benchmark with global best practices. In its meeting held on November 19, 2014 the Board broadly accepted the recommendations of the committee.
 
The Board today reviewed the status of the implementation of recommendations and noted that the Depositories have been advised to implement the following:

• Develop a mechanism to maintain complete reconciled record of total issued and listed capital, including both physical and dematerialized shares.
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• Risk Management Policy at the Depositories and Information Technology (IT) infrastructure of the Depository Participants.
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• Popularization of e-KYC among Depository Participants.
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• Put in place systems to facilitate generation and dispatch of single Consolidated Account Statements (CAS) for investors having investments in securities and Mutual Funds, which has been implemented with effect from March 01, 2015.
• 
  

9. Interim Use of Funds by the Issuers
In order to prevent misuse of funds during the interim period pending utilization by the issuer, for funds raised through public / rights issue in accordance with SEBI (ICDR) Regulations, 2009, the Board decided that net Issue proceeds pending utilization (for the stated objects) shall be deposited only in the Scheduled Commercial Banks included in the Second Schedule of Reserve Bank of India Act, 1934. In case of public / rights issue of Indian Depository Receipts, the issuer shall keep the funds in a bank having a credit rating of 'A' or above by an international credit rating agency.

Nikkei hits 18-1/2 year peak

The Nikkei rose 0.5 per cent to 20,922.00, rising above its peak of 20,833.21. 

Japan's Nikkei share has hit to the highest level since 1996 on signs of a pick up in economic growth and hopes that Greece will avoid a debt default. 

The Nikkei rose 0.5 per cent to 20,922.00, rising above its peak of 20,833.21. 

Asian market is in the green for now. China’s Shanghai index is up over a percent after some choppiness on Tuesday.