Tuesday, January 11, 2011

Introduction of Derivative Contracts on Foreign Stock Indices


SEBI has issued a circular which permit Stock Exchanges to introduce derivative contracts (Futures and Options) on foreign stock indices in the equity derivatives segment. This circular comes into force from today. It is available on SEBI website Click Here: at http://www.sebi.gov.in/circulars/2011/cirdnpd022011.pdf

Eligibility Criteria: The minimum market capitalization mandated is USD 100 billion and the stock exchange may introduce derivatives on a twenty four foreign stock index if the derivatives on that Index is available. Index should be is “broad based”, that is, the Index consists of a minimum of 10 constituent stocks and no single constituent stock has more than 25% of the weight, computed in terms of free float market capitalization, in the Index.

Trading in derivatives on Foreign Stock Indices shall be restricted to residents in India.
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Friday, January 7, 2011

High Food Inflation ─ Lessons for Indian Policy Makers


 
“Economics can be made more productive by paying greater and more explicit attention to the 'ethical' considerations that shape human behavior and judgments." Says Nobel laureate Dr. Amartya Sen

It is almost three years now since I took a conscious decision to retire prematurely from an exceptionally fulfilling and absorbing professional career of more than thirty and half years to pursue my subjects of interests. However, the recent past high inflation has already started making holes into my pockets, forcing me to rethink on that decision and join back the services. 

The latest release of the statistics on inflation blames high prices of food items, especially now on onions, led to a sharp spike in India's annual food inflation to 18.32 percent for the week ended Dec. 25, 2010, compared to 14.44 percent the week before. The fifth straight week of rise in food inflation rate, based on wholesale prices, was pushed back to double digits in the second week of December, according to weekly data released by the commerce and industry ministry. 

In the recent past some of our eminent economists, policy makers and lawmakers at seminars had opined that the double digit inflation is caused by some of exogenous factors; is a worldwide phenomenon and due to present high growth rate of economy – vociferously condemning Monsoon as one of the biggest culprit (when every excuse has exhausted blame it on “God–Varuna” - is the best adage) and had suggested prophetically that inflation will be brought down to around 6% before the end of the year [2010], but did not have any foreseeable technically viable Road Map either ‘A’ or ‘B’ in place to demonstrate their tall claims. The roles of others–who are also partners in the overall Supply Chain Management (SCM) in more than dozen other states and are condemning high price rise at the top of their voice, and recently executed “Bharat Bandh” successfully…!?, reasoning steep government expenditures being the cause…, were also totally confused and wanting, and don’t have any viable alternative techno–political solutions either. 

It’s high time that holistic solutions to these problems, like addressing SCM relating to agriculture – cultivation, production, storage and distribution, harnessing nexus of cartelization…; are genuinely well thought-out ‘jointly’ by all on long term basis and implemented at the earliest to ameliorate the sufferings of the Aam Admi”.
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Tuesday, January 4, 2011

SEBI’s Master Circular on Anti Money Laundering


Securities and Exchange Board of India (SEBI) has issued Master Circular on Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT) - Obligations of Intermediaries under the Prevention of Money Laundering Act, 2002 and Rules Framed there under which consolidates all the requirements/instructions issued by SEBI with regard to AML/CFT. This Circular is being issued to all the intermediaries and shall also apply to their branches and subsidiaries located abroad.

It's available at the SEBI's web site @ Click here.

This Master Circular is divided into two parts; the first part is an overview on the background and essential principles that concern combating money laundering (ML) and terrorist financing (TF). The second part provides a detailed account of the procedures and obligations to be followed by all registered intermediaries to ensure compliance with AML/CFT directives.




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