Mandatory disclosures by the media of its stake in corporate sector - Sebi Press Release

PR No.200/2010

Mandatory disclosures by the media of its stake in corporate sector

SEBI had taken up with Press Council of India its concerns on practice of many media groups entering into agreements, such as ‘Private Treaties’, with companies. Typically, such arrangements are with companies which are listed or which proposes to come out with public offerings. These, in general, entail a company giving stake in it (shares, warrants, bonds etc.) in return for media coverage through advertisements, news reports, advertorials etc. in the print or electronic media.

It was felt that such agreements may give rise to conflict of interest and may, therefore, result in dilution of the independence of press. This may consequently compromise the nature, quality and content of the news/editorials relating to such companies. Needless to say, biased and motivated dissemination of information, guided by commercial considerations can potentially mislead investors in the securities market. Such journalism would not be in the interest of securities market.

SEBI, given its legal mandate to protect the interest of investors felt that such brand building strategies of media groups, without appropriate and adequate disclosures may not be in the interest of investors and financial markets. There are prescribed norms of Journalistic Conduct that require journalists to disclose any interest that they may have in the company about which they are reporting. However, there are no equivalent requirements in the case of media companies holding a stake in the company which is being reported / covered.

Press Council of India has informed SEBI that in its meeting held on 22.02.2010 at New Delhi, it has accepted the following suggestions of SEBI and has mandated the following:

1) Disclosures regarding stake held by the media company should be made in the news report/ article/ editorial in newspapers/television relating to the company in which the media group holds such stake.

2) Disclosure on percentage of stake held by media groups in various companies under such 'Private Treaties' on the website of media groups should be made.

3) Any other disclosures relating to such agreements such as any nominee of the media group on the Board of Directors of the company, any management control or other details which may be required to be disclosed and which may be a potential conflict of interest for media group, should also be mandatorily disclosed.

The copy of the Press Release sent to SEBI by Press Council of India in the matter, is enclosed.

The above is for information and necessary compliance by all concerned.

Mumbai

August 27, 2010

Procedure for filing statutory returns 2010

TO AVOID LAST MINUTE RUSH AND SYSTEM CONGESTION IN MCA21 DUE TO HEAVY FILING IN LAST 10 DAYS OF THE MONTHS OF OCTOBER AND NOVEMBER 2010, IT IS REQUESTED BY MCA THAT FILING OF ANNUAL RETURN AND BALANCE SHEET MAY BE DONE AS PER THE DATES MENTIONED IN THE ATTACHED DOCUMENT.

Name availability guidelines for Companies

Superseding all previous Circulars and Instructions (Circular Letter No. 10(1)–RS/60, dated 01-04-1960 and Circular Letter No. 10 / (19)-RS/61, dated 15-03-1962) the Department of Company Affairs has laid down the new principles for deciding cases for availability of names.

Click here for the new guidelines.

Foreign Trade Policy 2009-2014

In exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act,1992 (No.22 of 1992) read with paragraph 1.2 of the Foreign Trade Policy, 2009- 2014, the Central Government hereby notifies the Foreign Trade Policy, 2009-2014 incorporating the Annual Supplement as updated on 23rd August, 2010. The policy shall come into force w.e.f. 23rd August, 2010.

Click here for the highlights of the Foreign Trade Policy.

Click here for thefull text of the Foreign Trade Policy.

Click here for the Foreign Trade Procedures.

Requirement to mention the firm registration number

Announcement on – Requirement to mention the firm registration number allotted by ICAI in all reports issued, including certificates, by members of the ICAI - (16-08-2010)

ANNOUNCEMENT FOR THE ATTENTION OF THE MEMBERS

Attention of the members is invited to the announcement regarding requirement relating to mentioning the firm registration number in the audit reports and resolution passed by the company for appointment of statutory auditors, published on page 1312 of the February 2010 issue of the Journal.

The Council of the Institute of Chartered Accountants of India, in terms of the decision taken at the 296th meeting held in June 2010 has decided to extend the requirement to mention the firm registration number to all reports issued pursuant to any attestation engagement, including certificates, issued by the members as proprietor of/ partner in the said firm. The requirement shall apply where such firm registration number has been allotted by the Institute of Chartered Accountants of India.

The Council further decided to make this requirement effective for all attestation reports/ certificates issued on or after 1st October, 2010.

Securities Contracts (Regulation) (Second Amendment) Rules, 2010 - Amendment in rules 2, 19 and 19A

Securities Contracts (Regulation) (Second Amendment) Rules, 2010 - Amendment in rules 2, 19 and 19A

Notification No. G.S.R. 662(E), dated 9-8-2010

In exercise of the powers conferred by clause (ha) of sub-section (2) of section 30 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Central Government hereby makes the following rules further to amend the Securities Contracts (Regulation) Rules, 1957, namely:-

1. (1) These rules may be called the Securities Contracts (Regulation) (Second Amendment) Rules, 2010.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Securities Contracts (Regulation) Rules, 1957,-

(i) in rule 2, after clause (d), the following clause shall be inserted , namely:-

"(da) "public sector company" means a body corporate constituted by an Act of Parliament or any State Legislature and includes a government company;"

(ii) in rule 19,-

(a) in sub-rule (2),

(A) in clause (b), in sub-clause (ii),-

(I) for the second proviso, the following shall be substituted, namely :-

"Provided further that the company, referred to in sub clause (ii), shall increase its public shareholding to at least twenty five percent, within a period of three years from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India.”

(II) the third proviso shall be omitted;

(B) after clause (b), the following shall be inserted, namely:-

"(c) Notwithstanding anything contained in clause (b), a public sector company, shall offer and allot at least ten per cent, of each class or kind of equity shares or debentures convertible into equity shares to public in terms of an offer document."

(b) for sub-rule (6A), the following shall be substituted, namely:-

"(6A) Except as otherwise provided in these rules or permitted by the Securities and Exchange Board of India under sub-rule (7), all requirements with respect to listing prescribed by these rules shall, so far as they may be, also apply to a public sector company."

(iii)for rule 19A,-

(a) in sub-rule (1),-

(A) after the words "Every listed company" and before the words "shall maintain public shareholding" the bracket and words "(other than public sector company)" shall be inserted;

(B) for the existing provisos, the following shall be substituted, namely:-

"Provided that any listed company which has public shareholding below twenty five per cent, on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, shall increase its public shareholding to at least twenty five per cent, within a period of three years from the date of such commencement, in the manner specified by the Securities and Exchange Board of India.

Explanation: For the purposes of this sub-rule, a company whose securities has been listed pursuant to an offer and allotment made to public in terms of sub-clause (ii) of clause (b) of sub-rule (2) of rule 19, shall maintain minimum twenty five per cent, public shareholding from the date on which the public shareholding in the company reaches the level of twenty five percent in terms of said sub-clause."

(b) after sub-rule (2), the following shall be inserted, namely:-

"(3) Notwithstanding anything contained in this rule, every listed public sector company shall maintain public shareholding of at least ten per cent.:

Provided that a listed public sector company-

(a) which has public shareholding below ten per cent, on the date of commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2010 shall increase its public shareholding to at least ten per cent, in the manner specified by the Securities and Exchange Board of India, within a period of three years from the date of such commencement;

(b) whose public shareholding reduces below ten per cent, after the date of commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2010 shall increase its public shareholding to at least ten per cent, in the manner specified by the Securities and Exchange Board of India, within a period of twelve months from the date of such reduction,."

External Commercial Borrowings (ECB) Policy – Liberalisation

External Commercial Borrowings (ECB) Policy – Liberalisation

A.P. (DIR Series) Circular No. 8, dated 12-8-2010

1.Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to para 2 (iv) of the A.P. (DIR Series) Circular No. 46 dated January 02, 2009 relating to External Commercial Borrowings (ECB) Policy.

2. At present, entities in the services sectors viz., Hotels, Hospitals and Software are allowed to avail of ECB up to USD 100 million per financial year under the Automatic Route, for foreign currency and/or Rupee capital expenditure for permissible end-uses. On a review, it has now been decided to consider applications from the corporates in the Hotel, Hospital and Software sectors to avail of ECB beyond USD 100 million under the Approval Route, for foreign currency and / or Rupee capital expenditure for permissible end-uses. The proceeds of the ECB should not be used for acquisition of land.

3. The modifications to the ECB guidelines will come into force with immediate effect. All other norms of the extant ECB policy relating to eligible borrower, recognized lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements would continue to apply in the case of ECBs availed of by the aforesaid sectors under the Automatic Route as indicated above.

4. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under sections 10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

Establishment of Branch Offices (BO) / Liaison Offices (LO) in India by Foreign Entities – Delegation of Powers

Shareholding pattern of listed entities- Press Release

PR No.184/2010

SEBI Board Meeting

The Board met on August 04, 2010 in Mumbai and took the following decisions:

Shareholding pattern of listed entities

Currently, the shareholding pattern of companies is contained in initial public offer document and upon listing, companies file shareholding pattern with stock exchanges every quarter. The Board decided to mandate that the companies shall file shareholding pattern as per Clause 35 one day prior to the date of listing, which shall be uploaded on the website of exchanges before commencement of trading.

The Board also decided that in order to ensure updated public dissemination of shareholding pattern, whenever the change exceeds +/- 2% of the paid up share capital of the company post a corporate event, the companies shall file revised shareholding pattern with the stock exchanges within 10 days from the date of such change in the capital structure.

The Board further decided that in the quarterly shareholding pattern, the disclosure of shares held by custodians, against which depository receipts have been issued, shall be classified as 'promoter/promoter group' and 'non-promoter'.

Mumbai

August 05, 2010

Guidelines on trading of Currency Options on Recognised Stock / New Exchanges

In order to expand the existing menu of exchange traded hedging tools, it was announced in the Monetary Policy Statement 2010-11 (para 62) that recognised stock exchanges would be permitted to introduce plain vanilla currency options on spot US Dollar/ Rupee exchange rate for residents.

Accordingly, it has been decided b RBI to permit trading of currency options on spot USD-INR rate in the currency derivatives segment of the stock exchanges, recognized by the Securities and Exchange Board of India (SEBI). The currency options market would function subject to the directions, guidelines, instructions, rules, etc issued by the Reserve Bank and the SEBI from time to time.

Click here for the text of the A.P. (DIR Series) Circular No. 05 dated July 30, 2010.