| Sebi allows MFs to place up to a fifth of ETF gold with banks |
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Mumbai, 15 February The Securities and Exchange Board of India ( Sebi) has allowed asset management companies ( AMCs) to deposit gold under their exchangetraded funds ( ETFs) with the so- called gold deposit scheme (GDS) of banks. The move follows the finance ministry's decision to link gold exchange- traded funds with gold deposit scheme and relaxation by the Reserve Bank of India of certain provisions in such schemes. Sebi has said the total investment in GDS will only be up to 20 per cent of the total assets under management (AUM) of gold ETF schemes. As on December 2012, the AUM of gold ETFs was nearly ₹ 12,000 crore. According to estimates, AMCs own 40- 45 tonnes of gold under these schemes. They will be able to garner about ₹ 2,400 crore by depositing a fifth of this gold with banks. "The incremental returns that AMCs get by depositing gold with banks will go into the scheme, which will add to the performance," said Lakshmi Iyer, senior vicepresident and head, fixed income, Kotak Mutual Fund. GDS fetches between one and three per cent annually. Sebi has said the gold certificates issued by banks in respect of investments by gold exchange- traded funds in gold deposit scheme should be held by mutual funds only in dematerialised form. Further, Mutual funds will have to put in place a written policy on investment in GDS, with due approval from the board of the allowed asset management companies and the trustees, said a Sebi circular. Banks lend the gold deposited by asset management companies to jewellery manufactures. Assuming asset management companies deposit 20 per cent of the 40 tonnes of gold they own, it will reduce gold imports by eight tonnes. Rising gold imports have been amajor concern for the government, as it widens the current account deficit (CAD). The CAD had touched a record high of 5.4 per cent of gross domestic product in the July- September 2012 quarter. Gold imports between April and December 2012 was $ 38 billion. India imported gold worth $ 56.5 billion in 2011- 12. GOLD ETF Name AAUM (₹ cr) GS Gold BeES 3,334.33 R* Shares Gold 3,040.47 SBI Gold 1,336.62 Kotak Gold 1,251.18 HDFC Gold 789.70 UTI Gold 735.57 Axis Gold 382.95 ICICI Prudential Gold 201.23 IDBI Gold 175.05 Birla Sun Life Gold 129.33 Canara Robeco Gold 100.05 Religare Gold 80.91 Quantum Gold Fund 64.79 MOSt Gold Shares 51.50 Average assets under management ( AAUM) for the October - December 2012 quarter Source AMFI India; Compiled by BS Research Bureau As on December 2012, the AUM of gold ETFs was nearly ₹ 12,000 crore. According to estimates, AMCs own 40- 45 tonnes of gold under these schemes. They will be able to garner about ₹ 2,400 crore by depositing a fifth of this gold with banks |
| Sebi extends call auction facility to all scrips |
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Mumbai, 15 February After successfully implementing the pre- open call auction mechanism for blue- chip stocks, the Securities and Exchange Board of India ( Sebi) has extended the framework to all other scrips in the equity market. Further, the regulator has introduced a new concept of hourly trading through call auction for illiquid scrips. The pre- open call auction is the process to arrive at an equilibrium price for a scrip based on a bidding process. At present, this mechanism is used for Sensex and Nifty scrips and for first- day trading of initial public offerings and re- listed stocks. The call auction mechanism has helped reduce high volatility seen during commencement of opening trades everyday. Going ahead, trading in illiquid scrips will be conducted only through hourly call auction sessions, Sebi said. Along with the illiquid scrips identified by the bourses, stocks that have trading volume of less than 10,000 or average daily trades of less than 50 shall be classified as illiquid. At the end of the December quarter, BSE had identified a little 2,000 illiquid scrips. "The issue of extending call auction mechanism in the preopen session to all scrips was deliberated in the Secondary Market Advisory Committee (SMAC). SMAC also made recommendations on introduction of trading through the periodic call auction mechanism for illiquid scrips in the equity market," Sebi said in a circular. Periodic call auction sessions for illiquid scrips will be conducted for one hour throughout market hours. Meanwhile, the call auction session duration for all other scrips will be for an hour, of which 45 minutes shall be allowed for order entry, order modification and order cancellation, eight minutes for order matching and trade confirmation and remaining seven minutes will be a buffer period for closing the current session and facilitating transition to the next session. The scrip will be shifted to the normal trading segment after it has remained in periodic call auction for at least two quarters, Sebi has said. The regulator has also set a penalty to prevent stock price manipulation during such sessions. Sebi said " If the maximum of buy price entered by a particular client equals or is higher than the minimum sell price entered by the same client and if this results in trades, it would attract a penalty." The penalty for such trade will be 0.5 per cent of the trade value for buy and sale orders each or ₹ 2,500 for a buy trade and ₹ 2,500 for a sell trade, whichever is higher. "The penalty shall be calculated and charged by the exchange and collected from the trading members on a daily basis. Trading members may recover such penalty from clients. The penalty so collected shall be deposited to the Investor Protection Fund," the Sebi circular said. The Securities and Exchange Board of India has set a penalty to prevent stock price manipulation during such sessions |
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Company Secretary, Chennai
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