fbombay stock exchange brokers' forum (bbf) oru|m … sep 2… · “demographic dividend”....

`15/-|SEPTEMBER 2019 VOLUME: 8 • ISSUE NO. 6 •|BOMBAY STOCK EXCHANGE BROKERS' FORUM (BBF) MUMBAI, INDIA

FORUM VIEWS

Even if your intentions are good, you have to follow the law.Ensure that discretionary trades are done only by

Securities and Exchange Board of India (SEBI) registered Portfolio Manager.

Issued in Public Interest byBombay Stock Exchange Brokers' Forum (BBF)

My friends are happyand will be now permitting her todo trade as per her discretion.

She will get a profit share.I am proud of her.

My daughter loves

share trading. She is managing the

Portfolio of my friends and

giving good returns.

But discretionallytrades are permitted only to

SEBI Registered Portfolio Managerswith minimum investment of

Rs. 25 lakh per investor.

Oh, I don’t want to beon the wrong side of law. Will

immediately ask my daughter to start this business only after

registering with SEBI.

48

R.N.I. No. MAHENG/2012/47145Postal Registration No. MCS/153/2019-21 • MR/Tech/WPP-355/South/2019

st rd thPublished on 1 (Day) of every month • Posted at Patrika Channel Sorting Office, Mumbai - 400001 • Posting date: 3 & 4 of every month

23 FORUM VIEWS - SEPTEMBER 2019

EXECUTIVE COMMITTEE

Uttam BagriChairman

Anurag BansalVice-Chairman

Purav Fozdar Secretary

Harin MehtaJt. Secretary

Lalit MundraJt. Treasurer

GOVERNING BOARD 201BOMBAY STOCK EXCHANGE BROKERS’FORUM (BBF) GOVERNING BOARD 2018 - 19

Kamlesh D ShroffTreasurer

GOVERNING BOARD MEMBERS

AnjanaVijay Shah

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KushalA. Shah

MadhaviVora

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RajivChoksey

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ParthNyati

VirenderMansukhani

MehulPatel

NareshRana

MahavirLunawat

BOMBAY STOCK EXCHANGEBROKERS' FORUM (BBF)OFFICIAL MASCOT

06 IN CONVERSATION WITH: VIRAJ KULKARNI, FOUNDER & CEOPIVOT MANAGEMENT CONSULTING

YOGA & MEDITATION: YOGA ANDCULTURAL APPROPRIATION44

CEO & COO DESK05

SEMINARS & EVENTS CONDUCTED BY BBFFOR THE PROGRESS OF STAKEHOLDERS OFCAPITAL MARKETS JULY - AUGUST 2019

37


Disclaimer: This magazine is meant for information purposes only and does not constitute any opinion or guidelines or recommendation on any course of action to be followed by the reader(s). It is not intended to be used as trading or investment advice by anybody and should not in any way be treated as a recommendation. The information contained in this magazine does not constitute or form part of and should not be construed as, any offer for purchase or sale of any product or service. While the information in the magazine has been compiled from sources believed to be reliable and in good faith, readers may note that the contents thereof including text, graphics, links or other items are provided without warranties of any kind. BSE Brokers' Forum expressly disclaims any warranty as to the accuracy, correctness, reliability, timeliness, merchantability or fitness for any particular purpose, of this magazine. BSE Brokers' Forum shall also not be liable for any damage or loss of any kind, howsoever caused as a result (direct or indirect) of the use of the information or data contained in this magazine. Any alteration, transmission, photocopied distribution in part or in whole or reproduction of any form of this magazine or any part thereof without prior consent of BSE Brokers' Forum is prohibited.

Printed, Published and Edited by Dr. VISPI RUSI BHATHENA, PhD (h.c.)& Dr. V. ADITYA SRINIVAS on behalf of BSE BROKERS' FORUM,

printed at KSHITIJ PRINTERS, 49, Parsi Panchayat Road,Ashok Ind. Estate, 1st, Floor, Andheri (East) Mumbai - 400 069.

and published from BSE BROKERS' FORUM, 808 A,P. J. TOWERS, DALAL STREET, FORT, MUMBAI - 400 001.

Editor: Dr. V. ADITYA SRINIVASDesign by: Harshad Gajera | Photographer: Sanjeev Dubey

BSE Brokers’ Forum Steering CommitteeUttam Bagri (Chairman)

Anurag Bansal (Vice - Chairman)Purav Fozdar (Secretary)

Harin Mehta (Jt. Secretary)Kamlesh D Shroff (Treasurer)Lalit Mundra (Jt. Treasurer)

18 ASIA-PACIFIC MARKETSMONTHLY HIGHLIGHTSAND INSIGHTS

THE OPPORTUNITY COSTOF ACTIVE MANAGEMENT14

COMPLIANCE CALENDARSEPTEMBER 201922

PHILOSOPHY & SELF MANAGEMENT:BRING JOY INTO YOUR LIFE38

CIRCULARS26

WELLNESS Q&A:WEEKEND BINGEING39

REGULATORYPULSE24

HEALING INSTITUTE: TECHNOLOGY: BOON OR BANE?40

MAY 2019 CONTESeptember 2019 CONTENTS

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LATEST SUPREME COURTJUDGMENT ON PROVIDENT FUND32BUDGET 2019: INCENTIVES ANDCONCESSIONS TO INTERNATIONALFINANCIAL SERVICES CENTRE (IFSC)

34

AMENDMENT TO SECTION 148 OFTHE NEGOTIABLE INSTRUMENTS ACT36

08 FAQ:BROKING COMMUNITY-TECHADVANTAGES

10 FAQ:DATA PRIVACY FOR SAFEGUARDING‘PERSONAL INFORMATION’ UNDER THEINFORMATION TECHNOLOGY ACT, 2000

GROWTH AND DEVELOPMENT:SOME CRITICAL INSIGHTS12

16 COMPLIANCE IN FINANCIALMARKETS USING TECHNOLOGY

FITNESS CLINIC: WHY I DON’T FEAR ‘MAIDA’!43

ceo & coo message


WelcomeDr. Vispi RusiBhathena,PhD (h.c.)

to magazine.Forum Views

The Indian economy and stock markets are passing through one of the tough

phases in the recent history. The

macroeconomic parameters are indicating weakness

and the stock market is also cracking due to the

continuous selling of the Foreign Investors.

The Indian economy and stock markets are passing through one of the tough phases in the recent history. The macroeconomic parameters are indicating weakness and the stock market is also cracking due to the continuous selling of the Foreign Investors.

RBI have reduced Repo Rate: RBI has reduced the Repo rate by 35 basis points and thus has given banks room to reduce the interest rates and thus make the house loan and auto loan cheaper. This would induce demand in the economy and thus boost the GDP.

Stock Markets have crashed: The Indian stock markets has corrected more than 3000 points in the last one month due to the FII selling which has been caused by the surcharge being imposed on the FII. The effective tax rate comes to 42.7% which is very high and is causing capital flight from our capital markets.

Dr. Aditya Srinivas

we have to grow at 8% GDP we cannot alone rely on the domestic consumption, but we need to also have exports boost up.

No Capex: There is no capex taking place which means no JOB creation t a k i n g p l a c e a s t h e

unemployment figures have reached 6.1% which is the threat to the demographic dividend theory which is core to the demand and consumption pattern.

Liquidity Crisis in NBFC: The NBFC account for 45% of the total lending done in India. With the severe liquidity crisis in the sector, there is more job losses on the way and this will spiral into real slowdown for demand and consumption in the economy. Govt. must intervene by pushing liquidity into NBFC and try to stop the damage from spilling over other sectors of the economy.

Chain of Corporate Unemployment’s: Jet Airways shut down has caused 22000 people unemployed, hand set sector has seen 2,50,000 job losses in last one year and the telecom sector has seen 1,20,000 job losses. Where are we heading when we are claiming there is huge “Demographic Dividend”.

Conclusion: Govt. needs to take urgent steps to induce liquidity in the system and create jobs in various sectors. They need to call the corporate companies and have joint meeting as to how they can create large number of jobs and induce confidence in the economy.

production has come down by 20%.This shows that there is slow down in the spending of the middle class persons which is the back bone of the Indian Economy.

Exports Down: Our exports have come down by 9.7% which is around 25$ Billion as effect of the US China trade war and slowing world economy. If

BBF - Seminars and Events

On the BBF front:

Auto sales down: Maruti which is referred to as the “Common Man” car for the first time in its history has cut down the work force by 6%. The

TopicDate

Cyber Security & Cyber Resilience framework for Stock Brokers / Depository Participants (with BSE Ltd.) at Chennai

22-Aug

IN COVERSATION WITH VIRAVIRAJ KULKARNI

Founder & CEOVIRAJ KULKARNI

PIVOT Management Consulting


In my view over the last decade the broking community ‘adapted’ more than they led, very contrary to the role they

played hitherto.

Winds of ChangeIn my view over the last decade the broking community ‘adapted’ more than they led, very contrary to the role they played hitherto.

The fast-changing capital market environment induced numerous positive changes thanks to SEBI, Exchanges and related institutions. While margins shrunk, volumes quadrupled, governance developed and much more. Clients segments too expanded! The future is about AI, innovation in products, client centricity, excellence in delivery, targeting new segments, leveraging strengths to name a few.

Increasingly the Indian Government and Regulators took steps to encourage FPIs and NRIs. Yes sometimes, in short term some of the policies are one step back, before the quintessential corrective two steps forward. Neither the Government nor policy makers or SROs can be expected to drive business- its not their mandate.

Infrastructure SROs like BSE, ICCL, CDSL have invested in world-class technologies to make execution and settlement a breeze, for the BSE brokers. The Regulators and SROs in India have done a pretty neat job in growing the market while containing risks and ensuring compliance. The BSE handbook for FPI’s (a guided initiative of Shri Ashish Chauhan, CEO and MD of BSE group) is widely popular in the FPI community. The BBF (BSE Broker’s Forum) has championed the broker community’s cause! In recent times BBF has taken baby steps in representing Indian capital markets, overseas. Yes baby steps.

Since 1875 Indian stockbroking community played a stellar role on developing India’s capital markets and in wealth creation- contributing to India’s growing footprints- locally and internationally. With every change whether Independence, multiple products, advent of online trading, computerisation, multi-location trading, advent of FPIs, derivatives an commodities trading to the latest - Interoperability- the community hardly flinched, accepted the change, ‘led/adapted’ and grew, just like India did over hundreds of years - adding diversity while it changed. This article is not an ode to the stockbroking community- it recognises what many know. Its about opportunities that will abound, for the community to grow and play a bigger role.

India’s current market cap(listed) is approx. $USD 2.2 Trillion(give or take a few hundred billion!) up from a few hundred billion in 1990s. PM Modi’s vision of India being a $ 5 Trillion economy over the next decade is the new bar! The broking community will have to choose between ‘adapt’ or lead. Will they lead?


IN COVERSATION WITH VIRAVIRAJ KULKARNI

Cat III (Will be merged with Category II as announced by SEBI in August 2019) segment has seen active participation of Indian Banks, Indian Tax firms, Indian Custodians. Limited is the presence of a larger number of Indian Broking community in this space. This stems mostly on account of lack of knowledge of the requirements and/or terms of engagement with investors or intermediaries based in these countries.

This is where a collaborative effort by BBF and the Broking community can come handy to offer a world class execution and service delivery mechanism at a pricing that while adding a new revenue stream for the broking community also enable many more investors to invest in India. At PIVOT our study indicates that roughly there are over 50 lines of costs that an FPI incurs when investing in India. Costs become a significant aspect of investment decisions especially in the case of Cat III (Will be merged with Category II as announced by SEBI in August 2019) Investors. Besides lower costs, such investors have a number of expectancies.

Our experience indicates that most of the Broking houses with over 30 years of presence (including retail) have adequate skills

Viraj Kulkarni values the stint at BSE in the early part of his career. He subsequently served as Operations head at Morgan Stanley broking Operations and for over a decade as country manager(Custody) at Citibank (India and Switzerland), JP Morgan Chase and BNP Paribas. In 2015 he set up PIVOT (India, Cyprus)which advises Exchanges, Custodians, FPIs, Broking firms, PE’s etc. In May 2019, he was recognised by Global Custodian as amongst the 30 Global leaders in the $100 Trillion Custody Industry.

For PM Modi’s vision to ring true, the Broking community will need to shift gear - to lead more than ‘adapt’.

Let’s take the case of FPI (Foreign Portfolio Investor). FPIs account for USD 443 Billion of the over USD 1 Trillion of assets(not including their interest in Debt and derivatives segment). Since 2015 a new class of FPIs (Category III-to be merged with Cat II, as per SEBI announcement of August 2019) have been investing in India. The numbers have been swelling to form almost 15% of the total number of FPIs. It has emerged as the fastest growing segment of the three segments( see table).

Recent initiatives of BBF in Japan and Korea supplements what the Custodians(including India’s Single Country Custodians)have recognised and been engaged in since June 2015! These investor countries besides US(see table) have increased inflow into India. In my view the current numbers though growing, are a fraction of what will be, in years to come. For the purpose of this note I’m concentrating on FPI Cat III, which is the lowest hanging fruit from the Broking community perspective.

and Technology to handle FPI business. However, they(including BBF) need to invest into a few aspects. Key areas of investment being:• Self-belief on their ability to service the segment and

positioning the same• Research the requirements of the segment and draw up a list

that can be commonly presented by BBF and the specifics by the broking house

• Actively engage in collaborative efforts with not only BBF but also overseas bodies of similar institutions

• Establish common standards• Marketing of their capabilities through websites

(BBF/Broking), marketing collaterals, overseas reach focusing specifically on segments concerns, requirements

• Establish Technology solutions like DMA and integrated Technology driven solution- from order stage to contracting

• Establish collaborative service standards that increase confidence through documentations, TATs, support time

• Identify client segment and their specific needs. This vary from jurisdiction to jurisdiction

• Re-org business dealing room with firm Chinese walls between the retail and the FPI (similar to institutional) business

• Develop relationships with diverse stakeholders(custodians, Tax firms, banks), understand their requirements- collaborate

• Tap collaborative efforts of SROs, other intermediaries and more importantly the Organisations in investor jurisdiction

Our experience has been that many a Indian broking house have the ability to deliver on the above but have been ‘reluctant’ to explore this fast-growing space. To an extent their stance is understandable. The key dissuading factor being the risk-reward perceptions culminating to them sticking to the safe zone of current domestic client segments- of thinning margins, intense competition etc. Given our international experience and presence, we feel BBF and the broking community needs to shrug the ‘perception’, draw a collaborative solution and develop in this space, as have Indian banks, custodians, tax firms done. The community could consider taking assistance of experts in this space(including in the home countries of the investors) as have been done by the other intermediaries in India.

The current 1239 Cat III FPIs (over the last 4.5 years) are being serviced by a mix of Indian and multi-country broking houses. This number will grow significantly as India aspires to grow to the $5 trillion size. In my view the broking community and BBF will have to shift gears- to lead than adapt.

The winds of change are here and will stay. Will the broking community showcase its leadership ability or play, ’waiting for Godot’? I believe in the broking community’s ability of the former. It is the need of the hour, together with BBF.

Source: NSDL * Not in top 10 ** Will be merged with Category II as announced by SEBI in August 2019

Table

Countries Cat. I Cat. II Cat. I ** II Equity Debt Hybrid Total

USA 13 2776 426 149 8 0.26 157UK 3 469 33 21 0.42 0.09 22Canada 24 564 42 14 2 0.08 16Singapore 36 217 128 29 15 0.56 44Sub-Total 76 4026 629 213 25 0.99 239HK* 1 96 15 - - - -Gulf*Dubai/ UAE 39 6 41 - - -Bahrain 1 2 1 - - -Total in India 268 7883 1239 414 58 1.36

No. of FPIs(as on 07-08-2019)

AUC (USD Bn.)as on June 201


VASANTH KAMATHCEOsmallcase Technologies

To make investing more mainstream among

individuals in India, the exchanges can have

multiple initiatives that percolate to a larger

audience.

BROKING COMMUNITY-TECH ADVANTAGES

smallcase Technologies enables retail investors to invest in portfolio of stocks and ETFs (called smallcases) with their existing trading & demat accounts. smallcases are available on platforms of largest stockbrokers. Since the launch of the platform in July 2016, over Rs 2,000 crore has been transacted in smallcases with a total base of 2,50,000+ across these broker partners. Based out of Bengaluru, smallcase Technologies was started in 2015 by three IIT Kharagpur graduates. Today, it has a 50+ team comprising finance professionals and engineers. The company counts leading investors like Sequoia Capital and Blume Ventures as its shareholders.

many startups within the FinTech domain that are trying solve various problems for investors & brokerages.

3. How can some of the existing practices of broking community can be improved using technology to benefit investors?

4. Can you throw some light on use of technology by global bourses and how these can be easily replicated in India?

• Client on-boarding can be digitised to make the process smoother

• Analytics can be used to personalise the client experience, e.g. trade history can be used to make better recommendations

• Support over chat/WhatsApp/Facebook can be used to be more accessible as well as reduce costs towards call-support

• Chatbots can also be used for standard communication/responses

• Engagement can be improved with mobile/web notifications - for example, clients can be advised to act (or not act) in a particular way during specific market conditions

• New exchanges like IEX & the proposed

1. What is your suggestions/advice to broking community to become more investor friendly by becoming tech-enabled and tech-oriented?

2. While bigger brokerage houses have the wherewithal to benefit from latest technology, how can small brokers/ brokerages too benefit from tech changes?

The brokerage community can achieve this in many ways, including:• Reduce paperwork (for clients &

yourselves) by adopting a fully online account opening process

• Conduct webinars online to educate & engage clients and make them aware of different products, strategies, etc.

• Reduce the number of different places a client goes for investing/finance related activities (e.g. news, research, trade execution, tracking, etc.)

• Leverage social media to spread investor awareness & engage better with existing & potential clients

• Having a smooth mobile app - this tends to boost client experience and engagement, since most people almost always have access to their phones today

A. Along with research & client care, technology can be a differentiator within the broking community. Small brokerages have the capability to be more nimble and adaptable to change, allowing them to be more proactive in seeking and adopting new technology. They can do this either in-house if they have the resources/expertise, or they can look at third-party partnerships that can help them offer additional value to clients & scale. In fact, today there are

LTSE in the US are making the markets fairer to all participants and conducive for fast-growing disruptive ideas to raise long term patient capital from retail investors. The SME segment on both national exchanges are a promising step in the right direction and can be extended to include more similar segments to increase interest in the private markets as well as depth from retail investors, which is critical as we grow

• NASDAQ& other global exchanges also collaborate heavily with technology startups to bring in new solutions and strengthen the current offerings. This can be done in India as well so as to encourage the fintech ecosystem to bring in a new cohort of investors as well as increase credibility of new projects

• To make investing more mainstream among individuals in India, the exchanges can have multiple initiatives that percolate to a larger audience. For eg. in Indonesia, a campaign to to hold contests and pop concerts on the trading floor of the bourse has helped boost the number of retail investors by 40%

9


Personally Identifiable Information (PII) is any

data that could potentially be used to identify a particular person. Examples

include a full name, Social Security number, driver's

license number, bank account number,

passport number, and email address.

Section 72A of The Information Technology Act prescribes ‘Punishment for disclosure of information in breach of lawful contract’.

The section reads as follows: ‘Save as otherwise provided in this Act or any other law for the time being in force, any person including an intermediary who, while providing services under the terms of lawful contract, has secured access to any material containing personal information about another person, with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain discloses, without the consent of the person concerned, or in breach of a lawful contract, such material to any other person, sha l l be punished with imprisonment for a term which may extend to three years, or with fine which may extend to five lakh rupees, or with both’.

DATA PRIVACY FOR SAFEGUARDING ‘PERSONAL INFORMATION’UNDER THE INFORMATION TECHNOLOGY ACT, 2000

1. Has the Information Technology Act, 2000, provided for safeguarding ‘Personal Information’ collected under a lawful contract by an entity?

2. What would a Lawful Contract mean?

Yes, the Information Technology Act, 2000, has made provisions for safeguarding Personal Information collected by an entity or intermediary, while providing services under a lawful contract or if they have secured access to any material containing Personal Information about another person. Section 72A punishes certain disclosure of the said information without the consent of that person and thereby they have intent to cause or knowing that it is likely to causes wrongful loss or wrongful gain to that person.

Under the Indian Contract Act, 1872, A contract is defined as an agreement between private parties creating mutual obligations enforceable by law. The basic elements required for the agreement to be a legally enforceable contract are: (a) mutual assent, (b) expressed by a valid offer and

acceptance; (c) adequate consideration; (d) capacity; and(e) legality.

Thus, a contract is a legal document that bestows upon the parties special rights, defined by the terms of contract entered into by the contracting parties themselves, and a lso ob l igat ions which are incorporated, defined and agreed upon by all the parties of the contract.

3. Does the Information Technology Act, 2000, provide for legal recognition of electronic records?Yes, Section 4 under the Chapter III of Electronic Governance of the Information Technology Act 2000 does provide for the same. It states that where any law provides that information or any other matter shall be in writing or in typewritten or printed form, then notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied is such information or matter is(a) rendered or made available in an

electronic form; and(b) accessible so as to be usable for a

subsequent reference.

Thus, electronic contracts are given legal recognition by the Act. The Act further prescribes the mode and the methods to be used to authenticate electronic records under Chapter 11 under the heading Digital Signature and Electronic Signature.

The Act further provides for Attribution, Acknowledgement and Dispatch of Electronic Records under Chapter 1V.

Therefore, any legal contracts that fulfills the prescriptions of the IT Act, 2000, that provides for the mode and methods therein for electronic records, as mentioned herein above can be termed as electronic contracts and these contracts should also confirm and adhere to the provisions of the Indian Contract Act, 1872.

Thus, electronic contracts have been granted legal recognition.

PRASHANT JHALACyber Lawyer & FounderIndian Cyber Lawyers


collected under a lawful contract or in breach of a lawful contract is punishable with a jail term and or a fine or both.

Personally Identifiable Information (PII) is any data that could potentially be used to identify a particular person. Examples include a full name, Social Security number, driver's license number, bank account number, passport number, and email address.

Personal information is any information relating to a person, directly or indirectly. Thus information such as name, mother’s maiden name, mobile/landline telephone numbers, billing address, email address, alternate email address, office address, residential address etc. may be termed as ‘Personal Information’.

“Sensitive Personal Data or Information” consists of password, financial information (including bank account, credit card, debit card or other payment details), physical, physio logica l and menta l hea l th conditions, sexual orientation, medical records, and biometric information. This has been defined under Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011.

However, section 72A pertains to safeguarding ‘Personal Information’.

Yes, Section 2(w) of the Information Technology Act, 2000, provides a wide definition of an intermediary, in relation to an electronic record, as any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record. The term intermediaries includes telecom service providers, web-hosting service providers, search engines, online payment sites, online auction sites, online, market places and cyber cafes.

The dictionary meaning of the term ‘disclose’ would mean to make the information to be known to others which

6. How can one differentiate between Personally Identifiable Information (PII), Personal Information and Sensitive Personal Data or Information?

7. This section is applicable to Intermediaries. Are intermediaries defined by the Information Technology Act?

8. What would it mean by the term to ‘disclose’?

otherwise was mean to be kept a secret. The term would also mean to expose, to divulge, to share, to give away, to reveal, to tell, to publish, to communicate, to broadcast, give away etc.

The dictionary meaning of the term ‘consent’ would mean to give permission to do something. It would also mean to sanction, assent, approval, allow, give nod, say yes etc.

Committing an offence under this section prescribes that the accused shall be punished with imprisonment for a term which may extend to three years, or with fine which may extend to five lakh rupees, or with both. Since the imprisonment is up to 3 years, it makes the acta) Cognizable - police officer may make

search and/or arrest of a person without warrant, from a public place.

b) Bailable - bail is the right an accused (jail is an exception) but it is at the discretion of the Court to grant the same or deny it.

c) Compoundable - out of Court settlement is possible but with the consent of the Court (though the Information Technology Act does provide for exceptions wherein compounding of certain offences are prohibited as mentioned in section 77A of the said Act).

This section provides for not only wrongful loss or wrongful gain caused by an accused wherein he had the knowledge or intention of the same, but also to acts wherein the accused had knowledge or intention that he is likely to cause wrongful loss or wrongful gain to the victim.

9. What would the term ‘consent’ mean?

10. What punishment does Section 72A prescribe?

11. Does this section apply only when there is a wrongful loss or wrongful gain caused?

Note: The above information is my personal interpretation and to the best of my knowledge. It should not be construed as a legal opinion.

4. What are the provisions of this particular section namely, 72A?

5. What would it mean by wrongful gain or wrongful loss?

Section 72A of the Information Technology Act, 2000, states that any person (irrespective of its constitution) including an intermediary who, (a) while providing services under the

terms of lawful contract, (b) has secured access to any material

containing personal information about another person,

(c) with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain

(d) discloses, without the consent of the person concerned, or in breach of a lawful contract,

(e) such material to any other person,

shall be punished with imprisonment for a term which may extend to three years, or with fine which may extend to five lakh rupees, or with both.

Thus this section punishes a person, including a intermediary, who has collected personal information under a lawful contract and thereafter shares/ discloses that data or information without the consent of the person who’s data or information was collected under such contract or in breach of a lawful contract, with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain to that person then the accused would face a jail term and or fine or both as mentioned herein above.

(a) “Wrongful gain”.-“Wrongful gain” is gain by unlawful means of property to which the person gaining is not legally entitled.

(b) “Wrongful loss”.-“Wrongful loss” is the loss by unlawful means of property to which the person losing it is legally entitled.

(c) Gaining wrongfully, losing wrongfully.-A person is said to gain wrongfully when such person retains wrongfully, as well as when such person acquires wrongfully. A person is said to lose wrongfully when such person is wrongfully kept out of any property, as well as when such person is wrongfully deprived of property.

Thus causing or likely to cause wrongful loss or wrongful gain to a person by disclosing the personal information without his consent that has been

Advocate Prashant Jhala is a Cyber Lawyer and founder of a law firm ‘Indian Cyber Lawyers’.Also trains Police and other Law Enforcement Agencies across the country.

He ca be reached at: [email protected]

Introductory ExpositionOne of the main highlights of the recently announced budget is that India’s GDP target is for it to become a 5 trillion dollar economy by 2024-25. This may sound an ambitious objective but achieving it is tenable. Fundamentally this would require a real annual growth rate in GDP of 8 per cent which would need an increase in the growth rate of all three sectors. In the light of this I thought that in terms of timing and relevance it would be useful if this article for Econ Buzz elucidate some important insights culled out from my research findings about growth strategies in the larger context of development. The findings enumerated are not restricted to a particular country specific context but is based on economic experience that is pertinent to the empirics of growth and development globally.

Proficient analysis by many about what makes growth rates escalate has not enabled us to ensure that an increase in growth rates will invariably lead to a rise in levels of development. The nub of the problem is translating this cognizance into a ground reality by creating the mechanisms that will facilitate the diffusion of development once economic growth begin to increase.

The pronouncedly flawed presumption that growth is the primary andsingular input that is required for development lies at the base of the rather disembodied approach to economic progress. Although this assumption has been invalidated by the overwhelming reality of persistent underdevelopment a more holistic approach to economic progress

Proficient analysis by many about what makes growth rates

escalate has not enabled us to ensure that an increase in growth rates will

invariably lead to a rise in levels of development.

GROWTH AND DEVELOPMENT:SOME CRITICAL INSIGHTS

By Professor Piya MahtaneyEconomist / Author


INSIGHTS - ECOINSIGHTS - ECONBUZZ

are three types of growth that can occur:1. Growth rates that do not have any

impact on development or the fructification of any of its objectives.

2. Growth rates that facilitate an increase in developmental objectives.

3. Growth rates that in the course of increasing have a regressive or negative impact on development. Thus in real term such increases in the growth rates should be assigned a much lower value than the numerical magnitude.

In the discussions of growth when we cite that country A has had double digit growth rates whereas country B has had say a 5 per cent growth rates do we differentiate between growth that helps or even facilitates the achievement of developmental goals and that which doesn’t.

In sheer nominal terms growth rate in country A is higher than the latter. However if the higher growth rates does not result in any changes that will help development and the lower growth rates the question that arises is whether we can infer that A’s growth performance is better than B’s. Observable we cannot.

If the pursuit of certain strategies or the implementation of some measures does not help in tapping the reservoir of skills, talent, knowledge competences and inputs that a country is endowed with it represents effectively a loss of potential opportunity creation and consequently growth.

continues to elude us. A rathermyopic approach to growth continues to override the implementation of measures that are rooted in fundamental considerations. The culmination of this is that economic growth that should always be the precursor to development can sometimes be inimical to it. (The manifestation of this is a trade-off between growth and development that is it is almost endemic in certain regions and exists in smaller and subtler measure elsewhere.)

The few instances of the rather adverse disconnect between growth and economic development makes it necessary to classify economic growth into two categories- economic growth that is pro-development and that which does not encourage development. It should be noted that the latter includes economic growth t ha t d o e s n o t d o m uc h f o r underdevelopment and could on occasion even deter it.

We have to begin to distinguish growth in terms of its developmental impact or the absence of it, in this context there


INSIGHTS - ECONBUZZINSIGHTS - ECONBUZZ

costs of opportunities foregone by the pursuit of strategies that do not do much for employment provision and poverty reduction lie outside the purview of growth accounting. Acceleration of growth achieved at the expense of other sectors or by deceleration of progress in other socio-economic categories are crucial variables that are either excluded from growth accounting estimates or not accounted for adequately. This is hardly surprising because there exists an expanse of non- monetized gains and benefits that arise from the pursuit of certain non-pecuniary activities most of which are linked to social welfare provision, the advantages conferred by natural endowments such as forests and fertile soil that enable individuals to eke out means of sustenance for themselves.

The Report by the Commission of Growth and Development, World Bank (2008) explains, “The growth ofGDP may be measured up in the macroeconomic treetops, but all the action is in the microeconomic undergrowth, where new limbs sprout, and dead wood is cleared away.”Most growth-oriented policies and reforms are designed to foster this microeconomics of creation and destruction, and, crucially, to protect people who are adversely affected by these dynamics.”’ It is this critical

Piya Mahtaney completed her second Master’s in Development Economics from Leicester University in England she embarked on a career in journalism with the Times of India. She was an assistant editor in Metropolis on Saturday, subsequent to which she joined as senior feature writer in Economic Times. As an economist that reported, analyzed and wrote on a wide range of socio-economic issues, writing a book about economic development and the emerging trends of globalisation seemed almost inevitable

The books that she has authored are as follows:• India China and Globalization (2nd ed), Palgrave

Macmillan (England), December 2014• Globalization and Sustainable Economic

Development, Palgrave Macmillan (U.S), August 1st 2013

• Institute of South East Asian Studies (Singapore) published an edition (August 2010) of my book India China and Globalisation.

• The first edition of India China and Globalisation was published by Palgrave Macmillan (England, 2007)

• Globalisation Con Game or Reality was published by Alchemy Publishers, India (2004) 2004.

• The first book titled Economic Con Game, Development fact or Fiction was published by Pelanduk Publications (Malaysia) in 2002.

link between various parametersof economic progress such as investment, innovation, infrastructure and institutions that needs to strengthened, synergies created need to be harnessed so that an increase in economic growth rates enables progress across dimensions and is not confined to a few enclaves. The ensuing articles for Forum Views would discuss various aspects about growth strategies and its impact on development.

Thus among the most frequent misjudgments in assessing overall economic performance arises from viewing a higher economic growth rate as equivalent to a commensurate increase in levels of development and vice versa. For all the rhetoric about development, growth accounting estimates does not provide us with an indication of qualitative constituents of growth. This is a flaw that needs to be remedied for more accuracy in evaluations and inferences about economic performance.

Thus the concept of growth in real terms should be expanded to include other socio economic variables besides inflation. One of the counter arguments to this may be that it is difficult to quantify qualitative changes,- while it is true that to account for certain ‘intangible’ variables and qualitative improvements in a mathematically precise method is difficult, these can certainly be incorporated for in growth assessments.

More often than not growth accounting estimates do not include a rather wide range of parameters that affect the quality of growth and play a crucial role in the process of development. Conventional growth accounting studies do exclude some aspects that are important determinants of economic progress. For instance the

nvestors typically flock to active funds to pass on the stock-picking decisionmaking to a seasoned fund Imanager, with the hope that the fund manager’s

experience and stock-picking capabilities will enable the investor’s portfolio to grow at a faster pace than that set by the benchmark. By using this approach, investors are able to circumvent one problem, only to get stuck in another problem: which fund manager to choose?

As seen in the SPIVA® India Year-End 2018 Scorecard, a large proportion of active fund managers underperformed the benchmark. Over the 10-year period observed, 64% of the large-cap funds underperformed the benchmark, the S&P BSE 100.

In the Indian Equity Large-Cap and Indian Mid-/Small-Cap categories, there was a wide spread in fund performance across different investment horizons (see Exhibit 1). For example, the spread in returns for an investor in two different large-cap funds over a 10-year horizon ending Dec. 31, 2018,could have been as high as 13.2% CAGR. Therefore, the selection of a fund can play a critical role in portfolio returns. The performance range in the case of the Mid-/Small-Cap category was even higher, at 14.92% over a 10-year horizon. The story remains the same across different time horizons. Furthermore, the average net returns generated by active funds were not far off from the benchmark returns (see Exhibit 1).


THE OPPORTUNITY COSTOF ACTIVE MANAGEMENT

By Akash Jain Associate Director - Global Research & Design S&P BSE Indices

INSIGHTINSIGHTS

We also studied the distribution of fund returns and calculated their mean, standard deviation, and skew (see Exhibit 2). The study compared the fund returns data distribution with a hypothetical normal curve constructed with the same mean and standard deviation. Again, we considered the large-cap category and mid-/small-cap category for this analysis.

Source: S&P Dow Jones Indices LLC and Morning Star. Data from Dec. 31, 2008, to Dec. 31, 2018. Past performance is no guarantee of future results. Chartsare provided for illustrative purposes and reflect hypothetical historical performance. The S&P BSE 400 MidSmallCap Index was launched on Nov. 30, 2017.

1Exhibit 1: Performance Spread of Active Funds in Indian Equity Large-Cap and Mid-/Small-Cap Categories

Average Fund Return Benchmark Return

23.6

21.6

15.2

10.4

7.4

5.1

16.0 13.9

10.0

16.1

13.6 12.8

24

22

20

18

16

14

12

10

8

6

4

Indian Equity Large-Cap Category versus the S&P BSE 100

10-Year 5-Year 3-Year

Fund

Ret

urn

25.91

29.87

16.49

10.99 11.44

3.24

19.4 19.8

10.0

18.4 18.8

10.5

28

23

18

13

8

3

Indian Equity Mid-/Small- Cap Category versus the S&P BSE 400 MidSmallCap Index

Average Fund Return Benchmark Return

10-Year 5-Year 3-Year

Fund

Ret

urn

• Large-Cap Category: We witnessed a positive skew (skewed to the right),which implies that, generally speaking, the mean was higher than median, indicating that few funds generated extraordinary returns, pulling the category average higher whereas the performance of most funds lies to the left of the mean.

We also studied the distribution of fund returns and calculated their mean, standard deviation, and skew (see Exhibit 2). The

study compared the fund returns data distribution with a

hypothetical normal curve constructed with the same

mean and standard deviation.

Akash Jain is part of the Global Research &Design group at S&P Dow Jones Indices, which is responsible for conceptualizing and developing new investable index-based products across different asset classes. He represents S&P Dow Jones Indices at media engagements, conferences, and other client events.

He is an integral part of Asia Index Private Limited, which is a partnership between S&P Dow Jones Indices and BSE Limited (formerly Bombay Stock Exchange).

He joined S&P Dow Jones Indices in 2016.He has been in the financial markets for more than six years, including at Deutsche, Credit Suisse, and Edelweiss, with experience in both the buyside and the sellside. He has worked extensively in researching, back-testing,and trading portfolios across different asset classes.

He attained his Bachelor of Technology (B.Tech) degree from Indian Institute of Technology (IIT Bombay) and holds a Masters of Business Administration (MBA) from Saïd Business School (University of Oxford).


INSIGHTINSIGHTS

The writing on the wall is clear. Fund outperformance is random and predicting an outperforming mutual fund maybe as challenging as the stock-selection process. From a purely mathematical point of view, an investor has better odds of flipping a coin than identifying an outperforming active mutual fund. Therefore, investing via a systematic, style consistent, low-cost passive route could be a better bet for an investor.

1. This study focuses on those funds that have survived the investment period of 10years (i.e., any fund that was merged or liquidated during the period from Dec. 31, 2008 to Dec. 31, 2018 were not considered).

Source: S&P Dow Jones Indices LLC and Morning Star. Data from Dec. 31, 2008, to Dec. 31, 2018. Past performance is no guarantee of future results. Chartsare provided for illustrative purposes.

Exhibit 2: Performance Distribution of Active Funds in Indian Equity Large-Cap and Mid-/Small-Cap Categories

Source: S&P Dow Jones Indices LLC and Morning Star. Data from Dec. 31, 2008, to Dec. 31, 2018. Past performance is no guarantee of future results. Table is provided for illustrative purposes.

Exhibit 3: Transition Matrix - Performance over Two Non-Overlapping Five-Year Periods

1STQUARTILE

1STQUARTILE

1STQUARTILE

1STQUARTILE

MERGEDOR

LIQUIDATED(%)

QUARTILE RANKING DURINGTHE PERIOD

DEC. 2013 TO DEC. 2018 (%)

QUARTILE RANKING DURING THE PERIOD DEC. 2008 TO DEC. 2013

NUMBER OF FUNDS AT START

INDIAN EQUITY LARGE-CAP CATEGORYst

1 Quartilend2 Quartilerd

3 Quartileth

4 Quartile

27 14.8 33.3 29.6 3.7 18.527 29.6 25.9 7.4 22.2 14.827 22.2 11.1 25.9 18.5 22.228 10.7 7.1 14.3 32.1 35.7

INDIAN EQUITY MID-/SMALL-CAP CATEGORYst1 Quartilend

2 Quartilerd3 Quartileth4 Quartile

14 42.9 0 21.4 35.7 013 23.1 30.8 23.1 7.7 15.413 15.4 38.5 23.1 15.4 7.714 7.1 21.4 21.4 35.7 14.3

• Mid-/Small-Cap Category: We noticed a negative skew (skewed to the left). This implies that the mean was less than the median, which means that only a few funds with large underperformance were dragging the mean down, but that most funds generated superior funds in this category.

This analysis indicates that, at least in the large-cap category, the majority of the funds failed to beat the category average.

What is more challenging is that the relative peer performance of a mutual fund has not been consistent (see Exhibit 3),whichmeans that funds that have outperformed in one period failed to maintain their superior performance in the following periods. In Exhibit 3, funds were classified into four quartiles based on their performance over the five-year period between Dec. 31, 2008,and Dec. 31, 2013. The columns to the right showcase how many of the funds continued to outperform their peers over the period from Dec. 31, 2013, to Dec. 31, 2018. Some important inferences include the following.

1. In the case of the large-cap fund category, only 14.8% of the 27 top-quartile funds continued to be in the top quartile the following five years. However, in the mid-/small-cap category, 42.9% of the 14 top-quartile funds continued to be in the top quartile in the following five years.

2. The worst-performing funds have higher probability to continue their underperformance. For example, in the mid-/small-cap category, 35.7% of the 14 funds in the bottom quartile continued their underperformance and failed to break out from the bottom quartile.

3. The highest number of fund mergers/liquidations was witnessed in the bottom quartile. For example, in the large-cap category, 35.7% of the 28 funds (i.e., 10 funds) in the bottom quartile failed to survive the period from 2013 to 2018.

COMPLIANCE IN FINANCIALMARKETS USING TECHNOLOGY

By Jayesh ShahPromoter, Prism Cybersoft Private Limited

TECH-SPEAKTECH-SPEAK


Service providers have developed

significant capabilities to meet

the key IT needs arising due to

regulatory compliance

mandate such as increased

reporting, data governance, client onboarding, and risk management.

he term compliance describes the ability to act according to an order, Tset of rules or request. In the

context of financial services businesses, it means compliance with internal systems of control that are imposed to achieve compliance with externally imposed rules which are regulated by regulatory bodies governing financial markets. To meet requirements and adhere to the compliance set by regulatory bodies, technology is playing an important role.

Banks and financial institutions are inundated by regulations introduced in the aftermath of the financial crisis of 2008. Lack of regulation and supervision in financial services, lax attitude of banks for managing risk, and easy evaluation standards by rating agencies are cited as some of the reasons that contributed to the crisis. The devastating impact of the financial crisis on the global economy led to regulators enforcing str icter regulatory norms and ensuring increased transparency, accountability, and risk management. Through the introduction of these regulations, the authorities primarily want to prevent another systemic breakdown and financial collapse.

The financial services sector is subject to multiple and complex legal and regulatory compliance requirements that span international boundaries - all of which have implications for storage, backup and the security and integrity of data. There are many Standards defined by various regulatory bodies e.g MIFID, KYC, FATCA,GDPR etc.

Financial market regulation todayis an environment which requires aview across assets, instruments, communicat ions , markets , and regulatory jurisdictions Backoffice

or if a specific problem needs to be investigated you can go back to that data and make sure the data is accurate, it has been kept the right way, hasn’t been tampered with and you can analyse it.

The regulatory compliance space, while complex and overbearing, has been a top priority for senior executives at banks and financial institutions for the last few years, and will continue to be so for the foreseeable future.

Agility is critical as threats and regulations constantly change. As the task of meeting compliance requirements becomes more challenging, backoffice solutions are deploying increasingly sophisticated technology that finds anomalous behavior both earlier and faster. These technology advancements and the resulting enhanced detection serve topositively impact business and customer ’s exper ience. With sophist icated technology, backoffice products are:

• Eliminating financial losses from theft, fraud, regulatory penalties, and sanctions.

• Decreasing operational costs to investigate and research suspicious activity.

• Improving customer experience with fewer disruptions in service

• Adapting to changing business needs and regulatory requirements.

• Detect & prevent non-compliant activities

Service providers have developed significant capabilities to meet the key IT needs arising due to regulatory compliance mandate such as increased reporting, data governance, client on boarding, and risk management. Service providers invested in proprietary solutions, formed alliances, and acquired strategic targets for this purpose.

products have been playing a very important role in enabling financial market participants like banks, brokers, treasuries, institutions etc to adhere compliance requirements set by respective regulatory bodies. Backoffice products are helping market participants in maintaining:

• Strong authentication of Data• Transparency of Data• Accuracy of Data• Integrity and confidentiality of Data• Data Processing and Portability• Risk Management

Backoffice products with help of latest technology is driving the financial industry systems of compliance and ensuring that the right controls are in place, that there’s a formal report onthe design, implementation and effectiveness of those controls to protect the data, but also that you retain the right data securely so that if there’s a problem

TECH-SPEAKTECH-SPEAK


As new regulations or amendments to existing regulations are announced, pressure for compliance will increase. Approaching timelines will also add to the compliance stress and banks might need to invest more resources in their function.

Banks and financial institutions need to make their functions more robust and ensure they are prepared to meet any upcoming modi f icat ions, new regu lat ions, and approaching timelines.

Stay ahead of the constantly evolving regulations, partner and proactively inform clients about upcoming changes and help them navigate this space. Invest in reusable components and scalable architecture.

Growing importance of data governance and security.• Data quality and governance is at the core of regulatory

compliance. Ensuring data completeness, consistency, and aggregation forms the foundation of transparency and reporting

• Data security is another critical aspect and security breaches of sensitive customer data must be avoided at all costs

• Further, in the times of extreme personalization of services, banks also need to strike the right balance in leveraging customer-related data for improved products and services and privacy intrusion

• Invest in quality data management programs, improving their data warehouses, and managing data security

• Improve internal processes to manage, store, and access data

• Take regulatory compliance as an opportunity to improve and revamp data quality and repositories

For service providers, this is a golden opportunity. They can up-sell / cross sell in their existing IT services agreement with banks and financial institutions with data management, reporting, and warehousing solutions tailored specif ical ly for regulatory compliance

Increasing cross-country / cross-border impact of regulations• Many regulations such as Dodd Frank, BASEL III, FATCA,

and SEPA have cross-country and cross-border impact. As most large banks are present across multiple geographies, their compliance function will become even more complex

• While so far North America and Europe have driven spending on regulatory compliance, emerging geographies such as APAC and MEA will also drive growth in regulatory spending in the years to come

Banks with global presence or expansion plans must keep abreast of the changes and have a holistic view spanning countries and borders

• Service providers must develop solutions taking geography-specific nuances into account

• Global majors will have distinct advantage due to their expansive and deep presence across different countries

Centralization and consolidation of the regulatory compliance function • Historically, risk and compliance functions were the

responsibility of different departments and compliance executives resisted centralization as they feared loss of control and effective output from a centralized unit

• However, this is now changing with more organizations moving towards a central function - this will prove to be both more impactful and cost efficient

• Consol idate and centra l i ze compliance function rather than staying in silos across different departments in the organization

• If a centralized department is a concern for some banks, they can adopt a hybrid approach to compliance management

• Stay aware of the changes and app roach buye rs accordingly

• Wh i l e ea r l i e r se r v i ce providers targeted individual units of an organization, they should now reach out to the central compliance officer / department

Implications for ProvidersRegulatory compliance insights Implications for Participants

Upcoming / evolving trends in regulatory compliance and implications for participants and service providers

Jayesh Shah holds B.S. and M.S. in Computer Engineering from University of Bridgeport, USA. He has more than 25 years of experience in field of IT.

He promoted Prism in 1996 and as its MD and CEO provides Vision, Direction and also takes care of Strategic Affairs, Marketing and Commercials.

Prism has recently been awarded by STPI & CeBIT INDIA for Best IT Exhibitor of ‘Make in India’ Pavilion at CeBIT India 2014.

Note: Looking at the Compliance Requirements and Regulatory Changes, We are reprinting the Article from 2018

Key findings:

ASIA-PACIFIC MARKETSMONTHLY HIGHLIGHTS

AND INSIGHTS

Ÿ M&A Activity By Country, Sector

Ÿ Initial Public Offerings

Ÿ Private Equity Investments & Buyouts

Ÿ Venture Capital Investments

Ÿ Credit Ratings Actions

Ÿ Market Attributes: Index Dashboard

Contact Information: If you have any questions relating to the content featured in the publication, please contact [email protected]

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GLOBAL INSIGHTSGLOBAL INSIGHTS



M&A ACTIVITY IN ASIA PACIFIC: SELECTED SECTORS

Source: S&P Global Market Intelligence as of August 1, 2019. Figures are based on M&A announcement dates. Includes closed and pending transactions as well as those without transaction values. NSD – No Sector Disclosed. Tables are provided for illustrative purposes. Data sorted by no. of deals and by transaction value from

highest (darkest green) to lowest (lightest green).

As of July 2019, overall deal volume in Asia Pacific remained mostly flat. Telecommunication services and the energy sector continued to be the best and worst performing sectors, respectively. The year-to-date total value of deals dropped by 25% YoY, with biggest decrease seen in energy, utilities, and staples sectors.

No. of Deals YTD Activity (19’ vs. 18’) Value of Deals (USDmm) YTD Activity (19’ vs. 18’)

No. of deals

'19 YTD '18 YTD YoY Growth

Industrials

Discretionary

IT

Real Estate

Materials

Teleco. Services

Health Care

Staples

Financials

Utilities

Energy

NSD

Total

1040

768

726

571

480

349

340

327

323

186

102

801

6013

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018

YoY ComparisonThrough

Jul 31, 2019

Sector

924

771

666

582

474

302

367

290

321

179

109

742

5727

13%

9%

16%

13%

4%

8%

0%

-2%

1%

-7%

1%

-6%

5%

No. of deals

'19 YTD '18 YTD YoY Growth

Real Estate

Industrials

Materials

Financials

Discretionary

IT

Staples

Healthcare

Teleco. Services

Energy

Utilities

NSD

Total

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

Sector

59,111

42,707

16,804

41,392

22,039

16,648

22,147

20,488

24,761

19,503

17,563

442,191

139,028

-13%

-21%

54%

1%

-41%

63%

-73%

-42%

6%

-57%

-76%

-72%

-38%

51,645

37,774

33,802

25,828

24,177

22,173

17,691

13,150

8,709

6,060

5,444

28,636

275,087

M&A ACTIVITY IN ASIA PACIFIC: SELECTED COUNTRIESIn July 2019, 690 M&A deals were announced for a total of US$29bn in aggregate deal value. On a year-over-year basis, total deal volume decreased by 16%, while total deal value also saw a significant decline of 32%. The most active M&A market was China, with total value of US$17bn across 272 deals, followed by Australia and Malaysia.

Source: S&P Global Market Intelligence as of August 1, 2019. Figures are based on M&A announcement dates. Includes both closed and pending

transactions as well as those without transaction values. Charts are provided for illustrative purposes.

Key Threshold (No. of Deals)

0 - 14

>14 - 63

>63 - 126

>126 - 190

>190 - 253

>253 - 316No. of Deals and Value YTD Activity (19’ vs. 18’)

No. of Deals and Value by Country (Jul’19)Country No. of Deals Value of Deals ($USDmm)

China Australia Japan India Malaysia Hong Kong Singapore South Korea Vietnam Thailand New Zealand Indonesia Philippines Taiwan

31612311072353426242117151485

14,618.603,332.404,976.005,133.50111.10483.10

3,794.40585.8065.10465.9020.80281.50

66257

19 YTD 18 YTD YoY Growth 19 YTD 18 YTD YoY Growth

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

No. of deals Value of Deals ($USDmm)

China -7%Australia 793 900 28,511 41,827 -32%Japan 883 895 22,975 41,001 -44%India 600 821 -27% 24,692 35,346 -30%Malaysia 214 240 6,949 2,791Hong Kong 240 264 8,442 27,517 -69%Singapore 236 211 19,318 24,986 -23%South Korea 345 616 -44% 19,701 27,485 -28%Vietnam 215 314 -32% 667 2,757 -76%Thailand 140 165 -15% 7,666 18,636 -59%New Zealand 115 157 -27% 1,387 4,143 -67%Indonesia 102 98 2,939 6,288 -53%Philippines 47 59 -20% 203 -100%Taiwan 37 75 -51% 701 6,626 -89%Total 6,013 7,019 -14% 275,087 481,037 -43%

2,046 2,204 -7% 130,937 140,346-12%-1%

-11% 149%-9%12%

4%101,286

China 34% -27%Indonesia 32 30 7% 658 912 -28%South Korea 35 30 17% 1,147 1,124 2%India 44 -62% 1,695 3,491 -51%Hong Kong 28 71 -61% 960 1,208 -21%Japan 44 49 -10% 1,093 3,397 -68%Malaysia 23 19 21% 436 207 111%Thailand 14 8 75% 430 418 3%Singapore 15 19 -21% 1,252 645 94%Australia 22 45 -51% 405 2,775 -85%Vietnam 17 25 -32% 51 1,937 -97%New Zealand 1 1 0% 7 11 -41%Philippines - 1 -100% - 152 -100%Taiwan 4 1 64 13Total 449 542 -17% 31,838 48,870 -35%

170 127 23,641 32,579

116

300% 385%

INITIAL PUBLIC OFFERINGS BY COUNTRY

Source: S&P Global Market Intelligence as of August 1, 2019. Figures are based on public offerings offer date. Includes all closed transactions.

Tables are provided for illustrative purposes.

Key Threshold (No. of IPOs)

0

>0 - 10

>10 - 20

>20 - 30

>30 - 40

>40 - 50

In June 2019, 66 IPOs took place in APAC with total proceeds of US$6bn, which was a step up compared to May 2019. However, the number of deals and the value raised via IPO declined 24% and 34%, respectively, on a YoY basis. China led the IPO market in terms of volume, followed by Japan and India.

No. of IPOs and Value by Country (Jul’19)Country No. of Deals Value of Deals ($USDmm)

China Indonesia South Korea India Hong Kong Japan Malaysia Thailand Singapore Australia Vietnam New Zealand Philippines Taiwan

5014865555322000

7,401.90486.80255.30

74144.40133.6052.90

621,068.50

17.800.20

00

26.40

No. of IPOs and Value YTD Activity (19’ vs. 18’)


Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

No. of deals Value of IPOs ($USDmm)

China -22% 128%Japan 139 174 -20% 2,950 1,610 83%India 171 171 0% 8,130 4,904 66%South Korea 89 117 -24% 6,883 7,423 -7%Singapore 33 28 18% 2,920 3,524 -17%Australia 51 55 -7% 5,004 9,687 -48%Indonesia 11 3 825 43Thailand 2 2 0% 101 54 87%New Zealand 8 6 33% 2,259 188Philippines 4 1 255 28Vietnam 12 15 -20% 178 822 -78%Hong Kong 9 10 -10% 444 1,565 -72%Malaysia 11 5 349 181 93%Taiwan 3 5 -40% 77 2,265 -97%Total 956 1,122 -15% 137,460 79,193 74%

413 530 107,086 46,900

267% 1829%

1100%300% 812%

120%


0

>0 - 10

>10 - 20

>20 - 31

>31 - 41

>41 - 51

Source: S&P Global Market Intelligence as of August 1, 2019. Figures are based on M&A announcement dates. Includes both closed and pending

transactions as well as those without transaction values. Tables are provided for illustrative purposes.

The APAC private equity market saw 14% decrease in deal volume YoY. Nevertheless, the overall total value of deals throughout the region soared by 89% YoY. With 61 PE deals announced in June, China accounted for 44% of the total deal volume and 80% of the total deal value in this region.

No. of Deals and Value by Country (Jul’19)Country No. of Deals Value of Deals ($USDmm)

China Japan India South Korea Singapore Australia Indonesia Thailand New Zealand Philippines Vietnam Hong Kong Malaysia Taiwan

5124231610932111000

1,151.401,283.60

490.5180

1,821.109.5020.50101

10.50250.10

1000

0.00

No. of Deals and Value YTD Activity (19’ vs. 18’)

PRIVATE EQUITY INVESTMENTS & BUYOUTS: SELECTED COUNTRIES


Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019






VENTURE CAPITAL INVESTMENTS: NON BUYOUTS BY COUNTRYThere were 197 VC deals with total deal value of $98bn announced in June. The total deal volume decreased slightly by 1%, whereas in terms of total value of deals, there has been a 23% decline YoY. The vast majority of the VC deals originated in China, which topped the chart with 94 deals announced and US$95 raised. The largest VC deal by value was the US$1bn deal by Blackstone Group L.P. to purchase Sydney Office Towers.


0

>0 - 19

>19 - 38

>38 - 58

>58 - 77

>77 - 96

Source: S&P Global Market Intelligence as of August 1, 2019. Figures are based on transaction announcement dates. Includes both closed and pending

transactions as well as those without transaction values. Non-buyouts will include all features except for leverage buyouts ( LBO), management buyout

or secondary LBO. Tables are provided for illustrative purposes.

No. of Deals and Value by Country (Jul’19)

No. of Deals and Value YTD Activity (19’ vs. 18’)

Country No. of Deals Value of Deals ($USDmm)China Japan India South Korea Singapore Australia Indonesia Hong Kong Vietnam Malaysia Philippines Taiwan New Zealand Thailand

963936168652211100

2,734.50189.80

863275

152.301,729.90

45.704.801.40

01.50

10

0.00

China -27% -65%Japan 257 307 -16% 1,793 1,856 -3%India 246 263 -6% 6,388 6,273 2%South Korea 64 86 -26% 1,897 6,217 -69%Singapore 85 55 1,102 3,615 -70%Australia 41 63 -35% 2,103 784 168%Indonesia 34 19 445 70Hong Kong 18 19 -5% 414 352 18%Vietnam 19 21 -10% 123 828 -85%Malaysia 9 10 -10% 40 29 37%Philippines 6 3 8 30 -74%Taiwan 6 10 -40% 5 1,996 -100%New Zealand 8 7 14% 45 34 31%Thailand 4 7 -43% 30 55 -45%Total 1,397 1,695 -18% 31,980 72,549 -56%

600 825 17,589 50,410

55%

79% 534%

100%


Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019

Jan 1, 2019 -Jul 31, 2019

Jan 1, 2018 -Jul 31, 2018


Jul 31, 2019


MARKET ATTRIBUTES: INDEX DASHBOARD

• Asian equities were mixed in July on the back of increased regional and global trade concerns. South Korea and Japan clashed after South Korea demanded reparations from Japan for forced war time labor. In response, Japanese Prime Minister Abe restricted exports of chemicals needed for the production of semi-conductors to South Korea, escalating tensions.

• The S&P Pan Asia BMI declined 1%, led down by the Energy Sector, which dropped 4% despite a positive month for oil prices. Energy wasn’t alone, however; seven of the eleven sectors of the S&P Pan Asia BMI ended the month in the red. Information Technology helped to offset some of the declines, gaining 1% on the month.

• In July, the S&P Taiwan BMI lead the way up, gaining 4%. Trade conflict with Japan weighed on the S&P Korea BMI, which finished the month with a decline of 5%.

• This month, Australian equities marked the completion of a recovery that began over a decade ago. On July 30th, the S&P/ASX 200 finally broke through 6,828 to record the first closing all-time high in the benchmark since 2007. The S&P/ASX 200 finished July with a 3% gain, putting it up 23% year-to-date

• Asian fixed income indices ticked up across the board this month, driven by fears of slowing global growth and dovish global central banks. The S&P BSE India Government Bond and S&P Korea Government Bond indices were the leaders in July, with both gaining 2%.

Summary

Source: S&P Dow Jones Indices LLC and/or its affiliates. Data as of August 1, 2019. Index performance based on total return. Numbers in brackets are closing price levels for the corresponding indices. Returns for single country indices and single country strategies are in local currency, otherwise USD. Sector contributions to the S&P Pan Asia BMI are calculated over the prior month.

Charts and graphs are provided for illustrative purposes. Past performance is no guarantee of future results. For more information, please visit our website at www.spdji.com

-0.5%

-0.4%

-0.2%

-0.2%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.1%

0.1%

0.2%

-0.70% -0.50% -0.30% -0.10% 0.10% 0.30%

Taiwan

Japan

Australia

Indonesia

New Zealand

Philippines

Pakistan

Singapore

Malaysia

Thailand

China

Hong Kong

India

South Korea

S&P Pan Asia BMI (-0.8%)

S&P Pan Asia BMI Country ContributionJuly 2019

FORUM VIEWS - SEPTEMBER 2019

Kamlesh P. Mehta B.Com. FCA, DISA (Post qualification course in information system audit from ICAI) is a practicing Chartered Accountant by profession having an experience of 24 years in the field of capital market compliance consultancy, depository services audit, management consultancy, system audit and Commodity market compliance consultancy.

He is a Proprietor of CA firm M/s. KAMLESH P. MEHTA ASSOCIATES & Partner of MEHTA SANGHVI & ASSOCIATES located at Borivali, Mumbai.

He along with his associated concerns specializes in Audit and Assurance Services of various compliance areas related to Capital Market Operations and system audits of broking industry.

He is also providing compliance calendar to BSE brokers forum and ANMI regularly and same is published in their journal. Recently he and his team had drafted compliance manual for commodity brokers published by BSE brokers forum.

He is a regular speaker of the various seminars for broking and DP compliances organized by WIRC (Western India Regional Council of ICAI) and study circle group.

COMPLIANCE REQUIREMENT FORTHE MONTH OF SEPTEMBER - 2019

Compiled by CA Kamlesh P. Mehta(B.Com, FCA, DISA)M/s. Kamlesh P. Mehta Associates

COMPLIANCE COMPLIANCE CALENDAR

22

Segment Particulars Due Date

BSE

PMS

All Exchanges

Income Tax

NSE

All Exchanges

Stamp Duty

Depositary

Income Tax

MSE

NSDL & CDSL

PMS

NSE & MSE

Income tax

BSE / NSE / MSE

BSE

All Equity &

Commodity Exchanges

All Stock Exchanges

BSE - Uploading of margin funding file for the month of August 2019

PMS- Submission of Activity Report- through SEBI portal

Contingency Drill / Mock Trading Session (Subject to circular to be issued by

respective exchanges)

TDS Payment for the Month of August 2019 for Corporate and Individual

NSE - Uploading of margin funding file for the month of August 2019

Uploading clients’ fund balance and securities balances by the stock brokers on

stock exchanges system as per SEBI circular of Enhanced supervision

for the month of August, 2019

Payment of Stamp duty: - Security and Commodity Exchanges

Investor Grievances (Report) • CDSL & • NSDL

Payment of advance tax

Uploading of margin funding file for the month of August 2019.

Submission of Net worth Certificate and balance sheet as at 31.03.2019

Submission of audit Certificate by Qualified Chartered Accountant to SEBI

Annual Returns with Networth certificate and other details as at 31.03.2019

(Subject to circulars)

Filling of Income tax return for corporate entity & Persons covered under Tax Audit

Submission of Corrective Action report for any “Non compliances / Work in

progress / Observation / Suggestion” pointed out by the auditor in System audit report

for the period ended March 2019

No. of STR filed with FIU-IND for the month of August, 2019. (Including NIL STR)

Uploading of Clients’ Funds, collateral and other details lying with the member broker

Uploading of day-wise Holding statement in the specified standard format to exchange

within 4 trading days of subsequent week

01/09/2019 to

07/09/2019

05/09/2019

07/09/2019

07/09/2019

07/09/2019

06/09/2019

10/09/2019

10/09/2019

15/09/2019

15/09/2019

30/09/2019

30/09/2019

30/09/2019

30/09/2019

30/09/2019

Before

30/09/2019

Weekly basis

Weekly Basis

23


REGULATORY PUREGULATORY PULSE

KEY HIGHLIGHTS FROM SEBI’S BOARD MEETING

On June 27, 2019, the SEBI board has approved certain major amendments to the existing securities laws. Some of these changes are discussed below:

Revised framework for issuance of Shares with Differential Voting Rights (DVRs)SEBI shall now allow technology-based start-up companies to issue shares with superior voting rights (SR shares), at a ratio of maximum 10:1 and minimum 2:1. Such SR shares can only be issued to the founders or promoters holding an executive position in the company. Also, such persons must belong to a promoter group whose collective net worth does not exceed Rs. 500 crores.

As per the broad policy provided in the press release, the SR shares must be compulsorily listed on stock exchanges after the issuer company has made a public issue, however, they cannot be transferred or encumbered. Absolute restrictions such as these may hinder the very objective of listing, i.e. free transferability of shares.

Further, enhanced rules of corporate governance and other restrictions have also been imposed to keep a check on the holder of SR shares, including norms for the protection of interests of public shareholders. For instance, certain ‘coat-tail provisions’ have been included which specify that SR shareholders cannot exercise their superior voting rights in important resolutions such as, related party transactions, willful transfer of control by promoters, etc.

In India, although DVRs were introduced under the Companies Act, 1956, only a handful of listed companies had issued DVRs. The revised framework is made on the lines of the model followed in countries

total share capital or 50% of their shareholding in the company.

These amendments have been made to increase the transparency and accountability of the promoters, in light of the recent events concerning Zee group of companies wherein the value of the security cover (in the form of pledge on promoters’ shareholding) against the debt instruments issued to various MFs had fallen down due to reduction in the underlying stock price of the group companies, adversely affecting various MFs.

Clarifications on closure of Trading WindowThe newly amended SEBI (Prohibition of Insider Trading) Regulations, 2015, effective from April 01, 2019 had provided that the trading restrictions “can be” made applicable from the end of every quarter till 48 hours after the declaration of financial results. With respect to the same, the stock exchanges had clarified that the word ‘can’ be read as ‘shall’. In the Board meeting, the SEBI board has approved the said interpretation and listed companies will now be required to close their trading window from the end of every quarter until 48 hours after declaration of the financial results, except in transactions such as, off-market inter-se transfer between insiders, pledging of shares for bona fide transactions, exercising of stock options, etc.

Considering that declaration of financial results may take about 40-45 days from the end of every quarter, implementation of this amendment would imply that the trading window will be effectively closed for around 160-180 days. This level of micro-management may be unnecessarily harsh and counter-productive.

like the USA, where the founders of start-ups can raise debt-free funds and retain control over the decision making of the company at the same time, while holding a smaller portion of its equity.

Investment Restrictions on Mutual Funds (MFs)In the wake of recent events, SEBI has imposed additional restrictions and has reduced exposure limits for liquid funds. These include: reduction in the sectoral exposure limit from 25% to 20%, prohibition of investments in unlisted non-convertible debentures, commercial papers and equity shares, and mandating a security cover of at least four times for investments in debt securities with credit enhancements. Several amendments related to valuation of money market and debt securities have also been approved by the SEBI board in order to usher in uniformity and transparency in valuation methods.

Lately, owing to frequent events of defaults in repayment of debt obligations by various issuers, the MFs were being viewed as instruments of shadow lending. The revised norms will prevent such practice and permit the MFs to continue their business in a controlled environment.

Disclosure of encumbrances by promotersThe definition of the term ‘encumbrance’ under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 will be amended to include all agreements restricting free and marketable title to shares such as, pledge, lien, non-disposal undertakings, etc. Further, disclosure norms with respect to encumbrances have been made stricter and the promoters will now be required to disclose reasons for encumbrances if they exceed 20% of the

SEBI REVISES GUIDANCE NOTE ON PIT REGULATIONSOn July 22, 2019, SEBI issued a press release announcing the revision of the Guidance Note on SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) to provide clarity on the requirement of maintaining structured digital database and the scope of investment company.

In terms of Regulation 3(5) of the PIT Regulations, ‘board of directors’ are required to maintain a structured digital database containing the details of such persons with whom unpublished price sensitive information (UPSI) is shared. The provision was introduced to aid insider trading investigations by establishing a

link between insiders and persons who trade while in possession of such UPSI. However, since the provision states that the ‘board of directors’ are required to maintain such a database, there was a lack of clarity as to whether this provision is appl icable to intermediar ies and fiduciaries, or only to listed companies.


REGULATORY PUREGULATORY PULSE

JOINT AND SEVERAL LIABILITY OF PACS UNDER TAKEOVER REGULATIONSIn an order dated June 28, 2019, the Securities Appellate Tribunal (SAT) in the matter of Sanjay JethalalSoni & Ors. v. SEBI, clarified that persons acting in concert (PACs) constituted a homogenous unit, and they would be jointly and severally liable for violations under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (Takeover Regulations).

The appellants, Mr. Sanjay JethalalSoni, his wife, Ms. Krupa Sanjay Soni and his proprietary concern, J.M. Soni Consultancy, as PACs, had acquired shares of M/s. Oregon Commercial Ltd. (OCL) above certain thresholds. However, they had failed to make necessary disclosures as provided under Regulation 7(1) read with Regulation 7(2) of the Takeover Regulations. Therefore, the Adjudicating Officer (AO), through an order dated July

27, 2018, had imposed a penalty of Rs. 5 lakh each on the PACs.

Additionally, Mr. Sanjay JethalalSoni and Ms. Krupa Sanjay Soni, had individually acquired shares of OCL beyond the specified thresholds, but failed to make necessary disclosures in violation of Regulation 7(1) read with Regulation 7(2) of Takeover Regulations, and Regulation 13(1) and Regulation 13(3) read with Regulation 13(5) of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Accordingly, the AO had imposed a penalty of Rs. 4 lakh and Rs. 5 lakh on Mr. Sanjay JethalalSoni and Ms. Krupa Sanjay Soni, respectively.

While partly allowing the appeal, SAT observed that Regulation 45 of the Takeover Regulations provides for imposition of penalty on an acquirer or any

other person acting in concert, and not on the acquirer and person acting in concert. SAT held that PACs were required to be treated as a homogenous unit for the purposes of imposition of penalty, and the AO’s decision to impose a penalty of Rs. 5 lakh on each of the appellants, as PAC, was incorrect. Accordingly, SAT modified the penalty to Rs. 5 lakh, to be paid by the appellants jointly and severally.

According to the scheme of law envisaged under the Takeover Regulations, persons acting in concert are not viewed as separate entities, but they are considered to work as one cohesive structure for acquisition of shares. In light of the same, the abovementioned order keeps a check on the erroneous imposition of penalties under the Takeover Regulations on PACs as separate entities.

Courtesy: Finsec Law Advisors A financial sector law firm which provides regulatory advice and assistance focusingon the securities, investments and banking industry. www.finseclaw.com

intermediaries and fiduciaries, which handle UPSI of a listed company in the course of their business operations, are required to maintain such a database. Further, with respect to investment companies, it is clarified that only those non-individual corporate promoters of intermediaries or fiduciaries, whose main object or principal activity is investing in securities of other companies,

are sought to be covered under Regulation 9(4)(iii).

While the Guidance Note provides much needed clarity, mandating intermediaries and fiduciaries to maintain a digital database with time stamping and audit trails, even where they receive UPSI on a single occasion, seems excessive.

Further, Regulation 9(4)(iii) of the PIT Regulations states that all promoters ‘who are individuals or investment companies for intermediaries or fiduciaries’ shall be covered by the code of conduct. However, an ‘investment company’ has not been defined.

The revised Guidance Note clarifies that not only listed companies, but also

Disclaimer :The newsletter is not in the nature of alegal opinion or advice. Copyright reserved.

Courtesy: Finsec Law Advisors A financial sector law firm which provides regulatory advice and assistance focusingon the securities, investments and banking industry. www.finseclaw.com

SAT: DISGORGEMENT CAN BE FROM ANY POINT OF UNJUST ENRICHMENTIn its July 12, 2019 order in the matter of Asia Texx Enterprises Ltd. v. SEBI, the Securities Appellate Tribunal (SAT), while observing that disgorgement is not a penalty, held that equitable remedy demands that the disgorgement can be made from any point of unjust enrichment, and need not be made only from the final beneficiary of the unjust enrichment.

The appeal was preferred against an order by SEBI directing the appellant to disgorge USD 92 million. In this convoluted case of manipulation of Global Depository Receipts (GDRs) involving a listed company, Cals Refineries Limited (Cals), the appellant

stated that it received a sum of USD 92 million from Cals towards purchase of refinery machinery. While no machinery ever changed hands, the amount of USD 92 million was immediately transferred by the appellant to another entity, M/s Honor Finance Limited, from which the appellant received GDRs of Cals. These GDRs were transferred free of cost to Mr. Gagan Rastogi, the beneficial owner of the appellant and a promoter of Cals. The appellant contended that the amount merely changed hands through accounting entries and no unlawful gain was made by it, and therefore, the disgorgement should not be ordered against it.

Disagreeing with this contention, SAT observed that the appellants were unjustly enriched in the scheme as no machinery was ever transferred for which payment was received by the appellant. In light of this, SAT held that if any entity, which was unjustly enriched, knowingly transferred those proceeds further to some other entity, then the regulator may disgorge the same either from the original beneficiary or from any other point in that transfer chain.

The above decision is an enabling order, as it permits SEBI to approach any entity in the transaction chain for disgorgement, once a violation is established.

ANALYZING CIRCULARS (07 JULY TO 03 AUGUST 2018)

CIRCULARSCIRCULARS


Regulator Important Circular's Title For The Period

SEBI Streamlining issuance of SCORES Authentication for SEBI registered intermediaries -->> In order to streamline the process of providing SCORES credentials in the interest of investors, generation of SCORES user id and password for new SEBI registered intermediaries being automated where details regarding user id and password will be sent through auto-generated e-mail to Contact Person/Compliance Officer as provided in the online Registration Form.~~ Accordingly newly registered intermediaries are no longer required to submit Form-B as per SEBI circular dated December 18, 2014.

SEBI Consultation Paper on SEBI (Portfolio Managers) regulations, 1993 -->> SEBI has released consultation paper on portfolio managers with a series of proposals and is seeking public comments by August 30th,2019 .The revised regulations include -Easing of documentation process w.r.t acknowledgement of fee structure.~~Working group proposed to amend definition of principal officer besides enhancing the minimum educational qualification requirements. According to the recommendations, portfolio managers may be permitted to invest only in listed securities (equity, debt or commodity derivatives) and units of mutual funds, on behalf of their clients. Currently, no such restrictions exist. Periodic reports should be furnished to clients at least once in 3 months instead of the current regulation of 6 months.~~It details information on conflicts of interest in services offered by group companies of PM should also be mandatory in the disclosure document. Commission paid to the distributor may also be included. ~~Additionally, the working group has also made recommendations on performance reporting by portfolio managers, reporting and disclosure requirements of portfolio managers, and rationalization.~~Increase in minimum net worth of PMS managers to Rs.5 crore from Rs.2 crore. ~~Minimum investment amount of Rs 50 lakh so that small savers can be prevented from taking exposure in PMS that technically carry higher risks, such as concentration risk, illiquidity, wide investment mandate, etc, ~~There is enhanced the qualification criteria. Principal officer should have NISM certification too besides the current criteria such as professional qualification in finance, law, accountancy or business management from a university or an institution recognised by the Central government or any State government or a foreign university. ~~PMS should have a principal officer, compliance officer and at least two employees~~Proposal includes disclosure of performance metrics.~~Returns to be calculated using time-weighted rate of return (TWRR). While calculating returns using TWRR, all cash and all investments in liquid funds, i.e., the cash drag has to be mandatorily included; and performance has be reported net of all fees, all expenses and taxes.~~PM to provide Disclosure Document along with a certificate to clients , prior to entering into an agreement instead of earlier provision of providing the same two days prior to the execution of PMS agreement~~ Whereas in case of material change , Disclosure Document to be filed with SEBI before circulation to any clients within 5 working days from the date of the change along with the certificate in specified format , whereas earlier disclosures were required to be filed every six months or when material change is effected whichever is earlier.~~Thirds party outsourcing of PMS not allowed.

SEBI Database for Distinctive Number (DN) of Shares - Action against non-compliant companies -->> SEBI mandated issuer or its agent to daily reconcile the records of dematerialized securities with all securities issued by them in order to enable depositories to maintain a complete reconciled record of equity shares, including both physical and dematerialized shares, issued by the company.~~Thus in case of noncompliant companies exchange to exercise Beneficiary Owner a/c level freezing including all corporate benefits and further restrict from any transfer, by way of sale, pledge, etc., of any of the securities, held by the promoters and directors of non compliant company and shall retain the same till such time the company complies with the provision of SEBI circular .~~Further depositories are advised to keep in abeyance in specific cases where moratorium on enforcement proceedings has been provided for under any Act, Court/ Tribunal Orders, etc.

SEBI/BSE/ NSE Rationalization of imposition of fines for false/incorrect reporting of margins or non-reporting of margins by TM/CM in all segments -->> In order to rationalize and bring uniformity in the manner of imposition of fine for ‘false/incorrect’ reporting of margin collected from clients , Exchange to device a standard framework for imposition of fine where fine will be charged on the basis of materiality of non-compliance done by the member taking into account factors such as number of instances, repeated violations, etc. on TM/CM .~~Further the quantum of fine to be charged may extend to 100% of such false/incorrectly/non reported amount of margin and/or suspension of trading for appropriate number of days.

SEBI/BSE Staggered Delivery Period in Commodity futures contracts -->>All compulsory delivery commodity futures contracts shall have a staggered delivery period i.e. beginning few working days prior to expiry of contract and ending with expiry subject to limitation of minimum period of five working days.~~Exchange to jointly prepare and publish framework outlining factors and circumstances required for longer duration of staggered delivery period in any commodity. ~~Further exchange to impose pre-expiry margin by the start of the staggered delivery period.

SEBI Guidelines for Liquidity Enhancement Scheme (LES) in Commodity Derivatives Contracts -->> Exchange to be exempted for first five years its operation from the date of SEBI’s approval for commencement or recommencement of business subject to conditions that Incentive designated for LES shall not exceed 25% of


CIRCULARSCIRCULARS

audited net-worth on the last day of the previous financial year.~~Create a reserve to transfer funds to meet its LES incentives/expenses and the same will not be considered for calculating netwoth.~~Exchange to comply with minimum networth requirement as per SCR (Stock Exchanges and Clearing Corporations) Regulations, 2018.

SEBI/BSE/ NSDL Streamlining the Process of Public Issue of Equity Shares and convertibles- Implementation of Phase II of Unified Payments Interface with Application Supported by Block Amount -->> Effective July 1, 2019, retail applications for blocking of funds, will be discontinued and only the UPI mechanism would be the permissible mode. Now only UPI Mechanism would be permitted. Applications through UPI in IPOs can be only through SCSBs / mobile applications (apps) whose name appears on the given link of SEBI website (eligible list also given in Annex A of circular)~~FAQs regarding use of UPI with ASBA in public issue given on specified link of SEBI website.

SEBI Circular on Modification of circular dated September 24, 2015 on ‘Format for compliance report on Corporate Governance to be submitted to Stock Exchange (s) by Listed Entities’ -->> Formats for Compliance Report on Corporate Governance are revised on the basis of recommendations of the committee under the Chairmanship of Shri Uday Kotak and some of the amendments necessitate changes to the format of the quarterly compliance report. ~~Further the Formats for Compliance Report on Corporate Governance are enclosed as Annexure

SEBI Procedure and formats for limited review / audit report of the listed entity and those entities whose accounts are to be consolidated with the listed entity -->> Since ICAI has revised SA 700 and thus Audit reports needs to be aligned with the revised SA 700 and further ICAI has also suggested certain updates with respect to the limited review report and thus the same will be replaced with revised exhibits and will be effective for financial results for the quarter ending September 30, 2019 and after.

SEBI Standardizing Reporting of violations related to Code of Conduct under SEBI PIT Regulations , 2015 -->> Listed companies, intermediaries and fiduciaries to Report violations of the respective Code of Conduct in accordance with Clause 12 of Schedule B and Clause 10 of Schedule C of PIT Regulations by designated persons and their immediate relatives in standardized format as enclosed in Annexure.~~Further to maintain a database of the violation by designated persons and their immediate relatives in order to entail initiation of appropriate action against them.

SEBI Consultative paper on policy proposals with respect to resignation of Statutory Auditors from listed entities -->> This Public Comments is based on the scenarios where sudden resignation by Auditors of multiple listed companies were observed with reason cited as "Pre-occupation". Resignation of an auditor due to reasons such as pre-occupation before completion of the audit of the financial results for the year seriously hampers the investor confidence ~~Public comments to be submitted latest by August 08, 2019 in prescribe format on proposal regarding Strengthening and clarifying the role of the Audit Committee and Strengthening disclosures to investors regarding Conditions prior to resignation, Format of resignation and Disclosure of views of Audit Committee and the Board of Directors in order to enhance responsible behavior of auditors and strengthen the disclosures to investors and stakeholders.

SEBI Disclosure of divergence in the asset classification and provisioning by banks -->> As per revised RBI requirements, Listed Banks are required to make disclosures to exchanges divergences in asset classification and provisioning, if the additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit before provisions and contingencies for the reference period, or/and the additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for the reference period.

SEBI SEBI (Stock Brokers) Regulations, 1992 - [Last amended on April 01, 2019] -->> The word “and Sub Broker” omitted by SEBI and thus Regulations will be called from Securities and Exchange Board of India Stock Brokers Regulations, 1992 .~~Further the same also omitted from definition of “regulations”,” Stock Broker”.~~Further clause regarding Register of accounts of sub-brokers, Agreement specifying scope of authority, and responsibilities of the Stock Broker , Dealing with unregistered Sub-broker, omitted .~~Word Stock broker omitted from the regulations regarding Liability for contravention of the Act, rules or the regulations, Monetary Penalty , Action under the Enquiry Proceeding Regulations, Prosecution .~~Further Form B, C , CA, and D under Recommendation of The Clearing Corporation/Form DA, DB, DC,E under CERTIFICATE OF REGISTRATION is omitted

SEBI Report of Working Group on Issues Concerning Proxy Advisors-seeking public comments -->> SEBI has formed working group to regulate and review the activities of proxy advisors, on account of this Working group provided various aspects of proxy adviser and also suggested that SEBI may like to obtain public comments on the substantive matters stated in the report before any regulatory review is undertaken.~~Institutional investors like FPI, PM, AIF, REIT, Infrastructure Investment Trusts are mandated to ensure that proxy advisory firms employed by them should have appropriate capacity & capability to issue proxy advice and such firm is complying with code of conduct for proxy advisers as specified by SEBI , Accordingly working Group has issued a report on issues concerning proxy advisor and recommended public to submit their comments on working group Report latest by August 18,2019 in prescribed format.


CIRCULARSCIRCULARS

SEBI-REGULATION SEBI LODR (Third Amendment) Regulations, 2019 - Dated June 27, 2019 -->> With effect from June 27 2019 Payments made to a related party with respect to brand usage or royalty shall be considered material if the transactions to be entered into individually or taken together with previous transactions during a financial year, exceed five percent( Earlier it was 2%) of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity”

SEBI-PRESS RELEASE Grant of Qualifying Central Counterparty (QCCP) status to MCXCCL -->> MCXCCL has been granted qualifying central counterparty (QCCP) status.

SEBI-PRESS RELEASE Special Court Convicts Four Directors of Kolkata based Company for Non-Compliance of Summons Issued by SEBI -->> Sauravmoy Ghosh, Jayanti Sounth, Hirak Nath Sounth, and Khudiram Sounth directors of Roofers Realty Limited, they were involved in illegal mobilization of funds from the public , thus SEBI sent summons directors to appear before the Authority ,Despite receiving the summons, directors did not appear before the investigating authority.~~Court sentenced three directors, Mr. Sauravmoy Ghosh, Jayanti Sounth and Hirak Nath Sounth to one year simple imprisonment and imposed a fine of Rupees Five Lakhs. The Court has imposed a fine of Rs.2. 5Lakhs on Mr. Khudiram Sounth considering his old age.

SEBI-PRESS RELEASE Amendment of Guidance Note on SEBI (PIT) Regulations, 2015 -->> As per amendment w.e.f February 17, 2016 providing exit opportunity to dissenting shareholders in terms of sections 13 and 27 of the Companies Act and exit offer is exempted from the restriction on contra trade under the PIT Regulations.~~Structured Digital Database will be applicable to listed companies, and intermediaries and fiduciaries handling UPSI of a listed company in the course of business operations.~~Further non individual corporate promoters of intermediaries or fiduciaries investing in securities of other companies to be included within the scope of ‘investment company’

BSE/CDSL UNSC Sanction Committee list- Press Releases -->> SEBI through e-mail dated July 19, 2019, has updated Exchange about insertions/ deletions and amendments made to the UNSC Sanctions Committee List since January 2019.Members need to ensure regular screening of clients based on updated press releases given in the link for addition and changes in names and aliases from strengthening of PMLA processes

BSE UAT for single file uploading of Holding Statement -->> Facility to upload the Holding Statement data to Exchange of a single file for all the dates in a week is being provided in a demo server.~~Revised file naming convention shall be PAN_HS_DDMMYYYY wherein PAN shall be the Stock broker’s PAN and date shall be end of the reporting week i.e. Saturday and file format will be CSV comma separated + ZIP.~~Further with respect to clients with nil holdings , brokers to upload a separate file in specified format (Enclosed as Annexure B) and file naming convention shall be PAN_NH_DDMMYYYY.~~Providing details regarding Login Id and Password to login on UAT for single file uploading of Holding statement.

BSE/NSE Additional Surveillance Measure (ASM) framework - Update -->> Margin for shortlisted stocks is being revised to Higher of 40% or existing margin subject to maximum rate of margin capped at 100% under Stage I of ASM.~~Margin for shortlisted stocks is being revised to Higher of 80% or existing margin subject to maximum rate of margin capped at 100% under Stage II of ASM.~~Further revised margin will be applicable from July 29, 2019.

BSE Reporting of Cyber Security Incidents -->> Providing the format of quarterly reports containing information on cyber-attacks and threats experienced by Stock Brokers /DP and measures taken to mitigate vulnerabilities, threats and attacks including information on bugs / vulnerabilities / threats that may be useful for other Brokers / DP should be submitted to Exchanges / Depositories ~~Further the report needs to be sent in specified format(Detailed in Annexure) quarterly by 1st of the next month after the end of quarter. For July 2019-Sep 2019, reporting to be done by 1st Oct, 2019

BSE Reporting of TM wise Collateral details by Clearing Members. -->> CM are required to submit DP account-wise, TM-wise and ISIN wise details of securities (Non-cash collateral) held and TM-wise details of Cash & cash equivalent collateral on account of weekly upload of Holding statements in a prescribe format as explained in Annexure w.e.f August 01, 2019.

BSE New Categories in UCC system w.r.t. Commodity Derivatives segment -->> Exchange has introduced new client category in UCC System such as F (Farmers), V/H-I (VCPs/ Hedgers) in Individual client type, V/H-NI (VCPs/ Hedgers) in Non-Individual type and DFI (Domestic Financial Institutions) in Institution type and the same will be available only for the client codes to be registered in the Commodity Derivatives segment.

BSE Introduction of NACH E-Mandate through Net-Banking /Debit Card based authentication. -->> NPCI launched NACH E-Mandate authentication either through the user’s net banking credentials or Debit Card details based on the authentication mode selected by the user and thus there will be no physical mandate form as the entire process of mandate registration will be digital.

BSE Streamlining the Process of Public Issue of Equity Shares and Convertibles - Mock Session -->> Exchange to conduct mock session on Live Environment to familiarize the participants with changes in the bidding process in retail category and all existing participants as well as new participants/ intermediaries are requested to participate in the mock session on Saturday July 20, 2019. ~~ Further mock sessions are


CIRCULARSCIRCULARS

restricted to Bidding entry only and thus second stage of creation and acceptance of mandate by Sponsor Bank and Investor respectively will not be available in the mock sessions.

BSE Networth requirement for Market Makers on SME platform -->> Market Makers on BSE SME platform are requested to take a note on Networth adequacy required while applying for market making w.r.t. to forthcoming issues

BSE Order per second in commodity derivatives -->> Exchange to place a limit of hundred orders per second from a particular User Id in commodity derivatives segment with effect from August 05,2019.~~Further , orders entered above hundred orders per second shall not be accepted by Exchange.

BSE Give-up/ Take-up only for client type “INST” and “SPLCLI” -->> Members and Custodians to note that, trades for client “INST” and “SPLCLI” should only be uploaded for Give-up / Take-up (6A/7A) process and any other client type uploaded will not be considered for settlement through Custodian and same will be part of CM obligation. The Custodians would not get such positions in their settlement file.

NSE Various Mock trading and New version of NEAT and NOTIS -->> Exchange has issued various circular regarding Mock session regarding interoperability and new Version release of NEAT and NOTIS in various Segments .

NSE Design of Commodity Indices and Product Design for Futures on Commodity Indices -->> Exchanges willing to start trading in future on commodity indices are required to take prior approval for launching such contracts, further Exchange will submit at least past 3 years data of the index constructed along with data on monthly volatility, roll over yield for the month and monthly return while seeking approval from SEBI.~~ The index value shall be updated on real time continuous basis and shall be displayed on the Exchange website, further Exchange shall ensure a transparent methodology of index construction, calculation, dates and details of roll over, dates and other details of periodic rebalancing, report on compliance with IOSCO principles. ~Regulator has already permitted commodity option in markets, further construction of commodity indices should conform to the guidelines prescribed by SEBI.~~Constituent futures contracts should be in existence on the respective exchange for at least previous twelve months, and should have traded for at least 90 percent of trading days in last twelve months and have a minimum average daily turnover.~~The turnover should be at least Rs 75 crore for agricultural and agri-processed commodities, and Rs 500 crore for all other commodities.~~The size of the contract has to be at least Rs 5 lakh at the time of introduction in the market with an initial maximum tenor of 12 months.~~With respect to position limits, it would be over 1,000 lots or more than 5 percent of the total open interest in commodity index futures for clients. It will be more than 10,000 lots or above 15 percent for traders.~~Regarding weightage, SEBI said any constituent in composite index will have a maximum weightage of 30 percent and a minimum of 1 percent. The weightage of the index constituents will be periodically selected and re-balanced.~~The regulator has directed the stock exchanges to submit proposal with contract specifications and risk management framework for approval before launching any futures contract on an index.~~Exchange with CMD segment must take prior approval of SEBI for start trading in Future on Commodity, and submit at-least past 3 years data of the index constructed along with data on monthly volatility, roll over yield for the month and monthly return while seeking approval from SEBI.~~Exchange must share disclosures such as open interest of top 10 largest participants/group of participants in index futures (both long and short) and the details of their combined open interest in underlying constituents.

NSE Facilitation of collateral movement on operationalization of interoperability (Cash/F&O/Currency Derivatives) -->> As CM required to maintain collateral with one CC for a segment, Collateral movement including all collateral except membership deposit, non settled outstanding and other obligation against outgoing CC to be facilitated from outgoing CC to Incoming CC in order to ease movement of collateral between Clearing Corporations for the clearing members.~~Further Process for Deposit and Release by outgoing CC is detailed in circular.

NSE Revision in base price computation methodology -->> Base price of futures contract, on the day of introduction of the new contract, shall be theoretical futures price and on subsequent trading days it will be the daily settlement price of the futures contract as computed by CC.~~Base price of the options contract, on the day of introduction of the new contract, shall be theoretical value of the options contract based on Black-Scholes model of calculation of options premium or the settlement price as computed by CC and on subsequent trading days it shall be the daily settlement price of the options contract as computed by CC.

NSE Operationalization of interoperability through the designated CC -->> Migration of all CM in the CDS to interoperability framework shall be made effective from August 19, 2019.

NSE NEAT Adapter - New Versions -->> Exchange to release new version 1.0.5 for Windows/1.0.6 for Linux NEAT adapter application in commodities Derivatives segment which can be logged in only through NEAT application. Thus old version of NEAT Adapter application will be supported up to September 06, 2019 and new NEAT Adapter application will be mandatory from September 07, 2019. (Cash/F&O/Currency Derivatives/CDS)


CIRCULARSCIRCULARS

NSE Acceptance of securities as collateral -->> CM permitted to provide approved securities owned by spouse, partners and their spouse, or any director and Further in case of individual/partnership/Corporate CM should ensure that they are sole or first holder and ensure that none of them is minor as on the date of deposit thereof towards margin and security deposit.~~CM permitted to provide approved collateral of its clients which are clearing through such CM towards margin deposit requirement and such CM to provide revised deed of pledge in prescribed format towards margin deposit and to obtain authorisation from its constituents/clients containing declaration as per stipulations of revised pledge deed.(Cash/F&O/CDS/Commodity/Debt & Bond/SLB)

NSE New Version release of NOTIS (4.0.8) in Currency Derivative Segment -->> New Version no. 4.0.8 (NOTISSetup.exe) shall be available in mock trading session in Currency Derivatives segment only on July 20, 2019.~~Members to login with existing NOTIS version no. 4.0.6 from Monday July 22, 2019 in Live~~Further installation and uninstallation procedure of NOTIS exe is detailed in Annexure.

NSE Changes in existing files and additional files on account of Interoperability (F&O) -->> File PS05 /PS06 regarding Position file providing Exchange wise positions to TM/CM will be downloaded at end of the day with effect from July 29, 2019 i.e. post interoperability and file format of the same is enclosed as Annexure.~~Further with regards to Exchange website files regarding TM/FPI Limits for Stocks there is a change in header without any change in file format and for Client Limit for Stocks a new column "Exchange" is added .

NSE Changes in existing files and additional files on account of Interoperability (CDS) -->> File PS05 /PS06 regarding Position file providing Exchange wise positions to TM/CM will be downloaded at end of the day with effect from July 29, 2019 i.e. post interoperability and file format of the same is enclosed as Annexure.~~Further with regards to Exchange website files regarding TM Limits ,PRO Limits and Client Level Limits for Domestic currency and cross currency /TM Limits, Client Level Limits and Exchange level overall position limit for IRF / MIBOR / T Bill and PRO Limits for Daily Proprietary wise OI limit a column is being added for providing the name of Exchange.

NSE Revised file format for CP code modification -->> Facility for CP Code modification will be provided in the NCMS application and revised file format to be uploaded for CP code modification in case of F&O and CD segments is Enclosed as Annexure-1.

NSE New Version of NOTIS (4.0.7) in Future & Option Segment -->> New version of NOTIS exe will be available for testing in F&O segment only in mock trading session on i.e. July 13, 2019.Further and will be available for testing in mock session on 13 July 2019.~~Further Members are requested to login with existing NOTIS version no. 4.0.6 from Monday July 15, 2019 onwards in LIVE and procedure of installation and unistallation is detailed in Annexure.

NSE Shortfall in Networth reported by members -->> Members are required to maintain minimum applicable networth at all points of time as prescribed else Exchange shall initiate the procedure for termination of membership, if they fail to adhere to the minimum networth requirement for a continuous period of 3 years or more

NSE Discontinuation of Trading Access Point (TAP) -->> Exchange shall discontinue all TAP versions i.e. (Windows and Linux) and its associated support w.e.f. mock of August 03, 2019.Further members using Non-Neat frontend (NNF) application to connect via TAP application are requested to connect through Direct Connection using Trimmed Protocol which shall be mandatory w.e.f. mock of August 03, 2019. (Cash)~~ Further revised date of discontinuation of TAP in the CM/F&O/CDS/ Commodity Derivatives Segments shall be effective from mock of September 07, 2019.( Extension of timelines).

NSE Revised Timelines for Change from off-market to on-market for securities settlement in debt segment -->> Deals on CBRICS shall continue to be settled using the off-market mode for corporate debt settlement under the reason code “Others” till August 31, 2019.

NSE Member Portal -->> NSE Policies and Guidelines section on member portal under Services introduced for hosting policies and guidelines applicable to members and the same will be effective from August 02, 2019.

NSE Clarification on Valuation of carry forward positions on account of Interoperability -->> In order to have a common settlement price for futures contract as on the date of implementation of interoperability i.e. July 29, 2019 across all Clearing Corporations price to be computed as the weighted average price across all Exchanges on Friday July 26,2019.

NSE Discontinuation of Give up Facility in NMASS -->> F&O/CDS :Existing functionality under Clearing Management - Giveup/Approval Screen will be discontinued in the NMASS platform and thus would be available only in the NCMS platform on account of interoperability live release w.e.f.July 29, 2019(F&O)/August 5 , 2019(CDS)

NSE Submission of Collateral details by Clearing Members -->> Facility is being provided to all CM for testing the system and formats. Procedure for submitting information through Inspection module in Member portal is


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enclosed as Annexure-A. CM to report details of collateral deposited by the CP along with TM-wise collateral details by CM every week within 4 working days, further initial submission will be made from Aug 01, 2019 to Aug 03, 2019. Link for submission in live environment shall be opened on each Mondays of the immediate following week

NSE New version of NCMS-->> Exchange has released a new version of NCMS (NCMS EXE version 4.1.2), which available on https://www.connect2nse.com and used for live operations from July 29, 2019. (CDS/CM/F&O)

CDSL Caution To Be Exercised While Dealing With Certain Entities -->> DP are hereby advised to exercise extreme caution while dealing with Sagar Investments and its related entities and their details are mentioned in circular as there have been complaints of illegal deposit raising from the public being raised against them. ~~Further since the matter falls within jurisdiction of EOW, DPs may be guided by the instruction of EOW in this matter and no prior concurrence is necessary for processing the transactions and not to execute any debit transactions before informing SEBI & EOW.

CDSL Release Of New Functionality In DPC9 Report -->> CDSL to release new functionality whereby CDAS system allows DPs to upload Bulk BO file in a specified format for generation of DPC9 reports with a limitation of 9999 records and the same will be made available in existing DPC9 setup menu.~~Only valid BOID will be considered for generation of Report and DPID mentioned in the file name should be of logged in DP.

NSDL Change in off-market transfers reason codes. -->> Pursuant to surveillance meeting at SEBI, reason codes for off-market transfer’s are revised by Addition, Separation and Renaming and Discontinuation of Codes and further providing details regarding implementation of system enhancement on account of discontinuation of code to be effective from September 14, 2019.

NSDL Providing information regarding SEBI Complaint Redress System (SCORES) to the investors -->>Members to display information regarding Registering on Score Portal, Mandatory Requirement for filing complaint and Benefits of filing complaint of Scores on their web site. ~~Further procedure for filing of complaints on SCORES and benefit of the same to be included in welcome kit give to Investors at the time of registration.

Compiled by Rekha Shah, Analyze N ControlThe firm specialises in helping Broking houses in Operational process set up and also has softwares focussed on compliances - regulatory search engine - www.circularsnorders.com and has a state of the art client screening product duly integrated with Anti Money Laundering and Surveillance product.

A bench of Justice Shri Arun Mishra and Justice Shri Naveen Sinha

ruled that employers cannot segregate 'special allowance' from basic wages for purpose of PF deductions.


FEATUREFEATURE

By Ramesh L. SoniManagement Consultant &Advisor on Labour Laws

LATEST SUPREME COURTJUDGMENT ON PROVIDENT FUND

To Conclude, PF is payable on Gross Salary, reduced by HRA and any variable allowance.

Certain other points to be considered:• There is no effective date specified by

the PF Department for application of rulings in the Judgment.

• This Ruling has not touched upon the impact of those contributing PF on amounts exceeding Rs.15,000/- per month which is the statutory wage limit.

• This Ruling impacts companies employ ing fore ign nat iona ls qualifying to be International Workers (i.e. other than Indian passport holders) where the statutory wage ceiling of Rs 15,000/- per month does not apply.

• Currently, there is no clarity on whether th is wi l l have any retrospective effect on companies contributing PF on amounts lesser than Rs 15,000/- per month.

implified Analysis of the Supreme Court ruling on Basic SWages for Provident Fund

Computation.

The Honorable Supreme Court of India have passed a Judgment on 28th February, 2019 in case of Regional Provident Fund Commissioner (II), West Bengal vs. Vivekananda Vidyamandir & Others. [Civil Appeal No 6221 of 2011]. A bench of Justice Shri Arun Mishra and Justice Shri Naveen Sinha ruled that employers cannot segregate 'special allowance' from basic wages for purpose of PF deductions.

It’s a judgment on the definition of 'basic wages' for the purposes of calculating Provident Fund contributions. This is a very important judgment as it impacts on cost to companies (Employers) and take home salary of employees.

1. PF contribution is payable on all amounts paid to employees, except on certain amounts. PF is payable on Dearness Allowance.

2. PF is not payable on House Rent Allowance (HRA).

3. PF is not payable on any allowance which is variable and not universal in nature like Overtime, Statutory Bonus, Commission, Incentive, Leave Encashment, etc.

Some Examples for the Calculation of Salary after the SC Judgment:

Case Calculation PF Computation

Example No.:1

In case when Gross Salary is

less than Rs. 15,000/- Per

Month.

PF is now payable on Gross Salary minus OT, HRA,

Statutory Bonus and other variable allowances.

Old PF Contribution - 12,000 X 12% = 1440/-

New PF Contribution - 12000+1500=13500,

13500 X 12% =1620/-

Basic + DASpecial Allowance other than DAHRAOvertimeGross

120001500600400

14500

Example No.:2

In case when Gross Salary is

more than Rs. 15,000/- Per

Month, but Basic is less than

Rs. 15,000 per month

(Example 1).

PF is now payable on Gross Salary minus OT, HRA,

Statutory Bonus and other variable allowances.


New PF Contribution - 13000+1800=14800,

14800 X 12% =1776/-


1300018004000400

19200

Ramesh L. Soni, Management Consultant and Advisor on Labour Laws

Executive Profile:• Qualified as M.B.A. (HR), B.Sc. (Hons.), LL.B., D.L.L.

& L.W. , D.P.M. & I.R., A.I.I.I, M.P.M. (H.R), DMS • Providing consulting services in the field of Labour

Laws since last 35 years• Providing services in this field on retainer ship basis to

more than 350 clients • Contributed articles on Labour Laws• Visiting Faculty at Bharatratna Dr. Ambedkar Institute

of Management & Legal Research, Mumbai

Acted as faculty for Labour Laws at various Seminars as under:-

• Confederation of Indian Industries (CII) (in this seminar various corporates participate)

• Institute of Chartered Accountants of India (ICAI) (Western Region)

• Nasik Branch of WIRC of ICAI; • Bhilai Branch of CIRC of ICAI• The Institute of Company Secretaries of India.• The Bombay Chartered Accountants Society• The Chamber of Tax Consultants• Bombay Stock Exchange (BSE) Broker’s Forum• Maharashtra Institute of Labour Studies (MILS)

[Given training to Asst. Labour Commissioners and Govt. Labour Officers, and Shops & Estb Inspectors of Maharashtra State]

• Larsen & Toubro Limited• The Tata Power Company Ltd.• Hindustan Unilever Field Services Pvt. Ltd• Vodafone Essar Limited • Bajaj Electricals Ltd• Anchor Electricals Pvt Ltd (By Panasonic)• Polycab Wires Pvt Ltd• Gammon India Ltd. • 3i-Infotech Limited• Maharashtra State Electricity Distribution Company

Ltd• Maharashtra State Power Generation Company Ltd• Maharashtra State Electricity Transmission Company

Ltd• Dun & Bradstreet Information Services India Pvt. Ltd • ABN AMRO Central Enterprise Services Pvt Ltd • Bharatratna Dr. Ambedkar Institute of Management &

Legal Research• IL&FS Transportation Networks Limited• Lodha Group of Companies• Ajmera Group of Companies.• Kanakia Spaces Pvt Ltd• JMC Projects (India) Ltd• Oberoi Realty Limited• OMKAR REALTORS & DEVELOPERS PVT. LTD.• National Academy of Indian Payroll (NAIP) • C. V. O. Chartered & Cost Accountants Association• Borivali (Central) CPE Study Circle of WIRC of ICAI, • Ghatkopar CPE Study Circle of WIRC of ICAI• J B Nagar C.A. Study Circle, Andheri,• Dahisar CA Study Circle of WIRC of ICAI

• Pune Camp CPE Study Circle, of WIRC of ICAI • Shri Kutchi Advocate’s Welfare Association• Princeton Academy (in this seminar various

corporates participate)• Satvam Consulting Pvt. Ltd (in this seminar various

corporates participate)• Sharp Facility Management Pvt Ltd (in this seminar

various corporates participate)• STEPS Management Serv ices Pvt . L td ,

UTTARKHAND (in this seminar various corporates participate)

• IEEMA (Indian Electronics & Electrical Manufactures Association)

• Bombay Management Association (BMA)• Bombay Master Printers Associations• Raishabh Academy Pvt Ltd• Shree Vagad Kala Kendra• Kutch Corporate Forum• Association of System Integrators & Retailers in

Technology (ASIRT)• Paper Traders Association • Smart Edge, Goa• Sampat & Mehta (Chartered Accountants)• Computer Media Dealers Association, Fort, Mumbai.• Ahmedabad Branch of WIRC of ICAI.• VAPI Industries Association.• VAPI Branch of WIRC of ICAI.• Carnival Group• Masjid CPE Study Circle of WIRC of ICAI• Highway Concessions One Pvt. Ltd.


FEATUREFEATURE

Example No.:3In case when Gross Salary is more than Rs. 15,000/- Per Month, but Basic is less than Rs. 15,000 per month (Example 2, Where Statutory Wage limit becomes applicable).

PF is now payable on Gross Salary minus OT, HRA, Statutory Bonus and other variable allowances.


New PF Contribution - 14000+1900=15900, 15900 X 12% =1908/- ( PF Ceiling Cap can be kept upto 15000 X 12% = 1800/-)


1400019005000800

21700

Example No.:4In case when Gross Salary is more than Rs. 15,000/- Per Month, and Basic is also more than Rs. 15,000 per month, and Management Currently Contributes PF on restricted / Statutory wages Ceiling.


New PF Contribution - 15,000 X 12% = 1800/-

(NO CHANGE)

( PF Ceiling Cap 15000 X 12% = 1800/-)


20000300060001200

30200

Example No.:5In case when Gross Salary is more than Rs. 15,000/- Per Month, and Basic is also more than Rs. 15,000 per month, and Management Contributes PF on actual Basic.


New PF Contribution - 25,000 X 12% = 3000/-

(NO CHANGE)

Since SC Judgmenthas not touched upon the impact of those contributing PF on amounts exceeding Rs.15,000 per month which is the statutory wage limit.


250005000

100004000

44000

In the current release, we shall endeavour to lay down the critical

impact of Union Budget, 2019 on GIFT

IFSC. Finance Minister Nirmala

Sitharaman, in her maiden budget, has proposed exemption from various tax and accumulated income to companies and

mutual funds in order to promote the IFSC

in GIFT City.

1.0 Synopsis of the previous releaseIn our last two releases, we had comprehensively covered the tax incentives and certain special incentives available for units at International Financial Services Centre (IFSC).

2.0 Coverage in the current releaseIn the current release, we shall endeavour to lay down the critical impact of Union Budget, 2019 on GIFT IFSC. Finance Minister Nirmala Sitharaman, in her maiden budget, has proposed exemption from various tax and accumulated income to companies and mutual funds in order to promote the IFSC in GIFT City. Apart from the same, there are certain critical amendments in the Income Tax Act, 1961 which are expected to bring significantly favourable results for the existing as well as prospective investors at GIFT IFSC and the IFSC segment in India as a whole.

3.0 Key incentives and concessions which have been proposed in the Union Budget:In the ensuing paragraphs, we shall d i scuss va r ious i ncen t i ves and concessions which have been proposed by the Government for units located at IFSC.

3.1 Section 47: Transactions not regarded as Transfer for taxability under Capital gains:Under the existing provisions of the section 47 of the Income Tax Act, any transfer of a capital asset, being bonds or Global D e p o s i t o r y Re c e i p t s o r R u p e e Denominated Bond (Masala Bond) of an Indian company or derivative, made by a non-resident through a recognised stock exchange located in any IFSC and where the consideration for such transaction is paid or payable in foreign currency shall not be regarded as transfer.


BUDGET 2019: INCENTIVES ANDCONCESSIONS TO INTERNATIONALFINANCIAL SERVICES CENTRE (IFSC)

By Roshan Kumar BajajDirector, JPNR Corporate Consultants Private Limited

This is our eighteenth release in the series of

awareness articles on IFSC

FEATUREFEATURE

Clause 17 of the Finance Bill, 2019 (herein after referred to as “the Bill”) seeks to amend the said section so as to provide that any transfer of a capital asset, being bonds or Global Depository Receipts or Rupee Denominated Bond of an Indian company or derivative, made by a specified fund through a recognised stock exchange located in any IFSC and where the consideration for such transaction is paid or payable in foreign currency, shall not be regarded as transfer.

3.2 Section 10: Incomes not included in total income:Clause 6 of the Bill seeks to amend section 10 of the Income Tax Act relating to incomes not included in total income.

It is proposed to insert sub-clause (ix) in the clause (15) of the said section so as to provide that any income by way of interest payable to a non-resident by a unit located in an IFSC in respect of monies borrowed by it on or after 1st September, 2019 shall be exempted from tax.

It is further proposed to insert an explanation to define the expressions “International Financial Services Centre” and “Unit”.

These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the Assessment Year 2020-21 and subsequent assessment years.

3.3 Section 80LA: Deductions in respect of certain incomes of International Financial Services Centre:Clause 28 of the Bill seeks to amend section 80LA of the Income Tax Act relating to deductions in respect of certain incomes of Offshore Banking Units (OBUs) and IFSC.

The said section provides that where the gross total income of an assessee,

(I) being a scheduled bank, or, any bank incorporated by or under the laws of a country outside India; and having an OBU in a SEZ; or

(ii) being a unit of an IFSC, includes any income referred to in sub-section (2), there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to (a) one hundred per cent of such income for five consecutive assessment years beginning with the assessment year relevant to the previous year in which the permission, under clause (a) of sub-

It is also proposed to provide that transfer, at a recognised stock exchange located in any International Financial Services Centre, of such other securities as may be notified by the Central Government in this regard, shall not be regarded as transfer in the hands of a non-resident or a specified fund.

These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the Assessment Year 2020-21 and subsequent assessment years.

For more information & queries, please contactJPNR Corporate Consultants Private Limited10, Bow Street, Near Central Metro, Kolkata - 700012.Email ID: [email protected] / [email protected] Mobile No: +91 8017467202 / 9903271562

Roshan Kumar Bajaj [FCA, CIFRS]

He is a Director in JPNR Corporate Consultants Private Limited which is a business advisory and consultancy company, incorporated under Companies Act, 2013. The company is engaged in providing services related to Goods and Services Tax, advisory services to International Financial Service Centre [Gujarat International Finance Tec-City (GIFT)]. During his association with Deloitte earlier, he has gained rich experience in providing Audit and Assurance services to various large Corporate including Telecom, FMCG, Cement, Consumer Appliances, Port, Healthcare, Hospitality sectors, Steel, Mining etc. He has expertise in providing services relating to IFRS and Ind-AS also and has handled domestic and international projects for the same. He also contributes to various articles relating to his domain.


FEATUREFEATURE

This amendment will take effect from 1st September, 2019.

4.0 Parting remarksThe Budget 2019 has proposed certain welcome amendments for IFSC that will contribute to the value proposition of IFSC. Apart from tax aspects, the key challenge involves resolving the ambiguities in the regulatory framework for IFSC and improving the ease of doing business. It is hoped that these fiscal incentives, accompanied by the establishment of a Unified Financial Regulator, will finally provide the much-needed acceleretion for IFSC to position it on the global map.

section (1) of section 23 of the Banking Regulation Act, 1949 or permission or registration under the Securities and Exchange Board of India Act, 1992 or any other relevant law was obtained, and thereafter; (b) fifty per cent of such i ncome fo r f i ve consecu t i ve assessment years.

It is proposed to amend the said section by substituting sub-section (1) with sub-section (1) and (1A) so as to provide that the deduction specified in the said section in respect of a Unit of IFSC shall be allowed at one hundred per cent for ten years. In addition the deductions may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of f ifteen years beginning with the assessment year relevant to the previous year in which the permission referred to in clause (a) of sub-section (1) of the said section was obtained.

This amendment will take effect from 1st2 April, 2020 and will, accordingly, apply in relation to the Assessment Year 2020-21 and subsequent assessment years.

3.4 Section 115A- Tax on dividends, royalty and technical service fees in the case of foreign companies:Clause 33 of the Bill seeks to amend section 115A of the Income Tax Act relating to tax on dividends, royalty and technical service fees in the case of foreign companies.

It is proposed to insert a proviso to the sub-section 4 of the said section so as to exempt a Unit of IFSC, for which deduction is allowed under section 80LA, from the applicability of the provisions of that sub-section.

This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the Assessment Year 2020-21 and subsequent assessment years.

3.5 Section 115O- Tax on distributed profits of domestic companies:Clause 35 of the Bill seeks to amend section 115-O of the Income Tax Act relating to tax on distributed profits of domestic companies. Sub-section (8) of the sa id sec t ion p rov ides tha t notwithstanding anything contained in this section, no tax on distributed profits shall be chargeable in respect of the total income of a company, being a unit of an IFSC, deriving income solely in convertible foreign exchange, for any assessment year on any amount declared, distributed or paid by such company, by way of dividends (whether interim or otherwise), on or after the 1st day of April, 2017, out of its current income, either in the hands of the company 7or the person receiving such dividend.

It is proposed to amend the said sub-section so as to include the income accumulated after the 1st day of April, 2017 within the purview of the said sub-section.

AMENDMENT TO SECTION 148 OFTHE NEGOTIABLE INSTRUMENTS ACT

By Neha Ahuja Advocate


n the 29th of May, 2019 the Bench comprising of Justice M. R. Shah Oand Justice A. S. Bopanna of

Hon'ble Supreme Court of India in the matter of 'Surinder Singh Deswal @ Col. S.S. Deswal & others Versus Virender Gandhi' have held that 'purposive interpretation' to be accorded to Section 148 Negotiable Instruments Act, 1881 ("N.I. Act") as inserted by Negotiable Instruments (Amendment) Act, 2018 (20 of 2018) ("amendment") and is applicable retrospectively and shall be applicable qua appeals against order of conviction and suspension of sentence for offence under Section 138 N.I. Act even if the complaints were filed prior to the amendment i.e. prior to 01.09.2018, which gives results in giving a benefit of a minimum of 20% of the fine or compensation awarded by the trial court may be directed to be deposited pending appeal by the appellate court.

The Hon’ble Supreme Court while adjudicating the instant appeal referred to the “Statement of Objects and Reasons” of the NI Amendment Act and as regards the first contention concerning applicability of the amended section 148, observed that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of section 138 of the NI Act was being frustrated and therefore the amended section 148 was brought by the Parliament.

It was further observed that the amendment in section 148 does not take away and/or affect any vested right of appeal of the appellants and therefore, the contention on behalf of the appellants that amendment in section 148 cannot be applicable to complaints filed prior to the amended section 148 came into

Neha Ahuja, Advocate

• Working as an Advocate in the field of Tax, Intellectual Property, Capital Markets & Securities, Anti-Corruption, Investigation, Manufacturing, Consumer Products, Industrial Products & Durables, Communications (Telecom & Broadcasting), Energy (Power, Coal, Oil & Gas),Mining, Civil and Criminal litigation. Specialized in Criminal Litigation.

• Working at Prompt Legal, which is one of India’s leading independent law firms.

• Regular faculty at Jai Hind College of Commerce and Science for the subject of Law. Lectures given on the following Acts and Bills:Contract Law, 1872, Companies Act, 2013, Reserve Bank of India Act, 1934, Banking Regulation Act 1949, Negotiable Instruments Act 1881, Indian Insurance Act 1938, IRDA Act 1999, Consumer Protection Act, 1986, Ombudsmen Act 1975,Indian Stamp Act 1899, Indian Registration Act 1908, Lokpal and Lokayukta Bill.

• Worked as a Constitutional expert on several books published by Lexis Nexis namely “India Needs GST” 3rd Edition. Also, written textbooks at college level on the subject of IPR & Cyber Law published by Vipul Prakashan.

• Editor for Law Textbooks on the subject of Contract Law, 1872 and Negotiable Instrument Act 1881 published by Reliable Publication.

• On the panel as a Legal Committee member to social clubs such as the Cricket Club of India.

• Completed her Bachelors in Banking and Insurance (BBI). There after obtained a Masters degree in Commerce (Mcom) and then completed Legum Baccalaureus (LLB).

The reasoning against the other contention, the Hon’ble Supreme Court observed that

even though the amended section148 used the word “may” it is generally to be

construed as a “rule” or “shall” and not as

an exception for which the appellate court has to assign special reasons for

directing for payment of deposit under

section 148.

compensation either on an application filed by the original complainant or even on the application filed by the appellant under section 389 of Cr PC to suspend the sentence.

Therefore, considering the Statement of Objects and Reasons of the amendment in section 148,the Court has clarified that the said section shall be applicable in respect of the appeals against the order of conviction under section 138 of the NI Act, even in a case where the criminal complaints for the offence under section 138 were filed prior to the NI Amendment Act came into force and clarified the confusion over enforce ability of the new provisions.

FEATUREFEATURE

The reasoning against the other contention, the Hon’ble Supreme Court observed that even though the amended section148 used the word “may” it is generally to be construed as a “rule” or “shall” and not as an exception for which the appellate court has to assign special reasons for directing for payment of deposit under section 148. In view of the foregoing, the Supreme Court held that amended Section 148 confers power upon the appellate court to pass an order pending appeal to direct the appellants to deposit the sum which shall not be less than 20% of the fine or

force was not accepted by the Hon’ble Supreme Court. The Court held that if such a purposive interpretation is not adopted then the objective and purpose of the amendment in section 148 would be frustrated.


SEMINARS & EVENTS CSEMINARS & EVENTS CONDUCTED BY BBF FOR THE PROGRESSOF STAKEHOLDERS OF CAPITAL MARKETS (JULY - AUGUST 2019)

Cyber Security & Cyber Resilience framework for Stock Brokers Depository Participants(with BSE Ltd.) | Delhi (25th July)

BBF Governing Board Meeting | Metropolitan Stock Exchange (MSE)Boardroom | Mumbai (3rd July)

BBF - Policy Group Meeting | Hotel Sahara Star | Mumbai (26th July)


BRING JOY INTO YOUR LIFE

By Jaya RowFounder, Vedanta Vision &Managing Trustee, Vedanta Trust

Jaya Row, Articulate, effective and engaging, Mrs. Jaya Row brings alive the wisdom of the Vedas in a modern context. Combining her experience in corporate life with 40 years of study and research of Vedanta she provides useful insights to life.

Charming oration which transforms complex Vedic principles into brilliant management mantras is the hallmark of her discourses. Her clarity, wit and zeal have captivated audiences far and wide and inspired people from all walks of life.

She has the rare gift of being able to connect with and address the concerns of a wide range of people from varied walks of life - from CEOs, corporate executives and policy makers to industrialists, scientists & doctors, lawyers, academicians, homemakers and university students.

Apart from her popular discourses in India, she is a well loved speaker in the United States, UK, Europe and other countries for the last several years. She has been invited to speak at prestigious organizations such as:

• World Economic Forum Davos • Google, California• Intel, California• MasterCard, New York• World Bank, Washington DC• Deutsche Bank, New York• Stockholm School of Economics• Princeton University, New Jersey• Shell UK, London• Coca Cola Company, Atlanta• Young Presidents’ Organization• Maersk Liner Graduate Programme

She has specially designed world-class educational programs on basic human values for school children and the youth. She has published books on life values for 5 to 8 year olds.

o you want to wake up joyful every morning? Jump out of bed with Denthusiasm, excitement, and a thirst

for life irrespective of your circumstances? Everybody wants happiness. Yet only a few really find it. Why is it so difficult to find joy? We are looking for it in the wrong place!

Life is designed such that anything that gives pleasure in the beginning yields sorrow in the end. True happiness appears in the mask of sorrow. Yet people seek instant pleasure, only to find pain. Learn this basic truth and you can avoid a lot of anguish. The ancient Indian seers discovered many such laws and presented them as the science of Vedanta. They led us away from momentary excitement to lasting happiness. Dr. Wayne Dyer said: “Change the way you look at things and the things you look at change.” Whilst you may not feel rapture this moment, you can attain bliss by making judicious choices.

What makes you prefer junk food over healthier options, shun exercise to laze around? Why do you give up a lifetime of happiness for a few seconds of joy? You are acting on the whims and fancies of the mind, disregarding the advice of the intellect. The mind is attracted to instant gratification. The intellect picks short term pain for long term gain. The mind is irrational, unstable and undependable. The intellect is rational, stable and dependable. Consult the intellect and embark on a concerted program to develop the intellect.

Most people act with the attitude of taking rather than giving. It is so pleasing to take. And painful to give. Yet the law is – Give you gain. Grab you lose. The mere thought of giving empowers you, makes you creative and successful. All givers are happy. And giving transforms you from an ordinary mortal to an extraordinary Immortal. Follow this simple principle and miracles will unfold.

People are chasing after sense objects in the belief that that the more they have the more they will enjoy. In fact, they are sculpting a life bereft of enjoyment. It is regulated

The mind is attracted to instant gratification.

The intellect picks short term pain for long term gain. The mind is irrational,

unstable and undependable. The intellect is rational,

stable and dependable. Consult

the intellect and embark on a

concerted program to develop the intellect.

contact with sense objects that gives lasting enjoyment. Let the intellect decide the quantum and frequency of contact and you will enjoy life fully till the last day of your life.

In relationships you want others to cater to you, pamper you, and meet with your expectations. You vociferously stipulate your demands. Rarely do you consider the other person’s needs. Little do you know you are signing up for a life of conflict, pain and loneliness. Love people for what they are, not for what they do for you. Love must be unconditional. It has no reference to any return, tangible or intangible. The more you reach out to people with love, the more they adore you. You become fulfilled.

You want a better home, luxurious cars, exotic food, fancy vacations and more of everything. You are fanning desire. Your assets can never meet with the ever increasing desires. You are trapped on a non-stop treadmill having to run faster for rewards that are shrinking. Ride on desire, the object of desire runs away from you. Rise above desire, the object comes to you. Fix a higher ideal. Dedicate yourself to the well being of others. Your desires will get fulfilled.

PHILOSOPHY & PHILOSOPHY &SELF MANAGEMENT

Jaya Row will speak on‘BHAGAVAD GITA CH 3’ at Bharatiya VidyaBhavan Auditorium, Chowpatty

from 19th to 21st Septemberdaily 6.15 pm to 8 pm.

All are Welcome. WhatsApp no. 9820138429

Some people seek knowledge. But they operate out of mere curiosity. They are information gatherers. They look outward in the world. This leads you nowhere. Turn your gaze inward. Discover the infinite resource of energy, vitality and happiness within.

Life is precious and your only duty is to live it joyfully. Tap into the wealth of Vedanta to experience abundant joy. At your core, you are peace and joy.

Sense it. Embrace it. Live it. Become one with it.

Weekend bingeing has become a

common phenomenon and it’s an everybody-does-it act. But one has to know that recurring bingeing will only lead to more and more weight gain.

WELLNESS Q&WELLNESS Q&ABY NAMITA JAIN

WEEKEND BINGEING

By Dr. Namita JainManaging Director, Kishco Limited


Weekends are days that I allow my willpower to relax. Weekend bingeing has now become a habit and I find pounds slowly creeping up. For any celebration or grievance I find myself at the bar and then at a restaurant. I need to focus on losing weight and improving health. Please suggest what I can do?

Weekend bingeing has become a common phenomenon and it’s an everybody-does-it act. But one has to know that recurring bingeing will only lead to more and more weight gain.

Whether one is celebrating a pay hike or grieving the loss of an account, a trip to the nearest bar is the norm these days. Whether it is the joy of an approaching weekend or the sorrow of cancelled leave, nursing a drink for it is de rigueur. All the drinking and subsequent eating gets accumulated as abdominal fat on your waist.

Did you know?Not all alcoholic beverages have the same alcohol content. If you have a drink containing a higher-than-average percentage of alcohol and mix it with beverages such as soft drinks, fruit juice or cream, you increase the number of total calories consumed. It is shocking that an innocuous Pina Colada packs in more than 250 calories! Add to it short eats like paneerpakodas, chips with creamy dips and your calorie count skyrockets, landing you straight with a beer belly.

Here are some tips I give my clients:1. Sip it. Go slow. Do not guzzle down your

drink.2. Munch low-cal snacks with your drink.

Options such as unbuttered popcorn, roasted chips or julienned carrot, cucumber and celery are perfect. Remember, the snacks you consume with your drink also count as dinner, so balance it out.

Namita Jain, MD Kishco Ltd. has been actively involved in the wellness space for over 25 years. She is qualified from the American College of Sports Medicine, the American Council of Exercise, the Aerobic and Fitness Association of America, the Reebok and the Pilates UK institute. She has authored over 10 best-selling health and wellness books. In the field of rehabilitation, she offers consultations at Bombay Hospital. This column addresses concerns faced by many and her insights for facing the challenge. Learn the powers and perils of lifestyle changes through this Q &A column.

For information and registration on specialized workshops conducted by Namita Jain, contact prism healing institute at - [email protected].

HOW TO FIGHT BINGEING

1. Do not skip your afternoon meal because you plan to eat out in the evening. This will make you hungry and cause you to overeat when you go out. Intersperse your regular meals with healthy snacks.

2. Tackle stress. If stress is making you go out and overeat, get to the root of the problem and resolve it. Don’t use food to combat stress. Instead, try regular exercise as it releases feel-good hormones in your body.

3. Maintain a food diary. If you write down whatever you eat and the moods and circumstances in which you eat, it will open your eyes to the real reason that makes you overeat. This habit will help you keep your overeating in check.

4. Learn to say no. If your friends are ordering food for all, you may feel inclined to accept it. Beg off by making up an excuse of dieting, fasting or indigestion. Or take only a little bite. The idea is to steer clear of these extra calories.

5. Join a gym with after-office timings. It’s an excellent way to stay away from the celebrating gang and if they insist, you can tell them you will join them later. Finish your workout, have a quick salad and grab a few nibbles here and there when you meet your colleagues.

• Schedule “workout” in your daily plannerMake exercise an important commitment and write it down in your planner so that you are more likely to keep the “appointment”. It is also a good idea to keep tabs on your workout progress so that you are motivated to continue exercising.

• Inc lude the dynamic duo - cardiovascular exercise and strength- trainingThe cardiovascular exercises (eg. walking) will help you burn calories; the strength training exercises will boost your metabolic rate and help you shape-up. You might consider hiring a qualified trainer to plan your exercise routine based on your goals.

• Take exercise breaks Take exercise breaks, regularly. You could stretch mid-morning, or take a walk at lunchtime, or climb up the stairs when you get the opportunity.

• Take breaks to deep breatheDo you binge eat when you are bored, angry or tense? Relax, deep breathe several times. This will help you distinguish between actual hunger and eating due to emotional responses.

• Weigh yourself once a weekThis way you can gauge the smallest fluctuations in your weight. The quicker you do that you can catch your behavioral slips and get back on track.

TECHNOLOGY: BOON OR BANE?

Priti K ShroffFounder & Managing DirectorPRISIM - The Healing Temple


We exist in a world where technology is king. Smartphone ownership has more than doubled in the last 8 years, and an estimated 95% of the world now own a cell phone. And this isn’t limited to the modern workplace. Children up to 8 years old are spending an average of about 3 hours a day in front of screens – children 8-18 are averaging around 7 hours a day.

A few months ago, the World Health Organization (WHO) issued guidance for how much screen time children under 5 should get. It was the first time that the U.N. agency has made these recommendations. And the truth is that too much screen time can be hurting our children in more ways than one.

In fact, too much screen time can stunt cognitive and emotional growth, lead to permanent vision problems, and may be a risk factor for heart disease and cancer. That’s why the WHO says children under 5 should never spend more than an hour a day in front of a screen – and that less is even better.

The World Health Organization (WHO) issued

guidance for how much screen time children under 5 should get. It was the first time that the U.N. agency

has made these recommendations. And the

truth is that too much screen time can be hurting our children in more ways

than one.

Excessive Screen Time Stunts Childhood DevelopmentChildren are in a constant state of development and learning, and the habits they form at a young age often stick with them well into adulthood. But a study published in a Pediatric magazine found a direct correlation between screen time and key developmental markers like communication skills, problem solving, and social interaction.

Another study evaluated sleep, screen time, and physical activity in over 4,500 children ages 8-11. National guidelines recommend 9-11 hours of sleep, less than 2 hours of screen time, and at least one hour of physical activity per day. But the researchers found that only 216 of the participants – less than 5% – met all three guidelines.

More importantly, they found that children who met all three recommendations had superior memory, attention, and language skills than their counterparts. Given that over half of the children met the recommended sleep quota, we find that screen time and lack of exercise are the main culprits in stunting development. But are the two connected?

According to the National Institutes of Health, they are. They reported that children ages 8-13 are spending nearly six hours each day in front of a screen. For those with a TV in their bedrooms, TV time increased by an additional 90 minutes per day. The kicker? The more time children spend in front of a screen, the more likely they are to be overweight.

HEALING TEHEALING TEMPLE


This, of course, is because children with excessive screen time tend to live more sedentary lifestyles. But the effects of too much screen time go even further. An article published last year in found that children who had a television in their bedroom had:7• A higher body mass index• Unhealthy eating habits• Higher levels of emotional stress• Symptoms of depression• Physical aggression• Poor social skills

While there are many health issues stemming from coincidental behavior involving screen time, there are other ailments resulting from the physical use of these devices. Kids who get too much screen time can experience faster macular degeneration and are more likely to have damaged vision than their tech-free counterparts.

There has also been a documented rise in head, neck, and spinal injuries in those who spend the most time using tech. Posture suffers, and they end up spending more time looking down leading to spinal misalignment, blurred vision, and even migraines.

Insomnia is another associated side effect, suffered by those who are unable to sleep because of technology addiction. When children have access to a phone, tablet, or television at night, they are less likely to get the sleep they need. And all these problems, from obesity to cognitive issues can lead to stress. Not only can they cause stress, they can be worsened by it, creating a vicious cycle that puts children at a disadvantage when they are most in need of healthy life habits.

Screen Time, Heart Disease, and CancerThe effects of a sedentary lifestyle and poor diet, which are both caused by too much screen time, can lead to more serious health issues down the road. A lack of exercise poses a health risk equal to or greater than traditional factors such as smoking, heart disease, and diabetes.

And if it isn’t enough to know that heart disease is the leading cause of death worldwide, consider this: heart disease is a major risk factor for cancer. Screen time isn’t just hurting our children’s development; it could literally be killing them.

The combination of poor social bonding and the rewiring of our brains by technology have led to a sharp up tick in stress and anxiety. Many people are turning to their devices to cope with stress. Receiving texts and emails, playing games, or watching shows releases small amount of dopamine to the pleasure center of the brain. This encourages children and even adults to find solace in their electronic devices and screens.

Emotional stress is a major contributing factor to the six leading causes of death all over the world: cancer, coronary heart disease, accidental injuries, respiratory disorders, cirrhosis of the liver, and suicide. It suppresses the immune system, increases the risk of diabetes, depression, and mental illness, and may be the cause of nearly half of certain cancers.

Not All Screen Time is Created EqualWhen it comes to screen time, especially for children, less is more. But there is evidence that the type of screen time to which children are exposed may be equally as important as the amount of screen time. With education and jobs becoming increasingly dependent on technology, it is inevitable that our youth will need to learn how to use it. In fact, it’s becoming more and more common that technology is being used as a tool for learning.

Educational programming and digital instruction are different than mindless entertainment and gaming. And even some of the most tech-savvy millennials are beginning to see the dangers. Pop star Selena Gomez, who is the third most-followed person on Instagram, recently warned about the effects of social media on her generation and generations to follow. According to Gomez:

They’re not aware of the news or anything [that’s] going on. It’s selfish - I don’t wanna say selfish because it feels rude - but it’s dangerous for sure. I think our world is going through a lot, obviously. But for my generation, specifically, social media has been terrible.”

And she’s right. The increased use of social media has led to a host of detrimental problems. According to the BBC, about 3 billion people, or 40% of the world’s population, use social media. And they’re spending an average of 2 hours a day on the platforms. According to the article, this increased use is causing problems with sleep, addiction, relationships, and overall wellbeing.

What Can We Do?The biggest problem with excess screen time is the way it affects other, vital aspects of a healthy lifestyle. Children are missing out on sleep and exercise that their growing bodies desperately need, leading to a sharp rise in childhood obesity worldwide? So, what can we do to protect our children?

1. Limit Access to DevicesThe first and most obvious change is to limit access to devices. Remove TVs and tablets from children’s bedrooms. Consider waiting to give your child a smartphone, or at least restrict the amount of time they spend with it. For both children and adults, sleeping with a smartphone or tablet in the bedroom can have a profoundly

HEALING TEMPLEHEALING TEMPLE


with important knowledge about the risks and benefits of our daily behavior. Consider rewarding healthy habits to support these ideas and talk with your family about how they choose to spend their time.

Studies have shown that families who eat dinner together tend to have better family and social relationships. The disconnect between digital interaction and personal interaction is immense, and you can help your kids develop strong social and interpersonal skills by teaching them how to interact without the distraction of their phones and tablets.

When it comes to parenting, there is nothing more important than protecting our children. We teach them not to play in the street or talk to strangers, but too often we fail to teach healthy life habits. Limiting screen time and encouraging nutrition, exercise, and proper sleep will protect your child from disease and illness long after you’re gone. And at the end of the day, isn’t that what every parent wants?

negative effect on health, so it’s advisable that both you and your children leave your tech in another room when it’s time to rest.

2. Encourage Plenty of Sleep and ExerciseThe next change is to focus on physical activity and sleep. Children need to spend at least an hour each day exercising, and the more the better. Given that exercise increases longevity and health (and that habits formed in childhood tend to carry over into adulthood), it is recommended to schedule structured time for your kids to get outside. This could mean joining a sports team, taking the family hiking, or simply sending the kids outside to play without their devices.

3. Eat Plenty of Healthy Food (and tell them WHY!)Another important thing to monitor is your child’s eating habits. Studies that indicate that too much screen time can lead to poor diet. This may be due to exposure to advertisements, or even just that being in front of a screen frees up all other senses that ask for satisfaction by munching on snacks that may be unhealthy. Be sure to provide your children with healthy nutrition. This will not only fuel their growing bodies and minds, but it will protect them from the myriad disease risks associated with the standard diet.

Finally, it’s important to talk to your children about why exercise and nutrition are important, and why you’re restricting tech time. Children are endlessly curious by nature, and this is a good time to reinforce healthy habits

HEALING TEMPLEHEALING TEMPLE

Prisim Healing Institute is an alternative health center that believes in healing one individual at a time.

We have various complementary therapies that help an individual to reach to their optimal health.• 10 Day Detox Programme• Brahma Satya Energy Healing• Aura Scan & Analysis• Aura Cleanse & Chakra Alignment• Crystal Healing Workshops & Crystal Grid• Yoga & Zumba• Sujok & Acupuncture• Sound Therapy• Art Therapy & Zentangle• Emotional Catharsis• Fairy / Angel Card Reading• Healing Meditations - Chakra Meditation, Naadabrahma etc.• Numerology• Hypnotherapy / Past Life Regression• Clearing of Spaces• Reconnective Healing & The Reconnection• Heartlight Ascension• Raw & Vegan Foods by Prana Kitchen

In the modern times Maida has been

alleged of constipation &

degrading intestinal health in the longer run. This is because we do not eat what is supposed to be

eaten along.

WHY I DON’T FEAR ‘MAIDA’!

By Parth AdhyaruFitness Fundamentalist & Wellness Consultant


FITNESS CLINICFITNESS CLINIC

The new science tried to find Maida guilty of Pancreatic damage; they found a link between the consumption of Maida & damage to the cells of pancreas. Modernisation came with a lot of commercialisation. To make the refined flour look more refined and more 'white’, the industry started to use Alloxan& Benzoyl peroxide as bleaching agents! Alloxan is responsible for the damage to insulin-producing cells of the Pancreas hence came in to picture the correlation between refined

Parth Adhyaru is a fitness fundamentalist & wellness consultant. He is an M.D. in Alternative Medicine & relies on herbs & phyto-compounds extensively for weight loss, control & prevention of lifestyle induced diseases & conditions. He is an active participant in the ESPEN (European Society of Clinical Nutrition) & a former newspaper columnist featuring ‘Fitness Fundas’.

aida, refined white flour from wheat; for centuries the Orient Mhas been eating Maida without

any significant health problems that may be attributed to its widespread use. From Bhatura, Paratha to Purutta, & from noodles to momos everything is made using Maida! Then what’s the recent fuss about it? Simply because we do not follow the cultural culinary science fully we tend to make huge mistakes by avoiding or omitting ingredients that act as antidotes of so many ingredients that have been used in the past very safely & effectively. Maida is not a modern thing; it is traditional! In Italy, since the year 997 AD Pizza-crusts were made using it. Since about 150 AD Noodles were made of Maida. Since about 1000 AD, Maida Parathas were common for the nobilities of Punjab. Pita bread has even older origin! In ancient Egypt, slaves and plebs wore their teeth off by eating coarsely ground flour, while royals and the wealthy insisted on eating breads made only from finely sifted flour. In imperial Rome and Plato’s Athens, fineness of flour was an instant indicator of social status, and rulers of medieval Iraq chomped down on bread made from the whitest flour available, while commoners used the unshifted, chunky wheat flour. Why? The simplest explanation of this could be the digestibility; refined flours are digested faster while coarse whole flours will take time and more effort to get digested. Those who had to work & toil will be able to ‘afford’ eating whole grains, they will also ‘need’ to eat these for long-duration, slow energy release while the nobles will have negligible physical work hence they will stick to refined flours. Not believable? Try eating brown or red rice for a week in lunch or dinner, shift to white rice after a week and observe!

In the modern times Maida has been alleged of constipation & degrading intestinal health in the longer run. This is because we do not eat what is supposed to be eaten along with Maida; roughage & fat (oil or

butter). I.e. pita bread with hummus & salad; hummus contains Olive oil & sesame paste - good natural fats! Pizzas; generously topped up with chilli oil / olive oil & to be accompanied with soups & salads. Paratha; cooked in generous oil or butter, eaten with lentil soup, curd & vegetables. Noodles &momos; either submerged in soups or filled with vegetables & to be consumed with oil/butter-rice soups. When we imitate, we don’t imitate fully cause when we imitate, we don’t imitate the science behind it. With the course of time, commercialisation degraded the quality of oils and butter; processed oils and butter replaced the wholesome goodness that was being used. Hence we started to run away from the oils and butter, thus consuming Maida without substantial amount of fats. This made Maida the culprit of intestinal diseases.

flour usage & diabetes - dangerous & ridiculous at the same - how we correlate things in today’s scientific age! Benzoyl peroxide is a toxic chemical & also explosive at higher concentrations; responsible for its cancer-producing effects if ingested regularly by the humans. Again, Maida gets a clean chit! Maida has been alleged of being nutritionally empty but who doesn’t know that the whole grains are high in phytic acid which inhibits the absorption of most of the vitamins whole-grain bran contains. Refined flours are stripped off of the bran & the wheat-germ hence are low on phytic acid. [Tip: to reduce the effects of phytic acid the whole grains or whole-grain flour has to be soaked / bound in an acidic medium like apple cider vinegar or buttermilk, or sprouted / soured (like with traditional sourdough) to neutralise the anti-nutrients]. Refined flour doesn’t require any of these special preparation methods because the anti-nutrient such as phytic acid has been removed along with the bran, thus for faster cooking or quicker kitchen preparations Maida is the only good option! Conclusively, (1) if we have good quality wheat & we can mill our own maida, (2) if we do not have any gluten intolerances, (3) if we can stick to consuming good fats from high quality natural oils or butter & eat adequate roughage along with maida, I think the best option for quick-cooking & easy digestibility is Maida. We do not fear the use of it but we rather understand how the ancestors used Maida for centuries maintaining health & fitness that we all still wonder of!

“Yoga has been under a lot of controversy lately due to how it is being practiced,” and which cultures those practices “are being taken from.”

The centre official argues since many of those cultures “have experienced oppression, cultural genocide and diasporas due to colonialism and western supremacy ... we need to be mindful of this and how we express ourselves while practicing yoga.”

Ordinarily, it wouldn’t be worth commenting on a single incident of an individual overreach. But the idea that Western yoga constitutes cultural appropriation isn’t limited to only west. It’s a major theme of the writers at the Yoga websites and has filtered into online feminism. Dr.Narayan says, “While many people appear uncomfortable when it comes to talking about cultural appropriation, yoga furnishes a textbook example; westerners lift something from another tradition, brand it as ‘exotic,’ proceed to dilute and twist it to satisfy their own desires, and then call it their own.”

Wha t t hese a rgumen ts r ea l l y demonstrate is how naive the whole “cultural appropriation” charge can be-particularly when it’s wielded by people who know very little of the cultures they purport to protect. In the case of yoga, it completely ignores the personalities of Indians themselves, who have been making a concerted effort to propagate yoga to the West since the late 19th century.

Back then, Indians saw getting Westerners interested in yoga as a way of undermining British colonialism.

Swami Vivekananda’s Raja Yoga, published in 1896, became a best-seller and had a lasting impact on American culture. One small example: Frank Baum, author of The Wizard of Oz, heard Vivekananda speak in Chicago and was deeply moved; Baum’s biographer Evan I. Schwartz argues that the quests of *Dorothy, the Scarecrow, the Tin Man, and the Cowardly Lion are allegories for the four yogic paths that Vivekananda elaborated.*

Vivekananda’s yoga didn’t involve the asanas, or poses, that we know as yoga today, because asana-based yoga is a modern phenomenon-one that emerged from the Indian nationalist movement’s attempt to develop a distinctly Indian version of what was then called physical culture (essentially, physical fitness). The short version of this story, which scholars like Mark Singleton and Joseph Alter have described, is that Indian innovators combined facets of medieval tantric practices with elements from Indian wrestl ing exercises, British army calisthenics, and Scandinavian gymnastics. They called their system “yoga,” a word that previously had had very different connotations.

The confident, outward-looking men who established modern yoga were eager to bring their system to the wider world. Tirumalai Krishnamacharya, who created the fast-paced vinyassa system that is the basis for so much of what the West knows as yoga today, ordered his Russian student Indra Devi-to share what he’d taught her internationally. (Devi ended up opening the first yoga studio in Hollywood, where she taught Greta Garbo and Gloria Swanson.)

Swami Satyananda fonder Bihar School of yoga the most relevant accepted

form of yoga in West says in simple

words, “Yoga is a science of

consciousness, a science of

personality, and a science of

creativity.” He immersed the Yoga Nidra practice and made it complete.


YOGA AND CULTURALAPPROPRIATION

By Dr. Vikramaditya Narayan Yoga Psychoanalyst, Bihar School

YOGA & MEDITYOGA & MEDITATION

Britain’s colonial administrators tended to be contemptuous of Indian religion; indeed, they treated the purported backwardness of Indian thought and culture as justification for their continued rule. Indian nationalists believed, rightly, that if they could popularize their spiritual practices in the West, they would win support for independence. Swami Vivekananda as a missionary went to America, where he introduced yoga philosophy in the 1890s. “By preaching the profound secrets of the Vedanta religion in the Western world, we shall attract the sympathy and regard of these mighty nations, maintaining for ever the position of their teacher in spiritual matters, and they will remain our teachers in all material concerns,” Vivekananda wrote to a journalist friend.


YOGA & MEDITATIONYOGA & MEDITATION

There is, of course, plenty to critique in the way Indian culture has been interpreted by Westerners. (See, for example, Urban Outfitter’s Ganesh socks.) But Indian writers on cultural appropriation generally recognize what some Western champions of identity politics do not, which is that Indians have played an active, enthusiastic role in globalizing their spiritual practices. As Gita Mehta wrote in her great 1994 book Karma Cola: Marketing the Mystic East, “As our home industry expands on every front, at last it is our turn to mass promote.”

Indian personalities have played an active role in globalizing their spiritual practices.

That mass Yoga propagation continues up until this very day. Earlier this year, Narendra Modi, India’s Prime Minister, succeeded in getting the United Nations to recognize International Yoga Day on June 21, which was celebrated with mass yoga acceptance worldwide. There was much to deride in International Yoga Day; it served as PR for India’s highly sensitive government and was widely seen as an affront to India’s Muslims. But it shows that the spread of yoga in the West is not just a story about Westerners raiding some

pristine subcontinental reservoir of spiritual authenticity.

India is a country of dizzying dynamism, one that has always eagerly absorbed elements from other cultures into its own while proudly sharing the best of its own culture with the world. “All humanity’s greatest is mine,” wrote poet Rabindranath Tagore, who won the 1913 Nobel Prize in Literature. “The infinite personality of man (as the Upanishads say) can only come from the magnificent harmony of all human races. My prayer is that India may represent the co-operation of all the peoples of the world.” Tagore-who, wrote India’s national anthem-founded a university whose motto translates to, “Where the whole world meets in a single nest.”

Swami Satyananda fonder Bihar School of yoga the most relevant accepted form of yoga in West says in simple words, “Yoga is a science of consciousness, a science of personality, and a science of creativity.” He immersed the Yoga Nidra practice and made it complete.

But the essence of cosmopolitanism. Obviously, power plays a role in the way cultures develop. Symbols and practices can be wrenched from their traditional contexts and used in ways that are

disrespectful. When privileged kids party while wearing yoga headdresses, it looks like they’re donning the spoils of a long-ago war. But the way that some contemporary activists would isolate different cultures-as if anything that travels from outside the West is too fragile to survive a collision with raucous mixed-up modernity-is provincialism masquerading as sensitivity. There’s no such thing as cultural purity, and searching for it never leads anywhere good. As Kwame Anthony Appiah put it in Cosmopolitanism: Ethics in a World of Strangers, “Cultures are made of continuities and changes, and the identity of a society can survive through these changes. Societies without change aren’t authentic; they’re just dead.”

Dr. Vikramaditya Narayan presently serving BJP in the communications for candidate lead in elections and President Rejuvenating Bharatvarsh propelled by Bombay Stock Exchange to Farmers cause.

He is actively involved in the policy driven by Government of India in direction by Honble PM for, Swachch Bharat *Make in India* Smart Cities* Beti Bacho Beti Padhao * Skill India.

He also played role as CEO at Eros InternaInecom Ltd and Inecom.Plc.USA

Funded Swan Yoga for Corporate Optimizing the human assets within corporations, the workshops address the engagement so they Feel Good : Think Good : Lead Good, ranging from business creativity to yoga and meditation.

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fbombay stock exchange brokers' forum (bbf) oru|m … sep 2… · “demographic dividend”....

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