Newsletter

Q3, 2015-16

BUSINESS NEWS HIGHLIGHTS

NTPS ISSUES TAX-FREE BONDS

NTPC's tax free bonds issue which were oversubscribed 6.31 times on the first day of the issue opening. Investors got a fraction of the amount that they applied for. Retail investors who put in an application of Rs 10 lakhs, the maximum that any retail investor can invest in, got an allotment worth only Rs 1.57 lakhs.

AFTER OLA AND UBER SUCCESS, BUS AGGREGATORS SUCH AS RBUS, SHUTTL & ZIPGO ATTRACTING INVESTORS' ATTENTION

After Ola and Uber disrupted the taxi-booking market, a new set of startups is looking to transform how you commute by bus, forcing investors to take notice. Emerging companies such as rBus, Shuttl, ZipGo and Cityflo have begun providing shuttle services, including to business hubs such as Bandra Kurla Complex in Mumbai, allowing commuters to book seats in AC buses either online or via mobile apps.
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SBI’S NEW DEBIT CARDS TO HAVE EMV CHIP & PIN SECURITY

Country's largest lender SBI will issue EMV chip and pin based debit cards to its new customers to ensure enhanced secure transactions. EMV chip and pin feature protects against skimming and card transaction frauds. With this, SBI said that it has become the first large bank to issue 100 per cent EMV cards compliant with RBI's directive on Security and Risk Mitigation Measures for Card Present and Electronic Payment Transactions. The latest offering will allow consumers to transact securely at Point of Sale terminals and would contribute towards making the Indian payment ecosystem more secure, SBI said.

FEDERAL BANK LAUNCHES FEDBOOK

Federal Bank has launched FedBook, an electronic version of the traditional passbook. Customers can freely download and install the application on their smart devices. FedBook can be carried in one's mobile or tab and it helps customers to view all transactions in their multiple bank accounts online and offline for 24 hours.

FINANCIAL TERM OF THE QUARTER

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TECHNOLOGY & INNOVATION

BLOCKCHAIN AS A SERVICE

A blockchain is like a place where you store any data semi-publicly in a linear container space (the block). Anyone can verify that you’ve placed that information because the container has your signature on it, but only you (or a program) can unlock what’s inside the container because only you hold the private keys to that data, securely.

So, the blockchain behaves almost like a database, except that part of the information stored — its “header” — is public.

The data stored can be a token of value, or a crypto money balance. So, the blockchain acts as an alternative value transfer system that no central authority or potentially malicious third party can tamper with (because of the encryption process). It’s based on the public/private hegemony, which is the yin-yang of the blockchain: public visibility, but private inspection. In the last year, millions of users were added to the Bitcoin ecosystem and daily transactions tripled. More revolutionary than the rise of Bitcoin, however, is the blockchain technology that makes it possible. Traditional banks may be rendered obsolete by Bitcoin and blockchain technology, but the reality is that blockchain has the potential to do much more than just support crypto currencies. It’s set to revolutionize the financial services sector more broadly thanks to its potential to provide unprecedented transaction security through cryptography.

REGULATORY SECTION

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SEBI’s LISTING REGULATIONS - 2015

On December 01, 2015, SEBI brought the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) into effect. SEBI’s provisions for listed entities have now been aligned with the provisions of the Companies Act, 2013. The Listing Regulations finalized after consultations, will consolidate and streamline the provisions of existing listing agreements for different segments of the capital market.

The Listing Regulations have been divided into two parts. They are substantive provisions incorporated in the main body of regulations and procedural requirements in the form of schedules to the regulations. They provide principles for disclosures by listed entities and also include corporate governance principles.

Listed entities are now under an obligation to prepare information in accordance with applicable standards of accounting and financial disclosure. They are required to ensure that the yearly statutory audit is conducted by an independent, competent and qualified Auditor. Further, there are provisions in the Listing Regulations with respect to protection of rights of shareholders and responsibility of directors of a company.

Companies desirous of listing its securities are required to enter into a listing agreement with the stock exchange. Existing listed entities are required to execute a fresh listing agreement within 6 months from date of notification the Listing Regulations.

The alignment of the Listing Regulations with the Companies Act 2013 is a step in the right direction by SEBI and will go a long way in removing the ambiguity and confusion with respect to the Listing Regulations. Further, consolidation of different provisions of the listing agreements with respect to different securities is also a positive step and will ensure ease for companies who intend to list themselves on various stock exchanges.

EDITOR'S PICK

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SEBI PANEL READIES RULES FOR ONLINE SALE OF MF’S

Mutual funds may soon be sold alongside electronic gadgets, furniture and apparel on India’s largest e-commerce websites.

A Securities and Exchange Board of India (Sebi)-appointed panel headed by Nandan Nilekani is set to finalize the guidelines for the online sale of mutual funds over the next three months, according to two people familiar with the committee’s deliberations.

Among the issues being debated by the committee are the types of mutual funds that can be sold online, the incentives allowed for online distributors and expense ratio (or fees) associated with such sales, according to the people.

“The move is a part of Sebi’s ultimate objective to digitize all securities market transactions and processes, not only to reach out to more potential investors through a cost-effective medium but also to save time and make investment processes simpler,” said one of the two people, a member of the Sebi committee, said on condition of anonymity.

However, coming up with a set of rules that allow for such sales without putting customers at risk of mis-selling will not be easy. Investing in mutual funds has a certain amount of risk associated with it, which must be clearly understood by buyers and sellers.

With Mutual fund schemes currently sold under two basic plans—direct and regular, the Sebi-appointed committee is now considering introducing a third category of mutual funds called online plans, which can be sold through e-commerce and m-commerce platforms which will have lower TER (total expense ratio) than regular plans. Its TER could be somewhere between the amounts charged under the direct plan and the regular plan of a given MF scheme as told by Dhirendra Kumar, chief executive of Value Research India Pvt. Ltd, a New-Delhi based mutual fund analytics firm.

POINT TO PONDER

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ABOUT US

HEXAGON GLOBAL IT SERVICES PRIVATE LIMITED

Hexagon Global is a company providing domain driven technology solutions to clients in the BFSI vertical. Hexagon Global has been founded by a team of professionals who have a combined experience of over 500 engagements in the BFSI segment & bring to the table individual experience ranging from 10 to 25 years. The Hexagon Global team combines deep domain expertise with a proven methodology in implementing solutions which enable clients to achieve the business outcome envisaged. Hexagon Global believes in being engaged with their clients every step of the way, right from defining the outcome through to helping them achieve every milestone leading up to the successful closure. For more details about the company, please refer to the website at www.hexagonglobal.in