&w=3840&q=100)
Govt provides stock brokers flexibility in investments in group firms
In a major relief to stock brokers, the Ministry of Finance on Monday issued long-awaited clarification on investments and fund-based activities by brokers under the Securities Contracts (Regulation) Rules (SCRR). The amendment to Rule 8 grants brokers greater flexibility in their investments and opens up more avenues, according to market participants.
Rule 8 of the SCRR prohibits brokers from engaging in any business other than that of securities or commodity derivatives—except as a broker or agent in another business that does not involve personal financial liability.
The primary intent of this restriction was to prevent brokers from using client funds to invest in unrelated businesses, thereby safeguarding investors' money.
'The amendment says that stock brokers can invest from their own net worth or borrowed funds in group companies that are not engaged in the securities business, provided the liability is limited to the extent of the investment. It applies to all investments, not just in group companies—so it is an excellent amendment,' said Dhiraj Relli, Managing Director and Chief Executive Officer, HDFC Securities.
The Department of Economic Affairs (DEA) had held consultations with stakeholders between September and October 2024. In its consultation paper, the DEA noted that prohibiting broker investments, including in group firms, imposed 'unreasonable fetters' on the ability to use retained earnings based on commercial judgement.
'...Investments made by a member shall, at all times, not be construed as business, except when such investments involve client funds or client securities, or relate to arrangements which are in the nature of creating a financial liability on the broker,' stated the amendment.
As per the consultation paper, around 100 brokers on the National Stock Exchange (NSE) and four on the BSE were found to be non-compliant after the exchanges issued clarifications on the list of prohibited activities in January 2022.
'Given the growth in scale and interconnectedness of the financial sector, and the evolving nature of brokerage business, the DEA felt it was necessary to revisit the safeguards in the Rules to ensure they serve their intended purpose without unnecessarily constraining stakeholder activities,' the ministry noted.
Existing norms prescribed by the Securities and Exchange Board of India (Sebi) already require brokers to meet minimum net-worth criteria. These norms exclude investments in group companies from net-worth calculations and discount investments in marketable securities by 30 per cent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
2 hours ago
- Time of India
After collector rate, conversion charges set to see steep hike in Chandigarh
Chandigarh: A steep hike in conversion charges will soon be made effective, with the UT deputy commissioner office submitting the proposal to the Chandigarh administration for the revision of charges for the conversion of leasehold residential property to freehold, based on the increased collector rates. Tired of too many ads? go ad free now The charges differ across categories, but officials state that the increase will be at least double the existing rates. The conversion charges were fixed as per the 2017 notification and collector rates. As per the latest proposal, the conversion rates will be revised annually in line with the annual collector rate revision. Nishant Kumar Yadav, deputy commissioner and estate officer, said, "We submitted the proposal for the revision of the conversion rates in furtherance of the 2017 notification. These will be based on the revised collector rates. As and when the collector rate is further revised, conversion charges shall also be revised/updated on the said revised collector rates in the future." The last revision in conversion charges was done on the basis of the UT notification dated October 24, 2017. The Chandigarh Conversion of Residential Leasehold Land Tenure into Freehold Land Tenure, Rules, 1996, govern the conversion modalities. Collector rates were increased 2 to 4 times with effect from April 1, 2025. Previously, the collector rate revision was done three and a half years ago, in 2021. The collector rate is the lowest rate at which a property is registered. The conversion from leasehold to freehold is permitted in the residential property segment after the payment of the conversion charges. The conversion charges are based on the collector rates. Tired of too many ads? go ad free now It is a percentage of the collector rate, which differs depending upon plot size and zone (sectors). For properties measuring between 0 to 50 sq m, there are no conversion charges. It is 7.5% of the collector rate for properties between 51 to 150 sq m. For properties ranging between 151 to 250 sq m, the rate is 10% of the collector rate. For 250 to 350 sq m residential properties, it is 15%. Properties with an area ranging between 351 sq m to 500 sq m have a conversion rate of 20% of the collector rate. For properties having an area ranging from 500 sq m to 1000 sq m, it is 22.5%. For residential properties above 1000 sq m, the conversion charges applicable are 25% of the notified land rate. For instance, for a 150 sq m residential property in Sector 15, the revised conversion rate will be around Rs 19 lakh, while the previous rate was Rs 10 lakh. The final charges to be paid are calculated based on a specific formula for each category of property. The conversion charges for the Milk Colony Dhanas will also be notified now. "The conversion rates for other residential sites were revised vide notification dated 24.10.2017; however, the notification was silent about the conversion rates for Milk Colony Dhanas. Now, the conversion rates in respect of sites of Milk Colony Dhanas can also be calculated on the same pattern as for other residential sectors of Chandigarh," states the estate office letter to the administration. **BOX 1** **CONVERSION RATES are Based on OLD/NEW COLLECTOR RATES** **Residential Urban Area | 2017 Collector Rates | 2025 Collector Rates** Sector 1 to 12 | Rs 93,587 per sq m | Rs 2,13,606 per sq m Sector 14 to 37 | Rs 88,908 per sq m | Rs 1,76,530 per sq m Sector 38 onward | Rs 84,227 per sq m | Rs 1,53,327 per sq m
Time of India
5 hours ago
- Time of India
NGT slams UP govt over gaps in sewage, waste mgmt report
Agra: The National Green Tribunal (NGT) has pulled up the Uttar Pradesh (UP) govt, citing several shortcomings in its report on the status of sewage treatment plants (STPs) and solid and liquid waste management across various districts of the state, including Agra. A three-member bench comprising chairperson Justice Prakash Shrivastava, Justice Sudhir Agarwal and expert member A Senthil Vel, in its order released on Saturday, has directed the state to address the deficiencies and submit a revised report in a prescribed format ahead of the next hearing on July 28. According to the green tribunal's six-page order, the state govt's report, dated April 16 and submitted on May 24, "failed to identify critical gaps and did not comply with the Solid Waste Management (SWM) Rules, the Water (Prevention and Control of Pollution) Act, and relevant Supreme Court (SC) directives". "Against the disclosure of 95% waste processing capacity (19,014 tons per day), the actual segregated waste stands at only 74% (14,884 TPD). This discrepancy needs clarification," the order stated. It further noted that the report failed to explain the operation of waste processing plants lacking mandatory authorisation under the SWM Rules. The tribunal pointed out that while the report covered waste generation in 762 urban local bodies (ULBs), it did not specify the actual quantity of waste being processed. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch vàng CFDs với mức chênh lệch giá thấp nhất IC Markets Đăng ký It also questioned the claim of 100% remediation of legacy waste at 60 sites, stating that no supporting evidence had been provided. Legacy waste refers to solid waste that has been collected and left untreated for years in landfills or open grounds. "Figures indicate that 60 sites have been remediated and only 26 remain with legacy waste. However, since many ULBs still lack processing facilities, there must be specific disclosure of legacy waste in those areas," the order said. Additionally, the NGT noted the absence of details on the operational status of waste-to-energy plants. The NGT also raised concerns regarding discrepancies in the planning and distribution of STPs. It pointed out that while some cities like Agra, Bijnor, Anupshahar, Chitrakoot Karwi, Pilkhuva, Kannauj, and Bela Pratapgarh have STPs with excessive capacity relative to sewage generation, many others, including Bahraich, Banda, Deoria, Fatehpur, Gonda, Hathras, Sambhal and Bhadohi, do not have STPs at all. It also flagged anomalies such as the case of Garh Mukteshwar, which reports zero sewage generation but has two STPs. The court was hearing the matter in the context of a 2018 SC ruling in Paryavaran Suraksha Samiti & others vs. Union of India & others, which issued key directives for controlling river pollution and improving the treatment of industrial and domestic waste. The apex court had mandated municipalities to ensure functioning STPs and set deadlines for new STPs and common effluent treatment Plants (CETPs), while also allowing the UP govt to approach the NGT to seek modifications in the implementation timelines. The NGT was tasked with monitoring compliance.
Hans India
13 hours ago
- Hans India
Institutional credit to agriculture grows nearly 4 times to Rs 27.5 lakh cr in 11 years
New Delhi: In the last 11 years under the Prime Minister Narendra Modi's government, institutional credit to agriculture has surged from Rs 7.3 lakh crore to Rs 27.5 lakh crore, the Ministry of Finance said on Saturday. Under the leadership of PM Modi, farmer-first governance has led to a historic surge in support prices, timely credit, and record payouts — ensuring security and stability for every cultivator, the minister said in a post on X social media platform. 'PM Modi ensured no 'annadata' is left waiting for timely financial support with institutional credit to agriculture nearly quadrupling — from Rs 7.3 lakh crore in 2013-14 to Rs 27.5 lakh crore in 2024-25,' the ministry further stated. From marginal fields to global shelves India's farmers are rising like never before. Since 2014, under PM Modi's leadership, 'our 'annadatas' have gained dignity, income support, MSP assurance, agri-infra, and global market access,' according to the government. Kisan Credit Card (KCC) scheme has also become a lifeline for millions of farmers. KCC is a banking product that provides farmers with timely and affordable credit for purchasing agricultural inputs such as seeds, fertilisers, and pesticides, as well as for meeting cash requirements related to crop production and allied activities. 'Over 465 lakh applications have been sanctioned with Rs 5.7 lakh crore credit limit,' according to Finance Minister Nirmala Sitharaman. The scheme has led to 'easy access to short-term crop loans'. About Rs 5.7 lakh crore have also been sanctioned in credit, with 'interest as low as 4 per cent with timely repayment'. With the KCC scheme, farmers can get up to Rs 3 lakh loan at just 4 per cent interest, if repaid on time. An additional Prompt Repayment Incentive of 3 per cent is also being provided to farmers on timely repayment of loans, which effectively reduces the rate of interest to 4 per cent for farmers. Thus, for every one lakh KCC loan, farmers can save up to Rs 9,000 in interest per year.
