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Business Standard
20-05-2025
- Business
- Business Standard
Amendment in Securities Contracts Rules to offer regulatory clarity to enhance ease of doing business for brokers
The Department of Economic Affairs (DEA), Ministry of Finance, amended Rule 8 of the Securities Contracts (Regulation) Rules (SCRR), 1957. The amendment gives regulatory clarity to enhance ease of doing business for brokers. After taking note of the concerns raised by various stakeholders over certain provisions in the said Rules, the DEA had released a Consultation Paper in September, 2024, inviting stakeholder comments. Given the growth in the scale and interconnectedness of the financial sector and the evolution of nature of business of brokers with time, the DEA felt it necessary to review the appropriateness of safeguards embedded in the Rules so that the intent of the Rules is served without constraining activities of the stakeholders. The amendment has been carried out after due consideration of feedback from the stakeholder and is part of the broader emphasis of the Government to provide regulatory clarity and enhance ease of doing business in the financial sector. It will ensure that market intermediaries continue to support the development of India's capital markets in a transparent and well-regulated manner.
Mint
19-05-2025
- Business
- Mint
Centre tweaks provision to ease compliance for brokers
New Delhi: The government has eased compliance for stock and commodity market brokers by providing clarity on investments that do not involve client money. The Department of Economic Affairs (DEA), ministry of finance has amended Rule 8 of the Securities Contracts (Regulation) Rules, 1957 to clarify that any investments made by a member (broker) shall not be treated as business activity, unless such investments involve client funds or securities or result in a financial liability for the broker, according to a notification on Monday. Rule 8 of the Securities Contracts (Regulation) Rules, 1957 (SCRR) restricts brokers from engaging, as a principal or employee, in any business other than securities or commodity derivatives. However, according to the rule, they may act as brokers or agents in other businesses, provided such roles do not entail personal financial liability. 'This (change) opens the room for brokers to easily utilise their own funds for a variety of purposes, to buy assets, etc., which was a time-consuming affair earlier,' said Rajesh Palviya, SVP, Axis Securities. 'One of the reasons for the government easing the rules is the stringent norms for client margin funding, among others,' said Palviya. 'Under this, the broker has to collect an upfront 20% margin from clients who wish to trade stocks on an intraday basis. As room for misutilisation of client funds is already tightened, there was a thinking this rule too should be eased.' The industry had concerns over the interpretation of Rule 8, which prescribes eligibility criteria for membership in stock exchanges. 'After taking note of the concerns raised by various stakeholders over certain provisions in the said Rules, the DEA had released a Consultation Paper in September 2024, inviting stakeholder comments,' the ministry said in its statement. 'Given the growth in the scale and interconnectedness of the financial sector and the evolution of nature of business of brokers with time, the DEA felt it necessary to review the appropriateness of safeguards embedded in the Rules so that the intent of the Rules is served without constraining activities of the stakeholders,' it added. The amendment, issued through a gazette notification, follows stakeholder consultations and aligns with the government's broader drive to simplify financial sector regulations. 'The amendment has been carried out after due consideration of feedback from the stakeholders and is part of the broader emphasis of the Government to provide regulatory clarity and enhance ease of doing business in the financial sector," the finance ministry statement said. 'It will ensure that market intermediaries continue to support the development of India's capital markets in a transparent and well-regulated manner.' By updating the rule, the government aims to reduce compliance burdens and facilitate the smooth functioning of market intermediaries, while maintaining transparency and investor protection. The reform is seen as part of India's ongoing efforts to modernize its capital market ecosystem and attract greater participation.
Time of India
19-05-2025
- Business
- Time of India
Govt amends SCRA Rules to give regulatory clarity to brokers
(You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel The government on Monday amended the Securities Contract (Amendment) Rules to give regulatory clarity and enhance ease of doing business for stock brokers. "Amendment gives regulatory clarity to enhance ease of doing business for brokers," the finance ministry a statement, the ministry said that given the growth in the scale and interconnectedness of the financial sector and the evolution of nature of business of brokers with time, the Department of Economic Affairs (DEA) felt it necessary to review the appropriateness of safeguards embedded in the rules so that the intent of the rules is served without constraining activities of the amendment has been carried out after due consideration of feedback from the stakeholders and is part of the broader emphasis of the government to provide regulatory clarity and enhance ease of doing business in the financial sector."It will ensure that market intermediaries continue to support the development of India's capital markets in a transparent and well-regulated manner," the ministry added.
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Business Standard
13-05-2025
- Business
- Business Standard
Unified Pension Scheme explained: Key features, FAQs, and what's new
In a landmark reform, the Centre has notified the Unified Pension Scheme (UPS) for central government employees appointed on or after January 1, 2004, blending the market-linked National Pension System (NPS) with assured pension benefits. According to the Ministry of Finance notification, the new scheme, formally titled the Central Government Unified Pension System Rules, 2023, is aimed at strengthening retirement security while maintaining fiscal discipline. Who is Covered? According to the notification issued by the Department of Economic Affairs, the UPS applies to: · All central government employees (except armed forces) who joined service on or after January 1, 2004. · Employees already under the NPS will be transitioned into the UPS automatically. · The old pension scheme continues to apply to those appointed before January 1, 2004. Key Features of the Unified Pension Scheme According to the official rules: · Guaranteed Pension: Retiring employees will receive a minimum assured pension of 40 per cent of their last basic salary. · Government Contribution: The employer (government) will contribute 14 per cent of basic pay plus dearness allowance to the pension fund. · Employee Contribution: Employees will continue to contribute 10 per cent of their basic salary and DA. · Family Pension: In the case of a subscriber's death, a family pension equivalent to the old pension scheme will be provided. · Investment Framework: The scheme will continue to be administered through the existing NPS framework, managed by PFRDA (Pension Fund Regulatory and Development Authority). What's New? Unlike the NPS, which is market-dependent and does not guarantee a minimum pension, the UPS introduces: · A hybrid model of guaranteed minimum benefit with continued flexibility of NPS investments. · Automatic inclusion of death-cum-retirement gratuity (DCRG) and leave encashment benefits. This, according to the finance ministry, ensures 'a defined level of pension income while preserving long-term fund sustainability.' FAQs The Department of Economic Affairs also released a detailed Frequently Asked Questions (FAQs) document alongside the notification. Some key clarifications include: · Q: Is this a return to the Old Pension Scheme (OPS)? A: No. The UPS retains the structure of the NPS while guaranteeing minimum pension benefits, unlike the fully budget-funded OPS. · Q: Will pension be market-linked? A: Yes, contributions will continue to be invested via NPS, but the government ensures at least 40 per cent of last salary as pension upon retirement. · Q: Can an employee opt out? A: No. All eligible employees are mandatorily covered under the UPS. · Q: What happens in case of death during service? A: Family will receive enhanced family pension at the rate applicable under the old system. Why it matters? This hybrid model seeks to balance the fiscal sustainability of NPS with the political and social demand for pension certainty. While it doesn't revert to the Old Pension Scheme, the guaranteed minimum pension under UPS addresses concerns of post-retirement insecurity, a major criticism of NPS till now.
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Business Standard
11-05-2025
- Business
- Business Standard
Green taxonomy: More resources will flow to climate-friendly projects
The draft taxonomy, launched with the aim of directing capital flows towards sustainable and climate-aligned activities, is thus a welcome development Business Standard Editorial Comment Mumbai Listen to This Article As India faces a mounting climate challenge, access to finance, advanced technologies, and critical mineral resources assumes greater importance. The draft 'Climate Finance Taxonomy', recently released by the Department of Economic Affairs, Ministry of Finance, comes in as a much-needed framework during these critical times. Given the increased climate vulnerability, particularly in sectors like agriculture and water resources, and the need to increase per capita energy consumption from a paltry 16.7 gigajoules (GJ) in 2022-23 to 45.7-75 GJ per year, India needs a cumulative $2.5 trillion to meet its Nationally Determined Contributions (NDC) targets till 2030. But at the same
