Latest news with #Rule8
Time of India
6 hours ago
- Business
- Time of India
Explained: How new rule tweak frees up stock brokers to invest beyond securities
Live Events In a welcome step for the broking industry, the government has amended Rule 8 of the Securities Contracts (Regulation) Rules, 1957 ( SCRR ), providing long-awaited clarity on what does not constitute 'business' for a stockbroker. The amendment addresses a long-standing industry concern around regulatory restrictions that limited brokers from investing their own surplus funds in non-securities 8 of the SCRR lays down the eligibility conditions for a person to act as a stockbroker or a member of a recognised stock exchange . Under sub-rules (1)(f) and (3)(f), brokers are prohibited from engaging in any business other than that of securities, unless such business is carried out without any personal financial liability. This essentially prevented brokers from exposing themselves to financial risks unrelated to their core broking time, the National Stock Exchange and the Bombay Stock Exchange issued circulars that significantly widened the interpretation of 'business' under Rule 8 of the SCRR. These circulars clarified that even passive investments in group companies (subsidiary or associate) engaged in non-securities businesses (such as NBFCs, real estate or insurance) would be treated as 'business' and would be in violation of Rule 8. This interpretation created a regulatory overhang that discouraged brokers from investing their own profits outside the securities practice, brokers were restricted from investing their retained earnings or surplus capital into group ventures operating outside the securities domain, even where such investments posed no financial risk to the broker or its clients. This created a significant operational constraint. If a broker wished to invest in a non-securities business, it first had to route profits to its parent, typically via dividends or buybacks, incurring additional tax liabilities before the funds could be redeployed by the parent. This structure was inefficient and deterred brokers from pursuing legitimate investment opportunities that could enhance their business offerings and these industry concerns, the Ministry of Finance released a consultation paper in September 2024 proposing a more nuanced interpretation of Rule 8. It clarified that the original intent of the restriction was to protect client interests and ensure the financial soundness of the brokers, not to place undue limitations on the use of their own capital. Since stockbrokers are already subject to stringent SEBI regulations aimed at safeguarding client funds, further restricting them from investing in group companies engaged in non-securities businesses under the guise of protecting client funds seemed excessive and position has now been codified through an amendment to Rule 8. It now clarifies that a broker's investment activity will not be treated as 'business', unless it involves client funds, client securities or creates a financial obligation for the broker. This empowers brokers to freely invest their retained earnings and surplus capital in group companies or unrelated ventures, so long as client interests remain unaffected. Brokers can now participate in broader financial services ecosystems such as lending or insurance through subsidiaries, allowing them to diversify revenue streams and build integrated financial this amendment to Rule 8 is now effective and offers much-needed regulatory clarity, it is worth noting that the circulars issued by NSE and BSE interpreting the earlier position have not yet been formally withdrawn. This could create some ambiguity for brokers on how the exchanges will align with the amended Rule 8, particularly given that the validity of the NSE circular had been challenged before the Bombay High Court. Until the exchanges formally update their stance, brokers may continue to face uncertainty in practice despite the regulatory intent to liberalise.(The authors Prashanth Ramdas is Partner and Shivaang Maheshwari is Associate at Khaitan & Co. The views expressed are personal.)
Yahoo
25-04-2025
- Yahoo
Charges: St. Peter man's shoplifting arrest may have stopped a 'mass casualty event,' police say
Police say they may have thwarted a "mass casualty event" after officers arrested a St. Peter man for shoplifting at a Mankato retail store. Blue Earth County District Court documents say Mohamed Adan Mohamed, 24, has been charged with theft and making threats of violence, but details of the criminal complaint suggest he may have been planning a much more serious crime. Mohamed was arrested on Thursday, April 17, after he was found to have attempted to steal $21,500 worth of merchandise at a local business – including ammunition and body armor. A Minnesota Bureau of Criminal Apprehension special agent had been aware of Mohamed's recent activity, informing law enforcement "there were strong indicators that Mohamed was preparing to conduct some sort of attack (mass casualty event) in the next 24 hours." According to the criminal complaint, officers with the Mankato Department of Public Safety went to the business in question just before 3 p.m. on April 17 to investigate a suspicious person. Employees told police that a man, later identified as Mohamed, entered the store wearing a heavy winter jacket, green knit cap, a COVID mask and gloves. He had selected multiple items from the store, such as several magazines for a 9mm firearm, bear spray and body armor. Staff became suspicious after Mohamed had continued to select high-priced items and not checking the prices. According to the complaint, Mohamed told people on the sales floor that he "possessed an AR-style rifle that was calibrated to 9mm." An investigation revealed Mohamed had a blue Toyota Sienna parked on the side of the building with no rear license plate. Mohamed then allegedly left the business with thousands of dollars worth of merchandise and was able to evade a citizen's arrest, getting into the Sienna, nearly running over a pedestrian, hopping a curb, and then driving through some mulch and onto Raintree Road. Employees found a list that Mohamed had been looking at while selecting items. The list reportedly says at the top, "Survival Gear List with Alternative" which included a sleeping bag, lights, eight magazines, knives, pepper spray, a "6-mag chest right," bows and arrows. Eight ammunition magazines were stolen from the store. One of the officers noted the items and recalled that he had been on a "call for service" in the last week when Mohamed had made several social media posts showing firearms and ammunition. One post reportedly showed himself pointing an apparent assault rifle at the camera, according to the charges. A hashtag used in the social media post said "#deathtoamerikkan&israeilliImperialism." Mohamed is in custody at the Blue Earth County Jail as of Thursday. He's set to make an initial, Rule 8 court appearance on May 1.
Yahoo
18-03-2025
- Yahoo
Charges: Woman, 23, fatally shot man in his rural Minnesota home
A Kennedy, Minnesota woman is charged with the murder of a 42-year-old Hallock man, according to court filings in Kittson County. Jordan Hanson, 23, is charged with one count each of 2nd-degree and 3rd-degree murder in the death of Justin Esparza. A tribute to Esparza is contained in a GoFundMe set up by family, which states Esparza had moved away from the Twin Cities to be closer to his father and half-brother, "hoping to build a connection with the family he had never known growing up." "Justin found joy in his work while living there. He labored in the potato fields and tended to bees as a beekeeper — work he loved so much that it never felt like a job to him. He took pride in it and often spoke of how much he enjoyed it," the fundraiser post reads. The family is raising funds for Esparza's funeral service and other costs. As of Tuesday afternoon, it has raised over $,1700 of its $10,000 goal. Warning: Some of the following contains graphic content. The Kittson County Sheriff's Office received a call on March 13 around 1:30 p.m. from a woman that reported her daughter — identified as Hanson — had said she had been as Esparza's Hallock home and shot him in the head. Hanson's mother said her daughter was recently at a drug treatment center and "evidently got picked up by someone during the night and came back to Kittson County." The mother said Hanson was also in possession of Esparza's dog and vehicle. Authorities went to Esparza's home and found the 42-year-old in the living room, lying "face down with his lower half on the floor and upper half on the couch." There was a significant amount of blood on the couch around his head and on the floor, according to the complaint. Esparza was pronounced dead at the scene. Deputies found a semi-automatic handgun lying on the couch, a couple of feet away from Esparza. A Smith and Wesson 9mm was also found near his body, with a single casing found on the floor in the living room. When law enforcement attempted to arrest Hanson, her family told a deputy she was "completely delusional from using drugs." At one point she asked the deputy "what all the sugar beets were still doing on the ground." A witness told investigators that her had been smoking meth with Hanson and Esparza at the latter's home, and that he saw Hanson shoot Esparza. Hanson is set to make her initial appearance in court for a Rule 8 hearing on Wednesday morning.
