Sebi rolls out system to detect misuse of client securities by brokers, National : Today Indya

Sebi rolls out system to detect misuse of client securities by brokers

National

livemint

• Under the new system, an online register will record brokers’ holdings of client securities, says the regulator

• The system will club details of client securities collected by exchanges, depositories and clearing corporations pertaining to all types of trades

Sebi rolls out system to detect misuse of client securities by brokers

MUMBAI : Securities and Exchange Board of India (Sebi) on Thursday introduced a system to monitor and detect misuse of client securities by stock brokers, following the debacle at Karvy Stock Broking Ltd.

Under the new system, an online register will record brokers’ holdings of client securities, a Sebi press statement said. The system will club all the information of client securities collected by exchanges, depositories and clearing corporations pertaining to all types of trades such as auction trades, corporate actions, and off-market trades.

“The securities holding balance computed is matched with the actual clients’ securities holding in the demat account and submission made by the broker for the next day. Any mismatch in data is flagged as an alert for exchanges," the statement said.

On 22 November, Sebi barred Karvy from acquiring new clients and using power of attorney, thereby preventing the company from trading on behalf of clients, after the broker allegedly used client money for other purposes and indulged in trades that were not authorized by them.

Karvy had, instead of pledging its own shares, pledged shares belonging to clients and utilised them to raise funds. Some of these funds were in turn transferred to its sister concerns such as Karvy Realty Ltd.

On 1 December, the National Stock Exchange of India Ltd (NSE), BSE Ltd, Multi Commodity Exchange (MCX) and MSEI suspended the trading licence of the brokerage firm.

The markets regulator has estimated the misuse of client securities by the broker at ₹2,800 crore.

Though the Depositories Act allows banks to accept client securities as pledged collateral, the client needs to transfer securities in the name of the broker and once the securities move out of the demat account of the client, it is not possible for him to keep track of use/misuse of those securities by the broker.

Sebi has developed in-house capabilities to track online the movement of client securities collected by the broker as collateral, and raise alerts with exchanges if diversion of clients’ securities is noticed, the market regulator added.

In the past, due to multiple data collection points, some of the data on client securities and pledges created on them leaked or fell between the cracks.

“This is a way for the regulator to prevent any leakage of any sort which could harm investors’ interest," said an exchange official.

Sebi reports have already highlighted three such mismatches and been forwarded to the exchanges for reconciliation with members.

Rising broker defaults over the last four years due to misuse of client securities has forced Sebi to change regulations on several occasions to prevent such occurrences.

In December 2018, the market watchdog introduced norms standardizing broker books and records to make inspection and comparison of data easier. Again in January 2019, the markets regulator directed brokers to report day-wise stock and fund balance with them. And in June 2019, Sebi barred brokers from raising funds by pledging clients’ shares, and ordered segregation and reporting of client stocks and funds.

Some other cases of alleged misuse include Kassa Finvest, Amrapali Aadya Trading & Investment Ltd, Ficus Investments.

Article Original Source : https://www.livemint.com/market/stock-market-news/sebi-sets-up-a-system-to-...

#misuse client securities

Train travel time to come down! Private trains on Indian Railways to be game-changers; what will be special

National

Financialexpress

Indian Railways steps up pace on private trains project! If all goes well, then in the next 2 years Indian Railways passengers will be able to travel in world-class luxurious private passenger trains. Piyush Goyal-led Railway Ministry has already held two meetings with private sector majors and various stakeholders and more meetings are lined up to take the feedback of the industry on the game-changing proposal. “We have already had two meetings with various stakeholders after NITI Aayog made public the draft proposal for operation of private trains on the network,” VK Yadav, Chairman Railway Board told Financial Express Online. “We have received feedback from the stakeholders and that has been incorporated, one more meeting is lined up and we hope that by March we will be able to finalise the contours of the proposal and invite bids,” Yadav said.

Financial Express Online had earlier reported that major private sector firms such as Siemens, Tata, Hitachi, Talgo, Adani, Alstom, Bharat Forge etc have expressed interest in running private trains on the Indian Railways network. The ambitious project is expected to require an investment of around Rs 22,500 crore and completely transform passenger experience.

Indian Railways in the draft proposal has listed out 100 routes for the private sector which will require around 150 world-class train rakes. While the private sector is allowed to bring their own trains, they have to meet the standards set by Indian Railways’ RDSO. Asked whether the new swanky trains will be made in India, Yadav said, “We are finalsing the policy. We would obviously want a Make in India component to the proposal, but it is too early to talk about the details”.

The finalisation of bids will take around 6 months and then the private player will be able to finalise the train rakes etc. “I believe that in around 24 months we should see private trains in India,” Yadav said. The private operator will have to pay fixed per kilometre haulage charges and additionally a share of the revenue that is generated from operating the trains.

Private trains: What’s in it for passengers?

According to Indian Railways, even with the existing 130 kmph speed potential, private trains will be able to save a minimum of 10-15% time, a big cheer for passengers. Meanwhile, Indian Railways is upgrading two important branches of the Golden Quadrilateral – Delhi-Mumbai and Delhi-Howrah – to 160 kmph speed potential. The project is expected to be completed in the next 4 years, till which time the Eastern and Western Dedicated Freight Corridors would also have been sanctioned, freeing up capacity for passenger trains.

The concept that Indian Railways is working on is “Trains on Demand” – the idea is to do away with the need for waitlisting on major routes with ready availability of trains. Private players will be allowed to charge market-linked fares for the premium services.

The private trains will have airline-style on-board entertainment services, local cuisines, high-quality food, and shopping option for passengers.

Similar to the IRCTC private trains, passengers will be compensated for delays and free travel insurance will be provided. The private train operators may also be asked to offer baggage pick-up and drop facilities.

Article Original Source : https://www.financialexpress.com/infrastructure/railways/train-travel-time-...