NISM update aug oct 2013

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NISM update aug oct 2013

  1. 1. August to October 2013 Volume 4 / Issue 24 NISM signs MoU with SIDC Malaysia
  2. 2. Foreword It has been an exciting period at NISM, major developments have taken place, paving the way for NISM to spread its wings across the Asia-Pacific region. In a step towards international expansion, we entered into an MOU with Securities Industry Development Corporation (SIDC) Malaysia at the World Capital Markets Symposium to collaborate on various development and capacity-building activities in the Securities Markets and financial sector of the emerging economies, predominantly in the ASEAN region. The Chairman, Securities and Exchange Commission of Sri Lanka (SEC) visited NISM to discuss the scope of capacity-building support NISM could provide to the various stakeholders in the securities markets of Sri Lanka We also held the third convocation for our outgoing students of School for Securities Education under the programs – PGPSM, CFERM and CSL. Dr. K. C. Charkrabarty, Deputy Governor of RBI, was the chief guest for the event and urged the students to utilize the knowledge and values amassed during their time at NISM for the benefit of people. We have embarked on a fast-track expansion of our activities both domestically and internationally and I believe that the expansion will propel NISM as a leading player in the knowledge dissemination and skills enhancement within the securities markets of emerging economies. Shri Sandip Ghose Director, NISM 01
  3. 3. NISM SIGNS MOU WITH SIDC National Institute of Securities Markets (NISM) entered into an MOU with Securities Industry Development Corporation (SIDC) to collaborate on various development and capacity-building activities in the Securities Markets and Financial Sector of the emerging economies, predominantly in the ASEAN region. SIDC is the training and development arm of the Securities Commission Malaysia (SC). The MoU was signed by NISM Director Mr. Sandip Ghose and SIDC CEO Mr. Azman Hisham Che Doi on Wednesday the 23rd of October, at the World Capital Markets Symposium, hosted by SC in Kuala Lumpur. Azman Hisham Che Doi (second from left), Chief Executive Officer of the Securities Industry Development Corporation (SIDC) and Sandip Ghose (third from left), Director, National Institute of Securities Markets (NISM), India formalising the signing of the MoU. Looking on are witnesses to the signing Dato Dr. Nik Ramlah Mahmood, Deputy Chief Executive of the Securities Commission Malaysia and member of the SIDC Board of Directors (far left), and Prashant Saran, Whole Time Member of the Securities and Exchange Board of India and Member of the Board of Governors of NISM (far right). National Institute of Securities Markets (NISM) entered into an MOU with Securities Industry Development Corporation (SIDC) to collaborate on various development and capacity-building activities in the Securities Markets and financial sector of the emerging economies, predominantly in the ASEAN region. SIDC is the training and development arm of the Securities Commission Malaysia (SC). Signatories, witnesses and members of the SIDC Board of Directors at the SIDC-NISM MoU signing ceremony. From left: Chay Wai Leong (Group Managing Director, K & N Kenanga Holdings Berhad and member of the SIDC Board of Directors); Angelina Kwan (Chief Executive Officer and Founder of Stratford Finance Limited, Hong Kong and member of the SIDC Board of Directors); Dato Dr. Nik Ramlah Mahmood (Deputy Chief Executive, Securities Commission Malaysia and member of the SIDC Board of Directors); Azman Hisham Che Doi (Chief Executive Officer, SIDC); Sandip Ghose (Director, NISM, India); Prashant Saran (Whole Time Member of the Securities and Exchange Board of India and Member of the Board of Governors of NISM); Dato' Tajuddin Atan (Chief Executive Officer, Bursa Malaysia Berhad and member of the SIDC Board of Directors). 02
  4. 4. Activities at NISM SCHOOL FOR SECURITIES EDUCATION (SSE) Third Convocation of NISM at IMC, Mumbai National Institute of Securities Markets (NISM) held the 3rd convocation for its outgoing batch of School for Securities Education (SSE) on 30th September 2013 to facilitate the successful students of the three programmes – Post Graduate Programme in Securities Markets (PGPSM), Certificate in Financial Engineering & Risk Management (CFERM) and the Certificate in Securities Laws (CSL). The event was held at Walchand Hirachand Hall, Indian Merchants' Chamber, Opp. Churchgate Railway Station, Mumbai. Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India was the Chief Guest for the occasion. Shri. Rajeev Kumar Agarwal, WTM, SEBI was Presiding Officer at the ceremony. He is also a member of Board of Governors, NISM. They were accompanied by Shri. Sandip Ghose, Director, NISM and Shri. G. P. Garg, Registrar, NISM on the dais. The function commenced with the rendering of the Sarasvati Vandana. 03
  5. 5. Shri.Sandip Ghose delivered the welcome address and thumbed through the various developments at NISM over the past one year and also expressed NISM`s intention to launch a certificate program for Independent Directors of Asset Management Companies under its School for Corporate Governance (SCG). The welcome speech was followed by the distribution of certificates to the successful candidates of CFERM, PGPSM & CSL. Shri. Mohan Subramaniam, Principal, SBI Staff College Hyderabad awarded the best student in PGPSM award to the batch topper Shri. Kaushal Patel by presenting him with an Honorarium, Gold Medal and SBI sponsored cash award of Rs.1 Lakh. Shri. R.K. Dubey, Chairman & Managing Director, Canara Bank awarded the best student in CFERM award to the batch topper Shri. Kaustubh Padwal by presenting him with an Honorarium, Gold Medal and Canara Bank sponsored cash award of Rs.50 Thousand. Dr. Chakrabarty awarded the best student in CSL award to batch topper Shri. Vikram Agarwal and presented him with the certificate of merit. Dr. Chakrabarty, in his Convocation Address, congratulated the proud youngsters for commencing on another journey of life to face the brave world outside and expressed his belief that NISM has prepared them well for it. He further addressed the students and remarked that, the skills, knowledge and values amassed during their time at NISM should be utilized to educate the people and disseminate the right information in the Securities Markets. Shri. Agarwal, in his Presidential Address, congratulated the successful students of the outgoing batch of NISM. He opinionated that the prevalent difficulties in the mobilization of resources hinder the country`s efforts to realize the desired productivity level required to achieve the high growth rate of 9% per annum. He expressed his belief that it is NISM, which is offering its leadership to nurture and nourish the country`s manpower to world standards. Shri. G. P. Garg proposed the vote of thanks. The occasion was concluded with a buffet to bid farewell to the successful students of NISM. General Our educational programmes are on course. The academic team has contributed to the overall institutional development also, particularly SRSS. Term I of PGPSM has been completed, and results are under compilation. In some subjects, performance feedback has been communicated to students by the concerned faculty members. In CSL, Term I is under way, with 1 of the 3 subjects having been completed, and past the half-way mark in the other 2. In CFERM, the Advanced Module is under way. Details are provided in the ensuing paragraphs. Month August Activity ▪ Completed book reviews of Ascent of Money, Currency Wars and Barbarians at the Gate ▪ News Analysis in the class has been received with enthusiasm. We cover Business Line, Business Standard, Economic Times, Financial Express and Mint ▪ Industries being covered are based on the NSE classification ranging from Auto to Real Estate ▪ Country studies have been completed on Myanmar, Saudi Arabia and Africa as a continent ▪ Touched base with the Treasury team of ICICI for evaluation of PGCSM projects ▪ Career Guidance for PGPSM: Touched base with Mr Ganesh Iyer of CISI (UK), and Mr Biharilal Deora and Aditya Ghatge of the Association of International Wealth Management offered by the Swiss body. ▪ Initiated tie-up with XLRI Jamshedpur for use of XAT Scores for PGPSM Admissions 2014-15. NISM will feature in the XAT Bulletin covering 60,000+ candidates across India. 04
  6. 6. September ▪ Dean, Prof. Sunder Ram Korivi was presented with the Outstanding Teacher in Finance award by the Higher Education Forum of India on Teachers' Day ▪ Supported SRSS in Mutual Fund Trustee's Workshop ▪ Entered into an MOU with ICSI for joint programmes ▪ Designed and delivered successfully, the training programme Finance for Non Finance Executives, from September 5-7, 2013 at NISM ▪ SSE was part of the design and conceptualization of the Conference on Ethics and Corporate Governance held on September 26, 2013 at the Sofitel Hotel. ▪ A grand Convocation ceremony for the pass-outs of SSE was conducted on September 30, at the hands of Dr. K. C. Chakrabarty, Deputy Governor, RBI. Shri R. K. Agarwal, WTM-SEBI was the Presiding Officer October ▪ PGPSM Term II commences. ▪ Drafted MOU with SIDC-Malaysia. This was signed on October 23, 2013. ▪ Kevin Moore from CISI visited NISM; modules embedded into PGPSM Mutual Funds course 206(B) ▪ Daniel Muzio from Newcastle University addressed PGPSM students on Leadership ▪ Met up with Aditya Ghatge of Association of International Wealth Management (AIWM) for recognition of CFERM as an approved programme for the global qualification Certified International Investment Analyst (CIIA) based in Switzerland ▪ Conducted a Workshop on Business Communication Skills for the PGPSM students, anchored by Mrs Anupama Iyer, as part of career planning and development ▪ Conducted a Workshop on Resume Writing and Interview Skills for students, by Mrs Anupama Iyer, as part of career planning and development ▪ Conducted a Workshop on Psychometric Assessment for PGPSM students, on Personal Style Inventory and Career Drivers, by Mrs Netra Neelam ▪ Successfully conducted a 2-day training programme for the officers of SBI-Societe Generale Global Services Pvt. Ltd. on Financial Risk Management and Derivatives. Akhlaque Ahmad and Sunder Ram Korivi anchored the programme from the NISM side. ▪ As Knowledge Partner, supported Morningstar India Conference 2013 which had over 400 participants from the mutual fund sector. PGPSM students were involved. Mr R K Agarwal, WTM-SEBI, was the Keynote Speaker in the inaugural session ▪ Supported the Training of Trainers MDP by engaging a session on Fixed Income Securities and Debt Markets ▪ Ms. Kavitha Ranganathan has completed the writing of her PhD thesis on Behavioral Finance and is in the process of conforming with the submission formalities. ▪ Designed a 2-day programme on Macro-Economics for SEBI Officers. This was based on Subject Code 101: Economics, being delivered in PGPSM/PGCSM. SCHOOL FOR INVESTOR EDUCATION & FINANCIAL LITERACY (SIEFL) Refresher Training Programme for SEBI Resource Persons NISM has organised two Refresher Workshops for the existing SEBI Financial Education Resource Persons during the month of September 2013. The program at Bengaluru was organised during Sept 21-22, 2013 which was attended by 27 Resource Persons. Shri Sandip Ghose, Director, NISM and Shri Suresh Menon, Chief General Manager, SEBI 05
  7. 7. addressed the participants. Sessions were handled on Securities Markets, Banking, Insurance, Grievance Redressal Mechanism, Communications etc. A review was made By Shri. Manjesh Roy, Dy GM, SEBI regarding the achievements, challenges etc. in respect of the financial education workshops held. The New Delhi Workshop was held during September 28-29, 2013, where Shri Sandip Ghose, Director NISM and Shri Gyan Bhushan, Chief General Manager, SEBI addressed the participants. Experts on respective domains – Securities Markets, Banking, Insurance etc. handled the sessions. Representing SEBI, Shri Arun Shukla reviewed the financial education workshops undertaken by the participants. 06
  8. 8. SCHOOL FOR REGULATORY STUDIES & SUPERVISION (SRSS) Workshop for Trustees of Mutual Funds and Independent Directors of AMCs NISM conducted the Workshop for Trustees of Mutual Funds and Independent Directors of Asset Management Companies on Thursday, the 29th of August, 2013. Shri U. K. Sinha, Chairman of Securities and Exchange Board of India and Board of Governors of NISM was the chief guest for the event. Shri Sandip Ghose, Director, NISM welcomed the participants. Shri U. K. Sinha delivered the inaugural address and dwelt upon the role of Trustees of Mutual Funds and Independent Directors of Asset Management Companies and the challenges faced by the Mutual Fund Industry. In the first technical session on “The Economic Landscape and Challenges for the Indian Mutual Fund Industry”, Shri Madan Sabnavis, Chief Economist, Care Ratings and Shri Dhirendra Kumar, CEO, Value Research addressed the participants. 07
  9. 9. In the second technical session on “Investor Services and Communication”, Shri N. K. Prasad, President and CEO, CAMS and Shri V. Ganesh, CEO, Karvy Computershare apprised the participants on the subject and also explained how technology can best be put to use for the benefit of the investors. Third technical session was a panel discussion on “Discharging Fiduciary Duties” moderated by Shri H. N. Sinor, CEO, AMFI. The participants to the panel discussion were Shri Ananta Barua, Executive Director, SEBI and Ms. Monika Halan, Editor, Livemint. Shri S. Raman Whole Time Member, SEBI summed up the discussion with his insights on the future of the Mutual Fund Industry and made the closing remarks at the event. The event saw wide participation from the senior Trustees and Independent Directors of Fund Houses. MDP on Finance for Non Finance Executives The School for Regulatory Studies and Supervision has organised a Management Development Program on FINANCE FOR NON FINANCE EXECUTIVES, wherein 19 participants attended the programme. The programme was conducted during September 5-7, 2013 at NISM Premises, Vashi. The programme was inaugurated by Shri G. P. Garg, Registrar, NISM. Shri Sunder Ram Korivi, Dean, NISM designed and served as the Chief Trainer for the programme. The topics discussed and debated during the three days programme included Introduction to Finance, Financial Statements, Cost Analysis, CVP relationship, Working Capital Requirements, Long term Investments, Financial Appraisal and Overview of Securities Markets. Prof. Rachappa Shette, Shri K Sukumaran and Shri Nitin Tike handled sessions. Towards the end, the participants have briefed the key learnings from the programme. 08
  10. 10. Refresher Programme in Securities Markets A five days programme on SECURITIES MARKETS was held in NISM Premises, Vashi during October 21-25, 2013. The programme was attended by 22 participants. The programme kicked off with the inaugural session attended by Shri G.P. Garg, Registrar, Shri K. Sukumaran, Dean, and Shri Nitin Tike, Senior Vice President, NISM. 09
  11. 11. The programme was designed in such a way that the participants would derive a deep knowledge on the functioning of securities markets. The sessions included an overview of the primary market and secondary market; securities market regulations; functioning of various intermediaries – stock exchanges, depositories, clearing and settlement houses, etc; foreign investment; venture capital; mutual funds, mergers and acquisitions; portfolio management services; surveillance, derivatives, fixed income securities, fundamental analysis, technical analysis etc. A live trading session was demonstrated through a simulation at ITM Institute of Financial Markets, Navi Mumbai. The programme got over on 25 October 2013 with valedictory address by Shri Sandip Ghose, Director, NISM. Programme on International Financial Reporting Standards NISM organised two one day workshops on International Financial Reporting Standards for SEBI Officers and two such workshops were held on 31st October 2013 and 1st November 2013 respectively at NISM premises, Vashi. Convergence to IFRS is a challenge for Indian companies and organisations are preparing a roadmap for compliance with the standards. The objective of the programme was to familiarise the concepts to the participants of the workshop. The key speakers for the programme were Shri P R Ravimohan, Chief General Manager, Reserve Bank of India, Shri Aman Bhargava from Grant Thornton, V Venkataramanan, from KPMG, A Pednekar from M P Chitale & Company, Ajay Mittal from ICICI Bank and Kalpesh Mehta from Deloitte. SCHOOL FOR CORPORATE GOVERNANCE (SCG) Conference on Ethics and Corporate Governance NISM in collaboration with the Institute of Company Secretaries of India (ICSI) organized a conference on 'Ethics & Corporate Governance' on September 26, 2013 at Hotel Sofitel, BKC, Mumbai. 10
  12. 12. Shri. S. N. Ananthasubramanian, President, ICSI, in his welcome address, focused on the transition of Company Secretary to Corporate governance Professional. Shri. U. K. Sinha, Chairman, Securities and Exchange Board of India, delivered the inaugural address and focused on the need for strengthening corporate governance principles in organisations. Smt. Rama Bijapurkar, Management Consultant, was the keynote speaker at the conference. Dr. Sandip Ghose, Director, NISM explained the role of Ethics and Governance in current perspective. The conference theme was discussed in three technical sessions as follows. 1) Shri. M. S. Sahoo, Secretary ICSI, Shri. Subrata Sarkar, IGIDR and Dr. Abhijit Phadnis, Management Consultant deliberated the Academic Perspective of Ethics & Corporate Governance. 2) In the second session, Dr. A. K. Khandelwal, Former CMD, Bank of Baroda, and Shri. M. M. Chitale, Managing Partner, Mukund M. Chitale & Co. Chartered Accountants discussed the Practitioner`s Perspective on the subject matter. 3) Third session saw the panel consisting of Smt. Grace Elizabeth Koshie, Former PCGM RBI and Shri. Sundaresen, CGM SEBI, moderated by Shri. R. K. Nair, Member IRDA exploring the regulatory perspective of Ethics & Corporate Governance. 11
  13. 13. Smt. Chitra Ramakrishna, MD & CEO of National Stock Exchange of India Ltd. graced the event with her valedictory address. SCHOOL FOR CERTIFICATION OF INTERMEDIARIES (SCI) School for Certification of Intermediaries 1. SEBI's Notification for NISM Certification Examinations SEBI vide its notification LAD-NRO/GN/2013-14/15/6319 dated August 2, 2013 has notified NISM-Series-IX: Merchant Banking Certification Examination as the requisite examination for Key Management Personnel of Merchant Bankers registered with the SEBI. As per this notification, the Merchant Bankers shall ensure that atleast two associated persons designated as Key Management Personnel, performing the following functions shall obtain the certification: a) Perform SEBI regulated activities such as initial public offer, further public offer, Open Offer, Buy-back, Delisting; b) Deal with the issuers in connection with activities mentioned in (a) above; c) Deal with intermediaries associated with activities mentioned in (a) above; d) Act as designated Compliance Officer dealing with the activities mentioned in (a) above; e) Submit Due Diligence Certificates to SEBI in connection with the activities mentioned in (a) above; 2. Revision of NISM Certification Examinations To incorporate the market changes and as part of the periodic review, NISM has updated and launched the following certification examinations: a) NISM-Series-I: Currency Derivatives Certification Examination w.e.f. November 1, 2013 b) NISM-Series-II-A: Registrars to an Issue and Share Transfer Agents - Corporate Certification Examination w.e.f. October 15, 2013 c) NISM-Series-V-A: Mutual Fund Distributors Certification Examination w.e.f. October 25, 2013 d) NISM-Series-VI: Depository Operations Certification Examination w.e.f. September 24, 2013 3. Accreditation of Certification Examinations for Investment Advisers Subsequent to SEBI's Investment Advisers Regulations, 2013, NISM has invited applications for accreditation of certification examinations for Investment Advisers. The last date for submission of application was 05.00 P.M. on November 15, 2013. The detailed advertisement is available on www.nism.ac.in. 12
  14. 14. NISM Certification Examination Consolidated Status Report (Upto October 27, 2013) Sr No. 01 02 03 04 05 06 07 08 NISM EXAMINATION Currency Derivatives (Launched on 15/05/2009) Currency Derivatives - Gujarati (Launched on 01/11/2012) Currency Derivatives - Hindi (Launched on 01/11/2012) RTA - Corporate (Launched on 03/08/2009) RTA - Mutual Fund (Launched on 03/08/2009) Securities Intermediaries Compliance (Non-Fund) (Launched on 28/01/2013) Interest Rate Derivatives (Launched on 17/05/2010) Mutual Fund Distributors (Launched on 01/06/2010) Number of Candidates Enrolled Number of Candidates Appeared Number of Candidates Passed 59,486 54,845 23,087 28 32 7 116 104 17 2,394 2,185 1,526 6,509 6,083 3,692 268 228 182 744 532 100 160,864 148,645 64,460 822 705 123 1,226 1,093 159 09 Mutual Fund Distributors - Gujarati (Launched on 01/06/2010) 10 Mutual Fund Distributors - Hindi (Launched on 01/06/2010) 11 Mutual Fund Foundation (Launched on 14/01/2013) 293 222 195 12 Mutual Fund Distributors (Level 2) (Launched on 16/04/2013) 176 149 24 13 Depositories Operations (Launched on 21/02/2011) 37,341 33,857 18,241 14 Securities Operations and Risk Management (Launched on 22/11/2010) 19,656 18,435 14,007 15 Equity Derivatives (Launched on 08/10/2012) 20,297 19,160 10,357 16 Merchant Banking (Launched on 21/03/2013) 95 72 57 17 Investment Adviser (Level 1) Certification Examination (Launched on 03/06/2013) 551 478 244 18 Equity Sales Certification Examination (Launched on 07/03/2013) 53 51 34 19 Securities Markets Foundation (Launched on 21/03/2013) 66 51 39 310985 286873 136551 Total 13
  15. 15. NISM Continuing Professional Education Consolidated Report (Upto September 29, 2013) Sr No. NISM Continuing Professional Education Cumulative Total Candidates Appeared through NISM & CPE Providers 01 NISM Mutual Fund Distributors CPE (1 Day Programme) (Launched on 01/06/2010 and upto 31/05/2012) 16039 02 NISM Mutual Fund Distributors CPE (Day 1) (Launched on 01/06/2012) 14276 03 NISM Mutual Fund Distributors CPE (Day 2) (Launched on 01/06/2012) 14268 04 NISM Mutual Fund Distributors CPE (1 Day Programme) (Launched on 16/06/2012) 05 NISM RTA Corporate CPE (Day 1) (Launched on 02/05/2012) 162 06 NISM RTA Corporate CPE (Day 2) (Launched on 02/05/2012) 162 07 NISM RTA Corporate CPE (1 Day Programme) (Launched on 16/06/2013) 31 08 NISM RTA Mutual Fund CPE (Day 1) (Launched on 02/05/2012) 21 09 NISM RTA Mutual Fund CPE (Day 2) (Launched on 02/05/2012) 21 10 NISM RTA Mutual Fund CPE (1 Day Programme) (Launched on 16/06/2013) 44 11 NISM Currency Derivatives CPE (Day 1) (Launched on 05/05/2012) 3072 12 NISM Currency Derivatives CPE (Day 2) (Launched on 05/05/2012) 3065 13 NISM Currency Derivatives CPE (1 Day Programme) (Launched on 16/06/2013) 2599 14 NISM Depository Operations Certification Examination CPE (Day 1) (Launched on 13/07/2012) 248 15 NISM Depository Operations Certification Examination CPE (Day 2) (Launched on 13/07/2012) 248 16 NISM Depository Operations Certification Examination CPE (1 Day Programme) (Launched on 16/06/2013) 762 17 NISM Mutual Fund Foundation CPE (Day 1) (Launched on 14/01/2013) 1484 18 Equity Derivative CPE (Day 1) (Launched on 16/06/2013) 5205 19 Securities Operations and Risk management CPE (Day 1) (Launched on 07/12/2012) 8580 233 14
  16. 16. Mr. Nitin Tike represented NISM at IFA Galaxy Knowledge Summit 2013 Mr. Nitin Tike, Senior Vice President – NISM, represented NISM at the IFA Galaxy Knowledge Summit 2013 held on 19th October 2013 at Hotel Hyatt Regency, Mount Road Chennai. IFA Galaxy is an organisation of Independent Financial Advisors which has members across the country. The Objective and Motto of IFA Galaxy is “Knowledge Sharing” wherein Prominent Speakers cover variety of topics for the purpose of enhancing the knowledge of IFAs. Mr. Tike spoke on ‘Continuing Professional Education’ in general and elaborated its importance in securities markets. He briefed the various CPE programs offered by NISM and articulated their relevance in the current scenario. He also communicated the various programs conducted by NISM, the number of locations reached for CPE programs, various certification examinations, number of participants in such programs and answered the queries on eligibility criteria, validity of certificates and so on by the audience. Articles Africa Beckons: An Exciting Investment Frontier Sunder Ram Korivi, Professor & Dean, SSE and SSIR Shobana Krishnan, Academic Associate In the early 1990s, Eastern European economies ushered in an era of glasnost and perestroika. These nations got classified as Emerging Economies. This coinage later got extended to cover other countries as well. In the 2000s, excitement shifted to Brazil, Russia, China and India under the coinage 'BRIC' later BRICKS, to cover South Korea and South Africa. Today, the rest of Africa is classified as a Frontier Economy and presents exciting investment opportunities. USA and China have major investments in Africa, and India has some catching up to do. But a beginning has been made, which is the subject of this article. Emerging and Frontier markets had lost their allure in light of the 'risk-off' mode adopted by global investors, when the financial markets in the developed world were engulfed in the financial crisis. With an abatement of further crises through fiscal deficit financing, quantitative easing, swap lines and other measures, emerging and frontier markets are back on the radars of international investors. Much of the 15
  17. 17. developed and emerging economies suffer from lack of natural resources and have also exceeded their 'quota' of pollution. These factors make Africa the next attractive investment destination. Whereas South Africa has already emerged as an investment destination, other nations such as Mozambique and Zambia are booming, a fact which makes news especially when most places in the global economy are barely coming to grips with economic turmoil. Kenya is a trailblazer in financial inclusion through mobile-commerce (M-PESA), whereas Angola, Algeria and Nigeria are energy exporters. India is the leading importer of Nigerian crude oil, surpassing USA. In recent times, the following industrial or investment activities by have been initiated by Indian companies. GAIL Activity: Present and Proposed Gas exploration and production in Tanzania Godrej Consumer Products Existing facilities in South Africa, Mozambique, Kenya and Nigeria Plans to expand footprint in Tanzania and Uganda Maruti Suzuki Plans a manufacturing facility in South Africa Tata Motors Have a manufacturing facility in South Africa Mahindra & Mahindra Have a manufacturing facility in South Africa Hero Moto Corp Set up a manufacturing assembly in Kenya Proposes setting up facilities in Burkina Faso and Ivory Coast ONGC-OVL Acquiring gas field in Mozambique McLeod Russel Plans to acquire tea plantations in Africa (Kenya) Company Other companies such as Bharti Airtel, Marico and Dabur have been operating in Africa since decades. There is vast scope for a broad-basing of industrial activities as well as countries to be covered. It is pertinent to note that thus far, Bank of Baroda is the only Indian entity to have issued shares to the India diaspora, which are listed on the Kampala Stock Exchange in Uganda. No other Indian bank or company has followed suit, which is surprising, since, especially under the Basel norms, every rupee of capital that is needed must be mopped up. Table: Statistical Snapshot depicting the investment infrastructure in Africa is presented below. No. of countries in the African Union 54 minus Morocco = 53 Number of Stock Exchanges 24 Association of Stock Exchanges of Africa (ASEA) Members: 24 minus Casablanca (Morocco) = 23 Common Stock Exchanges 2, viz. Bolsa Regionale des Valeurs Mobilières (BRVM) at Abidjan, Côte d'Ivoire Bolsa regionale des Valeurs Mobilières d'Afrique Centrales (BVMAC) at Libreville, Gabon Countries Covered by Regional Stock Exchanges’ BVRM (8): Benin, Burkina Faso, Guinea Bissau, Côte d'Ivoire, Mali, Niger, Senegal and Togo BVMAC (6): Cameroun, Central African Republic, Chad (or Tchad), Congo, Equatorial Guinea and Gabon IOSCO Members 19 Membership in World Federation of Exchanges 3 (Casablanca, Johannesberg and Mauritius) Common Currencies 2, viz. CFA Franc and Eco 16
  18. 18. Countries Covered by Common Currency CFA Franc (8): Benin, Burkina Faso, Côte d'Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo Eco (5): Gambia, Ghana, Liberia, Nigeria, Sierra Leone 7, viz: CEMAC (Economic and Monetary Community of Central Africa) COMESA (Common Market for Eastern and Southern Africa) EAC (East African Community) ECCAS (Economic Community of Central African States ECOWAS (Economic Community of Western African States) SADC (South African Development Community) UEMOA (West African Economic and Monetary Union) Trading Blocks Common Business Law OHADA (Organization pour Harmonization en Afrique du Droit des Affaires. 15 countries Accounting Bodies 29. 20 affiliated to International Federation of Accountants (IFAC). 15 affiliated to Accounting Bodies of West Africa (ABWA) Time Zones GMT +4 to GMT -1. Coincides with European time The African opportunity needs to be viewed under the PEST and SWOT template, as shown below, in order to obtain a holistic perspective. Political Economic Diversity across 54 countries is beset with challenges. Not a homogenous entity Vast untapped potential Rate of capital formation is low Within countries, there are power struggles. Skilled labour is in short supply Democracy survives, but with challenges There are islands of political stability Strengths Social Huge diversity in tribes, ethnicity, customs, languages. French is the dominant business language. Others are English, Arabic, Portuguese and Afrikaans, besides national languages Technological Has leapfrogged into mobile commerce Vast untapped mineral resources and oil & gas resources Geographical proximity to Europe There is a demographic advantage, but it needs to be harnessed Demographic advantage 17 Political instability Opportunities Threats Energy and mineral resources, domestic markets for goods and services Squandering of resources and opportunities through political instability, and subsidies Contract farming Vast untapped potential and mineral resources Weaknesses Military rule, terrorism and maritime piracy Riding on m-commerce to spur savings and financial products, develop financial and markets
  19. 19. The most appropriate manner for tapping the Africa advantage for inbound investors would be to first pick up the lowhanging fruit and then resort to opportunities for expansion in concentric circles. Business time coincides with European time zones, which is a huge plus. The three leading business languages are French, English and Arabic. There are signs of regional integration in business, financial, accounting and legal practices at regional levels. Based on the Robert Solow model of development, technology and finance from the developed world may now move towards Africa to reap productivity benefits. Financial systems need to act as catalysts. Africa truly beckons, but one may tread with caution. Regulatory Changes INITIATED BY SEBI Disclosure of Investor Complaints on websites of Stock Exchanges CIR/MIRSD/11/2013 | October 28, 2013 This is in reference to SEBI Circular no. MRD/DoP/SE/Cir-10/2009 dated September 03, 2009 on the captioned subject which inter alia prescribes the formats for disclosing the details of complaints lodged by clients/investors against stock brokers on the website of stock exchanges. The 'Report 1C' prescribes the format for disclosure of redressal of complaints lodged by clients against stock brokers during the financial year. In order to bring more transparency in the disclosure of complaint redressal status, SEBI has decided to modify the format by including the following information: 1. Number of active clients of each stock broker 2. Percentage of number of complaints received as against number of active clients of the stock broker 3. Percentage of complaints resolved as against complaints received by the stock broker The stock exchanges shall also disclose separately in a prominent manner (i) total number of complaints received against all the stock brokers of the Exchange, number of their active clients and its percentage and (ii) overall market redressal rate. The above provisions shall be implemented with effect from the quarter ended December 2013. All other provisions mentioned in the circular dated September 03, 2009 remain unchanged. Arbitration Mechanism in Stock Exchanges CIR/MRD/ICC/29/2013 Dated: September 26, 2013 1. Reference may be made to SEBI circular no. CIR/MRD/DSA/29/2010 dated August 31, 2010 and MRD/DoP/SE/Cir38/2004 dated October 28, 2004. Para 7.4 of the said circular no. CIR/MRD/DSA/29/2010 dated August 31, 2010 is being modified. 2. The para 7.4 of aforementioned circular no. CIR/MRD/DSA/29/2010 dated August 31, 2010 currently reads as follows: “7.4 A party filing an appeal before the appellate panel [as mentioned under item 6 above] shall pay a fee not exceeding Rs. 30,000,as may be prescribed by the stock exchange, in addition to statutory dues (stamp duty, service tax, etc.) along with the appeal.” 3. Para7.4 of the aforementioned circular shall now read as under: “7.4 A party filing an appeal before the appellate panel [as mentioned under item 6 above] shall pay a fee not exceeding Rs. 30,000, as may be prescribed by the stock exchange, in addition to statutory dues (stamp duty, service tax, etc.) along with the appeal. In case the party filing 18
  20. 20. the appeal is a client having claim/counterclaim of upto Rs.10 lakh, then the party shall pay a fee not exceeding Rs.10,000/- . Further expenses thus arising shall be borne by the Stock Exchanges and the Investor Protection Fund of Stock Exchanges equally. 4. The stock exchanges are advised by SEBI to:a. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately b. bring the provisions of this circular to the notice of the members of the stock exchange and also to disseminate the same through their website and c. take steps to make the investors aware of the scheme. d. communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Development Reports to SEBI. Investment by Qualified Foreign Investors (QFIs) in “to be listed” Indian Corporate Debt Securities CIR/IMD/FIIC/13 /2013 Dated: August 13, 2013 1. Vide SEBI circular CIR/IMD/FII&C/17/2012 dated July 18, 2012, QFIs had been allowed to invest in listed/ to be listed Indian corporate debt securities through public issues and units of debt schemes of Indian mutual funds. 2. Based on the feedback received from market participants, with a view to align the eligibility criteria for investment in debt securities between SEBI and RBI, and to bring QFI and FII at par for investment in “to be listed” debt securities, it has now been decided to allow QFIs to invest in “to be listed” corporate debt securities directly from the issuer. 3. In the circumstance that the debt issue cannot be listed within 15 days of issue for any reasons whatsoever, then the holding of the QFI shall be sold off only to domestic participants/investors until the securities are listed. 4. All other applicable stipulations prescribed by SEBI in circular CIR/IMD/FII&C/17/2012 dated July 18, 2012 shall continue to apply. INITIATED BY RBI Marginal Standing Facility-Revision in timings RBI/2013-14/351 FMD.MOAG. No. 93/01.18.001/2013-14 Dated October 31, 2013 As announced in the “Second Quarter Review of the Monetary Policy 2013-14” on October 29, 2013, it has been decided to revise the timings of Marginal Standing Facility (MSF). The MSF will now be available between 7.00 pm and 7.30 pm instead of the existing timings of 4.45 pm to 5.15 pm. The change in timings will take effect from November 5, 2013. All other terms and conditions of the current MSF scheme will remain unchanged. Due diligence in correspondent banking relationship RBI/2013-14/342 DBOD.AML.BC.No.63/14.01.001/2013-14 Dated October 29, 2013 Please refer to paragraph 2.16 of RBI Master Circular DBOD. AML.BC.24/14.01.001/2012-13 dated July 1, 2013 on 'Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards/ Combating of Financing of Terrorism (CFT) / Obligation of banks under PMLA, 2002' in terms of which banks were advised to carry out detailed due diligence while entering into correspondent banking arrangements, including information on the other bank's management, major business activities, level of AML/ CFT compliance, purpose of opening the account, identity of any third party entities that will use the correspondent banking services etc. Further, banks may refer to RBI circular DBOD.No.BP.BC.24/21.01.023/98 dated March 30, 1998 on 'Frauds in Banks/ Grant of 'At Par' facility for Dividend/ Interest Warrants and Refund Orders', in terms of which banks were advised to put in place adequate internal control mechanism to safeguard their interests while determining the policy regarding 'at par' facility with the approval of their respective Boards. 19
  21. 21. RBI has observed that some commercial banks have arrangements with co-operative banks wherein the latter open current accounts with the commercial banks and use the cheque book facility to issue 'at par' cheques to their constituents and walk-in- customers for facilitating their remittances and payments. Since the 'at par' facility offered by commercial banks to co-operative banks is in the nature of correspondent banking arrangements, banks should monitor and review such arrangements to assess the risks including credit risk and reputational risk arising therefrom. For this purpose, banks should retain the right to verify the records maintained by the client cooperative banks/ societies for compliance with the extant instructions on KYC and AML under such arrangements Foreign Contribution (Regulation) Rule, 2011- Online Reporting of Receipt of Foreign Contribution by banks RBI/2013-14/280 DBOD. AML.No.4814/14.08.001/2013-14 Dated September 20, 2013 Under Rule 16 of the Foreign Contribution (Regulation) Rule, 2011, banks are required to report to Central Government any transaction in respect of receipt of foreign contribution. Ministry of Home Affairs (MHA), Government of India has developed a software for submission of online reports of receipt of foreign contribution by banks. MHA has advised that submitting reports online through software would be optional till October 31, 2013. From November 1, 2013 onward, online submission of report would be compulsory. Link to instructions and formats may be obtained at: http://mha.nic.in/pdfs/USERGuideBank-270813.pdf" INITIATED BY PFRDA Exit guidelines under National Pension System – Option for Complete withdrawal of accumulated pension wealth by subscriber PFRDA/2013/17 /PDEX/10 Dated: October 23, 2013 In partial modification of exit guidelines provided under PFRDA master circular no: PFRDA/2013/2/PDEX/2 (at Serial no: 2 & 3) Dated: 2/01/2013, it has been decided to provide an option to withdraw the entire accumulated pension wealth to subscribers other than the subscribers of NPS Lite – Swavalamban Scheme, subject to the condition that: ▪ The accumulated pension wealth in the subscribers permanent retirement account is equal to or less than Rs.2,00,000/ - at the time of superannuation for government employee subscribers or upon attaining the age of 60 years for subscribers falling under All citizen model and Corporate model. The subscribers wishing to exercise this option shall have to fill a request form (format available for download along with this circular at www.pfrda.org.in ) along with the NPS Withdrawal form while submitting the same to their DDO/PAO/DTO/POP. Subscriber registration under NPS – NPS-Swavalamban PFRDA/ 2013/15/POP/1 Dated: September 17, 2013 Presently Swavalamban Scheme subscribers can be registered either through Aggregators or through Points of Presence (POPs). In order to streamline the system to cater to the Swavalamban scheme objectives , it has been decided that with effect from 01/10/2013, registration of NPS-Swavalamban subscribers would be allowed only through aggregators on the NPS-Lite platform. In effect, no new NPS- Swavalamban subscriber registration would be allowed through POP's on the all citizen model (UOS) on or after 01/10/2013. 20
  22. 22. All those POP's who have registered NPS-Swavalamban accounts on the all citizen model(UOS) of NPS earlier would be provided a period of 3 months starting from 01/10/2013 to approach PFRDA for become aggregator by duly submitting the required documentation so that they can move their existing NPS-Swavalamban accounts to the NPS-Lite platform as an aggregator. However, post the 3 month window provided, if there is no satisfactory action on part of the POP, the subscribers would be asked to choose one of the existing aggregators for subscriber maintenance activities. INITIATED BY IRDA e-KYC services of UIDAI IRDA/SDD/CIR/AML/207/10/2013 Dated: October 21, 2013 Attention is drawn to the following circulars issued by the Authority: I. IRDA/F&I/CIR/AML/151 /07/2011 dated July 5, 2011 wherein insurers were informed of the amendments to the Prevention of Money Laundering (Maintenance of Records) Amendment Rules 2010 by which “the letter issued by the Unique Identification Authority of India containing details of name, address and Aadhaar number” was considered as officially valid document that may be obtained as part of Customer Identification Procedure, for the purposes of identification. ii. Master Circular 2010 on AML/CFT guidelines clause 3.1.1 (iv) wherein it has been indicated that “No further documentation is necessary for proof of residence where the document of identity submitted also gives the proof of residence.” Ministry of Finance has confirmed that e-KYC services may be accepted as a valid process for KYC verification under the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. In lieu of this, it has been decided that e-KYC services of UIDAI is acceptable for KYC verification subject to specific and express consent of the customer to access his/her data through UIDAI system. In cases where e-KYC services are availed for KYC verification, certification requirements under clause 3.1.1 (iv) of the Master Circular (2010) AML/CFT guidelines shall be deemed to be complied with. IRDA Health Insurance Regulations, 2013 IRDA/HLT/REG/CIR/191/09/2013 Dated: September 27, 2013 Reference is drawn to the captioned Regulations of IRDA notified on 16th February, 2013. The following amendments are being carried out and may be noted: A. Regulation 5: General Provisions relating to Health Policies: 1. Free look Period: Existing provision: Regulation 5 (g): 'All health insurance policies shall have a free look period. The free look period shall be applicable at the inception of the policy…' Modification: Regulation 5(g): 'All individual health insurance policies except those with tenure of less than a year shall have a free look period. The free look period shall be applicable at the inception of the policy…' 2. Cumulative Bonus: Existing provision: Regulation 5 (i) (iii): 'Cumulative bonus may not be allowed on benefit based policies.' Modification: Regulation 5 (i) (iii): 'Cumulative bonus may not be allowed on benefit based policies with the exception of Personal Accident cover.' 3. AYUSH coverage: Existing provision: Regulation 5 (I) (i): 'Insurers may provide coverage to non-allopathic treatments provided the treatment has been undergone in a government hospital or in any institute recognized by the government and/or accredited by Quality Council of India/National Accreditation Board on Health or any other suitable institutions.’ Modifications: Regulation 5 (I) (i): 'Insurers may provide coverage to non-allopathic treatments provided the treatment has been undergone in a government hospital or in any institute recognized by the government and/or accredited by Quality Council of India/National Accreditation Board on Health' 21
  23. 23. NATIONAL CENTRE FOR FINANCIAL EDUCATION'S NATIONAL FINANCIAL LITERACY ASSESSMENT TEST (NCFE-NFLAT) Win Exciting Prizes!! Take charge of your pocket. Make yourself count! Open for students of Classes VIII to X. Registration through schools Registration Opens: 1st November 2013 No fee for the test Registration Closes: 29th November 2013 National Strategy for Financial Education (NSFE) has been developed for India and has recently been approved by the Honorable Union Finance Minister. National Institute of Securities Markets (NISM) has been identified as the nodal agency by Government of India for the implementation of the NSFE. In this regard, NISM has set up National Centre for Financial Education (NCFE) with the support of Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC) to further the cause of financial literacy and inclusion in India in a collaborative manner. The NSFE document identifies the need for introducing concepts of finance at the grass root level by educating students. Financial Literacy will become one of the focus areas in formal school education in due course of time. NCFE’s National Financial Literacy Assessment Test (NCFE-NFLAT) is one such step in this direction. It will be conducted across all the states and UTs in the country (in both English and Hindi). Through this test, NCFE plans to motivate school students (of classes VIII to X) to learn concepts of finance. The test brings to students an opportunity to learn about one of the most critical life skills, 'Managing money'. It will provide them recognition at the National Level with the winners being felicitated at the Grand Ceremony in Mumbai. Some features of the NCFE-NFLAT are listed below: ▪ Medals and laptops for National winners and medals and tablet PCs for regional winners ▪ National awards to schools for highest participation and highest success rate ▪ Winners will be felicitated at an exclusive grand event in Mumbai ▪ All India top 100 students get cash rewards ▪ Merit certificates for those in top-50 percentile and participation certificates for all ▪ Sponsored by all the financial sector regulators (RBI, SEBI, IRDA, PFRDA and FMC) ▪ Free downloadable study material ▪ No fee for the test Important Dates: Registration Opens: 1st November 2013 Registration Closes: 29th November 2013 Test Date: 12th January 2014 (Sunday) - National Youth Day Result Declaration: 23rd January 2014 - Netaji Subhash Chandra Bose's Birth Anniversary For any queries regarding NCFE-NFLAT, kindly visit www.nism.ac.in or contact us at nflat@nism.ac.in or call at 02266735100-05 22
  24. 24. BOUQUET OF PROGRAMMES MOST B-SCHOOL STUDENTS CHOOSE A SPECIALIZATION IN THEIR SECOND YEAR Admissions 2014-15 You would be a specialist in securities markets by then. Last date: April 17, 2014 Apply Online: www.nism.ac.in | Email: pgpsm@nism.ac.in | Call: 022-66735125/58 IN THE BUSINESS OF FINANCE, WHILE MANY TAKE RISKS Admissions 2014-15 One-year part-time programme for working executives Last date for application: June 16, 2014 Apply Online: www.nism.ac.in | Email: cferm@nism.ac.in | Call: 022-66735125/58 A Six-month, Week-end, in-class programme for Working Executives FEB 2014 to JUL 2014 Last date for application: January 21, 2014 Apply Online: www.nism.ac.in| Email: csl@nism.ac.in | Call: 022-66735125/58 National Institute of Securities Markets (An Educational Initiative of SEBI) NISM Bhavan, Plot No. 82, Sector 17, Vashi, Navi Mumbai - 400 703 Phone: 022 66735100-05 | Fax: 022 66735110 www.nism.ac.in

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