Markets regulator SEBI on Thursday notified revised guidelines for system audit to be conducted by mutual funds and asset management companies (AMCs). Besides, mutual funds (MFs)/ AMCs have been directed to constitute a technology committee entrusted with the task of reviewing the cyber security and cyber resilience framework for MFs and AMCs. The regulator has asked MFs and AMCs to conduct system audit on an annual basis by an eligible independent auditor.
Markets regulator SEBI on Wednesday extended the timeline for the implementation of phase 1 of Unified Payments Interface (UPI) as an alternative payment mechanism for retail investors buying shares in a public issue. The timeline has now been extended by 3 months to June 30. In November 2018, the regulator had said it would launch UPI as an alternative payment option for retail investors buying shares in a public issue in a phased manner from January 1, 2019, which will cut listing time for an IPO to three days from existing six days.
Citibank N.A. paid Rs 4.5 crore to settle a case with SEBI for alleged violation of portfolio manager norms in 2015. A relationship manager of Citi Bank had carried out a fraudulent portfolio investment scheme offering the applicant customers high guaranteed returns. The manager had received signed blank fund transfer forms, which were then used for transferring funds from the accounts of such customers' to the linked accounts of his family.
Market regulator SEBI on Monday reviewed and modified the commission as well as disclosure norms for the mutual fund industry. The regulator in October 2018 asked the asset management companies (AMC) to adopt full trail model of commission in all schemes while allowing upfronting of trail commission only in case of inflows through systematic investment plans (SIPs). Upfront commission is a one-time payment that an AMC pays a distributor on selling a mutual fund scheme to an investor. Trail commission, on the other hand, is a recurring fee paid to a distributor until the investment is withdrawn.
Markets regulator SEBI has barred 12 websites after receiving investors’ complaints that certain investment advisory portals cheated them. According to SEBI, these advisory firms were engaged in the business of fraudulent investment advisory activity. The banned websites are trade4target.com, niftysureshot.com, mcxbhavishya.com, callput.in, newsbasedtips.com, futuresandoption.com, optiontips.in, commoditytips.in, sharetipslive.com, thepremiumstocks.com, callputoption.in and tradingtipscomplaints.com. These websites lured investors with subscription packages promising investment and trading tips with 90-99% accuracy. The subscription packages offered investors to get a daily message, tips during live market hours and one-to-one customer support.
With an aim to prevent financial frauds, market regulator SEBI has sought powers to conduct inspection of books of accounts of listed companies for violation of any securities law and also to take direct action against the fraudsters. Besides, SEBI has proposed a heavy penalty for altering, destroying, mutilating, concealing or falsifying records and documents or other tangible objects with intent to obstruct, impede or influence a legal investigation. At present, SEBI is empowered to conduct such inspections in case of violations relating to insider trading and fraudulent or unfair trade practices.