IPO norms likely to be tightened by Sebi
Mumbai: According to a report appearing in the Economic Times, the Securities and Exchange Board of India (Sebi) board is due to meet on June 14 to discuss further tightening of the norms for initial public offer.

The board is also likely to discuss the J R Varma committee report on carry forward trading in a rolling settlement environment. The report had recommended a daily as well as weekly badla product and the two products were to run simultaneously. When the report was released, the Sebi board had raised doubts on the weekly badla product, as it felt that this amounted to stock futures and a view on this would have to be taken later.

For primary markets, the new norms may consider a lock-in on preferential offers for one year and not allowing companies avoiding the three-year profit track record by coming through the bank or financial institution appraisal route, to issue shares at a premium. The norms may also state that in the event of a merchant banker not being able to justify the pricing of an issue, the issue should not go through. As of now, an issue can go through even if a merchant banker discloses that the issue price cannot be justified.
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Sebi releases ad code for mutual funds
New Delhi: The mutual fund industry, which saw unprecedented growth in the last year, will now have to ensure that its products are marketed as per the Sebi outlined code of conduct, which bars them from making any assurances or claims that can mislead the public.

As per the latest guidelines, prepared by the Association of Mutual Funds of India and approved by the Sebi, mutual funds have to refrain from making exaggerated or unwarranted claims that cannot be substantiated by available public data and also avoid future forecasts and estimates of growth.

These guidelines are applicable to all forms of advertisements, communications, sales literature, TV interviews, public speaking, presentations in seminars and workshop to market a scheme or convey the performance of an existing scheme. Further, the funds cannot give any forecasts or growth in the net asset values or promise any returns that are not backed by adequate reserve funds or sponsors or third party guarantees. Claims, if any, made about the management capability must be backed by a three year track record.

The guideline also bans statistical information, unless these are supported by their source.
Where the advertisements claim any rankings, the same must be done a "ranking entity" that is independent of the asset management company or mutual fund and its affiliates, and the ranking used should be current to the most recent calendar quarter, except in the case of money market mutual funds wherein rankings should be based on yield for a period of less than one year.

The guidelines state that in case of growth funds with a minimum of 60 per cent of their investments in equities, comparisons should be done with the BSE Sensex, or NSE Nifty.
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BSE kicks off derivatives trading
Mumbai: Heralding a new era in the Indian capital markets, the Bombay Stock Exchange (BSE) today launched index futures (based on BSE-30 Sensitive index). Under this, a trader can bet on Sensex futures of six types _ one month, two months and three months and three spread futures (June-July, July-August and June-August). This will throw open new arbitrage opportunities between the cash and derivatives market.

The first historical trade for five contracts of June series was executed by Himanshu Kazi of Kazi & Maulik Securities at the rate of 4,755 when trading in Sensex futures was inaugurated by Prof. J.R. Varma, senior executive director, Securities & Exchange Board of India (Sebi). Officials and regulators are optimistic about increased interest in futures trading as the new hedging mechanism is aimed at improving liquidity in the market and reducing volatility.

The BSE is expecting daily volumes in the futures market to rise to 1 lakh contracts per day with volume of Rs. 2,500 crores within a year.

The National Stock Exchange will commence trading in S&P CNX Nifty futures from Monday (June 12).
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