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July 9, 2001
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Money > Business Headlines > Report July 9, 2001 |
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Ban on badla, use of celebrities in MF promotion to staySecurities and Exchange Board of India chairman R Mehta, on Monday ruled out lifting the ban on badla or underhand transactions trading and the involvement of celebrities in the promotion of mutual funds. Talking to reporters after a meeting of Sebi directors, Mehta said the ban was part of the reform process and was there to stay despite protests from brokers. Giving details of the board meeting, he said it had decided to retain the ban on mutual funds, corporates and other issuers for making use of celebrities in advertisements. He said, ''Products should be sold on the fundamentals of the fund,'' not through celebrities. He said the National Stock Exchange and Bombay Stock Exchange had introduced an order verification system in terms of quantity as well as price in the wake of complaints that brokers had inserted trades. The system would cover all transactions involving over Rs 20 million and cases where the price fluctuation in shares was 20 per cent or more, he said. Following the introduction of the system, the terminals of four brokers had been sealed, two each in the Bombay Stock Exchange and the National Stock Exchange. While the BSE brokers -- Angel Securities Pvt Ltd and Mahesh Kothari shares and stocks -- had been suspended, the investigation against the other two was still on. Admitting that the volume of trade had gone down following introducting of rolling settlement, Mehta said the stock exchanges were, however, confident that this was bound to improve after the users became familiar with it. The Sebi board on Monday clarified that mutual funds may invest in securities or units of unlisted venture capital funds up to a limit of five per cent of net assets in case of open-ended MF schemes and ten per cent of net assets of close-ended schemes. The board decided to expand the definition of qualified institutional buyers and include state industrial development corporations as part of QIB who can subscribe to an issue in pursuance to book building. UNI YOU MAY ALSO WANT TO READ:
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