Listed Cos must hike public stake:
Listed Indian companies with a relatively low public float may soon have to work on plans to increase their public shareholding by at least 3 to 5% annually to ensure that they fulfill the minimum threshold level of 25%. Early this year, the government had put out a draft proposal which said all listed companies would have to ensure a minimum public holding of 25% while listing and subsequently on a continuous basis. The norms, relating to public holding, are specified under the Securities Contract (Regulation) Act. The government move is aimed at boosting liquidity in the markets, better price discovery and to discourage efforts at manipulating stock prices. Public shareholding is now taken as inclusive of the shares held not just by individuals but also financial institutions, foreign portfolio investors, mutual funds and non-resident Indians, employees and others.
Outstation cheque clearance may soon cost less:
In a move that would result in huge savings for corporates and individuals, RBI has proposed slashing of bank charges for clearing outstation cheques and charges on electronic remittances through the Real Time Gross Settlement System (RTGS) and the National Electronic Fund Transfer (NEFT) mechanisms.
For outstation cheques, the average charge for clearing Rs 1 lakh is around Rs 420. Under the new regime, no bank would be allowed to charge more than Rs 50 for clearing outstation cheques up to Rs 1 lakh. For amounts above Rs 1 lakh, RBI proposes to cap charges at Rs 100.
The fees charged by banks for sending money through RTGS have been similarly slashed. For RTGS, RBI wants a maximum charge of Rs 25 per transaction for amounts up to Rs 5 lakh and Rs 50 per transaction for amounts above Rs 5 lakh. Similarly for NEFT, the new charge structure would be Rs 5 per transaction for amounts up to Rs 1 lakh and Rs 25 per transaction for amounts above Rs 1 lakh.
Introduction of Interest rate futures contracts:
Following the introduction of currency futures, exchange-traded interest rate derivatives may soon make their debut. A committee of RBI and SEBI is working on the final guidelines, which is expected to be disclosed by the end of January 2009.
An interest rate future is a standardised contract traded on an exchange to buy or sell an underlying asset (rupee interest rate in this case) at a certain date in future at a specified price on Thursday. The product is used to hedge volatility in the Indian interest rate.
It had also suggested that interest rate futures should be exempted from the securities transactions tax.
Small units may have it easy with new Companies Act:
The Companies Bill 2008, which was cleared by the Cabinet, last week, is expected to come into effect latest by the end of 2009.
Companies in the SME segment can look forward to a more liberalised and less cumbersome regulatory regime in the new Act. The new Act is all about self-regulation with accountability. Companies will also be allowed to conduct Board meetings and annual general meetings through the electronic mode (video conferencing).
Liability to pay interest on advance tax u/s 234B:
The Delhi I-T Tribunal has held that where the entire income of an assessee is subject to deduction of tax at source, and the payee has not deducted tax at source as per provisions of the I-T Act, the assessee would not be liable to pay interest on advance tax under section 234-B for non-payment of advance tax.
