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Money > Business Headlines > Report March 28, 2001 |
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Sebi puts on hold applications for deemed FII statusRashmi Das The Securities and Exchange Board of India (Sebi) has put on hold applications by various broking and investment companies for deemed FII status. The entities whose applications are on hold include First Global, Anand Rathi Securities, Munoth Financial Services Ltd and UTI Investment Advisory Ltd. The move comes close on the heels of the stock scam, which saw share prices fall as a result of bear hammering. As part of its probe into the matter, Sebi is investigating the alleged role of First Global and Anand Rathi Securities, among others, in price manipulation in the stock market. Top Sebi officials confirmed that the applications would not be considered till the present crisis was resolved. They also said that margin requirements for deemed FII status had emerged as a contentious issue and was holding up the matter. Commenting on the issue, Sebi chairman DR Mehta said the margin requirements for deemed FIIs were being looked into and a decision would be taken only after the present crisis was over. The guidelines for grant of deemed FII status, which allows domestic broking and investment entities to manage funds abroad, were announced in the third quarter of this fiscal. Deemed FIIs, however, cannot engage in proprietary trade, as per the guidelines. According to sources, First Global was the first company to approach Sebi for the deemed FII status. According to market sources, the guidelines do not mention any net worth qualification criteria or a specific margin requirement. "It was assumed that the net worth criteria of Rs 100 million applicable for asset management companies would be the framework. The margin qualification also seems to be governed by market developments," a source said. ALSO READ:
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