NISM Update Aug-Oct 2012

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Page 1: NISM Update Aug-Oct 2012

Volume 3 / Issue 20

August-October 2012

Learn the Lawand be Secure

A Six-month, Week-end, in-class programme

for Working Executives

NISM launches a new programmeCERTIFICATE IN SECURITIES LAW

Page 2: NISM Update Aug-Oct 2012

(SSE) of NISM is going to launch a new certificate course called Certificate in

Securities Law (CSL). This course is aimed at providing the securities

markets and the corporate world with a cadre of specialised securities law

professionals.

School for Certificate of Intermediaries (SCI) of NISM is launching the NISM-

Series-VIII: Equity Derivatives Certification Examination in October, 2012.

Some more such certification examinations would be introduced in the near

future.

NISM intends to announce many more locations for periodic conduct of

certificate examinations to make it convenient for the candidates. At present,

such tests are conducted in 104 cities.

NISM, for the benefit of market participants, is also working on a project to

conduct Continuous Professional Education (CPE) through eLearning i.e.

CPE would be conducted through the computerised mode.

With a view to scale up its activities in the area of financial literacy, certain

modifications are being carried out in the Financial Education Resource

Persons (FERP) programme to cover many more cities and increase the

number of resource persons who work for financial literacy in the country.

NISM has plans to carry out studies on various subjects in securities markets

on a regular basis. One such study on trends in the performance of corporate

sector has been carried out; a brief of the study is given in this issue.

I shall keep you informed of the progress made in the above activities in the

coming issues of this newsletter.

P K NagpalDirector

It gives me great pleasure to announce that School for Securities Education

FOREWORD

Page 3: NISM Update Aug-Oct 2012

GENERAL ORDER - SEBI (FRAMEWORK FOR REJECTION OF DRAFT OFFER DOCUMENTS) ORDER, 2012

PUBLIC ISSUES IN ELECTRONIC FORM AND USE OF NATIONWIDE BROKER NETWORK OF STOCK EXCHANGES FOR SUBMITTING APPLICATION FORMS

REVIEW OF MARGINING WITH RESPECT TO EXCHANGE TRADED FUNDS (ETFS)

PROCESSING OF INVESTOR COMPLAINTS AGAINST KRA [KYC (KNOW YOUR CLIENT) REGISTRATION AGENCY] IN SEBI COMPLAINTS REDRESS SYSTEM (SCORES)

STEPS TO RE-ENERGISE MUTUAL FUND INDUSTRY

(CIR/CFD/DIL/15/2012 dated 15-10-2012)

(CIR/CFD/14/2012 dated 04-10-2012)

(CIR/MRD/DP/ 26 /2012 dated 26-09-2012)

(CIR/MIRSD/12/2012 dated 21-09-2012)

(CIR/IMD/DF/21/2012 dated 13-09-2012)

SEBI has laid down the following general criteria subject to which draft offer documents filed for issue of securities with the Board, may be rejected.

Where Capital Structure involves existence of circular transactions for building up the capital / net worth of the issuer.Where Object of the Issue is vague for which a major portion of the issue proceeds are proposed to be utilized.Where business model of an issuer is exaggerated, complex or misleading and the investors may not be able to assess the risks associated with such business models.Where scrutiny of Financial Statements shows sudden spurt in the business just before filing the draft offer document and reply to clarifications sought is not satisfactory.

SEBI has decided to introduce an additional mechanism for investors to submit application forms in public issues using the stock broker (“broker”) network of Stock Exchanges, who may not be syndicate members in an issue.

This mechanism can be used to submit ASBA as well as non-ASBA applications by investors.Stock Exchanges shall provide for download of application forms on their websites/broker terminals.Merchant Bankers shall ensure that appropriate disclosures in this regard are made in the offer document.

The following additional provisions are hereby incorporated in the Risk Management framework for Cash Market specified by SEBI vide circular no. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005 and modification thereto.

Use of VaR Methodology with respect to Exchange Traded FundsIntroduction of Cross-Margining facility in respect of offsetting positions in ETFs based on equity indices and constituent stocks.

SEBI has commenced processing of investor complaints in a centralized web based complaints redress system, “SCORES”. The salient features of this system are:

Centralised database of all complaints,Online movement of complaints to the concerned KRA,Online upload of Action Taker Report (ATRs) by the concerned KRA, andOnline viewing by investors of actions taken on the complaint and its current status.

Accordingly, all complaints pertaining to KRAs will be electronically sent through SCORES at http://scores.gov.in/Admin and submission of physical ATR will not be accepted for complaints lodged in SCORES.

In order to increase penetration of mutual fund products and to energise the distribution network, SEBI has decided to implement the following:

Additional Total Expense Ratio (TER) can be charged up to 30 basis points on daily net assets of the schemeMutual funds /AMCs may charge service tax on investment and advisory fees to the scheme in addition to the maximum limit of TERMutual funds/AMCs shall launch schemes under a single plan and ensure that all new investors are subject to single expense structureMutual funds/AMCs shall provide a separate plan for direct investments

▪ ▪ ▪

▪ ▪ ▪

▪ ▪

▪ ▪ ▪ ▪

▪ ▪

REGULATORY CHANGES

INITIATED BY SEBI

Page 4: NISM Update Aug-Oct 2012

PENALTIES ON INDIAN INSURANCE/ REINSURANCE COMPANIES (IRDA/F&I/MISC/CIR/175/08/2012 dated 02-08-

2012)

▪ Penalties levied by IRDA on different insurance companies for various acts of omission and commission, shall only be debited

to the shareholders' account and not to its policy holders' account.

REVISION OF INVESTMENT MANAGEMENT FEE (IMF) FOR PENSION FUND MANAGERS (PFMS) FOR

PRIVATE SECTOR NPS (PFRDA/CIR/1/PFM/1 dated 31-08-2012)

with effect from 1st November 2012.

▪ The Investment Management Fee for the NPS Lite/ Swavalamban shall be at par with the Investment Management Fee

applicable to NPS Schemes for Government Employees which is currently at 0.0102% p.a.

▪ The Investment Management Fee applicable to the NPS schemes for Government Employees would continue at 0.0102% p.a.

which was revised with effect from 18/04/2012.

The PFMs will be permitted to revise the Investment Management Fee, once in a year.

FRDA has fixed the upper ceiling of the Investment Management Fees at 0.25% p.a. of the AUM (Asset Under Management)

INITIATED BY IRDA

INITIATED BY PFRDA

THE SCHEME OF 1% INTEREST SUBVENTION ON HOUSING LOANS UP TO RS. 15.00 LAKH

MAINTENANCE OF CASH RESERVE RATIO (CRR)

COMPREHENSIVE GUIDELINES ON OVER THE COUNTER (OTC) FOREIGN EXCHANGE DERIVATIVES - COST REDUCTION STRUCTURES

(RBI/2012-

2013/214 dated 18-09-2012)

(RBI/2012-2013/209 & 212 dated 17-09-2012)

(RBI/2012-2013/204 dated 12-09-2012)

▪ The interest subvention scheme has been liberalized with effect from FY 2011-12 by extending it to housing loans up to Rs.15

lakh where the cost of the house does not exceed Rs.25 lakh. The Scheme has since been extended by Government of India

and will remain in force up to March 31, 2013.

▪ RBI has decided to reduce the CRR of Scheduled Commercial Banks and Scheduled Primary (Urban) Co-operative Banks by 25

basis points from 4.75 per cent to 4.50 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight

beginning September 22, 2012.

▪ Use of cost reduction structures, i.e., cross currency option cost reduction structures and foreign currency -INR option cost

reduction structures have been permitted to hedge exchange rate risk arising out of trade transactions and the External

Commercial Borrowings (ECBs).

▪ It has been decided to permit the use of cost reduction structures for hedging the exchange rate risk arising out of foreign

currency loans availed of domestically against FCNR (B) deposits.

INITIATED BY RBI

APPLICATION SUPPORTED BY BLOCKED AMOUNT (ASBA) FACILITY IN PUBLIC/ RIGHTS ISSUE(CIR/CFD/DIL/12/2012 dated 13-09-2012)

For applications made by any investor using ASBA facility, the Self Certified Syndicate Banks (SCSB) shall block the application amount only against/ in a funded deposit account and ensure that clear demarcated funds are available for ASBA applicationsFor making applications on own account using ASBA facility, SCSBs should have a separate account in own name with any of the SEBI registered SCSBs

Page 5: NISM Update Aug-Oct 2012

FINANCIAL LITERACY FOR SCHOOL STUDENTS - POCKET MONEY PROGRAM

The School for Investor Education & Financial Literacy has organized three Pocket Money programs at Atul (Gujarat),

Pimpri (Maharashtra) and Silguri (West Bengal) during the immediate past.

At Atul the program was held on 23rd June 2012 at the premises of Atul Vidyalaya, Atul, Valsad. Fifty one teachers

from Atul Vidyalaya and associated schools attended the program. Lt Col. A. Sekhar, Principal of Atul Vidyalaya

introduced the topic to the students. Mr. K. Sukumaran, Dean, spoke about the objectives of the program and the

methodology of implementing financial literacy in schools.

In Pimpri, the programme was organised on 26th June 2012.This programme was conducted with the active support

of Mr. Zuberi of Urdu Concil from Pimpri Chinchwad. Forty seven teachers from 18 Municipal Schools under Pimpri

Chinchwad Municipal Corporation and three Urdu medium schools were trained in the Teachers Training Programme.

It is expected to benefit around 3700 school students from 8th and 9th standard.

In Silguri, the programme was organised on 28th July, 2012. This Teachers Training Programme was organised at

Salesian College, Siliguri. It covered 30 teachers from 10 schools in Siliguri.

The school authorities assured to penetrate the financial literacy learning to the student community in the coming

months.

The concept of money and smart goals were discussed in a participatory style with the participants. Budgeting was

explained focussing on the concepts income, expenditure, assets and liabilities. Basics of Banking was handled,

starting from opening an account with the bank, the procedures to be followed and discussing on the various features

of the payment mechanism. Loans and interest rates are explained. Investment market was discussed providing

various avenues for investment. Risks and Rewards were highlighted. Investment in share market, its pros and cons,

investment in mutual fund schemes, investment in post office schemes, provident fund schemes etc. were

discussed. The concept of retirement planning was discussed.

The school authorities assured to penetrate the financial literacy learning to the student community in the coming

months.

Teachers of Atul Vidyalaya trained by NISM on Financial Literacy

ACTIVITIES AT NISM

SCHOOL FOR INVESTOR EDUCATION AND FINANCIAL LITERACY (SIEFL)

Page 6: NISM Update Aug-Oct 2012

Mr. G.P. Garg, Registrar, NISM addressing the participants of the workshop organisedfor the Western Region Financial Education Resource Persons.

SEBI FINANCIAL EDUCATION RESOURCE PERSONS PROGRAM - WESTERN AND NORTHERN REGIONS

State No. of Resource Persons

Maharashtra

Gujarat

Rajasthan

Madhya Pradesh

Chhattisgarh

Total

21

15

10

7

3

56

The SEBI Financial Education Resource Persons

Program - empanelment of new resource persons and

workshop for western region were held during July 7-14,

2012 at NISM premises, Navi Mumbai. The state wise list

of the newly empanelled resource persons are as

follows:

The empanelment and workshop for northern region was

conducted during July 21-28, 2012 at New Delhi. The

state wise list of the newly empanelled resource persons

are as follows:

Mr. P. K. Nagpal, Director, NISM distributing the certificate to SEBI Financial EducationResource Person during the workshop conducted at Mumbai during July 8-14, 2012.

State No. of Resource Persons

Uttar Pradesh

Delhi

Haryana

Punjab

Uttarakhand

Western Region (Madhya Pradesh+Rajastan)

Total

25

12

11

5

3

2

58

Of the 58 new resource persons empanelled in Northern Region, 56 resource persons belonged to northern region

and two Resource Persons belong to western region.

Page 7: NISM Update Aug-Oct 2012

The empanelled candidates were given seven days workshops wherein all topics under financial education were dealt

in detail. These include role of regulators, capital market - primary and secondary market, Time Value of Money,

Mutual Funds, Fixed Income securities, banking and loan products, insurance, tax planning, retirement planning,

financial planning, SEBI Grievance redressal scheme, inter personal skills etc. The six SEBI Modules on Financial

Education were disseminated to the participants of the workshop. One full day was allotted wherein the participants

conducted workshops on selected topics, under guidance from NISM officials. Examination was conducted, based

on the topics handled in the workshop. All the participants successfully completed the examination. On final day of the

workshop SEBI team interacted with the participants explaining the process of conducting the SEBI Financial

Education. Certificates were distributed to all the participants.

Under Investment Education Program, the School conducted two programmes, one in Mumbai and the other in Silguri.

In Mumbai, the programme was conducted for RCF employees on Retirement Planning on 20th July 2012. The objective of the program was to inculcate the awareness among the prospective retirees the need for sound investment practices so as to make a corpus for happy retired life.

INVESTOR EDUCATION PROGRAM

Mr. Gyan Bhushan, Chief General Manager, SEBI distributing the certificate toSEBI Financial Education Resource Person at New Delhi during 22-28 July 2012

Thus, a total of 114 Resource Persons were empanelled in June and July 2012 from western region and northern

region.

Participants of the SEBI Financial Education Resource Persons Workshop (Western Region)

Page 8: NISM Update Aug-Oct 2012

Launch of NISM-Series-VIII: Equity Derivatives Certification Examination

NISM is launching the NISM-Series-VIII: Equity Derivatives Certification Examination on October 8, 2012. The

examination seeks to create a common minimum knowledge benchmark for associated persons functioning as

approved users and sales personnel of the trading member of an equity derivatives exchange or equity derivative

segment of a recognized stock exchange.

This examination will be made available through all NISM, NSE, BSE and MCX-SX Test Centers. For further details of

the revised examination, please visit www.nism.ac.in.

Revision of Certified Personal Financial Advisor Examination (CPFA)

NISM has launched the revised Certified Personal Financial Advisor Examination (CPFA) on July 16, 2012 as part of

periodic review. The revised examination is available through all NISM, NSE and MCX-SX Test Centers. For further

details, please visit www.nism.ac.in.

CPE Requirements for Depository Operations Certification Examination

NISM launched the two day CPE programs for the NISM-Series-VI: Depository Operations Certification Examination.

NISM specified the CPE requirements for associated persons engaged or employed by a registered depository

participant for performing any of the activities as given below (specified in SEBI Notification No. LAD-NRO/GN/2010-

11/26/10252 dated March 29, 2011):

(a) Dealing or interacting with clients;

(b) Dealing with securities of clients;

(c) Handling redressal of investor grievances;

(d) Internal control or risk management;

(e) Activities having a bearing on operational risk, or

(f) Maintenance of books and records pertaining to the above activities.

The CPE requirements for Depository Operations are effective from July 13, 2012.

Examination Update

CPE Update

An Investor Education Programme for college students was held in Silguri on 27th July. One hundred thirty six

Graduate level students of Commerce and Management stream from Salesian College attended the programme. The

programme gave emphasis on the Goal setting for young students, planning for Financial Goals, Educational Goals,

appropriate spending habits and five important investment mantras.

Participants of the SEBI Financial Education Resource Persons Workshop (Northern Region)

SCHOOL FOR CERTIFICATE OF INTERMEDIARIES (SCI)

Page 9: NISM Update Aug-Oct 2012

CONSOLIDATED STATUS REPORTPERIOD: AS ON SEPTEMBER 23, 2012

Sr

No.

01

02

03

04

05

06

Cumulative of CandidatesAppeared throughNISM & CPE Providers

NISM Continuing Professional Education

NISM Mutual Fund Distributors CPE ( 1 Day Programme)(Launched on 01/06/2010 and upto 31/05/2012)

NISM Mutual Fund Distributors CPE (Day 1)(Launched on 01/06/2012)

NISM Mutual Fund Distributors CPE (Day 2)(Launched on 01/06/2012)

NISM RTA Corporate CPE (Day 1)(Launched on 02/05/2012)

NISM RTA Corporate CPE (Day 2)(Launched on 02/05/2012)

NISM Currency Derivatives CPE (Day 1)(Launched on 05/05/2012)

NISM Continuing Professional Education

16039

2283

2278

65

65

996

99607 NISM Currency Derivatives CPE (Day 2)(Launched on 05/05/2012)

SrNo. NISM Examination

Total Cumulative

of Candidates

Enrolled

Total Cumulative

of Candidates

Enrolled

Total Cumulative

of Candidates

Passed

Cumulative

Pass Rate

Currency Derivatives

(Launched on 15/05/2009)46802 43272 17754 41.03%

RTA - Corporate(Launched on 03/08/2009) 2001 1799 1303 72.43%

RTA - Mutual Funds(Launched on 03/08/2009) 5117 4746 2907 61.25%

Interest Rate Derivatives(Launched on 17/05/2010) 563 406 75 18.47%

Mutual Fund Distributors(Launched on 01/06/2010) 103194 95463 36685 38.43%

Mutual Fund Distributors - Gujarati(Launched on 01/06/2010) 499 403 70 17.37%

Mutual Fund Distributors - Hindi(Launched on 01/06/2010) 677 547 92 16.82%

Depositories Operation(Launched on 21/02/2011) 13973 12776 5494 43.00%

Securities Operations and Risk Management(Launched on 22/11/2010) 6708 6185 4765 77.04%

Total

01

02

03

04

05

06

07

08

09

179534 165597 69145 41.75%

NISM Certification Examination

Page 10: NISM Update Aug-Oct 2012

SCHOOL FOR SECURITIES EDUCATION (SSE)

CERTIFICATE IN SECURITIES LAW (CSL)

Why CSL? Key Takeaways

The CSL is a classroom-based executive programme, of 6 months' duration, across 26 Saturdays. This programme

has been designed for working professionals who wish to hone their skills in functions such as preparation of

compliance, due diligence review (DDR) of documents, legal obligations and contracts, and to understand and apply

knowledge of securities laws and regulations in the securities markets. The philosophy for launching this programme

is: “Know the Law and Be Secure”. It is in line with NISM's vision, which is: "To be a hub of knowledge initiatives for

playing a strategic role in quality enhancement and capacity building, for transforming the securities markets in

India and the Asia-Pacific Region."

Trends in Securities Market Regulation

Securities market laws can be demarcated as a distinct field of specialization with a unique body of knowledge. This

body of knowledge is under-going continuous expansion and consolidation. New laws are being written while old

laws are being repealed. From an Indian perspective, some of the seminal studies conducted are by Raghuram Rajan,

Percy Mistry, Deepak Parekh, Bimal Jalan, R H Patil and Parhasarathy Shome. From the international academic

perspective, studies by Richard Posner, Cass Sunstein and Frank Partnoy are highly insightful in the field of Law &

Economics.

Another force that influences change is internationalism. Bodies such as International Organization of Securities

Commissions (IOSCO), Bank for International Settlements (BIS), Financial Action Task Force (FATF), International

Accounting Standards Board (IASB) etc., have corresponding Indian bodies as their members, resulting in a gradual

percolation of international practices into the Indian legal and regulatory system. At the same time, several countries

in the SAARC region, Indian and Pacific Ocean rims and Africa look to India for guidance in framing of regulations and

their implementation.

For Whom? Target Audience

The CSL programme has three types of audiences. The first consists of practitioners in finance, who need the legal

background. The second consists of legal practitioners who need the financial background. The third consists of

students of post graduate-level programmes such as M.Com, MBA, Chartered Accountancy, Cost Accountancy,

Company Secretaries, and LLB etc.

Organizations that are likely to benefit from CSL inputs are intermediaries regulated by SEBI, such as Merchant

Bankers, Underwriters, Stockbrokers, Stock Exchanges, Depositories, Depository Participants, Custodians, Bankers

to Issues, Registrars & Share Transfer Agents, Portfolio Managers, Mutual Funds, FIIs, PE Funds, etc. Large

companies and industrial groups that access the securities markets and engage in corporate actions such as

restructuring, share buy-back offers, ESOP, delisting, IPO, FPO, OFS, IIP etc will also benefit. Consultants engaged in

advising on matters such as corporate finance, restructuring, fund-raising plans, collaborations, FDI, private

placements etc will also find this programme beneficial.

CSL - Design, Content and Delivery

The CSL programme is a fine blend of practice and theory, with workshops, guest lectures, field visits, cases,

assignments, projects and exercises. The programme will specifically cover Securities Market Regulations,

Securities Market Laws, Corporate Laws, Taxation of Securities Transactions and contemporary as well as emerging

aspects in Securities Markets.

Page 11: NISM Update Aug-Oct 2012

MORNINGSTAR INVESTMENT CONFERENCE 2012

Morningstar hosted its two-day conference on November 1 and 2 at the Grand Hyatt, Mumbai. The conference was

well-attended with visitors flying in from various parts of the country.

As many as 40 renowned speakers, from both within Morningstar and the industry, took part in 17 presentations and

panel discussions that outlined investing insights and investment ideas.

Active or passive

Passive investment products such as index funds are not a force to reckon with yet in India, but a panel discussing the

topic was of the view that even as most investors expect active mutual funds to outperform, there may be a case to

opt for index funds or ETFs at least as a tactical portion of the portfolio.

Stick with stocks

Some of India's top fund managers said investors waning appetite for equities were a worrying sign and said that

rather than overweighting recent information and performance of equities, they should remember stocks outperform

most other asset classes over the long term.

Retirement planning

Panelists on the retirement planning panel rued the lack of a retirement-planning culture. According to them the only

financial goals that investors have is children's education or marriage, and almost always, Indians depend on their

children for support in retirement.

The final panel comprising veteran stock market investors was unanimous in its view that Indian stocks are poised to

clock impressive growth over the long term despite the short-term challenges the country faces.

The faculty team shall be drawn from a vastly experienced pool. It would consist of officers from SEBI, experts from

industry, legal practitioners and experts and academicians from NISM and other institutions.

Admission Process

The CSL programme offering is being brought to the public from the School for Securities Education (SSE) at NISM.

Graduates in any discipline from a recognized Indian University or equivalent, are eligible to apply. The last date for

submission of completed applications is November 21, 2012. The selection process shall consist of an interview and

an essay on Saturday, November 24, 2012. The programme is expected to commence from Saturday, December 8,

2012.

The admission process for the batch is open. Enquiries may be directed to Mr. Rajshekhar Torgal, Dy. Manager-

Programme Office, on Phone 022-66735125 or email: [email protected]. The detailed programme prospectus and

application form can be downloaded from www.nism.ac.in.

Participants at Morningstar Investment Conference, 2012

Page 12: NISM Update Aug-Oct 2012

ARTICLES

RESEARCH AT NISM

TRENDS IN THE PERFORMANCE OF THE CORPORATE SECTOR

NON-TECHNICAL SUMMARY

Title

Authors

Published in

Quarterly Corporate Results are one of the indicators of economic activity in the country. A study on Quarterly

Earnings of 100 companies (Nifty 50 companies and Nifty Junior 50 companies) is carried out with a view to obtain

broad trends in the performance of companies and various sectors for Quarter April-June 2012 as compared to April

June 2011.

Based on 100 companies, it is found that Sales have grown 15% over the corresponding Quarter, but Operating

Expenses have grown 21%. As a result, Operating Profit (before Depreciation, Other Income, Finance Cost and

Exceptional Items) declined by 22% and PAT declined by 13%.

These 100 companies are classified into 14 sectors. In terms of PAT (Profit After Tax), 7 sectors have reported an

increase, with 1 sector unchanged. PAT increased mainly in FMCG (+42%) and Banking (+42%). 6 sectors reported

a decline, mainly Oil & Gas (-215%), Healthcare (-56%), PSU (-39%) and Metals (-28%).

Global markets exposure and price efficiency: An empirical analysis of order flow dynamics of

NYSE-listed Indian firms

Kiran Kumar, NISM; Varsha Mamidi, Monash University, Australia; Vijaya Marisetty, RMIT

University, Australia

Journal of International Financial Markets, Institutions and Money, Dec 2011, pp686-706

The paper examines whether exposure of local stock markets to order flow competition from a global stock market

will improve overall market efficiency. The paper uses Indian stocks that are cross-listed in two local markets namely,

NSE and BSE, and also in a global market- NYSE. The paper addresses the following three important issues relating to

the order imbalance and relative market efficiency in a setting where markets compete for order flows:

▪ Does local market efficiency improve when markets are fragmented and are open to global competition?

▪ Does global order imbalance affect local prices?

▪ Does global competition improves local market quality by reduction of spreads?

The paper finds the following evidence: (1) Order imbalance can predict stock returns in both order driven (BSE and

NSE) and quote driven (NYSE) trading mechanisms. There is no noticeable difference in the magnitude of the order

imbalance influence in different trading mechanisms. (2) There has been overall efficiency for the cross-listed Indian

stocks post-ADRs listing. This confirms that order flow competition and corresponding market fragmentation leads

to market efficiency. The results are stronger in the case of BSE market. BSE listed stocks had a dramatic

improvement in their market efficiency post-ADRs listing. (3) We find that global effect in the form of NYSE listing is

felt in the local market (NSE), however, vice versa does not hold. (4) The paper also reports evidence of improvement

in the local market quality through reduction of spreads. In summary, the paper provides comprehensive evidence

that competition among markets leads to fragmentized and specialized markets with no single dominant player and

competition improves overall efficiency.

Page 13: NISM Update Aug-Oct 2012

INDIAN ECONOMIC INDICATORS

Gross Domestic Product (GDP) at Constant Prices(Base: 2004-05=100, Unit: ` Billion, Period: Q1= April - June)

2012 2011 %Change

Total

Agriculture

Industry

Services

13063

1724

3558

7781

12387

1675

3433

7579

5.5

2.9

3.6

6.9

Index of Industrial Production (IIP)(Base: 2004-05=100, Unit: ` Billion, Period: July)

2012 2011 %Change

General

Mining

Manufacturing

Electricity

167.3

123.2

177.1

156.3

167.2

124.1

177.4

152.1

0.1

-0.7

-0.2

2.8

India's Trade(Unit: ` Billion, Period: July)

2012 2011 %Change

Total Exports

Total Imports

1245

2105

1170

1824

6.5

15.4

Combined

Rural Areas

Urban Areas

Consumer Price Index (CPI)(Base: 2010=100)

2012 2011 %Change

July

August

July

August

July

August

121.4

122.9

122.6

124.3

119.9

121.1

110.5

111.7

111.7

113.1

108.9

109.9

9.9

10.0

9.8

9.9

10.1

10.2

Wholesale Price Index(Base: 2004-05=100)

2012 2011 %Change

July

August

164.8

166.6

154.2

154.9

6.9

7.6

Foreign Exchange Reserves(As on 14th Sept. 2012)

` Billion

Foreign Currency Assets

Gold

SDR

Reserve Position in IMF

14312

1462

245

123

Page 14: NISM Update Aug-Oct 2012

Analytical accounts of the RBI(As on 21st Sept. 2012)

` Billion

Reserve Money

Net RBI Credit to General Government

RBI Credit to Commercial Sector

RBI's Claims on Banks

Net Foreign Exchange Assets of RBI

14496

5362

202

166

15575

Analytical accounts of the RBI(As on 21st Sept. 2012)

` Billion

Broad Money (M3)

Domestic Credit to General Government

Other Domestic Credit

Net Foreign Exchange Assets of the Banking Sector

78183

26217

51001

16612

FII Net Investments(Upto 26th Sept. 2012)

US $ Million

Total for September

Total for 2012

3302

20279

FDI Net Investments(As per RBI's monthly bulletin dated 12/09/2012)

US $ Million

Total for July

Total for FY 2012

1492

5826

Policy Rates(As on 27th Sept. 2012)

Percentage

Bank Rate

Repo Rate

Reverse Repo Rate

9.0

8.0

7.0

Lending/ Deposit Rates (As on 27th Sept. 2012)

Percentage

Base Rate

Deposit Rate

10.00 - 10.50

8.00 - 9.25

| www.sebi.gov.in | www.rbi.org.in | www.irda.gov.in www.pfrda.org.in www.finmin.nic.in

| www.mospi.gov.in | www.eaindustry.nic.in | www.dipp.nic.in |

| | |

SOURCES

Page 15: NISM Update Aug-Oct 2012

National Institute of Securities Markets (NISM) is a public trust, established by the Securities

and Exchange Board of India (SEBI), the regulator for securities markets in India. It is located

in Navi Mumbai, India.

NISM seeks to add to market quality through educational initiatives. It is an autonomous body

governed by its Board of Governors. An international Advisory Council provides strategic

guidance to NISM.

NISM consists of six different schools as follows:

· School for Investor Education and Financial Literacy (SIEFL)

· School for Certification of Intermediaries (SCI)

· School for Securities Information and Research (SSIR)

· School for Regulatory Studies and Supervision (SRSS)

· School for Corporate Governance (SCG)

· School for Securities Education (SSE)

VisionTo lead, catalyze and deliver educational initiatives to enhance the quality of securities markets.

MissionTo engage in capacity building among the stakeholders in the securities markets through

financial literacy, professional education, enhancing governance standards and fostering policy

research.

About NISM

NATIONAL INSTITUTE OF SECURITIES MARKETS

NISM Bhavan, Plot No. 82, Sector 17,Vashi, Navi Mumbai - 400 703Phone: 022 66735100-05 | Fax: 022 66735110www.nism.ac.in