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Sebi develops system to detect misuse of client securities by stock brokers



This comes after Sebi observed that some brokers have misused clients’ securities

regulator on Thursday said it has developed an online system to timely detect misuse of clients’ securities by stock and alert exchanges in case of diversion of investors funds.

This comes after observed that some have misused clients’ securities received as collateral to meet their own settlement obligation or obligations of other clients.

In fact, the regulator noticed that some have also misused clients’ securities by pledging them with the banks and non-banking finance companies (NBFCs) to raise funds for their own use.

Consequently, the regulator developed an in-house online system by which it would be able to prepare client level securities holding register of the brokers, said in a statement.

Under the system, Sebi collects the details of the clients’ securities submitted in weekly report filed by brokers with the exchanges and updates the same with trades conducted in the accounts of the clients using the data available in its data warehouse & business intelligence system as well as data provided by bourses, clearing corporations and depositories pertaining to auction trades, corporate actions and off market trades among others.

The securities holding balance computed is matched with the actual clients’ securities holding in the demat account and submission made by the broker for the next day. Any mismatch in data is flagged as an alert for exchanges.

These reports are being generated by the regulator on a weekly basis and three such mismatch reports have already been forwarded to exchanges for reconciliation with members, the regulator noted.

“This system is likely to timely detect the misuse of clients’ securities collected by brokers as collateral or received in pay-out of securities,” the Securities and Exchange Board of India (Sebi) added.

In order to prevent the misuse of clients’ securities by broker, Sebi said it has taken a number of policy measures including laying down early warning mechanism to detect diversion of clients’ funds and securities, restricting broker to pledge clients’ securities even with the consent of the client, securities to be transferred to client account within 24 hours of payout and mapping of unique client code with demat account of the client.

Further, Sebi has also directed clearing corporations to share client level pay-in and pay-out obligations with depositories, and depositories are required to check the corresponding debit or credit in the demat account of client and report mismatches to the exchanges. This has detected the diversion of clients’ securities received in payout.

The Depositories Act provides for acceptance of client securities as collateral by way of pledge, the collateral of securities is accepted by way of title transfer of securities by brokers.

The client providing collateral in the form of securities needs to transfer his securities in the name of the broker and once the securities move out of the demat account of the client, Sebi said it is not possible for him to keep a track of use or misuse of those securities by the broker.

Moreover, a few brokers have been declared defaulter by the exchange not on account of failure to meet settlement obligation but in failing to meet liabilities/ dues to the clients. The available assets of the broker were found short to meet the clients’ funds and securities obligations and accordingly, the regulator has come out with measures to prevent the misuse of clients’ securities.

First Published: Thu, February 13 2020. 19:56 IST

Source: Business Standard

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Biodiesel industry faces coronavirus heat as meat exports drop sharply




Problems compounded after China started a clampdown of illegal imports through stricter border controls beginning in December, which was pegged at $2 billion annually

Shine Jacob  |  New Delhi 

Bio-diesel units in India are facing the heat of the disease (Covid-19) outbreak, as Asian and West Asian countries have stopped importing buffalo and goat meat, leading to a drop in animal tallow production, a key raw material of biodiesel.

Tallow is a rendered form of beef or mutton fat, used as a feedstock by the bio-diesel industry in winter. “Animal fat or tallow is used by a majority of manufacturing units as other sources like palm oil are costly. The problem is that animal fat is a by-product of the meat industry. After the outbreak of Covid-19, declined and our plants started running at around 30-40 per cent capacity since December,” said Shiva Vig, director, BioD Energy, a Haryana-based bio-diesel manufacturer.

Problems compounded after China started a clampdown of illegal imports through stricter border controls beginning in December, which was pegged at $2 billion annually.


This is because, ever since the outbreak of foot-and-mouth disease in 2001, Beijing had banned direct import of buffalo meat from India, which meant that the meat made its way to China through other countries. “Around 60 per cent of overall continued through other countries like Vietnam, Malaysia and Indonesia. Hence, after Covid-19 outbreak in December, my company was facing a loss of over Rs 5 lakh per month. With complete lockdown, this has increased,” said Muhammad Gulzar, owner of Al Suhail, a major animal fat supplier in North India.

According to a data available with Agricultural and Processed Food Products Export Development Authority (APEDA), out of total meat export worth of Rs 25,168.33 crore in 2018-19, Rs 11,914.49 crore was to Vietnam, Rs 2,574.63 crore to Malaysia and Rs 2,266.99 crore to Indonesia.

“Our capacity utilisation is only 25 per cent and we are facing a loss of Rs 25-30 lakh for last four months. The is leading to a loss of over Rs 3 crore per month. Meat production has dropped as orders from Asian and middle-eastern countries have stopped since January, leading to a drop in availability of tallow too,” said Sarthak Soni, director of Jaipur-based Rajputana Biodiesel. Soni added that there are around 40-50 retail outlets in Rajasthan that sell bio-diesel, and unless the government considers it essential as a clean fuel, Covid-19 might completely destroy the industry.

“Our industry is the most affected because of Covid-19. We are in talks with member units and buyers to start of production immediately after the ends,” said Sandeep Chaturvedi, president of Biodiesel Association of India (BDAI).

First Published: Fri, April 03 2020. 02:44 IST

Source: Business Standard

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How much will your car tax go up by in 2020 as VED rates rise?




Vehicle Excise Duty costs will rise for most drivers from 1 April 2020 – but especially so for those in the market for a new car.

As expected, the Chancellor confirmed that VED, as car tax is officially known would rise in line with the Retail Price Index, with the biggest increase being £10 for owners of the most polluting models.

However, the cost of owning a brand new petrol, diesel or hybrid car from this month will jump dramatically. 

That’s because the Government has now switched to the latest (and more accurate) measure of carbon dioxide emissions that determine which first-year VED band a vehicle is in – and the average increase for new models will be £300.

Car tax costs are going up for many drivers from 1 April 2020. Use our tools and tables to find out how much your VED is going up this year

Car tax costs are going up for many drivers from 1 April 2020. Use our tools and tables to find out how much your VED is going up this year

Car tax costs are going up for many drivers from 1 April 2020. Use our tools and tables to find out how much your VED is going up this year

If you’re reading this story in the MailOnline app you will be unable to use our car tax tools – click on this link to view it on our website to get access to the interactive VED look-ups.

While the changes are likely to see an increase in car tax costs for many motorists, it’s electric cars buyers – and those who have purchased zero-emission models recently – who are going to benefit from cheaper tax. 

And there could be more bad news on the horizon, as the government has hinted it could hike VED again in the near future as part of efforts to encourage more people to drive low-emission vehicles

Here’s how it VED changes introduced on 1 April 2020 affect you, And you can use our handy tools to find out how much your car tax bill will be increasing from this month. 

Blow number 1: VED bands to increase in line with RPI

Chancellor Rishi Sunak confirmed in last month’s budget that VED rates would continue to rise in line with inflation in line with the RPI.

How this impacts cars registered between 1 April 2017 and 31 March 2020 

For owners of cars bought after 1 April 2017, this will result in a small hike in standard-rate car tax (paid from the car’s second year onwards) of £5.

The standard rate tax for all vehicles – no matter what its CO2 output – is rising from £145 to £150 for petrol and diesel models and increasing from £135 to £140 for ‘alternative fuel vehicles’, including hybrids and plug-in hybrids purchased between April 2017 and the end of March 2020.

The standard rate for VED for electric cars bought during this period is zero. 

Vehicle Excise Duty standard tax rates paid from the second year onwards from April 1, 2020 for cars first registered after April 2017 
Fuel type  Standard rate 2019-2020 Standard rate 2020-2021 Increase 
Petrol or diesel £145 £150* £5
Alternative fuel (hybrid)  £135 £140* £5
Electric  £0 £0 £0
*models with a ‘list price’ (the published price before any discounts) of more than £40,000 to pay an additional premium tax of £325 for the first 5 years of the standard rate

As well as increasing the standard rate for all vehicles with a combustion engine, there has also been a hike to an additional premium rate tax for models that cost more than £40,000 when new.

This premium rate is paid on top of the standard rate from year two for five years. So if you bought your £40,000-plus car new in April 2017, you will be paying the premium rate on top of the standard rate from April 2018 to April 2022.

The cost of this ‘expensive car’ tax has risen from £320 to £325. That means if you drive a petrol or diesel car with a ‘list price’ (the published price before any discounts) of more than £40,000 in the last three years, the standard rate of tax is a whopping £425 (£415 for alternative fuel vehicles), irrelevant of if it produces low CO2 or extremely high levels of carbon dioxide.   

As part of efforts to reward electric car buyers, this expensive car taxation has been lifted for zero-emission models bought during this period, saving owners up to £1,625 if they bought a battery-electric car last year. 

Electric cars bought after 1 April 2017 are now exempt from the expensive car tax, which will see owners save £320 a year on their running costs

Electric cars bought after 1 April 2017 are now exempt from the expensive car tax, which will see owners save £320 a year on their running costs

Electric cars bought after 1 April 2017 are now exempt from the expensive car tax, which will see owners save £320 a year on their running costs

How RPI increase affects older cars registered between 1 March 2001 and 31 March 2017

For older petrol and diesel cars registered between March 2001 and March 2017, the impact of the RPI impacts cars with CO2 emissions in excess of 131g/km CO2.

Annual VED costs will rise between £5 to up to £10 for the most polluting models with CO2 emissions of 226g/km or more.

For alternative fuel vehicles and electric cars (free), there has been no increase in VED, according to the Government’s website.

 The table below outlines the changes for cars first registered from March 2001 to the end of March 2017. 

Vehicle Excise Duty from April 1, 2020 for cars registered between March 1, 2001 and March 31, 2017 
VED Band CO2 emissions (g/km)  2019-2020 Standard rate* for PETROL AND DIESEL cars 2020-2021 Standard rate* for PETROL AND DIESEL cars Increase 2019-2020 Standard rate* for ALTERNATIVE FUEL VEHICLES 2020-2021 Standard rate* for ALTERNATIVE FUEL Increase
A Up to 100  £0 £0 £0 £0 £0 £0
B 101-110 £20 £20 £0 £10 £10 £0
C 111-120 £30 £30 £0 £20 £20 £0
D 121-130  £125 £125 £0 £115 £115 £0
E 131-140 £145 £150 £5 £135 £135 £0
F 141-150 £160 £165 £5 £150 £150 £0
G 151-165  £200 £205 £5 £190 £190 £0
H 166-175 £235 £240 £5 £225 £225 £0
I 176-185     £260 £265 £5 £250 £250 £0
J 186-200   £300 £305 £5 £290 £290 £0
K** 201-22  £325 £330 £5 £315 £315 £0
L 226-255 £555 £565 £10 £545 £545 £0
M Over 255  £570 £580 £10 £560 £560 £0
**Includes cars emitting over 225 g/km registered before March 23, 2006 

RPI rise impact on all older cars registered before 1 March 2001

For the oldest vehicles registered before 1 March 2001, VED is split into just two bands based on engine size – up to 1.55 litres and over 1.55 litres.

Both have seen an increase of £5 from April 2020 – up from £160 to £165 for the smaller engine group and up from £265 to £270 for the larger engine capacities.

Classic models over 40 years are exempt from VED on a rolling basis, meaning all models registered before April 1980.

Blow number 2: First year VED rates determined by WLTP test cycle for the first time – making new cars pricier to tax 

Unlike the standard rate of tax for all cars registered since April 2017, the first-year rate of car tax isn’t a flat rate and is instead determined by the car’s ‘official’ CO2 emissions.

These emissions are the figures measured during type approval testing using the NEDC test cycle. 

From 1 April 2020, the CO2 emissions determining which tax band a car fits into is based on the results of the new cycle, the WLTP fuel economy tests.

This is a more realistic interpretation of actual driving on the roads, and therefore generally produces higher CO2 emission readings.

This means cars could jump into higher tax bands due to how their CO2 is calculated. 

As an additional blow, diesel cars that don’t meet RDE2 emissions standard – which became mandatory in January 2020 – will continue to be pushed into one VED band higher than a petrol vehicle with the exact same CO2 output. 

The new WLTP test cycle finds that car CO2 emissions are higher by 20% on average, ultimately pushing new cars into higher first-year VED bands than they were in previously

The new WLTP test cycle finds that car CO2 emissions are higher by 20% on average, ultimately pushing new cars into higher first-year VED bands than they were in previously

The new WLTP test cycle finds that car CO2 emissions are higher by 20% on average, ultimately pushing new cars into higher first-year VED bands than they were in previously 

First-year VED bands also being hit with the RPI rise

The impact of the RPI hike increases some VED band, ranging from £5 to £40 for all models producing more than 91g/km CO2 (see increases in table below). This makes the most-polluting new petrol and diesel cars a massive £2,175 to tax in the first 12 months.  

The combination of the switch to the WLTP cycle and the impact of RPI will make the average new petrol or diesel car £300 more expensive, says vehicle valuations expert cap hpi.

With the car industry already hard-pressed by a huge decline in registrations of new models due to uncertainty about the future values of diesel models and the impact of Brexit on new prices, a rise in running costs for vehicles with internal combustion engines is another hit for the sector. 

It says the new test cycle increases the average combustion-engined car’s CO2 outputs by 19.7 per cent, almost certainly pushing new models into higher VED bands from this month. 

The average CO2 output of passenger cars has jumped by 26g/km – from 135g/km CO2 in the old test (NEDC) to 161g/km CO2 under WLTP. 

The MPV sector will see the biggest increase of a third (33 per cent) followed by large executive cars (30 per cent rise) and SUV (29 per cent jump). The smallest percentage increase was seen in the supercar sector at just 8 per cent.  

Jonathan Clay, head of vehicle identification at cap hpi said: ‘The combination of the introduction of WLTP and a new tax regime aimed at encouraging private drivers and fleets to make greener motoring choices has driven up costs across the board.’ 

Vehicle Excise Duty first year tax rates for cars registered after 1 April 2020 
Emissions (g/km) CO2 First year rate PETROL and RDE2 DIESEL cars 2019-2020 First year rate PETROL and RDE2 DIESEL cars 2020-2021 Increase First Year rate for non-RDE2 DIESEL cars 2019-2020 First Year rate for non-RDE2 DIESEL cars 2020-2021 Increase ALTERNATIVE FUEL cars 2019-2020 ALTERNATIVE FUEL cars 2020-2021 Increase
0 £0 £0 £0 £0 £0 £0 £0 £0 £0
1-50 £10 £10 £0 £25 £25 £0 £0 £0 £0
51-75 £25 £25 £0 £110 £110 £0 £15 £15 £0
76-90 £110 £110 £0 £130 £135 £5 £100 £100 £0
91-100 £130 £135 £5 £150 £155 £5 £120 £125 £5
101-110 £150 £155 £5 £170 £175 £5 £140 £145 £5
111-130 £170 £175 £5 £210 £215 £5 £160 £165 £5
131-150 £210 £215 £5 £530 £540 £10 £200 £205 £5
151-170 £530 £540 £10 £855 £870 £15 £520 £530 £10
171-190 £855 £870 £15 £1,280 £1,305 £25 £845 £860 £15
191-225 £1,280 £1,305 £25 £1,815 £1,850 £35 £1,270 £1,295 £25
226-255 £1,815 £1,850 £35 £2,135 £2,175 £40 £1,805 £1,840 £35
Over 255 £2,135 £2,175 £40 £2,135 £2,175 £40 £2,125 £2,165 £40

WLTP test cycle will also impact Benefit in Kind company car tax 

The WLTP measurements will also come into force for BiK from 6 April 2020. 

Vehicles registered after this date will be taxed using the new WLTP CO2 emissions values. The values will relate to the specific configuration of an individual vehicle, taking optional equipment fitted to the vehicle into account for the first time.

Large executive vehicles saw the most substantial increase in VED at £546, followed by executive, £459, and MPV, £455. City car and supercar saw the smallest increases with £52 and £40, respectively, cap hpi says.

On average diesel vehicles saw CO2 increase by 30 grams while petrol-hybrid vehicle rose by 29.3 grams. Diesel plug-in hybrids saw CO2 decrease by 1.9 grams on average.

The petrol hybrid, petrol and diesel sectors all saw increases in BiK of 4.1 per cent, 2.6 per cent and 2.5 per cent respectively. Petrol plug-in hybrid saw a decrease of 5 per cent and diesel plug-in hybrid of 5.5 per cent.

The diesel sector saw the largest increase in VED of £423 on average, followed by petrol, £232, and petrol hybrid, £180. Petrol plug-in hybrid only saw a rise of £6 while diesel plug-in hybrid saw no increase.

Benefit in kind tax rates for EVs slashed

Drivers of electric company cars will also benefit from new tax changes with BiK for zero-emission models being cut to 0 per cent, down from 16 per cnet as of Monday 6th April. 

This mean drivers will be able to save thousands of pounds on zero emissions vehicles through salary sacrifice schemes. 

To find out more, read This is Money editor Simon Lambert’s full comment piece on the huge saving available. 


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Global stocks rally as oil gains offset coronavirus concerns; Dow up 2%




World equity climbed on Thursday on a surge in risky assets like oil, offsetting concerns over an increasing death toll from the pandemic that is expected to push the global economy into recession.

Investors sought the safety of the US dollar and government bonds. Stocks and oil futures were among the few risk assets that advanced, with oil benchmarks surging 20 per cent after US President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war.

MSCI’s gauge of stocks across the globe rose 1.20 per cent after broad declines in Japan. European shares also rose 0.42 per cent despite data showing US weekly jobless claims jumped to a record 6.6 million, double the record from the previous week.

At the close of trading on Wall Street, the Industrial Average rose 469.93 points, or 2.24 per cent , to 21,413.44, the gained 56.4 points, or 2.28 per cent , to 2,526.9 and the Nasdaq Composite added 126.73 points, or 1.72 per cent , to 7,487.31.

“Most of the selling was done yesterday in anticipation of the jobs number and investors were looking for entry points as everyone expected it to be bad and they have been,” said Jamie Cox, managing partner of Harris Financial Group in New York.

“A lot the trading has been on fixed income because if oil prices stabilize, that will stabilize the bond market and will feed through to reduced default risk.”

Investors sought the perceived safety of government bonds. Benchmark US 10-year notes last rose 3/32 in price to yield 0.6251 per cent , from 0.635 per cent after trading hours on Wednesday.

The World Health Organization said the global case count would reach 1 million and the death toll 50,000 in the next few days. It currently stands at 46,906.

US President Donald Trump, who had initially played down the outbreak, told reporters at the White House on Wednesday that he is considering a plan to halt flights to hot zones in the United States.

In currency markets, the dollar rose 0.632 per cent against a basket of six major currencies <=USD> after a gain of 0.53 per cent overnight. The euro traded down 0.99 per cent at $1.0853 as the dollar advanced.

Brent crude futures jumped 20.9 per cent to $29.91. US West Texas Intermediate (WTI) crude futures soared 21 per cent to $24.73.

Trump said he had talked with the leaders of both Russia and Saudi Arabia and believed the two countries would make a deal within a “few days” to lower production, thereby bring prices back up.

First Published: Fri, April 03 2020. 02:39 IST

Source: Business Standard

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