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President's Message

Namaste dear friends!

It has been about a month when since the new National council members have assumed office. As I have said earlier, and I reiterate even now, that the road ahead though steep, will not be impossible to negotiate.

At the onset I bring to your notice the recently signing of the protocol amending the India Mauritius Treaty by the government of India. The government does deserve due credit for avoiding any retrospective impact and on implementation of reforms in a phased manner. Through the signing of the protocol the government’s intention is apparent. It wishes to align itself with BEPS, tackle treaty abuse and round tripping. It also wishes to establish a favourable environment for promoting FDI by providing ample opportunity for business houses to adjust to the changes. It will offer stability of tax environment and attract foreign investment.

This will provide a stable tax environment for foreign institutional investors and other foreign investors who wish to invest in India. Mauritius contributes nearly 34 per cent of total FDI flow into India and thus providing a sense of credibility to foreign investors and their investments was indeed a need of the hour

There are certain issues remain. These are applicability of capital gains amendment to securities other than shares, interplay of the tax treaty with GAAR and its impact on India-Singapore Treaty. I am sure and hope best that the government will be as proactive and come out with suitable clarifications to alleviate any future controversies and ensure a stable tax regime.

It was discussed in detail at the national council meeting to conduct a few important research papers that may serve as guides for the future development of the capital market. Your organisation ANMI has decided to go ahead with conducting the first research to produce a white paper on penalties imposed by SEBI, under which where the market regulator has been imposing stiff penalties on companies following a recent ruling by the Supreme Court. This has begun to cause serious concerns across various segments of industries. ANMI has decided to prepare a White Paper on the subject of Rationalizing the Monetary Penalty imposed by SEBI on Capital market participants and as per the regulations of SEBI. This will be done in partnership with the West Bengal National University of Juridical Sciences has decided to undertake a research study to produce a white paper on the Need to Rationalize Monitory Penalties Imposed by SEBI. The said White Paper would tentatively have as its content a review of the different orders delivered and associated monetary penalties imposed by the SEBI in relation to different infractions and violations of its regulations during the period 2011-2016, as well as a cross-border comparison of the same with the monetary penalty regimes under the governance of similar capital market regulators in other jurisdictions, along with a possible comparison of the quantum of the said penalties with those imposed by other financial and fiscal regulators in India for comparable infractions and violations. The time line and the budget for the above study have been approved by ANMI.

It is also heartening to note that the ruling party at the centre has now become stronger following its emergence as a majority for government formation in Assam. This is a major confidence boost for the capital market which is expected to revive in shortly. We also appreciate the recent observations made by the finance minister Mr. Arun Jaitley where he stated that the government has decided to go ahead with placing the GST bill in the forthcoming session of the Rajya Sabha, despite stiff opposition. Once through the move will pave the path for other reforms to come forth from the government that will ultimately translate into a stronger development of the economy. It is important for Indian economy to gain strength from within and develop a domestic market base for its good and services. This will allow us a stronger wall of fortification from external factors and disruptions in other economies.

As an organisation we do benefit from meeting decision makers from various fields. ANMI has to play a pivotal role in help build opinion with the decision makers and at various ministry levels. This helps in developing overall confidence levels at market levels too and amongst our members. These are best achieved within the regulatory framework and by implementing good practices for future prosperity of all.

ANMI had meetings with the SEBI top brass in April and followed up with two meetings with the NSE and BSE in May. The effort is to meet all who matter and are involved in ideating and decision making in the capital market. To note, the meeting with the SEBI was particularly fruitful where much of it were on the present capital market situation and on possible steps to be taken for increasing retail investors. At National Stock Exchange we have successfully made them agree to ‘Create Pledge of Shares’ from our own DP and to ease various compliance procedures towards Dormant Clients etc.

BSE has welcomed our suggestion for regularisation the transaction charges and to bring down the cost of transactions.

An organisation such as ANMI has passed through many tests of time. Experiences have now made us stronger and able to function as an apex body that helps members to understand various complex matters and thus perform at their best.

It is also an appropriate time when we need to increase our membership base at all corners of the country to carry the good norms already preached and practised. Small and medium sized market intermediaries from all regions are invited. This is an initiative that will be best performed by chairpersons of various regions. I am sure that in the days to come we will have more persons amongst us to carry the ANMI mantel forward.

With Best Wishes,

Mr. S. K. Rustagi