SEBI has issued guidelines for preparing warehousing norms by Clearing Corporations(CCs) for agricultural/agro-processed goods and non-agricultural goods (base and industrial metals). The guidelines would come into effect from June 1, 2021.
Guidelines by SEBI to CCs:
- The norms set by CCs will be the minimum requirements/standards that its Warehouse Service Providers(WSPs) should comply with.
- In addition to the norms of CCs, the WSPs should comply with the norms laid down by Warehousing Development and Regulatory Authority (WDRA)
- Bankruptcy: In the event of bankruptcy or insolvency of the WSP, the CCs should remove the WSP from the accredited warehouse list and should not place any restriction for possession of its commodities.
- A CC cannot stop its WSP from providing service to other CCs as it can be accredited with more than one CC.
Warehousing Norms:
- Capital: An accredited WSP should have a minimum subscribed and paid-up share capital of Rs 10 crore.
- Experience: The promoter or promoter groups of a WSP are required to be in the public warehousing business for at least 3 years and a CC can relax the requirement, based on certain conditions.
- Net worth: The net worth required of a WSP varies for agricultural/agri-processed, base/industrial metals and composite goods and they will get six months to augment the net worth in case there is a reduction of net worth below the stipulated amount.
- The value of the goods stored in the accredited storage facilities of WSP should not exceed 33 times the net worth of the WSP (irrespective of the number of CCs it serves)
- Review: Every year CCs have to review each WSP and it should have a grievance cell to handle the investor complaints.
Recent Related News:
On March 10, 2021, The Securities and Exchange Board of India (SEBI) in its circular set a limit for Mutual Funds (MF’s) investment to 10% in debt instruments with special features such as additional Tier-I (AT1) bonds.5% for single issuers and stated the maturity for perpetual bonds as 100 years.
About Securities and Exchange Board of India (SEBI)
Establishment – 1992
Headquarters – Mumbai, Maharashtra
Chairman – Ajay Tyagi
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