For transactions undertaken by investors through their RGESS designated demat account, depositories may seek necessary transactional details from stock exchanges for enforcing lock-in period
Capital market regulator SEBI (Securities and Exchange Board of India) on Thursday announced the framework for Rajiv Gandhi Equity Savings Scheme (RGESS), an Indian government initiative aimed at attracting small investors into the capital market.
The objective of RGESS is to encourage the savings of the small investors in domestic capital market. The deduction under the Scheme shall be available to a new retail investor.
As announced in the Union Budget 2012-13, the Finance Act 2012 has introduced a new section 80CCG on ‘Deduction in respect of investment made under an equity savings scheme’ to give tax benefits to new investors who invest up to Rs. 50,000 and whose gross total annual income is less than or equal to Rs. 10 lakh, the SEBI circular said.
For transactions undertaken by investors through their RGESS designated demat account, depositories may seek necessary transactional details from stock exchanges for enforcing lock-in (period), among others.
“On receipt of such request from depositories, stock exchanges shall provide the details to depositories on an immediate basis. It shall also be ensured that a uniform file structure is used by stock exchanges and depositories for such intimation of transaction details, the circular further added.
The eligible securities brought into the demat account will automatically be subject to lock-in during the first year, unless the new investor specifies otherwise, the circular added.
In case of corporate actions where investors has no choice in the matter, for example: Demerger of companies, etc, the compliance status of RGESS demat account shall not change. If corporate actions where investors has the option to exercise his choice and thereby result in debit of securities, for example: buy-back, etc, the same shall be considered as a sale transaction for the purpose of the scheme.
Mutual funds / AMCs are directed to create wide publicity of the scheme among the investors, including displaying details on their website.