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TMI BlogRajiv Gandhi Equity Savings Scheme, 2012X X X X Extracts X X X X X X X X Extracts X X X X ..... Trustees of Mutual Funds are directed to take note of the notification and take necessary steps to implement the scheme. AMCs / Trustees shall ensure that RGESS eligible Exchange Traded Funds (ETFs) and Mutual Funds (MFs) schemes are in compliance with the aforementioned notification. 4. With regard to implementation of the MoF notification, the following is clarified: (i) For RGESS eligible close-ended Mutual Funds schemes, advice given by AMCs to the depository for extinguishment of units of close-ended schemes upon maturity of the scheme shall be considered as settled through depository mechanism and therefore RGESS compliant. (ii) AMCs shall disclose that the concerned RGESS eligible Exchange Traded Funds and Mutual Fund schemes is in compliance with the provisions of RGESS guidelines notified by Ministry of Finance vide notification no. 51/2012 F. No. 142/35/2012-TPL dated November 23, 2012, in Scheme Information Document (SID), in case of new fund offer, or by way of addendum, in case of existing RGESS eligible Exchange Traded Funds and Mutual Fund schemes. (iii) Section 6(c) of the notification states that the eligible securities brought into the demat account will au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchange Board of India Act, 1992, Section 19 of the Depositories Act, 1996 and the Regulation 77 of SEBI (Mutual Funds) Regulations, 1996 to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market. Yours faithfully, Maninder Cheema Deputy General Manager [email protected] Enclosures: (i) Annexure A - Treatment of corporate actions (ii) Annexure B - Illustration of lock-in period in RGESS (iii) MoF notification No. 51/2012 F.No.142/35/2012-TPL dated November 23, 2012 Annexure A Treatment of corporate actions (i) Involuntary corporate actions: 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. (ii) Voluntary corporate actions: In case of 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. Consolidated list of 'corporate actions' Sr. No. Corporate Action Classification (Involuntary or Voluntary) 1 Amalga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ); (ii) "demat account" means an account opened with the depository participant in accordance with the guidelines laid down by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (iii) "depository" means a company as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (iv) "depository participant" means a participant as defined in clause (g) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (v) "eligible securities" means any of the following :- (a) equity shares, on the day of purchase, falling in the list of equity declared as "BSE-100" or " CNX-100" by the Bombay Stock Exchange and the National Stock Exchange, as the case may be; (b) equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government; (c) Units of Exchange Traded Funds (ETFs) or Mutual Fund (MF) schemes with Rajiv Gandhi Equity Savings Scheme (RGESS) eligible securities as underlying, as mentioned in sub-clause (i) or sub-clause (ii) above, provided they are listed and traded on a stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestor; (c) the new retail investor shall furnish his Permanent Account Number (PAN) while opening the demat account or designating the existing account as a Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be. 6. Procedure for investment under Scheme.- A new retail investor shall make investments under the Scheme in the following manner :- (a) the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed; (b) the new retail investor may make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme shall not exceed fifty thousand rupees; (c) the eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during its first year, as per the provisions of paragraph 7, unless the new retail investor specifies otherwise and for such specification, the new retail investor shall submit a declaration in Form B indicating that such securities are not to be included within the above limit of investment; (d) the new retail investor sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of two years beginning immediately after the end of the fixed lock-in period shall be called the flexible lock-in period. (5) The new retail investor shall be permitted to trade the eligible securities after the completion of the fixed lock-in period subject to the following conditions:- (a) the new retail investor shall ensure that the demat account under the Scheme is compliant for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the flexible lock-in period as laid down hereunder:- (A) the demat account shall be considered compliant for the number of days where value of the investment portfolio of eligible securities , within the flexible lock-in period, is equal to or higher than the amount claimed as investment for the purposes of deduction under section 80CCG of the Act; (B) in case the value of investment portfolio in the demat account falls due to fall in the market rate of eligible securities in the flexible lock-in period, then notwithstanding sub clause(A), - (i) the demat account shall be considered compliant from the first day of the flexible lock-in period to the day any such eligible securities are sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of designating his demat account as demat account for the purpose of the Scheme. (2) The depository participant shall furnish an annual statement of the eligible securities invested in or traded through the demat account to the demat account holder. 10. The depository shall provide a consolidated statement of details in the electronic format, as specified in Form C, on all the Rajiv Gandhi Equity Savings Scheme beneficiaries to the Director General of Income Tax (Systems) or any other person authorised by him, within a period of thirty days from the end of the relevant financial year. 11. For the purpose of paragraph 10, the Director General of Income Tax (Systems) shall determine the procedures, formats and standards for furnishing of the report in electronic format in Form C by the depositories. 12. Assessees shall be liable to submit the relevant records to the income-tax authorities for verification, as and when required. [ Notification No. 51 /2012 F. No. 142/35/2012 -TPL) (Raman Chopra) Director (TPL-II) Form A [See paragraph 5(b)] Declaration to be submitted by the investors to the depository participants for availing the benefits under the Rajiv Gandhi Eq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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