Weekend Miracle

Just finished reading this interesting book "Weekend Miracle" by Ravi Nair. In the initial pages, the book seems heavy, but as you go along it becomes immensely interesting. It is written in the form of a dialogue between four individuals and talks about the power of visualisation in getting to one's goals or achieving something which someone immensely desires. We are all born with no prejudices but with schooling and college and work environment, family and all, become prejudiced towards lots of things with the result that we are not able to achieve our full potential no matter how hard we try. The answer lies deep in subconscious mind. Basically the subconscious mind is powerful so if one is able to use of the power of the subconscious mind he or she can lead powerful lives. Goodreads rating 4/5

AFC Asian Cup Challenge

9.82 kms for the AFC Asian Cup challenge. We are doing a challenge to run x kms for every goal scored by India in the ongoing AFC Asian Cup Challenge in UAE. India is participating in this tournament after more than 4 decades and in the first match itself they scored 4 goals against Thailand. So my commitment is 6 kms for every goal scored by India. That makes it 24 kms to be done. The challenge to be completed within one week of India exiting the tournament or the last date of the tournament, whichever is later. 

Today's run is dedicated to India's win in football against Thailand 

AI/ ML reporting -

SEBI circular dated 4th January 2019 on Artificial Intelligence/ Machine Learning being used by market intermediaries

Background

1. There is increasing usage of AI (Artificial Intelligence) and ML (Machine Learning) as product offerings by market intermediaries and participants (eg: “robo advisors”) in investor and consumer facing products. SEBI is conducting a survey and creating an inventory of the AI / ML landscape in the Indian financial markets to gain an in-depth understanding of the adoption of such technologies in the markets and to ensure preparedness for any AI / ML policies that may arise in the future.

2. As most AI / ML systems are black boxes and their behavior cannot be easily quantified, it is imperative to ensure that any advertised financial benefit owing to these technologies in investor facing financial products offered by intermediaries should not constitute to misrepresentation

Scope definition
3. Any set of applications / software / programs / executable / systems (computer systems) – cumulatively called application and systems,

a. that are offered to investors (individuals and institutions) by market intermediaries to facilitate investing and trading, OR

b. to disseminate investments strategies and advice, OR

c. to carry out compliance operations / activities, where AI / ML is portrayed as a part of the public product offering or under usage for compliance or management purposes, is included in the scope of this circular. Here, “AI” / “ML” refers to the terms “Artificial Intelligence” and “Machine Learning” used as a part of the product offerings. In order to make the scope of this circular inclusive of various AI and ML technologies in use, the scope also covers Fin-Tech and Reg-Tech initiatives undertaken by market participants that involves AI and ML

4. Technologies that are considered to be categorized as AI and ML technologies in the scope of this circular, are explained in Annexure B. 

Regulatory requirements

5. All registered Stock Brokers / Depository Participant offering or using applications or systems as defined in Annexure B, should participate in the reporting process by completing the AI / ML reporting form (see Annexure A).

6. With effect from quarter ending March 2019, registered Stock Brokers / Depository Participant using AI / ML based application or system as defined in Annexure B, are required to fill in the form (Annexure A) and make submissions on quarterly basis within 15 calendar days of the expiry of the quarter.

7. Stock Exchanges and Depositories have to consolidate and compile a report, on AI / ML applications and systems reported by registered Stock Brokers / Depository Participants in the reporting format (Annexure C) on quarterly basis. The said report (Annexure C) shall be submitted in soft copy only at AI_SE@sebi.gov.in (for Stock Exchange) / AI_DEP@sebi.gov.in (for Depositories) to SEBI within 30 calendar days of the expiry of the quarter, starting from quarter ending March 2019.

Full copy of the circular can be accessed here

transmission of securities

SEBI has vide its circular dated 4th January, 2019 clarified that in case of transmission of shares held in demat mode, it shall follow the same procedure in respect of documentation as is specified in case of transmission of shares in physical mode. In physical mode, it has been specified that succession certificate or probate of will or will or letter of administration or court decree etc. as may be applicable in terms of the Indian Succession Act, 1925 are the documentary requirements.

Now in terms of the aforesaid circular, the same documentary requirements shall be applicable to transmission of securities held in demat made. So basically the successors or heirs have to produce the above set of documents to prove their title and submit the same to the depository participant.

Copy of SEBI circular is enclosed here

Brave Param Vir Chakra Stories

Just completed this absolutely brilliant and breath taking book on the soldiers who were accorded the highest gallantry award by the Indian government i.e. the Param Vir Chakra. Written by Rachna Bisht Rawat in the form of independent stories covering each recipient of the award. She has done a painstaking job in researching the subjects, going across to the family members or the battalion to get more details on the soldiers. The narrative she has kept as moving back and forth between the situation of the war and their past childhood, but it is quite engrossing. 

Most of the Param Vir Chakra were given posthumously and few lived to tell their tale. The stories starts from 1947-18 war over Kashmir with Pakistan, touches briefly on Indian soldiers' deployment as part of the UN force in Congo, the disastrous and unplanned Indo-China war of 1962, the second Kashmir war of 1965, the Indo-Pak war of 1971 which resulted in Bangladesh independence, the retaking of the Saltoro ridge in Siachin glacier in 1987, again another disastrous and unwarranted interference by Indian soldiers in Sri Lanka as part of the Indian Peace Keeping Force and the Kargil war of 1999. 

All stories have goosebumps moment in them, but in my view the most daring and courageous feat is that of Bana Singh who was awarded the Param Vir Chakra for the retaking of Saltoro ridge in the Siachen glacier in 1987 a war which was fought at 18000 feat in sub zero temperatures where man can hardly breathe for a few minutes at the most. The most daring breath taking and courageous feat ever in history of mankind. 

These are stories of soldiers who are ill equipped with poor equipment, clothing, helmets, bullet proof jackets, boots, ammunition etc. but who had abundance of courage to not let down their duty.

Goodreads review 5/5 

customer protection

Gist of RBI notification dated 4th January, 2019 on customer protection for authorised non banks pre-paid instruments.

Please refer to paragraph 9 of Statement on Developmental and Regulatory Policies regarding framework for limiting customer liability in respect of unauthorised electronic payment transactions involving PPIs, announced in the Fifth Bi-monthly Monetary Policy Statement for 2018-19 by the Reserve Bank of India (RBI).

2. As you are aware, a framework for ‘Risk Management’ and ‘Customer Protection’ has already been laid down in paragraphs 15 and 16 of Master Direction on Issuance and Operation of Prepaid Payment Instruments (PPI MD) issued vide DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October 11, 2017 (updated as on December 29, 2017). With a view to further strengthen customer protection for the PPIs which are issued by entities other than banks, the criteria for determining the customers’ liability in unauthorised electronic payment transactions resulting in debit to their PPIs have been reviewed as under:

Applicability

3. The provisions of these directions will be applicable to all authorised non-bank PPI issuers (referred to as ‘PPI issuer’ hereafter). Bank PPI issuers will continue to be guided by DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017 or DCBR.BPD.(PCB / RCB). Cir.No.06/12.05.001/2017-18 dated December 14, 2017, as applicable. PPIs issued under the arrangement of PPI-MTS (PPIs for Mass Transit Systems) as per paragraph 10.2 of PPI MD will be outside the purview of these directions except for the cases of contributory fraud / negligence / deficiency on the part of the PPI-MTS issuer.

Categories of electronic payment transactions

4. For the purpose of this circular, electronic payment transactions have been divided into two categories:

1. Remote / Online payment transactions (transactions that do not require physical PPIs to be presented at the point of transactions e.g. wallets, card not present (CNP) transactions, etc.).
2. Face-to-face / Proximity payment transactions (transactions which require the physical PPIs such as cards or mobile phones to be present at the point of transactions e.g. transactions at Point of Sale, etc.).

5. Reporting of unauthorised payment transactions by customers to PPI issuers

1. PPI issuers shall ensure that their customers mandatorily register for SMS alerts and wherever available also register for e-mail alerts, for electronic payment transactions.
2. The SMS alert for any payment transaction in the account shall mandatorily be sent to the customers and e-mail alert may additionally be sent, wherever registered. The transaction alert should have a contact number and / or e-mail id on which a customer can report unauthorised transactions or notify the objection.
3. Customers shall be advised to notify the PPI issuer of any unauthorised electronic payment transaction at the earliest and, shall also be informed that longer the time taken to notify the PPI issuer, higher will be the risk of loss to the PPI issuer / customer.
4. To facilitate this, PPI issuers shall provide customers with 24x7 access via website / SMS / e-mail / a dedicated toll-free helpline for reporting unauthorised transactions that have taken place and / or loss or theft of the PPI.
5. Further, a direct link for lodging of complaints, with specific option to report unauthorised electronic payment transactions shall be provided by PPI issuers on mobile app / home page of their website / any other evolving acceptance mode.
6. The loss / fraud reporting system so established shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The communication systems used by PPI issuers to send alerts and receive their responses thereto shall record time and date of delivery of the message and receipt of customer’s response, if any. This shall be important in determining the extent of a customer’s liability. On receipt of report of an unauthorised payment transaction from the customer, PPI issuers shall take immediate action to prevent further unauthorised payment transactions in the PPI.

Limited liability of a customer

6. A customer’s liability arising out of an unauthorised payment transaction will be limited to:

Customer liability in case of unauthorised electronic payment transactions through a PPI
S. No.	Particulars	Maximum Liability of Customer
(a)	Contributory fraud / negligence / deficiency on the part of the PPI issuer, including PPI-MTS issuer (irrespective of whether or not the transaction is reported by the customer)	Zero
(b)	Third party breach where the deficiency lies neither with the PPI issuer nor with the customer but lies elsewhere in the system, and the customer notifies the PPI issuer regarding the unauthorised payment transaction. The per transaction customer liability in such cases will depend on the number of days lapsed between the receipt of transaction communication by the customer from the PPI issuer and the reporting of unauthorised transaction by the customer to the PPI issuer -
	i. Within three days#	Zero
	ii. Within four to seven days#	Transaction value or ₹ 10,000/- per transaction, whichever is lower
	iii. Beyond seven days#	As per the Board approved policy of the PPI issuer
(c)	In cases where the loss is due to negligence by a customer, such as where he / she has shared the payment credentials, the customer will bear the entire loss until he / she reports the unauthorised transaction to the PPI issuer. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the PPI issuer.
(d)	PPI issuers may also, at their discretion, decide to waive off any customer liability in case of unauthorised electronic payment transactions even in cases of customer negligence.
# The number of days mentioned above shall be counted excluding the date of receiving the communication from the PPI issuer.

The above shall be clearly communicated to all PPI holders.

Reversal timeline for zero liability / limited liability of a customer

7. On being notified by the customer, the PPI issuer shall credit (notional reversal) the amount involved in the unauthorised electronic payment transaction to the customer’s PPI within 10 days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any), even if such reversal breaches the maximum permissible limit applicable to that type / category of PPI. The credit shall be value-dated to be as of the date of the unauthorised transaction.

8. Further, PPI issuers shall ensure that a complaint is resolved and liability of the customer, if any, established within such time, as may be specified in the PPI issuer’s Board approved policy, but not exceeding 90 days from the date of receipt of the complaint, and the customer is compensated as per provisions of paragraph 6 above. In case the PPI issuer is unable to resolve the complaint or determine the customer liability, if any, within 90 days, the amount as prescribed in paragraph 6 shall be paid to the customer, irrespective of whether the negligence is on the part of customer or otherwise.

Board approved policy for customer protection

9. Taking into account the risks arising out of unauthorised debits to PPIs owing to customer negligence / PPI issuer negligence / system frauds / third party breaches, PPI issuers need to clearly define the rights and obligations of customers in case of unauthorised payment transactions in specified scenarios. PPI issuers shall formulate / revise their customer relations policy, with approval of their Boards, to cover aspects of customer protection, including the mechanism of creating customer awareness on the risks and responsibilities involved in electronic payment transactions and customer liability in such cases of unauthorised electronic payment transactions. The policy must be transparent, non-discriminatory and should stipulate the mechanism of compensating the customers for the unauthorised electronic payment transactions and also prescribe the timelines for effecting such compensation. PPI issuers shall provide the details of their Board approved policy in regard to customers’ liability formulated in pursuance of these directions, as well as the provisions of paragraph 15 and 16 of PPI MD, to all customers at the time of issuing the PPI. PPI issuers shall display their Board approved policy, along with the details of grievance handling / escalation procedure, in public domain / website / app for wider dissemination.

Burden of proof

10. The burden of proving customer liability in case of unauthorised electronic payment transactions shall lie on the PPI issuer.

Reporting and monitoring requirements

11. The PPI issuers shall put in place a suitable mechanism and structure for reporting of the customer liability cases to the Board or one of its Committees. The reporting shall, inter-alia, include volume / number of cases and the aggregate value involved and distribution across various categories of cases. The Board or one of its Committees shall periodically review the unauthorised electronic payment transactions reported by customers or otherwise, as also the action taken thereon, the functioning of the grievance redressal mechanism and take appropriate measures to improve the systems and procedures.

12. Directions contained in paragraph 16.4 of PPI MD as applicable to non-bank PPI issuers are being modified accordingly.

13. The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007), and shall come into effect from March 01, 2019.

MSME - trade receivables

Vide a notification issued by the Govt. of India on 2nd November, 2018, all companies with a turnover of more than Rs.500 crores, and all Central Public Sector Enterprises shall get themselves registered at the Trade Receivables Discounting System Platform set up by the RBI. The Registrar of Companies in each state shall be the competent authority to monitor the compliance of these instructions in respect of companies under its respective jurisdiction and Department of Public Enterprises is the authority for the public sector enterprises.

The RBI guidelines in respect of the Trade Receivables Discounting Sytem (TReDS) is given here

So this is another set of compliances to be done by these big companies.