Retail trading of government securities?

first_imgA recent article in the Economic Times suggests that the RBI is in talks with Clearing Corporation of India (CCIL), for facilitating direct access for retail and corporate investors in government securities. CCIL is the central clearing authority in settlement of trades in government securities, foreign exchange and money markets. This is a long-overdue reform for the financial markets and would be a first in the world if it were to materialize.Some years ago, when interest rates were at their peak and inflation in double digits, the 10-year yield was as high as 11.83% at an auction of government securities. I approached my bank to buy the security in retail and was willing to comply with all formalities. This was a new request to the branch, and I was told they would check with the central treasury and would revert in a few days. Nothing came out of it.A few years later, the bank would discourage individuals from buying government securities, advising clients to invest in RBI bonds or invest through mutual funds instead, perhaps rightly so. In today’s scenario with technological platforms already in place, it is logical to facilitate direct access of government securities to retail and HNI investors with straight-through processing, with delivery in a regular Demat account, just like in the case of shares. The institutional investors can then provide a liquid and vibrant market, with 2 – way quotes across the spectrum of listed government securities. It is crucial to ensure that search cost is kept to the minimum, else, yields would widely fluctuate.Lastly, gains from the sale of government securities should be treated as capital gains, similar to debt schemes of mutual funds, and eligible for indexation benefits.last_img read more

Labor Dept catches decade-old, $26,000 UI coding error

first_imgVermont Business Magazine The Vermont Department of Labor is taking swift action to address an error that impacts Vermont employers who hold past due balances for unemployment insurance and health care assessments. The Department is undertaking an effort to modernize and innovate its legacy unemployment insurance system, and this month that process revealed – and the Department promptly verified – a rounding error was coded improperly into the 30-year old system. This rounding error affected only the interest rate calculations on past due unemployment insurance and health care fund assessment contributions. As of June 1, 2017, the rate is being calculated correctly.“The Department of Labor is committed to ensuring that anyone impacted by this error is made whole, and I have directed my team to begin proactively working to identify impacted entities and make refunds for verified overpayments as quickly as possible.” Lindsay Kurrle, Commissioner of Labor.The rounding error was limited to calculations for businesses who have carried a past due balance for unemployment insurance and health care fund assessment contributions. No other entities, individuals or programs were impacted.Vermont law requires the Department of Labor to charge 1.5 percent interest per month on unpaid contributions. The rounding error equated to a .05 percent overcharge for only the months that contain thirty-one days. As an illustration, an employer with a past due balance of $1,000 for an entire year, would have overpaid by $2.50. The Department has verified that the coding error existed as far back as 2008. Since that date Department has collected approximately $26,000 in total interest overpayments.The Vermont Department of Labor will begin notifying impacted employers and working to issue refunds for accounts that its verified have paid past due balances within the last three years. Records retention limits the Department’s ability to verify overpayments prior to 2014, so the Department is asking employers with paid past due balances before 2014 to call the Vermont Department of Labor’s Employer Assistance Line at 1-877-214-3331. VBM vermontbiz.comSource: Vermont Department of Labor 6.8.2017last_img read more