Daily Prelims Notes 29 December 2021

December 29, 2021
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

29 December 2021

Table Of Contents

1. Stricter IPO Norms

Subject – Economy

Context – Stricter IPO norms: Cap on proceeds for future acquisitions, corporate use

Concept –

The Securities and Exchange Board of India (SEBI) tightened the guidelines for usage of proceeds from the initial public offering (IPO) by companies.
The regulator, in a board meeting, has prescribed certain conditions for selling shares in an Offer-for-Sale (OFS) under IPO by significant shareholders and has extended anchor investorslock-in period to 90 days for half of the quota for such investors.
The regulator has decided to put a cap on IPO proceeds earmarked for making future acquisition of unspecified targets and will bring under monitoring the funds reserved for general corporate purposes.
In addition, Sebi has decided to revise allocation methodology for non-institutional investors (NIIs).
The board of Sebi cleared a proposal to prescribe a combined limit of up to 35 per cent of the fresh issue size for deployment on such objects of inorganic growth initiatives (takeovers) and general corporate purpose (GCP), where the intended acquisition/strategic investment is unidentified in the objects of the offer.
- However, such limits will not apply, if the proposed acquisition or strategic investment object has been identified and suitable specific disclosures are made at the time of filing of the offer document.

Why SEBI wants longer lock in period?

Sebi has decided that a longer lock-in period is needed to protect the interest of other investors. It suggested that at least 50 per cent of the anchor book should have a lock-in of 90 days.

A lock-in period of 30 days allows anchor investors to sell their holdings just after 30 days, leading to substantial fluctuations in the stock price. According to experts, this significantly hurts the interest of smaller retail investors.

2. The Consumer Protection (Direct Selling) Rules 2021

Subject – Economy

Context – Centre notifies new rules for direct selling industry

Concept –

The central government on December 28 notified new rules for the direct selling industry banning companies from promoting pyramid and money circulation schemes. The entities have to ensure that these new rules are complied by within 90 days.
According to the new rules, the direct selling companies will also be liable for the grievances arising out of the sale of goods or services by its direct sellers.
Tupperware, Amway and Oriflame are among the key players in the direct selling industry.
The Consumer Protection (Direct Selling) Rules, 2021 notified by the nodal Consumer Affairs Ministry are to be complied with by both direct selling entities and direct sellers using e-commerce platforms for sale.
As per the new rules, state governments will have to set up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.
Direct selling entities are also liable for the grievances arising out of the sale of goods or services by its direct sellers.

Pyramid Scheme

Pyramid scheme is a business model that recruits or engages members with a promise of payments or services for enrolling others into the scheme, instead of sale of products or services.
The Prize Chit and Money Circulation Schemes (Banning) Act prohibits any company or individual from running any Pyramid or Money Circulation Scheme.

3. Covid Graded Response Action Plan (GRAP)

Subject – Governance

Context – Yellow alert issued in Delhi

Concept –

As per the plan, the restrictions will be based on three parameters–positivity rate, cumulative active cases and oxygen beds in the hospitals.
The restrictions will come under Yellow, Amber, Orange and Red alerts.
Yellow would be the lowest level of restriction while Red would be the highest.
Under Red, the entire city will come under a complete lockdown.
As for Orange alert, most of the economic activities and social gatherings/activities and public transport facilities will come to halt.

Alert	Conditions
Yellow alert	The Yellow alert will come into force if the positivity rate remains over 0.5 per cent for two days straight, or say the cumulative fresh cases touches 1,500 or average occupancy of oxygen beds in hospitals remains 500 for a week.
Amber alert	With the Amber alert, the city enters the next phase of restrictions if the test positivity rate remains over 1 per cent for two consecutive days, or the city witnesses 3,500 new cases in a week, or average oxygen bed occupancy remains over 700 over the course of a week.
Orange alert	Stricter restrictions will come in place as orange alert kicks in. The orange alert comes in when the city records 9,000 cases over a week’s time or the average occupancy of oxygen hospital beds remains 1,000 for seven consecutive days.
Red alert	If the test positivity rate crosses 5 per cent for two consecutive days, or the city records 16,000 new cases in a week, a red alert will kick in. This will also happen if average occupancy of oxygen beds in hospitals remains 3,000 or above over a week.

4. GI tag sought for Apatani textile product

Subject – Science and Tech

Context – GI tag sought for Apatani textile product

Concept –

An application seeking Geographical Indication (GI) tag for the Arunachal Pradesh Apatani textile product has been filed by a firm, ZeetZeero Producer Company Ltd.
The Apatani weave comes from the Apatani tribe living at Ziro, the headquarters of Lower Subansiri district.
The woven fabric of this tribe is known for its geometric and zigzag patterns and for its angular designs.
Apatani community weaves its own textiles for various occasions, including rituals and cultural festivals.
The tribe predominantly weaves shawls known as jig-jiro, and jilan or jackets called supuntarii.
The people use leaves and plant resources for organic dyeing of the cotton yarns in their traditional ways. And only women folk are engaged in weaving.