Current Affairs – June, 2019

Latest Current Affairs June, 2019 with Current Affairs, news summary on current events of National and International importance of June, 2019 for Banking, SSC, CLAT, UPSC, State PCS, IBPS, Railways and other Competitive Examinations.

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SEBI sets up panel for reviewing Margins on Derivatives

The Securities and Exchange Board of India (SEBI), the capital markets regulator has set up a panel, to review current framework of margins in the futures and options (F&O) derivative segment.

Key Highlights

The working group set up by SEBI is headed by the National Stock Exchange (NSE) Clearing Ltd., and will submit its recommendations to Secondary Market Advisory Committee.

Reason: This is review panel is set up based on the feedback that existing margin requirements in derivatives segment is pushing up cost of trading while not managing risk in most efficient manner,.

Need: The reviewing of Margin Derivatives assumes significance as lower cost of trading was the main reason why institutional investors preferred to trade in Nifty contracts on Singapore Exchange Limited (SGX) at Singapore rather than on highly liquid derivatives segment of NSE.

Findings of Study

High Margin requirements in India: In a recent study jointly conducted by Association of National Exchanges Members of India (ANMI) and consultancy firm Ernst & Young (EY), highlighted fact that trading in derivatives in Indian market costs much more when compared to most of other leading markets. This is due to a variety of margins that are imposed on traders.

Variety of Margins: It also disclosed that unlike other trading markets where higher event-based margins are applied temporarily (such as during instances of increased volatility), the Indian stock market levy a variety of margins during normal course which pushes up overall cost of trading.

Exposure Margin: Across global exchanges considered under review, only SPAN margin (or single margin system)  is collected as initial margin but India levies exposure margin (or the margin charged over and above SPAN margin which is discretion of broker), excessive short option margin as part of initial SPAN margin and event-based margins for covering intermittent periods of higher volatility.

Way Ahead: Using margining as a tool should be to address risk of a given portfolio but should not be used to control market volumes/exposures.

WHO launches AWaRe tool to Combat Antimicrobial Resistance

The World Health Organisation (WHO) recently launched a global campaign urging governments all across the world to adopt its new online tool called AWaRe (Access, Watch and Reserve), which is aimed at guiding policy-makers and health workers of country to reduce spread of antimicrobial resistance, adverse events and costs.

This AWaRe tool was developed by World Health Oraganisation’s Essential Medicines List (EML) to reduce spread of antimicrobial resistance, antibiotic-related adverse events, and also to make antibiotic use safer, cheaper and more effective for its consumer.

Key Highlights

Objective: to combat growing menace of antibiotic abuse and burgeoning resistance worldwide and to limit drugs those are at risk of resistance.

About: The WHO’s latest advisory, suggested adoption of AWaRe approach which classifies antibiotics into three groups –

  1. Access– which antibiotics to use for the most common and serious infections
  2. Watch– which ones should be available at all times in the healthcare system
  3. Reserve– those that must be used sparingly or preserved and used only as a last resort

Need:

As per WHO estimates, in most of the countries more than 50% of antibiotics are used inappropriately for treatment of viruses even when they only treat bacterial infections, or are wrong choice of antibiotic (broader spectrum), thus contributing to spread of antimicrobial resistance (AMR).

Also, when antibiotics stop working effectively, treatments become more expensive and hospital admissions are increased, thus this may take a heavy toll on already stretched health budgets of developing countries.

Measures Undertaken:

This new campaign will strive towards increasing proportion of global consumption of antibiotics in Access group to minimum 60%, and towards reducing use of antibiotics most at risk of resistance from Watch and Reserve groups.

As Access antibiotics are narrow-spectrum antibiotics drugs (means that they target a specific microorganism rather than many), therefore, using Access antibiotics lowers the risk of resistance. They are also less costly than others as they are available in generic formulations.

India’s Efforts

Red Line Campaign: In India, Union Ministry of Health Affair has made it mandatory to display a 5mm-thick red vertical band (line) on packaging of prescription-only drugs (those which compulsorily require Doctors’ Prescription) so as to sensitise people and make them cautious while buying these Antibiotic medicines that are widely sold without prescriptions.

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