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-BINAL KOTADIA
PRIYANKA
CHARMI
SANGHAVI
ANKITA
SARVAIYA
KRINAL SHAH
RIKISHA SHAH
EQUITY MARKET-II
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Contents Introduction
Establishment
Important roles
Functions
Powers
SEBI & Primary Market
SEBI & Secondary Market
SEBI & FIIs
Various departments under
SEBI
Limitation of SEBI
Guidelines to investors
BIBLIOGRAPHY
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Establishment
It was in 1980s that India had witnessed a phenomenal growth anddevelopment of the securities market. During the phase, India was
entering into period of liberalization and decontrol which was to
accelerate and gather momentum in the 1990s
In order to sustain the growth of the market an form the growing
awareness and interest in investment opputunities,the regulatoryfunction should have Sharpe objective of fostering fair competition
and correction market deficiencies and irregularities with a view to
bringing about health growth of the sector and the protection
participants
On April 12, 1988 the Securities and Exchange Board of India(SEBI) was established by the government of India through an
executive resolution, and was subsequently upgraded as a fully
autonomous body(a Statutory Board) in the year 1992 with the
passing of the securities and exchange board of India act (SEBI
Act) on 30th
January 1992
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Power of board to order
investigation
Power of investigating authority
Prohibition to dealing in certainsecurities
Prohibition of unfair trade
practices fraudulence
Duty to co-operate
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Functions of SEBI Regulating the business in stock exchange
and any other securities market
Registering and regulating the working of
intermediaries associated with securities
market
Registering and regulating the working of
collective investment schemes including
mutual funds.
Promoting and regulating self regulatory
organization
Prohibiting fraudulent and unfair trade
practices in the security market
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Promoting investors education andtraining of intermediaries in the security
market
Prohibiting insiders trading in securities.
Regulating substantial acquisition ofshares and take over of companies.
Calling for information, undertaking
inspection, conducting enquiries and
audits of the stock exchanges,intermediaries and self regulatory
organization in the securities market.
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Powers of SEBI
Powers of inspection
Powers of court
Powers in the interest of securities
market
Powers regarding protection ofinvestors
Powers to issue directors
Powers of investigation
Powers to cease and desists
proceedings
Registration of stock brokers ,
share transfer agents etc.
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SEBI regulates
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SEBI and Primary market
Measures undertaken by SEBI
Entry norms
Promoters contribution
Disclosure Book-building
Allocation of shares
Market intermediaries
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Entry norms
Track record of dividend payment
for minimim 3 years preceding theissue.
Already listed companieswhen
post issue net worth becomes
more than 5 times the pre issue
new worth For manufacturing company not
having such track record-appraise
project by a public financial
institution or a schedule
commercial bank. For corporate body -5public
shareholders for every rs.1lakh of
the net capital offer made to the
public.
Banks-2yrs of profitability forissues above ar.
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Promoters contribution
Should not be less than 20% of the issuecapital
Receiving of promoters contribution Lock in period as per SEBI
Cases of non under written public issue
Disclosure
Draft prospectus
Un audited financial resultsBook building
One of the mode of public issue thruprospectus
Roles of syndicate members and book runners
Minimum 30 centers
Allocation of shares
Minimum application of shares
Reservation of small investors
Allotment of securities
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Market intermediaries
Licensing of merchant
bankers
Licensing of underwriters
,registrars, transfer
agents etc
Merchant bankers net
worth- 5crores
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SEBI & Secondary Market
Reforms in the secondarymarket:
1. Setttlement & clearing
2. Debt market3. Price stabilization
4. Delisting
5. Governing board
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4.Delisting
On voluntary de-listing from
regional stock exchanges-buy
offer to all share holders
Promoters to buy or arrrenge
buyers for the securities
3yrs listing fees from companies
and be kept in escrow A/c with thestock exchange
5.Governing board
Brokers and non-brokers
repersentation made 50-50
60% of the brokers inarbitration,disciplinary & default
committees
For trading members 40%
representation
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SEBI & FIIs
Union govt allowed
Foreign institutional investors (FIIs)
Non-resident Indians(NRIs)
Persons of Indian origin(PIOs)
To enter into both primary & secondary
market in india through the portfolio investmentscheme(PIS), under Liberalized policyregime.Under this scheme,FIIs/ NRIs canacquire shares/ debentures of Indiancompanies through the stock exchanges inIndia
Implications After the sensex movements
Determines the market indications
Guidelines announced in 1992
In 1993,12 FII got regisitered
At the end of 1996-97,439 FIIs were registered
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The ceiling for overall investment for FIIs
24% of the paid up capital of indian
company 10% for NRIs / PIOs
20% of the paid up capital in the case of
public sector banks,including the state
bank of india
Modifications in ceilings
The ceiling of 24% for FII investment can
be raised up to sectoral cap/statutory
ceiling,subject to the approval of he board
and the general body of the company
passing a special resolution to that effect
The ceiling of 10% for NRIs/IPOs can be
raised to 24% subject to the approval of
the general body of the company passing
a resolution to that effect
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FIIs breakup in Indian Capital
Market
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SEBI guidelines for FIIs
According to 1995 regulations, FIIs
should hold certificate granted by SEBI
to trade in Indian Stock Market.
To grant the certificate the applicantshould
Have track record,professional &
competence record, financial
soundness,general reputation of
fairness and integrity.
Regulated by an appropriate foreign
regulatory authority.
Permission under the provisions of
FERA Act 1973.(FEMA-2006)
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Various department under SEBI
S.NO
1 MARKET INTERMEDIARIES REGULATION & SUPERVISION
DEPARTMENT(MIRSD)
2 DERIVATIVES & NEW PRODUCT DEPARTMENT(DNPD)3 INVESTMENT MANAGEMENT DEPARTMENT(IMD)
4 INVESTIGATION DEPARTMENT(ID)
5 LEGAL AFFAIRS DEPARTMENT(LAD)
6 OFFICE OF INVESTOR ASSISTANCE & EDUCATION(OIAE)
7 DEPARTMENT OF ECONOMIC & POLICY ANALYSIS(DEPA)
8 INFORMATION TECTNOLOGY DEPARTMENT(ITD)
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S.NO
9 MARKET REGULATION DEPARTMENT(MRD)
10 CORPORATION FINANCE DEPARTMENT(CFD)
11 INTEGRATED SURVELLIANCE DEPARTMENT(ISD)
12 ENFORCEMENT OF DEPARTMENT(EFD)
13 ENQUIRIES & ADJUDICATION DEPARTMENT(EAD)14 GENERAL SERVICE DEPARTMENT(GSD)
15 OFFICE OF THE CHAIRMAN(OCH)
16 THE REGIONAL OFFICE (ROs)
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Limitation of SEBI
Interference of government
to frame rules and
regulations of SEBI
Lack of serious approach to
investors needs
SEBI have to seek approval
for filing criminal complaints
for misuse and break of
regulation
Weak legislation
Long and complex
procedures
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Guidelines to investor by SEBI
Deal only with SEBI registered broker. Ensure that brokers have valid
registration certificate.
Insist on bill for every settlement
Ensure that all the necessary details
like brokers name, trade time andnumber etc are shown on a contract
note.
In case of disputes, file written
complain to intermediary stock
exchange/SEBI within a reasonabletime.
Keep track of your portfolio in your
demat a/c on a regular basis.
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Bibliography http://www.sebi.gov.in/sebiweb/ http://www.sebi.gov.in/faq/pubissuefaq.pdf
http://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_India
http://en.wikipedia.org/wiki/Securities_and_Exchange_Boa
rd_of_India_Act,_1992 http://www.authorstream.com/Presentation/punitha-
252078-sebi-securities-exchange-board-education-ppt-powerpoint/
http://www.authorstream.com/Presentation/gandhi_pratik2008-1225972-sebi/
http://www.authorstream.com/Presentation/ajitrokz20002-1240711-sebi/
http://www.authorstream.com/Presentation/ramandev-834777-sebi-ppt/
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