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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/

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