BY: Ashish Agarwal (16047) Sagar Yadav (16056) BFIA - 2

What is SEC? A brief history of SEC Main Laws & Acts Debt Market Foreign Debt Market Major Rules relating to Foreign Debt Conclusion

The Securities & Exchange Commission, of the United States of America Responsibility of enforcing Federal Securities Laws & Regulating the Securities Market The main regulator of USAs Stock & other exchanges Five main divisions.

Exchanges and OTC markets are effected with a national public interest which makes it necessary to provide regulations To keep frauds and other scams from happening and protect the investor from them To form rules and regulations to better manage the financial markets.

Was created by the Securities & Exchange Act, 1934, during the great depression after the crash of 1929. Prior to SEC, Blue Sky Laws were enacted among state governments Also called the exchange act or the 1934 act

Securities Act of 1933 Securities Exchange Act of 1934 Trust Indenture Act of 1939 Investment Company Act of 1940 Investment Advisers Act of 1940 Sarbanes-Oxley Act of 2002

The Debt market is:

Decentralized OTC (though large institutions do have their binds listed on exchanges) Deals in debt securities (mainly bonds)

Total volume of about $82.2 Trillion, worldwide, as of 2009

3 Basic type of International Bond Issues:

Foreign Bonds EuroBonds Global Bonds

Risks involved:

Sovereign Risk ( Country/Political Risk) Foreign Exchange Risk

SEC Rule 144A Shelf Registration (Rule 415)

Enacted in April, 1990 to enable Institutions to trade amongst themselves without registration. Enhanced domestic issuance of foreign issuers as it eliminated the need for registration.

Also called Shelf Registration Rule Compliance and other legal paper work can be done up to 3 years before the actual issue Usually used when the market conditions are not favorable for an issue

The SEC was formed to regulate the markets Has liberalized many rules for the benefit of the investor These rules increased the inflow of foreign security issuers manifold.