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CHARMI
Contents
Introduction Establishment
Important roles
Functions Powers SEBI & Primary Market SEBI & Secondary Market SEBI & FIIs Various departments under
Introduction
The SEBI is the national
regulatory body for the securities market It was set up under the securities and exchange board of India It has its head office in Mumbai It has now set up regional offices in metropolitan cities of Kolkata , Delhi, AND Chennai
Establishment
It was in 1980s that India had witnessed a phenomenal growth and
development 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 regulatory function 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
investigation Power of investigating authority Prohibition to dealing in certain securities Prohibition of unfair trade practices fraudulence Duty to co-operate
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
training of intermediaries in the security market Prohibiting insiders trading in securities. Regulating substantial acquisition of shares 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.
Powers of SEBI
Powers of inspection Powers of court Powers in the interest of securities
market Powers regarding protection of investors Powers to issue directors Powers of investigation Powers to cease and desists proceedings Registration of stock brokers , share transfer agents etc.
SEBI regulates
Entry norms
Track record of dividend payment
for minimim 3 years preceding the issue. Already listed companies when 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 for
Promoters contribution Should not be less than 20% of the issue capital Receiving of promoters contribution Lock in period as per SEBI Cases of non under written public issue Disclosure Draft prospectus Un audited financial results Book building One of the mode of public issue thru prospectus Roles of syndicate members and book runners Minimum 30 centers
Allocation of shares Minimum application of shares Reservation of small investors Allotment of securities
Market intermediaries Licensing of merchant bankers Licensing of underwriters ,registrars, transfer agents etc Merchant bankers net worth- 5crores
1.settlement & clearing Weekly settlements Auctions for non-delivered shares within 80days of settlement Advice to set up clearing houses,clearing coporation or settlement garuntee fund 2. Debt market segment Regulates thru SEBI regulation act 1996 Listing of debt instuments Investment range for FIIs 3.Price stabilazation Division to monitor the unusual movements in prices Price filters Price bands
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 the stock exchange 5.Governing board Brokers and non-brokers repersentation made 50-50 60% of the brokers in arbitration,disciplinary & default committees For trading members 40% representation
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
NAME OF DEPARTMENT
MARKET INTERMEDIARIES REGULATION & SUPERVISION DEPARTMENT(MIRSD) DERIVATIVES & NEW PRODUCT DEPARTMENT(DNPD) INVESTMENT MANAGEMENT DEPARTMENT(IMD) INVESTIGATION DEPARTMENT(ID) LEGAL AFFAIRS DEPARTMENT(LAD) OFFICE OF INVESTOR ASSISTANCE & EDUCATION(OIAE) DEPARTMENT OF ECONOMIC & POLICY ANALYSIS(DEPA) INFORMATION TECTNOLOGY DEPARTMENT(ITD)
S.N O 9 10 11 12 13 14 15 16
NAME OF DEPARTMENT
MARKET REGULATION DEPARTMENT(MRD) CORPORATION FINANCE DEPARTMENT(CFD) INTEGRATED SURVELLIANCE DEPARTMENT(ISD) ENFORCEMENT OF DEPARTMENT(EFD) ENQUIRIES & ADJUDICATION DEPARTMENT(EAD) GENERAL SERVICE DEPARTMENT(GSD) OFFICE OF THE CHAIRMAN(OCH) THE REGIONAL OFFICE (ROs)
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
registration certificate. Insist on bill for every settlement Ensure that all the necessary details like brokers name, trade time and number etc are shown on a contract note. In case of disputes, file written complain to intermediary stock exchange/SEBI within a reasonable time. Keep track of your portfolio in your demat a/c on a regular basis.
Bibliography
http://www.sebi.gov.in/sebiweb/ http://www.sebi.gov.in/faq/pubissuefaq.pdf http://en.wikipedia.org/wiki/Securities_and_Exchange_Boa