ROLES

PRESENTED IN CLASS OF:DR.JYOTI RAINA

&

FUNCTIONS OF

SEBI

PRESENTED BY:GOURAV GUPTA

50-MBA -10 SEM 3RD

www.sebi.gov.in

C ONTENTS
INTRODUCTION Organizations Structure Objectives of SEBI Functions of SEBI Powers of SEBI Various Departments
Various Departments

CONDITIONS FOR ISSUE OF SECURITIES

1
2 3 1

FORMED: 1992
JURISDICTION: INDIA

HEADQUARTERS: MUMBAI, MAHARASTRA

3 4 CHAIRMAN: UPENDRA KUMAR SINHA

4 EMPLOYEES: 525

SEBI is the regulator for the Securities Market in India.

It was formed officially by Government of India in 1988 with SEBI Act, 1992. It is chaired by UPENDRA KUMAR SINHA
It is a closely held company i.e. a company in which public is not substantially interested.

As the name suggest, it means a place where exchange of stock take place. Stock here means securities like shares, debentures, bonds, etc.

GENERAL DETAILS
There are 24 SE in India. Out of which 20 are Recognized & 04 are Derecognized. De-recognized SE are :1. Hyderabad SE 2. Magadha SE 3. Saurashtra Kutch SE 4. Mangalore SE Out of these all SE, top two SE of India are: 1. NSE ( National Stock Exchange ) 2. BSE ( Bombay Stock Exchange )

O RGANIZATION S S TRUCTURE
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Management of the Board

The Board shall consist of the following members, namely:a)
b)

a Chairman
Two members, One from amongst the officials of the Ministry of the Central Government dealing with Finance and second from administration of the Companies Act, 1956. One member from amongst the officials of the Reserve Bank of India. Five other members of whom at least three shall be the whole-time members to be appointed by the central Government .

c)

d)

O BJECTIVES

OF

SEBI

The primary objective of SEBI is to promote healthy and orderly growth -of the securities market and secure investor protection. The objectives of SEBI are as follows:

To protect the interest of investors, so that, there is a steady flow of savings into the capital market.
To regulate the securities market and ensure fair practices. To promote efficient services by brokers, merchant bankers, and other intermediaries, so that, they become competitive and professional.

TEXT

It means SEBI can make law according to its Legislative capacity.

It asses rulings & orders in its Judicial capacity.

It conducts investigation & enforcement action in its executive function.

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F UNCTIONS

OF

SEBI

The SEBI Act, 1992 has entrusted with two functions, they are

Regulatory functions And Developmental functions

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R EGULATORY F UNCTIONS

Regulation of stock exchange and self regulatory organizations. Registration and regulation of stock brokers, sub-brokers, Registrars to all issues, merchant bankers, underwriters, portfolio managers etc.

Registration and regulation of the working of collective investment schemes including mutual funds.
Prohibition of fraudulent and unfair trade practices relating to securities market. Prohibition of insider trading Regulating substantial acquisition of shares and takeover of companies.

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D EVELOPMENTAL F UNCTIONS

Promoting investors education Training of intermediaries

Conducting research and publishing information useful to all market participants.

Promotion of fair practices Promotion of self regulatory organizations

SEBI R EGULATES .

SEBI regulates

Primary Market

Secondary Market

Mutual Funds

Foreign Institutional Investment

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4/15/2012

SAPM

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P OWERS

OF

SEBI

Power to call periodical returns from recognized stock exchanges.

Power to compel listing of securities by public companies.

Power to levy fees or other charges for carrying out the purposes of regulation.
Power to call information or explanation from recognized stock exchanges or their members. Power to grant approval to bye-laws of recognized stock exchanges.

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P OWERS

OF

SEBI

CONTINUE ..

Power to control and regulate stock exchanges. Power to direct enquiries to be made in relation to affairs of stock exchanges or their members. Power to make or amend bye-laws of recognized stock exchanges. Power to grant registration to market intermediaries. Power to declare applicability of Section 17 of the Securities Contract (Regulation) Act 1956, in any State or area, to grant licenses to dealers in securities.

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VARIOUS DEPARTMENTS UNDER SEBI

S. No. 1. 2. 3. 4. 5. 6. 7.

Name of Dept.
MARKET INTERMEDIARIES REGULATION AND SUPERVISION DEPARTMENT (MIRSD) DERIVATIVES AND NEW PRODUCTS DEPARTMENT (DNPD) INVESTMENT MANAGEMENT DEPARTMENT (IMD) INVESTIGATIONS DEPARTMENT (IVD) LEGAL AFFAIRS DEPARTMENT (LAD) OFFICE OF INVESTOR ASSISTANCE & EDUCATION (OIAE) DEPARTMENT OF ECONOMIC & POLICY ANALYSIS (DEPA)

8.

INFORMATION TECHNOLOGY DEPARTMENT (ITD)

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VARIOUS DEPARTMENTS UNDER SEBI CONTINUE

S. No. 9. 10. 11. 12.

Name of Dept.
MARKET REGULATION DEPARTMENT (MRD) CORPORATION FINANCE DEPARTMENT (CFD) INTEGRATED SURVEILLANCE DEPARTMENT (ISD) ENFORCEMENT OF DEPARTMENT (EFD)

13.
14.

ENQUIRIES & ADJUDICATION DEPARTMENT (EAD)

GENERAL SERVICES DEPARTMENT (GSD)

15.
16.

OFFICE OF THE CHAIRMEN (OCH)

THE REGIONAL OFFICES (ROs)

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SEBI & C ENTRAL G OVT.

The Central Government has power to issue directions to SEBI Board, supersede the Board, if necessary and to call for returns and reports as and when necessary. The Central Government has also power to give any guideline or to make regulations and rules for SEBI and its operations.
The activities of SEBI are financed by grants from Central Government, in addition to fees, charges etc. collected by SEBI. The fund called SEBI General Fund is set up, to which, all fees, charges and grants are credited. This fund is used to meet the expenses of the Board and to pay salary of staff and members of the body.

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C ONDITIONS FOR ISSUE OF

SECURITIES
Filing of offer document

No issuer company shall make any public issue of securities, unless a draft Prospectus has been filed with the Board through a Merchant Banker, at least 30 days prior to the filing of the Prospectus with the Registrar of Companies

Companies barred not to issue security

No company shall make an issue of securities if the company has been prohibited from accessing the capital market under any order or direction passed by the Board

C ONDITIONS FOR ISSUE OF

SECURITIES
Application for listing No company shall make any public issue of securities unless it has made an application for listing of those securities in the stock exchange Issue of securities in dematerialised form No company shall make public or rights issue or an offer for sale of securities, unless: The company enters into an agreement with a depository for dematerialisation of securities already issued or proposed to be issued to the public or existing shareholders; and The company gives an option to subscribers/ shareholders/ investors to receive the security certificates or hold securities in dematerialised form with a depository.

Initial Public Offerings by Unlisted Companies An unlisted company may make an initial public offering (IPO) of equity shares or any other security which may be converted into or exchanged with equity shares at a later date, only if it meets all the following conditions:

The company has net tangible assets of at least Rs. 3 crores in each of the preceding 3 full years (of 12 months each), of which not more than 50% is held in monetary assets The company has a track record of distributable profits in terms of Section 205 of the Companies Act, 1956, for at least three (3) out of immediately preceding five (5) years The company has a net worth of at least Rs. 1 crore in each of the preceding 3 full years (of 12 months each);

Credit Rating for Debt Instruments

No issuer company shall make a public issue or rights issue of convertible debt instrument, unless the following conditions are satisfied

Credit rating is obtained from at least one credit rating agency registered with the Board and disclosed in the offer document The company is not in the list of willful defaulters of RBI The company is not in default of payment of interest or repayment of principal in respect of debentures issued to the public, if any, for a period of more than 6 months.

Means of Finance

No company shall make a public or rights issue of securities unless firm arrangements of finance through verifiable means towards 75% of the stated means of finance, excluding the amount to be raised through proposed public/ Rights issue, have been made.

Partly Paid-up Shares

No company shall make a public or rights issue of equity share or any security convertible at later date into equity share, unless all the existing partly paid-up shares have been fully paid

Outstanding Warrants or Financial Instruments

No unlisted company shall make a public issue of equity share or any security convertible at later date into equity share, if there are any outstanding financial instruments or any other right which would entitle the existing promoters or shareholders any option to receive equity share capital after the initial public offering.