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PROMOTERS
A corporate promoter (also "projector") is a person who solicits people to invest money into a corporation.
An investment banker, an underwriter, or a stock promoter may, wholly or in part, perform the role of a promoter. Promoters general owe a duty of utmost good faith, so as to not mislead any potential investors, and disclose all material facts about the company's business.
TYPES OF PROMOTERS
Professional Promoters
Occasional Promoters Entrepreneur Promoters Financier Promoters
FUNCTIONS OF PROMOTERS
ROLE OF SEBI
To protect the interests of investors through proper education and guidance as regards their investment in securities.
To regulate and control the business on stock exchanges and other security markets. To make registration and to regulate the functioning of intermediaries such as stock brokers, sub-brokers, share transfer agents, merchant bankers and other intermediaries operating on the securities market.
ROLE OF SEBI
To register and regulate the working of mutual funds including UTI (Unit Trust of India).
To promote self-regulatory organization of intermediaries. SEBI is given wide statutory powers. To regulate mergers, takeovers and acquisitions of companies in order to protect the interest of investors. To prohibit fraudulent and unfair practices of intermediaries operating on securities markets
ROLE OF SEBI
Raise funds
Offer advisory services Security distribution
Aid in projects
Overall financial reconstruction
IMPORTANT CONCEPTS
GDR-A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches. ADR: A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction.
IMPORTANT CONCEPTS