SEBI as a Capital Market Regulator

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SEBI as a Capital Market Regulator & Regulations applicable to different financial service agent

Presented ByKamta PrasadPGDM-VIDisha School of Management

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About SEBI

The Government of India set up a body called Securities and Exchange Board of India in April 1988.However,the real beginning of SEBI started in 1992,when the SEBI Act, 1992 was passed and assented by the President of India.

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Securities and Exchange Board of India

Why ?????

HARSHAD MEHTA

MARKET CRASH

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Objectives of SEBI

The main objectives of SEBI are as follows:

Objectives towards the Investors.

Objectives towards Capital Issuers.

Objectives towards Intermediaries

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Role And Functions Of SEBI1. Protection of Investors’ Interest.2. Promoting the development of

securities market3. Regulating the securities market4. Guidelines on Capital Issues.5. Regulates Working of Mutual Funds.6. Regulates Merchant Banking

Services.7. Regulates Stock Brokers Activities.

Contd…

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6. Portfolio Management.

7. Restrictions on Insider Trading.

8. Regulates Take-over, and Mergers.

9. Research and Publicity.

10.Dematerialization of Shares.

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Structure & Organization of SEBI

The head office of the board is in Bombay

The board may establish offices at other places in India

The Board consist of the following members, namely---

a. A Chairman b. Two members from amongst the

officials of the central government dealing with finance

c. One member from amongst the officials of the RBI

d. Five other members of whom at least three shall be the whole-time members to be appointed by the central Government.

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Chairman : Shri C. B. Bhave, SEBI

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Mr. K.P.Krishnan - Joint Secretary, Ministry of

Finance

Mr. Anurag Goel - Secretary, Ministry of Corporate

Affairs

Dr. G. Mohan Gopal- Director, National Judicial

Academy, Bhopal

Mr. M.S. Sahoo - Whole Time Member

Dr. K.M.Abraham - Whole Time Member

Mr. Mohandas Pai - Director, Infosys

Other Members…..

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Duties, powers & functions exercised by SEBI Subject to the provisions of this Act, it shall be the duty of

the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit

Regulating the business in stock exchanges and any other securities markets 

Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner

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Contd….

Registering and regulating the working of the depositories, depository participants, custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as the Board may, by notification, specify in this behalf.

Registering and regulating the working of venture capital funds and collective investment schemes, including mutual funds.

Prohibiting fraudulent and unfair trade practices relating to securities markets .

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Contd….

Prohibiting insider trading in securities Regulating substantial acquisition of shares

and take-over of companiesCalling for information from, undertaking

inspection, conducting inquiries and audits of the stock exchanges, mutual funds, other persons associated with the securities market intermediaries  

Suspend the trading of any security in a recognized stock exchange

Restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities

SEBI in Capital Market

New SEBI guidelines were issued.

Guidelines for First Issue of New Company.

Guidelines for the New issues made by the Private Limited Company.

Guidelines for Issue to the public by existing Company.

The terms & conditions of the New Instruments.

Disclose the arrangement of the amount received by issuing of Shares.

Public issue by the existing listed companies & the calculation of NAV & Market price.

Credit rating is compulsory in case of convertible debentures.

Minimum Interval criteria.

Bonus issues.

Debenture maturity period and redemption.

Disclosure of application amount raised through issue of shares.

Issues to Promoters, Shareholders & Employees.

SEBI Guidelines With regard to

First Issue of New Company

Issue of Shares to public only by New Company.

New Company set up by an existing Company.

A draft prospectus containing disclosure will be examined by the SEBI.

Bonus Issue/Right Issue.

Bonus issue is made out of free reserve.

Reserves are not capitalized.

Calculation of residual value.

The residual reserve should be at least 40% of

increased paid-up capital.

The capital reserve created will not form any part of Balance Sheet.

The bonus issue is not made unless the partly paid Shares are fully paid.

SEBI PowersCall periodical Returns.

Call for any information from Stock Exchanges.

Direct enquiries of the affairs of Stock Exchanges.

Power to grant approval to the bye-laws of recognized Stock Exchange.

Power to make or amend the bye-laws.

Power to compel listing of Securities by Public Companies.

Power to control & regulate Stock Exchanges.

Power to grant registration to market intermediaries.

Power to levy fees or other charges.

Power to regulate FII etc.,

Future ChallengesSpeculative Trading & Distribution of Turnover.

Market Abuses.

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