SEBI n FEMA

8/9/2019 SEBI n FEMA

1/28


2/28

Indian Financial Market


3/28

Organized financial markets have existed in India for

more than a century.

Today markets of varying maturity exist in Equity,

Debt, Commodities and Foreign exchange.

There are 25 stock markets all over the country, the

most important of which, are the Bombay Stock

Exchange and the National Stock Exchange.

India Financial market happens to be one of the fastest

growing and best among all the financial markets of

the emerging economies.


4/28


5/28


6/28

Protecting the rights of small investors.

Regulating and developing the stock

markets in India.


7/28

Reforms

Introduced several stock market reforms that transformed

the face of Indian stock markets.

SEBI introduced on-line trading and demat of shares thusbringing more transparency into the trading system.

The government, therefore, constituted SEBI as a

supervisory body to regulate and promote security

markets.


8/28

SEBI continued its efforts to introduce more capitalmarket reforms in India, making the markets an

attractive investment destination for FIIs.

Due to SEBI reforms and guidelines, a significantincrease was witnessed in the volume and amount of

stock transactions done on BSE and NSE.

SEBI has to be responsive to the needs of three groups,which constitute the market:-

The issuers of securities

The investors

The market intermediaries


9/28

SEBI Drafts regulations in its legislative capacity.

Conducts investigation and enforcement action in its

executive function.

Passes rulings and orders in its judicial capacity.

Though this makes it very powerful, there is an appeals

process to create accountability.

SEBI has enjoyed success as a regulator by pushing

systemic reforms aggressively and successively.


10/28

SEBI had increased the extent and quantity of

disclosures to be made by indian corporate promoters.

Inlight of the global meltdown,it liberalised the

takeover code to facilitate investments by removing

regulatory strictures.

SEBI has been active in setting up the regulations as

required under law.


11/28


12/28

SEBI in India's Capital Market

SEBI from time to time have adopted many rules andregulations for enhancing the Indian financial marketwhich are as follows:-

Sole Control on Brokersevery brokers and sub brokers have to get registrationwith SEBI and any stock exchange in India.

For Underwriters

For working as an underwriter an asset limit of 20 lakhshas been fixed.


13/28


14/28

FEMAFEMA

&&

Its AmendmentsIts Amendments

in Indian Foreignin Indian Foreign

Exchange MarketExchange Market


15/28

FEMA

The Foreign Exchange Management Act (FEMA).

It was passed in the winter session ofParliament in1999.

It is the improved model ofThe Foreign ExchangeRegulation Act of 1973 .

Due to the backdrop of acute shortage of ForeignExchange in the country.


16/28

Objectives and Extent of FEMA

To consolidate and amend the law relating to

foreign exchange.

To promote the orderly development and

maintenance of foreign exchange market in India.


17/28

Application

To the whole of India.

Branches, offices and agencies outside India.

And to any contravention there under

committed outside India.


18/28

Amendments by FEMA

Dealing in foreign exchange

Holding of foreign exchange

Current account transactions

Capital account transactions.

Export of goods and services

Realization and repatriation of foreign exchange


19/28

Exemption from realization and repatriation in

certain cases

Authorised person

Reserve Bank's powers to issue directions to

authorised person

Power ofReserve Bank to inspect authorised person


20/28

Dealing in Foreign exchange

No person shall:-

a)deal in or transfer any foreign exchange or

foreign securityb)make any payment outside India

c)receive any payment outside India

d)enter into any financial transaction in India


21/28

Holding of foreign exchange

No Person shall :-

Acquire

HoldOwn

Possess or transfer any foreign exchange, foreign

security or any immovable property.


22/28

Current account transactions

Any person may sell or draw foreign exchange

The Central Government may consult with RBI.

And also can impose such reasonable restrictions.


23/28

Capital account transactions

Any person may sell or draw foreign exchange

The Reserve Bank may, by regulations, prohibit, restrictthe following:-

a)transfer or issue of any foreign security by a personresident in Indiab)Outside Indiac)any branch, office or agency in Indiad)any borrowing or lending in rupeese)export, import or holding of currency or currencynotes;


24/28

Export of goods and services

Regarding such declaration of export of goods by exporter.

If the amount is not ascertainable then exporter will tell.

Every exporter of services shall furnish to the Reserve Bank.

RBI determines the value of goods according to marketconditions

Information provided without any delay


25/28

Exemption from realization and

repatriation in certain cases..

These provisions of sections 4 and 8 shall not apply to

the:-

possession of foreign currency or foreign coins by anyperson

Exchange held from employment,business,trade

foreign exchange held by a person resident in India

foreign exchange acquired from employment, business,trade,services, honorarium, gifts, inheritance


26/28

Authorization

Reserve Bank may provide the authorization to person

if.

An authorization under this section shall be in writing.

After making application

An Authorized person in all his dealings in Fr Ex will doacco to RBI.


27/28

Power ofReserve Bank to Inspect

authorized person

The Reserve Bank may, at any time, cause an

inspection to be made, by any officer.

Verification of statements given to RBI

Obtaining any info. Which he did not provided

Person should provide accounts,books


28/28

Contraventions andContraventions and

PenaltiesPenaltiesIf amount quantifiable

If not quantifiable

If contravention is continuing

Any Adjucating authority can

impose the penality of currency,

securities,money or property

SEBI n FEMA

Documents