SEBI as a Capital Market

Regulator & Regulations

applicable to different financial
service agent

Presented By
Kamta Prasad
PGDM-VI
Disha School of Management

02/11/10 1
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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 Why ?????

Securities and Exchange Board of

India
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HARSHAD MEHTA
MARKET CRASH
Objectives of SEBI

vThe 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
SEBI
1.Protection of Investors’ Interest.
2.Promoting the development of
securities market
3.Regulating the securities market
4.Guidelines on Capital Issues.
5.Regulates Working of Mutual
Funds.
6.Regulates Merchant Banking
Services.
Contd…
7.Regulates Stock Brokers Activities.
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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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St ru c t u re & Org a n iza t io n o f
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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C h a irm a n : S h ri C . B . B h a v e ,
SEB I

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 Other Members…..
 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


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Du t ie s , p o we rs & fu n c t io n s
e xe rc is e d b y 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 02/11/10
other intermediaries who12
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 .
 02/11/10 13
Contd….
 Prohibiting insider trading in securities
 Regulating substantial acquisition of
shares and take-over of companies
 Calling 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 securities14
02/11/10
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 Powers
Call 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 Challenges
Speculative Trading & Distribution of Turnover.


Market Abuses.
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