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Security Analysis

And
Portfolio
Management

ASSIGNMENT

Submited To: Submitted By:
Prof. Kamal Kishore Deepak Kumar
17/014

• Administrative control of the exchange  All stock exchanges are required to be Body Corporates  The exchange provides a fair.’ Focus being the greater investor protection. . Objectives of SEBI Securities & Exchange Board of India (SEBI) formed under the SEBI Act.  The exchange’s organisation. the securities market and for matters connected therewith or incidental thereto. 1956 B) Prohibiting fraudulent and unfair Trade Practices In the Securities Market SEBI is vested with powers to take action against these practices relating to securities market manipulation and misleading statements to induce sale/purchase of securities. – Promoting the development of. organizational structure and administrative control of the exchange. equitable and growing market to investors. and – Regulating. A) Regulation Of Business In The Stock Exchanges: A review of the market operations. 1992 with the prime objective of – Protecting the interests of investors in securities. SEBI has become a vigilant watchdog Functions Of SEBI Section 11 of the Securities and Exchange Board of India Act. systems and practices are in accordance with the Securities Contracts (Regulation) Act (SC(R) Act).

and serving the investors' interest by defining and maintaining high ethical and professional standards in the mutual funds industry'. custodians of securities. increasing public awareness of mutual funds. E) Registration And Regulation Of The Working Of Intermediaries PRIMARY MARKET SECONDARY MARKET Merchant Bankers Stock Brokers Underwriters Sub-Brokers Portfolio Managers • Regulates the working of the depositories [participants]. foreign institutional investors.C) Prohibition of Insider Trading – Stock Watch System. surveillance over insider trading would be further strengthened.  Every mutual fund must be registered with SEBI and registration is granted only where SEBI is satisfied with the background of the fund. Venture Capital Funds & Collective Investment Schemes. .  AMFI-Self Regulatory Organization-'promoting and protecting the interest of mutual funds and their unit-holders. which has been put in place. D) Investor education and the training of intermediaries – SEBI distributed the booklet titled “A Quick Reference Guide for Investors” to the investors – SEBI also issued a series of advertisement /public notices in national as well as regional newspapers to educate and caution the investors about the risks associated with the investments in collective investment schemes – SEBI has also issued messages in the interest of investors on National Channel and Regional Stations on Doordarshan. credit rating agencies and such other intermediaries F) Registration And Regulation Of Mutual Funds.

managed and controlled such that it retains its independence.  SEBI also has the authority to initiate penal actions against an erring MF. while continuing to perform a genuine market development role. AMC and custodian where it deems it necessary.  SEBI has the authority to inspect the books of accounts. G) Promoting & Regulating Self Regulatory Organizations. I) Regulating substantial acquisition of shares and take-overs. refund procedures.  SEBI (Mutual Funds) Regulations.  SEBI has also laid down advertisement code to be followed by a mutual fund in making any publicity regarding a scheme and its performance. H) Inspection and inquiries. – In order for the SRO to effectively execute its responsibilities.  Regulations have been laid down regarding listing of funds. . transfer procedures.  SEBI has prescribed norms / restrictions for investment management with a view to minimize / reduce undue investment risks.  In case of a change in the controlling interest of an asset management company. its trustees. disclosures. organized. records and documents of a mutual fund.  Every new scheme launched by a mutual fund needs to be filed with SEBI and SEBI reviews the document in regard to the disclosures contained in such documents. guaranteeing returns etc. it would be required to be structured. investors should be given at least 30 days time to exercise their exit option. 1996 lays down the provisions for the appointment of the trustees and their obligations.

L) Conducting research for the above purposes.J) Performing such functions and exercising such powers under the provisions of the securities contracts (regulation) act. . K) Levying fees or other charges for carrying out the purposes of this section. 1956 as may be delegated to it by the central government.

• Power to call upon the Stock Exchange or any member of the exchange to furnish relevant information. • Power to appoint any person to make inquiries into the affairs of the Stock Exchange. • Power to control and regulate stock exchanges • Power to grant registration to market intermediaries • Power to register and regulate working of collective investment schemes including mutual funds • Power to promote and regulate self-regulatory bodies • Power to prohibit insider trading and fraudulent and unfair trade practices relating to securities • Power to promote investor’s education and training of intermediaries in the market • Power to regulate substantial acquisition of shares and takeover of companies • Power to levy fees • Power to conduct research and other functions . • Power to amend the bye-laws of the Stock Exchange. • Power to compel a public company to list its shares in any Stock Exchange. Powers of SEBI In order to carry out its functions SEBI has been given various powers which were previously vested with the Central Government. These include: • Power to call for periodical returns from Stock Exchanges.

 Presided by Supreme Court Judge  Appeal lies to Supreme Court A Securities Appellate Tribunal shall consist of a Presiding Officer and two other Members. Security Appellate tribunal is formed to:  Hear appeals against SEBI orders and penalties. by notification. namely: (a) Summoning and enforcing the attendance of any person and examining him on oath. 1908(5 of 1908). by the Central Government: Powers of SAT (1) The Securities Appellate Tribunal is not bound by the procedure laid down by the Code of Civil Procedure. while trying a suit. the Securities Appellate Tribunal has powers to regulate their own procedure including the places at which they shall have their sittings. to be appointed. (d) Issuing commissions for the examination of witnesses or documents. Security Appellate Tribunal The Central Government by notification has established an Appellate Tribunal known as the Securities Appellate Tribunal. (b) Requiring the discovery and production of documents. (2) The Securities Appellate Tribunal has.  Hear appeals against listing refusal by SE and delisting by SE. 1908(5 of 1908). (c) Receiving evidence on affidavits. the same powers as are vested in a civil court under the Code of Civil Procedure. for the purposes of discharging their functions under the SEBI Act.  Follows principles of Natural Justice. subject to the other provisions of SEBI Act and of any rules. in respect of the following matters. but it is guided by the principles of natural justice and. .

nonpublic information about the security. Illegal insider trading therefore includes tipping others when you have any sort of nonpublic information. Insider Trading What Does Insider Trading Mean? . (g) Setting aside any order of dismissal of any application for default or any order passed by it ex parte. (f) Dismissing an application for default or deciding it ex parte. however. Insider trading can be illegal or legal depending on when the insider makes the trade: it is illegal when the material information is still nonpublic--trading while having special knowledge is unfair to other investors who don't have access to such knowledge. as insiders have an insight into the workings of their company. 1973(2 of 1974). still requires all insiders to report all their transactions. at which time the insider has no direct advantage over other investors. (3) Every proceeding before the Securities Appellate Tribunal deems to be a judicial proceeding within the meaning of sections 193 and 228. and the Securities Appellate Tribunal is deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure. (h) Any other matter which may be prescribed. . and for the purposes of section 196 of the Indian Penal Code(45 of 1860). The buying or selling of a security by someone who has access to material. The SEC. Directors are not the only ones who have the potential to be convicted of insider trading. (e) Reviewing its decisions. So. Insider trading is legal once the material information has been made public. People such as brokers and even family members can be guilty . it may be wise for an investor to look at these reports to see how insiders are legally trading their stock.