SECURITIES EXCHANGE BOARD

OF INDIA

Presented by :-

Ankit Kumar Ojha

Ankit Kamra Gaurav Sarien Roshan Singh Sumit Bhardwaj Yogesh Khandelwal

ESTABLISHMENT
12th April 1988.
Statutory recognition on 31st January 1992, by

an ordinance of the president of India. Established as a surveillance body.

OBJECTIVES
Protect the interest of investors in securities. Promote the development of capital market by ensuring

flow of saving in it. Promote development of the securities market with the reasonable regulation thereof. Facilitates companies to raise their finances at minimum cost along with fair practices. Prohibit insider trading in securities. Restrict transaction pertaining to acquisition of shares & take over of companies. Impose monetary penalties on capital market intermediaries & other participants for a range of violations. Exercises the power as may be delegated to it by the government.

Function of SEBI
Regulating the business in stock exchange and any other securities market Registering and regulating the workings of intermediaries associated with securities market Registering and regulating the working of collective investment schemes including mutual funds Promoting and regulating self-regulatory organizations

Cont.
. Promoting investors education and training of intermediaries in securities market Prohibiting insiders trading in securities Regulating substantial acquisition of shares and take-over of companies Calling for information, undertaking inspection, conducting enquiries and audits of the stock exchanges, intermediaries and selfregulatory organizations in the securities market

Organization of SEBI
Primary Mkt. dept.

Issue Mgt. & Intermediaries Dept. Departments Secondary Mkt. dept.

Advisory Committees

Institutional Invt.

SEBI Regulates.

SEBI regulates

Primary Market

Secondary Market

Mutual Funds

Foreign Institutional Investment

SEBI & Primary Market

Measures undertaken by SEBI: Entry norms Promoters contribution Disclosure Book building Allocation of shares Market intermediaries

Conti..
1. Entry norms
Track record of dividend payment for minimum 3 yrs preceding the issue. b) Already listed companies - when post-issue networth becomes more than 5 times the pre-issue networth c) For Manufacturing company not having such track record appraise project by a public financial institution or a scheduled commercial bank. d) For corporate body 5 public shareholders for every Rs.1 lakh of the net capital offer made to the public e) Banks 2 yrs of profitability for issues above par. Offer documents to companies.
a)

Conti..
2. Promoters contribution

Should not be less than 20% of the issued capital. Receiving of promoters contribution. Lock in period as per SEBI. Cases of non-under written public issues.

3. Disclosure
draft prospectus Un audited financial results

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Conti..
4. Book building
SEBI recommends two-tier under writing system One of the mode of public issue thru prospectus. Role of syndicate members and book runners. Minimum 30 centers. 5. Allocation of shares Minimum application of shares Reservation for small investors Allotment of securities

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Conti..
6. Market intermediaries
Licensing of merchant bankers Licensing of underwriters, registrars, transfer agents, etc., Merchant bankers net worth Rs.5 crores Segregate fund based from fee based activities.

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SEBI & Secondary Market

Reforms in the secondary market:1. Governing board 2. Infrastructure 3. Settlement & clearing 4. Debt market 5. Price stabilization

Conti..
1. Governing board Brokers and non-brokers representation made 50:50

60% of brokers in arbitration, disciplinary & default committees For trading members 40% representation
2. Infrastructure

On-line screen based trading terminals

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Conti..
3.

Settlement & clearing Weekly settlements

Auctions for non-delivered shares within 80 days of settlement Advice to set up clearing houses, clearing corporation or settlement guarantee fund Warehousing facilities permitted by SEBI.

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Conti..
4.

Debt market segment Regulates thru SEBI (depository & participants) regulation Act 1996.

Listing of debt instruments Invt. Range for FIIs Dual rating for above Rs.500 million

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Conti..
5.

Price stabilization Division to monitor the unusual movements in prices.

Monitor prices of newly listed scrip from the first day of trading. Circuit breaker system and other monitoring restrictions could be applied Imposing of special margins of 25% on purchase in addition to regular margin. Price filters Price bands

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ADVANTAGES
Fair deals to investors , informed choices & decision.
Regulating malpractices of company

management. Builds investors confidence in securities through efficient , orderly & clean markets.