SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI - Introduction
Established through an executive solution in 1988. Upgraded as fully autonomous body on 30th Jan1992. Setup to cover development and regulation of the market.

Objectives of the Board

To protect the interest of the investors in securities. To promote the development of securities market. To regulate the securities market.

Approaches of SEBI

Integrate the securities market at the national level. Diversify the trading products.

SEBI Administration

Consist of one chairman and six members One each from the Department of Finance and Law of Central Government. One from RBI Two other persons. Head office in Bombay Regional offices in Delhi, Calcutta and Madras.

Powers of Board

Issue Directions. Investigation. Cease and desist proceedings.

Functions of Board

Protect the interest of the investors and securities. Regulate the securities market. Prohibiting fraudulent and unfair trade practices relating to securities market. Prohibiting insider trading in securities. Conducting enquiries and audits.

Cont

Regulating substantial acquisition of shares and take over of companies. Calling for information from stock exchanges, mutual funds, other persons associated with the securities market. Inspection of any books, registers and other documents of any person.

SEBI Investors know how

Who is required to file with SEBI? Public Issue: Entry norms. Entry norm I (EN I) 1. Net tangible assets of at least rupees three crores for three full years. 2. Distributable profits in at least three years. 3. Net worth of rupees one Crore in three years.

4. If change in name at least 50 % revenue for proceeding one year should be from the new activity. 5. The issue size does not exceed five times the pre issue net worth.

Cont

1.

2.

Entry norm II (EN II) Issues shell be through book building root with at least 50 % to be mandatory allotted to the qualified institutional buyers (QIBs) The minimum post issue face value capital shell be rupees ten crores or there shell be compulsory market making for at least two years.

Cont

1.

2.

Entry norm III (EN III) The Project is apprised and participated to the extent of 15% by FIs/ scheduled Commercial banks of which atleast 10% comes from the appraiser(s). The minimum post issue face value capital shell be rupees 10 crores or there shell be a compulsory market making for at least two years.

Exempted from ENs

Private sector banks. Public sector banks. Rights issue by listed companies.

Merchant Bankers Bankers to Issue Brokers & sub-brokers

Code of Conduct

Portfolio Managers

Underwriters

PORTFOLIO MANAGER
Disclosures to the board. Producing various documents to the inspecting authority of the board. Information about the contract with clients.

BROKERS AND SUB BROKERS

GENERAL

Integrity. Compliance with statutory requirements. INVESTOR Execution of orders Issue of contract note Investment advice

UNDERWRITERS
Not to derive any benefit from underwriting the issue. Compliance with the rules and regulations, notifications of agreement for underwriting.

BANKERS TO ISSUE.
To execute diligence, professional dealings with clients. Not to indulge in unfair execution of its services. Submission of all various reports to the board.

INSIDER TRADING

Insider means any person who is or was connected with the company or is deemed to have been connected wuth the company and reasonably expected to have access to unpublished price sensitive information in respect of securities of the company.

PRICE SENSITIVE INFORMATION:

Periodical financial results of the company. Intended declaration of the dividend. Amalgamation, mergers and takeovers. Significant changes in the policies, plans or operations of the company.

PROHIBITION ON DEALING, COMMUNICATING AND COUNSELLING.

CODE OF CONDUCT
For prevention of the insider trading for listed companies. Compliance officer. Limited access confidential information. Disclosure of interest of holding by directors and officers.

VANISHING COMPANIES
Companies which have not compiled with listing requirements/ filing requirements of stock exchange. No correspondence has been received by the exchange from the company for a long time. No office of the company is located at the mentioned registered office address at the time of stock exchange inspection.

Contd

SEBI has a separate section operating under the primary market department, which handles the complaints about the vanishing companies and further action against the companies and their directors.