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SECURITIES EXCHANGE BOARD OF INDIA

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OBJECTIVES OF ESTABLISHMENT 

To remove shortcomings and deficiencies and to regulate the capital market, the Government of India set up the SEBI in 1998.

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functions  

To regulate all merchant banks on issue activity, lay guidelines and supervise and regulate the working of mutual funds and oversee the working of stock exchanges in India To introduce improved practices and greater transparency in the capital markets in the interest of the investing public and the healthy development of the capital markets.
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Role of SEBI: Primary Market Reforms in India

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Role of SEBI: Primary Market Reforms in India  

  

Companies issuing capital in the primary markets are now required to disclose all material facts and specific risk factors with their projects They should also give information regarding the basis of calculation of premium leaving the companies free to fix the premium. It also introduced a code of advertisement for public issues for ensuring fair and truthful disclosures. To encourage IPO SEBI has permitted companies to determine the par value of shares issued by them ( now it is Rs. 10 and Rs.100) SEBI has allowed issues of IPOs to go for BOOK BUILDING ie., reserve and allot shares to individual investor. But the issuer will have to disclose the price, the issue size and the number of securities offer to the public
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Role of SEBI: Primary Market Reforms in India Private Placement :
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A private placement is a direct private offering of securities to a limited number of sophisticated investors. It is the opposite of a public offering 

Underwriting of issue optional, subject to the condition that if an issue was not underwritten and was not able to collect 90% of the amount offered to the public; the entire amount collected would be refunded to the investors.

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Role of SEBI: Primary Market Reforms in India 

The merchant bankers are now to be authorized by SEBI. They have to adopt the stipulated capital adequacy norms, abide by a code of conduct which specifies a high degree of responsibility towards investors in respect of pricing and premium fixation of issues and disclosures in the prospectus or offer letters .
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Role of SEBI: Primary Market Reforms in India 

SEBI advised stock exchanges to amend the listing agreement to ensure that a listed company furnishes annual statement showing variations between financial projections and projected utilization of funds in the offer document and the actual utilisation

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Role of SEBI: Primary Market Reforms in India  

UTI has now been brought under the regulatory jurisdiction of SEBI SEBI has relaxed the guidelines for investment in money market instruments.

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Role of SEBI: Secondary Market Reforms in India

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Role of SEBI: Secondary Market Reforms in India  



It has started process of registration of intermediaries such as the stock brokers and subbrokers under the provisions of the Securities and Stock Exchange Board Act, 1992. The registration on the basis of certin eligibility norms such as capital adequacy, infrastructure etc. SEBI also made rules for making client/broker relationships more transparent, in particular, segregating client and broker accounts.

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Role of SEBI: Secondary Market Reforms in India 

Insider Trading:
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An illegal activity in which persons in a company having confidential information, such as expansion plans, financial results, takeover bids, etc., take advantage of such information to make a profit on the stock exchange by buying or selling shares.

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Role of SEBI: Secondary Market Reforms in India 
 

SEBI has notified regulations on insider trading under the provisions of SEBI Act. Since 1992, SEBI has constantly reviewed the traditional trading systems in Indian Stock Exchanges. IT is simplifying procedures and achieving transparency in cost and prices at which consumers¶ orders are executed, speeding up clearing and settlement, and, finally transfer of shares in the names of buyers
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Role of SEBI: Secondary Market Reforms in India The GOI has allowed FII such as Pension Funds, Mutual Funds, Investment Trusts, Asset or Portfolio Management companies etc. to invest in the Indian Capital Markets provided they are registered with SEBI To prevent Excessive speculation and volatility in the stock market, SEBI has introduced Rolling Settlements from July, 2001 under which settlement has to made every day.
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THANK U

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