Security Exchange Board of India(SEBI)

CHAPTER 1 INTRODUCTION
The capital market has witnessed tremendous growth in recent times characterized particularly by the increasing participation of public. Investors confidence in the capital market can be sustained largely by ensuring investor protection. With this end in view, the government decided to vest SEBI immediately with statutory powers required to do effectively with all matters relating to capital market.

It was felt by the government that by transferring the powers of the controller of capital issues to an independent body it would enable it to effectively regulate, promote and monitor the working of stock exchange in the country.

Earlier, the regulation of the securities market was being done through the office of controller of capital issues under the capital issues (control) Act, 1947 which has been since reapled.

Accordingly, SEBI has been set up under the SEBI Act, 1992. The CCI Act has now ceased to have any application and stand withdrawn from the law w.e.f 246.5.1992. The Securities Exchange Board of India Act was passed by the parliament as Act No.15 of 1992 and received the assent of the President on 4th April, 1992.

The Securities and Exchange Board of India Act, 1992 (the SEBI Act) was amended in the years 1995, 1999 and 2002 to meet the requirements of changing needs of the securities market and responding to the development in the securities market.

Security Exchange Board of India(SEBI)

Based on the Report of Joint Parliamentary Committee (JPC) dated December 2, 2002, the SEBI Act was amended to address certain shortcomings in its provisions. The mission of SEBI is to make India as one of the best securities market of the world and SEBI as one of the most respected regulator in the world. SEBI also endeavors to achieve the standards of IOSCO/FSAP.

Security Exchange Board of India(SEBI)

CHAPTER 2 ESTABLISHMENT OF THE SECURITIES AND EXCHANGE BOARD OF INDIA

1) Establishment and incorporation of Board: a) With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Board by the name of the Securities and Exchange Board of India.

b) The Board shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued.

c) The head office of the Board shall be at Bombay.

d) The Board may establish offices at other places in India.

2) Management of the Board:a) The Board shall consist of the following members, namely:A Chairman; Two members from amongst the officials of the [Ministry] of the Central Government dealing with Finance [and administration of the Companies Act, 1956(1 of 1956)]; One member from amongst the officials of [the Reserve Bank]; 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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b) The general superintendence, direction and management of the affairs of the Board shall vest in a Board of members, which may exercise all powers and do all acts and things which may be exercised or done by the Board.

c) Save as otherwise determined by regulations, the Chairman shall also have powers of general superintendence and direction of the affairs of the Board and may also exercise all powers and do all acts and things which may be exercised or done by that Board.

d) The Chairman and members referred to in clauses (a) and (d) of sub-section (1) shall be appointed by the Central Government and the members referred to in clauses (b) and (c) of that sub-section shall be nominated by the Central Government and the [Reserve Bank] respectively.

e) The Chairman and the other members referred to in clauses (a) and (d) of subsection (1) shall be persons of ability, integrity and standing who have shown capacity in dealing with problems relating to securities market or have special knowledge or experience of law, finance, economics, accountancy, administration or in any other discipline which, in the opinion of the Central Government, shall be useful to the Board.

3) Term of office and conditions of service of Chairman and members of the Board:a) The term of office and other conditions of service of the Chairman and the members referred to in clause (d) of sub- section (1) of section 4 shall be such as may be prescribed.
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b) Notwithstanding anything contained in sub-section (1), the Central Government shall have the right to terminate the services of the Chairman or a member appointed under clause (d) of sub-section (1) of section 4, at any time before the expiry of the period prescribed under sub-section (1), by giving him notice of not less than three months in writing or three months salary and allowances in lieu thereof, and the Chairman or a member, as the case may be, shall also have the right to relinquish his office, at any time before the expiry of the period prescribed under sub-section (1), by giving to the Central Government notice of not less than three months in writing.

4) Removal of member from office:The Central Government shall remove a member from office if he Is, or at any time has been, adjudicated as insolvent; Is of unsound mind and stands so declared by a competent court; Has been convicted of an offence which, in the opinion of the Central Government, involves a moral turpitude; Has, in the opinion of the Central Government, so abused his position as to render his continuation in office detrimental to the public interest: Provided that no member shall be removed under this clause unless he has been given a reasonable opportunity of being heard in the matter.

5) Meetings:a) The Board shall meet at such times and places, and shall observe such rules of procedure in regard to the transaction of business at its meetings (including quorum at such meetings) as may be provided by regulations.

Security Exchange Board of India(SEBI)

b) The Chairman or, if for any reason, he is unable to attend a meeting of the Board, any other member chosen by the members present from amongst themselves at the meeting shall preside at the meeting.

c) All questions which come up before any meeting of the Board shall be decided by a majority votes of the members present and voting, and, in the event of an equality of votes, the Chairman, or in his absence, the person presiding, shall have a second or casting vote.

6) Member not to participate in meetings in certain cases:Any member, who is a director of a company and who as such director has any direct or indirect pecuniary interest in any matter coming up for consideration at a meeting of the Board, shall, as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and such disclosure shall be recorded in the proceedings of the Board, and the member shall not take any part in any deliberation or decision of the Board with respect to that matter. 7) Vacancies etc., not to invalidate proceedings of Board:No act or proceeding of the Board shall be invalid merely by reason of Any vacancy in, or any defect in the constitution of, the Board; or Any defect in the appointment of a person acting as a member of the Board; or Any irregularity in the procedure of the Board not affecting the merits of the case.

8) Officers and employees of the Board:a) The Board may appoint such other officers and employees as it considers necessary for the efficient discharge of its functions under this Act.
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b) The term and other conditions of service of officers and employees of the Board appointed under sub- section (1) shall be such as may be determined by regulations.

Security Exchange Board of India(SEBI)

CHAPTER 3 DUTIES AND POWERS OF SEBI

SEBI has to be responsive to the needs of three groups, which constitute the market:

The issuers of securities The investors The market intermediaries.

SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is presently headed by a former Chief Justice of a High court -Mr. Justice N.K.Sodhi. A second appeal lies directly to the Supreme Court. SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively. SEBI has been active in setting up the regulations as required under law. SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. It had increased the extent and quantity of disclosures to be made by Indian corporate promoters. More recently, in light of the global melt down, it liberalized the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to Rs 2 lakh, from Rs 1 lakh at present. Powers For the discharge of its functions efficiently, SEBI has been invested with the necessary powers which are:
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1. To approve bylaws of stock exchanges. 2. To require the stock exchange to amend their bylaws. 3. Inspect the books of accounts and call for periodical returns from recognized stock exchanges. 4. Inspect the books of accounts of a financial intermediary. 5. Compel certain companies to list their shares in one or more stock exchanges. 6. Levy fees and other charges on the intermediaries for performing its functions. 7. Grant license to any person for the purpose of dealing in certain areas. 8. Delegate powers exercisable by it. 9. Prosecute and judge directly the violation of certain provisions of the companies Act.

Security Exchange Board of India(SEBI)

CHAPTER 4 DEPARTMENT OF SEBI AND ITS FUNCTIONS

1) MARKET INTERMEDIARIES REGULATION AND SUPERVISION DEPARTMENT (MIRSD):- The Market Intermediaries Regulation and Supervision Department is responsible for the registration, supervision, compliance monitoring and inspections of all market intermediaries in respect of all segments of the markets viz. equity, equity derivatives, debt and debt related derivatives. The Department also handles the work related to action against the intermediaries for regulatory violations (As regards action it is clarified that the current practice of issuing show cause notices, appointment of Enquiry/Adjudication officers and consequential action up to serving of Chairman order and maintenance of database will be with the respective Divisions). The following divisions will perform the functions of the department. 1) MIRSD-1 (A-M) This division would look after work relating to registration, monitoring, supervision, inspection, investor grievances and policy related issues of Stock Brokers and Fees related matters including coordination of summary proceedings. 2) MIRSD-2 (N-Z) This division would look after the work relating to Registration, monitoring, supervision, inspection, and investor grievances and policy related issues of Stock Brokers and Sub-Brokers. 3) MIRSD-3 This division would look after the work relating to Registration, monitoring, supervision, inspection, investor grievances and policy related issues of the following Primary market related intermediaries: i) Merchant Bankers

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ii) Registrars to Issue iii) Bankers to Issue iv) Underwriters. 4) MIRSD-4 This division would look after the work relating to Registration, monitoring, supervision, inspection, and investor grievances and policy related issues of the following intermediaries: a) Debenture Trustees, b) Credit Rating Agencies c) Depository Participants 5) MIRSD-5 This division looks into the matters relating to the following intermediaries: a) Sub-brokers b) Debenture Trustees c) Bankers to Issue 2) MARKET REGULATION DEPARTMENT (MRD):The Market Regulation Department is responsible for supervising the functioning and operations (except relating to derivatives) of securities exchanges, their subsidiaries, and market institutions such as Clearing and settlement organizations and Depositories. (Hereinafter collectively referred to as Market SROs) The following Divisions will perform the functions of the Department:

a) Division of Policy The Division will handle the work related to policy and practice relating to Market SROs i.e., securities exchanges, clearing and settlement organizations and depositories; market policy, trading, clearance, settlement issues, risk management,
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and related areas; Reviewing rules and rule-change proposals of these Market SROs relating to market policy issues (except for listing matters standards in purview of Corporation Finance Department); Procedures for suspending trading of securities.

b) Division of SRO Administration The Division will handle the work related to Registration and recognition of the Market SROs; administration of these Market SROs; Demutualization or Corporatization of exchanges; reviewing rule change proposals relating to nonmarket policy issues; supervision of the market SROs to the extent of compliance with regulatory provisions through periodical reports and regulatory action. (As regards action it is clarified that the current practice of issuing show cause notices, appointment of Enquiry/Adjudication officers and consequential action up to serving of Chairmans order and maintenance of database will be with the Division).

c) Division of Market supervision The Division will hand the work related to conducting compliance, examinations and inspections of Market SROs.

d) Investor Complaints Cell The cell would receive complaints relating to the market SROs from the Office of Investor Assistance and Education (OIAE) and take follow up action and report back to the OIAE. If regulatory action is required, the Cell shall inform the Division of SRO Administration besides reporting to OIAE.

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3) DERIVATIVES AND NEW PRODUCTS DEPARTMENT (DNPD):a) Division of Policy and Supervision The Division is responsible for supervising the functioning and operations of derivatives exchanges and related market organizations. In order to accomplish its tasks, this division would be responsible for the following: a) Derivatives market policy issues. b) Approval of new derivative products c) Monitoring the functioning of derivatives exchanges including conducting inspections and compliance exams. d) Prescribing and Monitoring risk management and settlement practices in derivatives exchanges e) Developing the trading and settlement framework for new products. f) Regulatory action was required. As regards action it is clarified that the current practice of issuing show cause notices, appointment of g) Enquiry/Adjudication officers and consequential action up to serving of Chairman Order and maintenance of database will be with the Division.

4) CORPORATION FINANCE DEPARTMENT (CFD):The Corporation Finance Department deals with matters relating to (i) Issuance and listing of securities, including initial and continuous listing requirements (ii) corporate governance and accounting/auditing standards (iii) corporate

restructuring through Takeovers / buy backs (iv) Delisting etc. The following divisions form part of this Corporation Finance Department:a) Division of Issues and Listing (DIL)

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Policy pertaining to (i) primary market (ii) disclosures (initial as well as continuous) (iii) listing (iv) corporate governance (v) Employee Stock Option (vi) Preferential issues (vii) Qualified Institutional Placement (QIP) (viii) common electronic filing platforms viz. EDIFAR & CFDs (ix) listing conditions and (x) vanishing companies in consultation with Ministry of Corporate Affairs (MCA) through the framework of Coordination and Monitoring Committee (CMC), set up by Government of India. Issue of observations on the draft offer documents of public and rights issues. Operational matters pertaining to accounting standards, compliance with corporate governance, guidance to Stock Exchanges on listing matters, vanishing companies in consultation with respective Registrar of Companies, allegations of non-compliance with listing agreement etc. The following Committees of SEBI:a) Primary Market Advisory Committee (PMAC)- to advise SEBI on policy issues pertaining to Primary Market. b) SEBI Committee of Disclosures and Accounting (SCODA) - to advise SEBI on disclosures and accounting related issues. Regulatory action where required(As regards action it is clarified that the current practice of issuing show cause notices, appointment of Enquiry/Adjudication officers and consequential action upto serving of Chairman Order and maintenance of database will be with the Division).

b) Division of Corporate Restructuring: The Division will handle the work relating to: Policy related to corporate restructuring
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Substantial Acquisition and Takeovers Buy back of securities Delisting of Securities Coordinating with the Takeover Panel Regulatory action where required. (As regards action it is clarified that the current practice of issuing show cause notices, appointment of Enquiry/Adjudication officers and consequential action up to serving of Chairman Order and maintenance of database will be with the Division). Investor complaints relating to corporate restructuring. 5) INVESTMENT MANAGEMENT DEPARTMENT (IMD):The Investment Management department is responsible for registering and regulating mutual funds, venture capital funds, foreign venture capital investors, and collective investment schemes, including plantation schemes, Foreign Institutional Investors, Portfolio Managers and Custodians. The following Divisions will perform the functions of the Department; Division of Funds 1((Portfolio Managers, Venture Capital, Corporate Bonds, etc.) 2 (Mutual Funds) and 3 (Inspection of Mutual Funds) : The Divisions handle the following works related to their respective entities: a) Registrations b) Policy related issues c) Inspections d) Investor Complaints e) Regulatory actions.

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Division of Foreign Institutional Investors and Custodian The Division will handle all work related to: a) FIIs b) Custodians c) Regulatory action wherever required. Division of Collective Investment Schemes: This Division administers the SEBI (Collective Investment Schemes) Regulations 1999. It includes work relating to the following: a) Existing CIS entities b) Investigating complaints of purported CIS entities c) Grant of provisional registration to existing CIS entities in terms of regulation 73 of the Regulation d) Taking action against the entities for non compliance with the regulations like, prohibitory orders and launching prosecutions against errant entities and their promoters/ directors and key management personnel. e) Providing evidences in courts pertaining to prosecution proceedings. f) Registration of Collective Investment Management Companies - CIMC

6) INVESTIGATIONS DEPARTMENT (IVD):The Investigations department is responsible for: Conducting investigations on potentially illegal market activities Providing referrals to the enforcement department. Assisting the enforcement department in enforcing SEBI action against violators.
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Security Exchange Board of India(SEBI)

(As regards action, the current practice of issuing show cause notices, appointment of Enquiry/Adjudication officers and consequential action up to serving of Chairman Order and maintenance of database will be with the Department). 7) ENFORCEMENT OF DEPARTMENT (EFD):Enforcement Department is responsible for proceedings related to regulatory action and obtaining redress for violations of securities laws and regulations against all market participants, issuers and individuals and other entities that breach securities laws and regulations. The following Divisions will perform the functions of the Department; a) Division of Regulatory Action The division shall enforce action against market misdemeanors through SEBI administrative proceedings. The role of the Division shall commence from the time the hearing before Chairman/Board is proposed. The Division will assist the Chairman/Board in its proceedings, prepare the orders, and handle all matters relating to SAT, appeals against SAT orders and Court cases relating to regulatory action. The Division will also frame the procedures relating to the above matters.

b) Division of Prosecutions The division shall handle work related to filing prosecution proceedings through the courts and follow up to obtain conviction. The Division will also frame procedures for cooperation with public prosecutors, other agencies and for making referrals to prosecutors and other government agencies.

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Security Exchange Board of India(SEBI)

CHAPTER 5 PENALTIES AND ADJUDICATION

1) Penalty for failure to furnish information, return, etc:If any person, who is required under this Act or any rules or regulations made there under, To furnish any document, return or report to the Board, fails to furnish the same, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less To file any return or furnish any information, books or other documents within the time specified there for in the regulations, fails to file return or furnish the same within the time specified there for in the regulations, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less. To maintain books of accounts or records, fails to maintain the same, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less. 2) Penalty for failure by any person to enter into agreement with clients:If any person, who is registered as an intermediary and is required under this Act or any rules or regulations made there under to enter into an agreement with his client, fails to enter into such agreement, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.

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3) Penalty for failure to redress investors' grievances:If any listed company or any person who is registered as an intermediary, after having been called upon by the Board in writing, to redress the grievances of investors, fails to redress such grievances within the time specified by the Board, such company or intermediary shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less. 4) Penalty for certain defaults in case of mutual funds:If any person, who is Required under this Act or any rules or regulations made there under to obtain a certificate of registration from the Board for sponsoring or carrying on any collective investment scheme, including mutual funds, sponsors or carries on any collective investment scheme, including mutual funds, without obtaining such certificate of registration, he shall be liable to a penalty of one lakh rupees for each day during which he sponsors or carries on any such collective investment scheme including mutual funds, or one crore rupees, whichever is less. Registered with the Board as a collective investment scheme, including mutual funds, for sponsoring or carrying on any investment scheme, fails to comply with the terms and conditions of certificate of registration, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less. registered with the Board as a collective investment scheme, including mutual funds, fails to make an application for listing of its schemes as
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provided for in the regulations governing such listing, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees , whichever is less. registered as a collective investment scheme including mutual funds fails to dispatch unit certificates of any scheme in the manner provided in the regulation governing such dispatch, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less. registered as a collective investment scheme, including mutual funds, fails to refund the application monies paid by the investors within the period specified in the regulations, he shall be liable to pay a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.

5) Penalty for failure to observe rules and regulations by an asset management company:Where any asset management company of a mutual fund registered under this Act, fails to comply with any of the regulations providing for restrictions on the activities of the asset management companies, such asset management company shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.

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6) Penalty for failure in case of stock brokers:If any person, who is registered as a stock broker under this Act, fails to issue contract notes in the form and in the manner specified by the stock exchange of which such broker is a member, he shall be liable to a penalty not exceeding five times the amount for which the contract note was required to be issued by that broker; fails to deliver any security or fails to make payment of the amount due to the investor in the manner within the period specified in the regulations, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less. Charges an amount of brokerage which is in excess of the brokerage specified in the regulations, he shall be liable to a penalty of one lakh rupees] or five times the amount of brokerage charged in excess of the specified brokerage, whichever is higher.

7) Penalty for insider trading:If any insider who, either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stock exchange on the basis of any unpublished price sensitive information; or

8) Penalty for non-disclosure of acquisition of shares and take-overs:If any person, who is required under this Act or any rules or regulations made there under, fails to,-

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Disclose the aggregate of his shareholding in the body corporate before he acquires any shares of that body corporate; or Make a public announcement to acquire shares at a minimum price; Make a public offer by sending letter of offer to the shareholders of the concerned company; or Make payment of consideration to the shareholders who sold their shares pursuant to letter of offer. he shall be liable to a penalty twenty-five crore rupees or three times the amount of profits made out of such failure, whichever is higher. 9) Penalty for fraudulent and unfair trade practices.If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty-five crore rupees or three times the amount of profits made out of such practices, whichever is higher.

10) Penalty for contravention where no separate penalty has been provided.Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the Board there under for which no separate penalty has been provided, shall be liable to a penalty which may extend to one crore rupees.

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CHAPTER 6 REGISTRATION CERTIFICATE

1) Registration of stock brokers, sub-brokers, share transfer agents, etc. -broker, sub- broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of certificate of registration obtained from the Board in accordance with the [regulations] made under this Act: Provided that a person buying or selling securities or otherwise dealing with the securities market as a stock- broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market immediately before the establishment of the Board for which no registration certificate was necessary prior to such establishment, may continue to do so for a period of three months from such establishment or, if he has made an application for such registration within the period of three months, till the disposal of such application. No depository, [participant,] custodian of securities, foreign institutional investor, credit rating agency or any other intermediary associated with the securities market as the Board may by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act. No person shall sponsor or cause to be sponsored or carry on or cause to be carried on any venture capital funds or collective investment schemes
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including mutual funds, unless he obtains a certificate of registration from the Board in accordance with the regulations.

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CHAPTER 7 INVESTIGATION, ENFORCEMENT AND SURVEILLANCE

A well-regulated market fosters investors confidence in its fairness and integrity by ensuring true and fair price discovery, prompt detection of market manipulations and safety of the markets through risk containment measures and effective enforcement. With a view to achieve these objectives, the SEBI took several initiatives both at macro and micro level, which are briefly discussed below. a) Market surveillance:The Investigation, Enforcement and Surveillance Department since its inception organized itself to carry out its responsibility of protecting the investors and ensuring a healthy development of the securities markets. Market Surveillance Division was set up in the SEBI in July 1995, with a view to effectively monitor abnormal market movements and detects market manipulations. It was involved in monitoring the market movements, identifying price volatility, analyzing its causes and overseeing the surveillance activities of the stock exchanges. The main source of information for the Market Surveillance Division is the trading data obtained from the stock exchanges, newspaper reports, investor complaints, market intelligence, etc. It also analyses major market movements in the wake of significant market sensitive information. Some of the surveillance systems and risk containment measures that were put in place during 1997-98 are: market monitoring by independent surveillance cells of stock exchanges; stock exchanges reporting to SEBI through settlement reports and pre-issue monitoring reports; risk containment measures in the form of elaborate margining system comprising of daily, special, penal and mark to market margins;
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circuit filters, daily price bands and weekly price caps to curb abnormal price behaviour and volatility; intra-day trading and gross exposure limits for stock brokers linked with capital adequacy; suspension of trading in scrips to prevent market manipulation; inspection of intermediaries; enhancement of SRO capabilities of stock exchanges; interactive and pro-active oversight by the SEBI; Formation of Inter Exchange Market Surveillance Group for prompt and effective co-ordination between stock exchanges.

b) Strengthening of surveillance and monitoring mechanisms:During 1997-98, further steps were taken at the level of the SEBI and the stock exchanges under the oversight of the SEBI to improve and strengthen their surveillance capabilities. Some of the developments in this regard are briefly given below.

c) Meetings of the Inter Exchange Market Surveillance Group:During 1997-98, SEBI convened two meetings of the Inter Exchange Market Surveillance Group. The first meeting was held on July 14, 1997 and the second meeting was held on December 17, 1997. The Group discussed market trends; various risk containment measures that needed to be revised and new measures to be implemented. It also discussed issues relating to dissemination of price sensitive information to the public, dealing with market

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d) Uniform intra-day price band of 10 per cent:Presently, there is a price variation cap of 25 per cent during a settlement which was uniformally implemented by all the stock exchanges. The intra-day price variation was flexible in range upto 10 per cent subject to the settlement variation cap of 25 per cent. Now, it is implemented uniformly at 10 per cent intra-day variation by all the stock exchanges.

e) Price bands in respect of infrequently traded scrips:There was a need to have a uniform guideline in respect of price bands on infrequently traded scrips. A small group was formed comprising of representatives of Mumbai, NSEIL and Delhi stock exchanges to frame guidelines and a basis on which such price bands could be fixed. The group has already given some deliberation on this issue and their final report is expected shortly.

f) Public disclosure of information relating to actions taken against stockbrokers:As the action taken against the member brokers of the stock exchanges including penal actions were not disclosed to other market participants by all the stock exchanges, it was felt that such actions need to be disclosed in the larger interest of the investors and market participants. The stock exchanges were therefore asked to make public the actions taken by the Disciplinary Action Committee of the stock exchanges against their member brokers. The stock exchanges were also asked to issue press releases when such actions are of serious nature.

g) Dissemination of price sensitive information to public:There was a need to have proper method for dissemination of price sensitive and other important information relating to corporate and market to the public so that
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they can make informed investment decisions. The stock exchanges were asked to display such information on their terminals in the quickest possible manner.

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CHAPTER 8 CONCLUSION
The enactment of the SEBI Act within the context of other statutes such as the Companies Act and Depositories Act has provided a strong regulatory framework for the Indian market. Subsequently much of the growth of the Indian market can be attributed to the robust processes for issuance, pricing, allotment and listing of securities enabled by SEBI. Strengthening SEBI's power in the investigative, administrative and legal aspects of enforcement would enable it to speedily address legal challenges such as those faced during dematerialization or disclosure requirements. In the future, SEBI should adopt more transparency to gain higher public confidence.

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CHAPTER 9 BIBLIOGRAPHY

Websites www.google.com

www.wikipedia.com

www.sebi.gov.in

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