Project on Overview of Selected objectives of SEBI Prepared by Shubhangi Bhanudas Ghadge T.Y.B.

Com (banking & insurance) Semester V Roll no.06 Year 2011-12 Under the guidance of Professor. Bhavika karkera Submitted to Shailendra Education Societys Arts, commerce, & Science College (NAAC accredited B+) Affiliated to University of Mumbai Dahisar (E), Mumbai 40006

ACKNOWLEDGEMT
It gives me a great pleasure to present my project on Overview of Selected Objectives of SEBI. I am very thankful of our co-coordinator Mrs. Bhavika Karkera, who always helped me to complete my project. Without her support and motivation this project would not have seen the light of the day, her review, comments, suggestions, have enormously enriched my project. I also would like to thank Mrs.Ahuja. P. jadhav madam who is our librarian and who supported me by giving various books, magazines related to my project and to help me in completion of my project. And lastly I will also thank my friends, who helped me in completing my project. Before conducting this project I was having limited knowledge about SEBI but this project helped me to expand my knowledge related to IDBI.

INDEX

Sr.no
1 2 3

chapters
INTRODUCTION HISTORY OF SEBI SEBI FULFILING ITS OBJECTIVES

Page no
4-10 11-13 14-23

4 5

PRIMARY DATA ANALYSIS FINDINGS AND CONCLUSIONS

24-54 55-59

SUGGESTIONS AND RECOMMENDATIONS

60-61

BIBLIOGRAPHY ANNEXURE I QUESTIONERIRE

62-6

CHAPTER 1: INTRODUCTION

1.1 INTRODUCTION 1.2 CONSTITUTION AND ORGANISATION

1.3 RESEARCH AND OBJECTIVE 1.4 BACKGROUND

1.5 LIMITATIONS OF PROJECT 1.6 RESEARCH METHODOLOGY

CHAPTER1.INTRODUCTION TO SEBI

1.1

INTRODUCTION

As it is very necessary for the road which is heavily crowded to have traffic police man to regulate the traffic in an orderly manner and to see that there are no accidents, similarly the same way here SEBI (securities and exchange board of India) act as a regulatory body that regulates stock exchange intermediaries so that there is no loss to the public. It takes care that all the intermediaries are working efficiently and with honesty with the interest of the investor .the investor are the backbone of the stock exchange so there care is first and foremost duty of the regulatory body. The SEBI has put in lots of efforts to make the market move smoothly and grow faster with avoiding the frauds and errors by intermediaries and companies handle the finance of the investor which have to be rightly use in order to earn profit and give return to investor thus SEBI became necessary for the investors protection .

1.2

CONSTITUTION AND ORGANISATION

The SEBI is a body of six members comprising the chairman two members amongst the officials of ministry of central government dealings with finance and law, two members who are

Professional and have experience or special knowledge related to securities market and one member from RBI. all except the RBI members are appointed by government who lays down their term of office tenure and condition of service and who can also remove any members from office under certain circumstances .the central government is empowered to supersede the SEBI in public interest or if ,on account of grave emergence ,its unable to discharge its functions or duties ,or if persistently defaults in complying with any directions issued by governments ,or if its financial position and administration deteriorates. The work of the SEBI has been organized into five operational department each of which is headed by an executive director who reports to the chairman. Besides, there is a legal department and the investigation department. The department has been divided into two divisions .the various departments and scope of their activities are as follows

The primary market policies intermediaries, self regulations (SROs), investors grievance and guidance department. It looks after all policy matter and regularly issues in respect of primary market , registration ,merchant bankers , portfolio management service ,investment advisors, debenture trustee , underwriters ,SROs and investor grievance ,education and association .

The issue management and intermediaries department it is responsible for vetting of all prospectuses and letter of offer for public rights issue,

For co ordination with the primary market policy, for registration, regulation and monitoring off issues related to intermediaries.

The secondary market policy ,operations and exchange administration ,new investment products and insider trading department it is responsible for all the policy and regulatory issues for the secondary market and new investment product , registration and monitoring of members of stock exchange , administration of stock exchange ,market surveillance and monitoring of price movements, insider trading and EDP and SEBIs data base. The secondary market exchange administrator ,inspection and non members intermediary department it looks after the smaller stock exchange of Guwahati , Magadh, Indore ,Mangalore , Hyderabad , Bhubaneswar ,Kanpur ,Ludhiana , and cochin .it is also responsible for inspection of all stock exchange registration , regulations and monitoring of non members intermediaries such as sub brokers .

Institutional investment (mutual fund and foreign institutional investment) mergers and acquisitions , research and publications ,and international relation and IOSCO department it looks after the policy ,
2

registration regulation and monitoring of foreign institutional investors (FIIs), domestic mutual fund , mergers and substantial acquisition of shares and IOSCO (international organization of security commission). Membership, international raters and research, publication and council report of SEBI. Legal departments look after all legal matters under the supervision of the general council. Investigation department carries out inspection and investigation under the supervision of the chief of investigation.

1.3 RESEARCH OBJECTIVES

To identify different types of investor. To study the guidelines of SEBI in respect of investors protection. To identify intermediaries in the security market. To study rules and regulations of SEBI in respect of intermediaries dealing in market.

1.4 BACKGROUND

The objectives of investor protection is selected because the investor almost is important part of market as they are one who are at the maximum risk of ultimate losing their money. The guideline of SEBI are studied to know the legal frame work for investors protection To identify the intermediaries as they are operating in market and take the money of public for investing. The guidelines of intermediaries are studied to know the functions of intermediaries.

1.5 Limitations of Project

Only limited guidelines and regulations are studied for investor protection Overview of objectives of SEBI is taken.

All the intermediaries are not studied in the projects. studied

All the regulations and guidelines regarding the intermediaries are not

1.6 Research Methodology Primary data is the data collected from direct source, primary data was collected from the institution of merchant banker, Mutual
1

Fund Company, brokers, sub brokers. My sample study consist 15 institution that is the above mentioned intermediaries from which questioner of seven questions were filled. The questioner consist of data that how did they act to SEBI guidelines enforcement. Sample study also consist of ten individual investor who invested in stock exchange to know there attitude and knowledge about the SEBI guidelines This question gives the information about the SEBI efficient work For the investor protection. A small questioner is also collected from SEBI which gives information about the workers of SEBI in the market.

CHAPTER 2 HISTORY OF SEBI

CHAPTER: 2 HISTORY OF SEBI

The SEBI was established in 12th April 1988 through an administrative order, but it became a statutory and really powerful organization only since 1992. The CICA was repealed and the office of CCI was abolished in 1992 and the SEBI was set up on 21st February 1992 through an ordinance issued on 30th January 1992. The ordinance was replaced by SEBI act on 4th April 1992. Certain powers under certain sector of SCRA and CA have been deleted to the SEBI. The regulatory powers of SEBI were increased through the securities law (amendment) ordinance of January 1995 which was subsequently replaced by an act of parliament. The SEBI is under the overall control of ministry finance and has its head office in Mumbai. It has now become a very important constituent of financial regulation framework in India .The philosophy

Underlining the creation of SEBI is that multiple bodies for securities industries mean that the regulatory system gets dividend, causing confusion among market participant as to who is really on command

.in a multiple regulatory structure there is also an overlap of functions of different regulatory bodies.

Through the SEBI, the regulation model which is sought to be put in place in India is one which every aspect of security market regulation is entrusted to a single highly visible and independent organization, which is backed by a statue and which is accountable to the parliament and in which investor can have trust.

CHAPTER 3. SEBI FUILFILLING ITS OBJECTIVES

PRIMARY SECURITY MARKET SECONDARY MARKET AND INTERMEDIARY

MUTUAL FUNDS MISCELLANEOUS

CHAPTER 3. SEBI FULFILING ITS OBJECTIVES

Since the enactment of the SEBI act 1992 financial institutions agencies and marketing intermediaries are been governed by the guidelines, rules and regulations notified by SEBI from time to time. Few major policies measures and reforms introduced by SEBI during 1992-1996

PRIMARY SECURITY MARKET

The issue of capital by companies no longer requires any consent from any authority either for making the issue or for pricing it

Efforts have been made to raise the standard of disclosure in public issue and enhance the transparency. The SEBI has accepted and implemented almost all the Malegam committee appointed by it in 1994-95 in this connection.

The offer document is now made public even at the draft stage

Companies making their first public issue are eligible to do so only if they have three years of dividend paying track record preceding an

issue .Those not meeting this requirement can still make an issue if their project are upraised by bank or foreign institute with minimum 10% of participation in the equity capital of the issue, or if their securities are listed on the OTCEI (over the counter exchange of India).

For issue above Rs 100crore ,Book building process has been introduced

The pricing of preferential allotment has to be at market related levels and there is a five year lock in period for such allotment.

In case of proportionate allotment scheme, a minimum of 50% of net offer to the public is to be reserved for individual investor applying for securities not exceeding 1000 securities and the remaining part can be allotted to application for more than 1000 securities.

Initially the underwriting of the issue to public was mandatory, but now this stipulation has been removed .During 1995-96, the SEBI granted registration to four underwriters bringing their total number to 40.

Banker to an issue and portfolio manager has to be registered with SEBI. There were 77 bankers to the issue thus registered as of 31 March 1996.

SECONDARY MARKET AND INTERMEDIARIES

The governing boards and various committees of stock exchange (SEs) have been recognized, restructured a board based.

The inspection of all 22 stock exchanges has been carried out to determine the extent of compliance with directives of SEBI.

Computerized or screen based trading has achieved on almost all exchange except some of the smaller one

Corporate membership of SEs allowed encouraged and preferred. The article of association of SEs has been amended so as to increase their membership.

All the SEs have been directed to established either a clearing house or a clearing corporation

The Bombay stock exchange has been asked to reduce their trading period or settlement cycle from 14 to7 days for B group of shareholders

A process through which a investors grievances against brokers may find redressed through a complaint to SEBI has been put in place.

The SEBI has been instructed to set up independent market surveillance department .The SEBI has strengthened its own investigation and enforcement machinery.

All the recommendation of Dave committee for improving the working of OTCEI has been accepted.

In accordance with the recommendations of GS Patel committee BSE has been allowed to introduced a revised carry forward system (CFS) of trading .Other SEs can introduce forward trading only with prior permission of SEBI .Transactions are not allowed to be carried forward more than 19 days now. The shares received by financiers funding carry forward transaction have to be deposited and kept in safe custody of clearing house of stock exchange and its authorized agent every member is required to keep books and record the source of

finance with the sub accounts being maintained in the clearing house .The likewise carry forward position has to be disclosed to the
1

market .The SEs are required to introduce the twin track system which will segregate transaction into carry forward and cash transaction and each

One of the former will be indentified with a transaction identification number till its final settlement.

The brokers are required to ensure segregation of client account & owned account. The capital adequacy norms of 3 percent for individual brokers & 6 percent for corporate brokers introduced.

Both of the brokers & sub brokers have been brought within the regulatory fold for the first time now; & the concept of the dual registration of stock brokers with the SEBI & the Ses has been introduced. The total number of registered brokers & sub brokers was 8, 746 at the end of March 1996, of which 1917 were corporate members.

Penal action can now be taken directly by the SEBI against any member of a stock exchange for violation of any provision of the SEBI Act.
2

 It has been made mandatory for the stock brokers to disclose the transaction price & brokerage separately in the contract notes issued by them to their client. The daily margin & additional margin for volatile scrips are now lei vied on a weekly & marked to- marked basis.

The Ses have amended their listing agreements such that the issuer have now to provide share holders with a cash flow statement in a prescribed format, along with the complete balance sheet & profit & loss statement.

The trading hours in all most all the Ses have now been in realized from 2 & half hour to 3 hours per day.

Compulsory audit of the brokers books & filing of the audit reports with the SEBI has now been made mandatory.

A system of market making in less liquid scrips on selected SEs has been introduced.

Insider trading has been prohibited & such trading had been made a criminal offence punishable in accordance with the provisions of the SEBI Act. Registrars to Issue(RI) & Shares Transfers Agent(STA) have now been classified into two group : (a) Category 1 with a minimum net worth requirement of Rs. 6 Lakh who can carry on the activities both as RI & STA & (b) Category 2 with a minimum net worth requirement of Rs. 3 Lakh who can carry on any of these activities. There were 209 RI & STA in category 1 & 125 in category at the end of March 1996.

Till end- August 1997, Merchant Bankers (MBs) were classified into four categories, each with different responsibilities & commensurate with capital requirements, with effect from September 1997, such a classification has been abolished & there will be only one entity now, namely, merchant bankers. A system of penalty points of MBs for default committed by them has been introduced. It is provided that they can be suspended or reauthorized after a maximum of 8 penalty points. The MBs have to fulfill capital adequacy requirement also. During 1995-96, 231 MBs were granted registration of nine MBs was cancelled. The number of MBs was 1,012 in 1995-96 & 790 in 199495.

Mutual Funds

March 31, 1996, 26 Mutual Fund excluding the UTI, were registered with the SEBI. Mutual funds are required to have a board of trustees or Trustee Company separate from the asset management company, & securities belonging to the various schemes are required to be kept with an independent custodian. There has to be an arms length relationship between the trustees, the asset management company. & the custodian. The SEBI (Mutual Fund) regulations, 1993 were revised to provide for portfolio disclosure, standardization of accounting policies, valuation norms for determining net asset value & pricing. The UTI has been organized under the UTI Act, 1963, & it has evolved as a distinct institution. Therefore, certain special dispensations have been provided to it under the SEBI regulatory framework. Subject to this, the UTI also has been brought under the SEBI since July 1994. As a result, new schemes of the UTI also fall under the jurisdiction of the SEBI.

Miscellaneous

 Foreign institutional investors also required to be registered with the SEBI. The total number of them so registered was 367 as of march 31, 1996.

It is required that the capital to be registered as depositories must be Rs. 100 crore. Similarly custodians are required to have a net worth of Rs, 50 crore, & they are to get their systems & procedures evaluated externally.

Venture loans.

Capital

Fund

allowed

investing

in

unlisted

Complainers, to finance turn around companies, & to provide

As per the approved modified takeover Code recommended by the Bhagawati Committee, the minimum public offer of 20% purchases, when the threshold limit of 10% equity is crossed, is made mandatory. Those in control are permitted to 2% of share per annum up to a maximum of 51%. The acquirers have to deposit a certain value of cash & assets in an escrow account. The escrow deposits have to be higher for conditional. Public offers unless the acquirer agrees to buy a minimum of 20%.

CHAPTER 4 PRIMARY DATA ANALYSIS

CHAPTER 4 PRIMARY DATA ANALYSIS

1] Does the SEBI guide line provide the exact way of performing your work?

Table 1.

Yes No

15 0

The number of Market institution who said that yes SEBI Provides the exact way of performing their work are fifteen.

The number of Market intermediaries who said that the SEBI does not provide the exact way of performing their work is zero.

The data show that all the investors got the exact way of performing their work. The SEBI has provided detailed guidelines for performing the work of the intermediaries.

Chart 1 SEBI provide exact way of performing their work Yes or No Series1, No, 0, 0%

Series 1, Yes, 15, 100%

Here the number of institution who said YES for the question of providing exact way of performing the work was 100% while the number of institution who said NO were 0%. This question was to know that all the institutions are provided the exact way of performing their work. The work relates to the code of conduct for their business. There were no institutions which said that they are not provided the exact way of performing their work they are provided that include their complete work.

2] SEBI has full authority & control over your functioning?

Table 2 YES NO 15 0

The number of intermediaries who said that the SEBI has the full authority & control over the intermediaries are fifteen. The number of intermediaries who said that the SEBI does not have full authority & control over the intermediaries is zero. The data show that the SEBI has full control all over the intermediaries in the market. SEBI examines this control by making continues observation on the market intermediaries. SEBI is also allowed to charge penalties for those institutions that are in the defaulters list. Chart 2 SEBI has full authority and control over the market intermediaries Yes or No Series1, No, 0, 0%

Series 1, Yes, 15, 100%

Here the number of institutions who said YES that SEBI has full control & authority over their functioning is 100% while the number of institutions who said NO that the SEBI has no full control over the functioning are 0%. The answer 100% showed that SEBI is one or the way had a full control on all the institutions who are there in the market & who function by taking the investors money in their hand. SEBI excise its power of control over the institutions.

3] Does SEBI want you to register you with it?

Table 3 YES NO 15 0

The above tables shows that the number of institution who said YES for the registration with the SEBI are 15 & number of institution who said NO were 0. This showed that SEBI did not let any institute to come on his own & take over the investors money for investing without the registration with SEBI. The registration with SEBI is compulsory for all the market intermediaries who invest the peoples money in the market. The SEBI also wants all the companies to register themselves with is all the companies existing in the stock market are taking the money of the investors which includes common people also.

The SEBI has to take this step in order to control all the companies & the market intermediaries

Yes or no

Chart 3

Does SEBI wants companies and market intermediaries to register with it

Series1, No, 0, 0%

Series 1, Yes, 15, 100%

The above chart shows that here the institutions who said YES for the registration with the SEBI are 100% & the number of intermediaries who said NO is nil. This showed that SEBI did not let any institute to come on his own & take over the Investors money as the market is very risky & the
1

companies & market intermediaries can practice any malpractices, if there is no proper supervision.

4] Does SEBI take any amount as a security for the investors protection

Table 4 YES NO 0 15

Here the number of institution who said NO for the deposit was 15. While no institution said that the SEBI takes any amount as a security for the investors. This show that the SEBI is not taking any amount for the investors protection which tells that the SEBI have the control over the Organization through it regulation in such a manner that it need not require any amount as the investors security amount.

Chart 4

The above chart shows here that the number of institutions Who said NO for the deposit was 100%. While the institution who said YES for the deposit was 0%, thus the SEBI takes no amount as investors protection. But the intermediaries need certain condition to be fulfilled i.e. certain minimum capital has to be rising by the company for entering into the market. 5] Does SEBI guidelines create any rigidity in the process of your work?

Table 5 YES NO 9 6

Here the number of institute who said that following the SEBI guidelines create rigidity are 9, while the number of institution who said that following the SEBI guidelines does not create rigidity were only 6.

The answer extracted tells that the intermediaries have to follow the guide lines which are rigid according to them but the SEBI have framed they with the intention of investors protection. The intermediaries who said that the guidelines were not rigid according to them the guidelines have been perfectly framed for the investors protection.

Chart 5

The chart shows that here the number of institute who said that following the SEBI guidelines rigidity are 60%. While the number of institute who said that following the SEBI guidelines does not create rigidity were only 40%. The chart explains us more intermediaries fell that the Guidelines are very legal & difficult to follow. But the purpose of SEBI for framing the guidelines has been served.

6] Does SEBI provide any way through which you can give your grievances to the SEBI?

Table 6 YES NO 15 0

The above table shows that the number of intermediaries who said YES SEBI provides any way through which you can give your grievances to the SEBI is 15. While the number of institutions who said that SEBI does not provides any way through which you can give your grievances to the SEBI is 0. SEBI has taken this step in order to know the problems of the intermediaries. The SEBI receives a lot of grievances from the intermediaries which SEBI tries to solve to his best possible level. The SEBI has setup some of the institutions who collect the investors grievances for the purpose of resolving them.

Chart 6

The numbers of institute who said that YES SEBI provides then the way through which they launch their complaint are 100% i.e. All the institution said that they can launch their Complaint with SEBI

7] Write in short the how to get registration? Registration of merchant banking, venture capitalist, Mutual Fund Company & other intermediaries. All the Intermediaries have to register them self with SEBI.

This process is applicable to merchant bank which include all most all type of intermediary services.

First the companies have to go through due diligence i.e. they have to follow the SEBI regulation for being eligible to Enter into the market.
1

The company file DHRP (Draft Red Herring Prospectus) the SEBI checks the DHRP to get all the required knowledge after that SEBI issues due diligence certificate if he feels the company to be eligible to enter the market & it had fulfilled all required conditions.

The company has to show their prospectus to SEBI within 21 days of issuing public notice, the SEBI makes it available on its website, on book running led managers sites & the companys site for notice of the public & if SEBI want any more information to be provided it is taken into consideration. After this stage SEBI conducts as observation of all the documents provided to it from the company. The SEBI have officers who make the check of the companys document. Ones the SEBI observation procurer is over the company can go further for incorporation. Advertisement any company making any of its advertisement must not provide any false or sugarcoated information.

Questions for individual investors.

Name of the intermediary through whom you invest?

Table 1 Broker 3
1

Mutual Fund Merchant Bank Portfolio Manager Any other please mention

3 0 4

The above table shows that the number of investors who invested through brokers was three. The number of investors who invested through mutual fund was three. & the number of investors who invested through portfolios managers was four.

This shows that the investors are more relying on diversification of risk by investing in diversified portfolio. While the person investing in through broker & mutual funds are same.

Chart.1

The above chart show that the number of investors who invested through brokers were 30%, the number who invested in through mutual fund were 30% & the number of investor who invested through portfolio managers were 40%. This showed that the people invest through intermediaries which are under the control of SEBI.

1. You invest & interact regularly or some times?

Table 2 REGULARLY Some times 6 4

The above table shows that the people investing in the stock market regularly are 6. Whereas the people investing sometimes are 4. This shows the number of people seeking profits from the share market have increased along with that the number of risk takes have also increased. This increase has been seen because of the securities & exchange board of India is acting as the regulatory body for controlling all the companies & the intermediaries who are functioning in the market. Because of this no listed company can cheat people can take away their money.

CHART 2

The above chart shows that the people investing in the stock market regularly are 60% where as the people investing some times are 40%. This show the numbers of people seeking profits from the share market have increased & along with the number of risk takers have also increased. This shows that the efforts have to be increased for the market regulation as when more number of investors increase the number of intermediaries also increases.

3. Are you aware of SEBI guidelines available for investors protection?

Table 3

YES NO

7 3
1

The number of investors who said that they are aware of the guidelines available for the investors protection is 7. Whereas the number of investors who said that they are not aware of the investors protection guideline by the SEBI are 3, this shows that the SEBI guidelines are known to majority of the people but the interest of the minor must also be taken in consideration & some measures should be taken to make the investors know about the guidelines provided for their benefit by the SEBI. The SEBI has setup some of the institutes which work for the investors awareness this institutes conduct investors awareness campaign in which it makes many investors aware about the new schemes of the SEBI as well as they act as a grievance taking institute which collect the investors grievances & try to resolve them.

Chart 3

The above chart show that the number of investors who said that they Are aware of the SEBI guidelines are 70%.

While the number of investors who said that they are not aware of the SEBI guidelines are 30%.

This showed that the investors are aware of the market risk & SEBI to a great extent has succeeded in his objective but still it has to take some measures through which it can create awareness among all the people investing in stock exchange.

4. Are you aware of Investor education informed provided by SEBI ?

Table 4 YES NO 7 3

The number of people who said that they are aware of the investors education provided by SEBI is 7. Whereas the number of investors who said that they are not aware of the investors education provided by SEBI are 3. This data showed that the number of investors aware about the investors education is more. & the numbers of investors unaware are less. SEBI make

this investors education through different ways like news papers magazines & SEBI bulletin which are available in the market.

Chart 4

The above chart shows that the number of investors who said that they are aware of the investors education is 70%. Whereas the number of investors who said that they are not aware of the investors education are 30%. This data shows that the SEBI has done its work to great extent but still it needs some improvement in its system to create awareness among this minor class. But the overall work is successful.

5. Who do think is the most reliable source of information for investing?

Table 5 Brokers Portfolio manager Mutual fund Merchant banker Your own knowledge 3 4 3 0 0

The above table shows that the investor who thinks that the Brokers give best source of information is three. The investor who thinks that the merchant bankers five best source of information is three. And the numbers of investor who believe the portfolio manager are best source of information are four. This data says that the investors depend on the information provided by this organization.

Chart 5

The above table shows that the investor who thinks that the broker give best source of information is 30% The investor who thinks that the merchant banker give best source of information is 30% And the number of investor who believe the portfolio manager as best source of information are 40% The above data shows that investors believes in these intermediaries and invest their money and these intermediaries have to work according to the rules and regulations of SEBI.

6 In which instrument do you normally invest?

Table 6 Equity shares Preference shares Bonds 2 2 3

2

Debentures Any other please mention

3 0

The above table shows that the number of investors investing in equity shares is two The numbers of investors investing in preference shares are two the number of investors investing in the bonds is three And the number of investors investing in debentures is three. The data shows that the Indian investors are not the risk taker they try to minimize the risk by investing in the secured securities.

Chart 6

The above chart shows the number of investors investing in the equity shares is 20%. The number of investor investing in preference share is 20%. The number of investor investing in the debentures is 30%. The number of investor investing in the preference share is 30%

The above data shows that the investors seek for the secured securities in the market. Thus it is necessary for the SEBI to undertake all the intermediaries under its proper guidance.

Data collected from SEBI

1] Which are the intermediaries registered under SEBI please mention? Stock exchange (cash market) Stock exchange (derivative market) Brokers (cash segment) Corporate brokers (cash segment) Sub brokers(cash segment) Brokers (derivative) Foreign institutional investor Custodian Depositaries Depositary participants
1

 Merchant banker Bankers to an issue Underwriters Debenture trustees Credit rating agencies Venture capital fund Registrar to an issue & share transfer agents Portfolio managers Mutual funds Collective investment schemes

Approved intermediaries(stock lending scheme)

2] In what do you tackle the new emerging problem in the market?

Answer:- By charging penalty for defaulter and for new market challenges in their rules and regulation. Few regulation in which major amendment are made. SEBI (Insider Trading) Regulation, 1992. SEBI (Underwriter) Regulation, 1993. SEBI (Debenture Trustees) Regulation, 1993. SEBI (Portfolio Manager) Regulation, 1993. SEBI (Foreign Institutional Investor) Regulations, 1995. SEBI (Mutual Fund) Regulation, 1996. SEBI (Substantial Acquisition of Shares and Turnover) Regulation, 1997. SEBI (Employee Stock Option Scheme and Employee Stock Purchases) guidelines, 1999. SEBI (Credit Rating Agency) Regulation 1999. SEBI (Disclosure and Investor Protection) Guideline 2006. SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2006.

3] What is to be considered before investing in security market? For the individual investor SEBI has proposed some of the objectives which have to be considered before investing in the security market.
2

 Obtain written documents explaining the investment, Read & understand such documents, Verify the legitimacy of the investments, Find out the cost & benefit associated with the investment, Assess risk return profile of the investment, Know the liquidity & safety aspect of the investment, Ascertain if it is specific for your goals, Compare this details with other investment opportunities available, Examine if it fits with other investments you are considered or you have made Deal only through & SEBI registered intermediary whenever required Seek all clarification about the intermediaries & the investment Explore the option available to you might sometime go wrong & then if satisfied make the investment

4] Do you interact with the investors in any indirect manner? The SEBI said no The SEBI interact through newspaper, SEBI bulletins, magazines where SEBI articles are printed. It also interacts indirectly with the help of some institutions which are setup for gathering investors grievances & for the creating investor awareness. 5] How are you able to achieve your objective of investor protection? Answer: There is continues observation on the market, on all the stock exchange, all the market intermediaries, and all the companies in the stock market. This had let the full control over the activities in the market. The
1

SEBI setup comities whenever it sees that it is required to have a check on the

Suspected company or market intermediaries. SEBI also create a market survey each year to see the overall progress report of the Indian stock market. SEBI continuously monitors the changes in the indexes of all the stock exchange & its record all the factor affecting the stock exchanges.

CHAPTER 5 FINDINGS AND CONCLUSIONS

CHAPTER 5- FINDINGS & CONCLUSIONS

1] From the first question asked to the intermediaries I conclude that the intermediaries are provided the perfect way of performing their work. They carry all their work according to the guidelines provided by the SEBI. Here the SEBI had done all the work of providing the guidelines to all the intermediaries. 2] From the answer of second question I conclude that the SEBI full control & authority over the functioning of intermediaries & their working. SEBI makes the observation continuously over the intermediaries so that they cannot make any malpractices or carry on the business in any unproved way in opposite to the interest of the investors. 3] From the answer of third question I conclude that all intermediaries have registered themselves with SEBI. From this SEBI is able to lay down the control over the intermediaries in the market. Registration with SEBI also give confidence to the investor in the stock exchange that there money will be invested in proper place & no misuse of the money will be made for any purpose by the company as SEBI is made for investors protection. 4] From the answer of the fourth question I conclude that SEBI does not take any amount of the investors protection. As SEBI makes rules for the intermediaries in the market so it has a full control over the intermediaries so

SEBI do not require any amount as a deposit however the intermediaries are required to have certain minimum capital. 5] From the answer extracted from the fifth question asked to the intermediaries it tells that the intermediaries have to follow guidelines compulsorily though some of the intermediaries fell that following SEBI guidelines create rigidity still they have to follow and those that do not follow them are considered as defaulter and strict action are to be taken against those intermediaries. Following guidelines by the intermediaries helps the SEBI to regulate the stock market in the smoother manner. 6] From the answer of the sixth question I conclude that SEBI has provided a exact way by which the investor can place their grievances to SEBI. These grievances are resolved to the maximum extent to what it can be resolved. SEBI tries in all the ways to satisfy the investor and market intermediaries to their maximum possible extent. 7] From the answer of the seven questions I conclude that SEBI registers the intermediaries in very legal manner after taking all the prerequisites into consideration. It checks their all the document which are required for registration their minimum capital to be subscribed. It gives them registration when it fell sees that all conditions are fulfilled. 8] From the first question I conclude that all the investor invest through the market intermediaries which are registered in the SEBI. This enables the SEBI to work for investors protection as the as all the intermediaries are registered under SEBI.

9] From the second answer I conclude that more than 50%of the investor in the market has become regular investor this situation is due to SEBI. This has worked a lot for the market to run smoothly and which has led the Indian stock market to grow. 10] From the third answer I conclude that 70% of the investor knows about the SEBI guidelines available for the investors protection this leads to better and efficient investment by the investors. Investors protection guidelines help the investor to be aware of his rights and the intermediarys responsibility. 11] From the fourth answer I conclude that 70% of the investor knows about the investors education that is provided by SEBI. These all points are to b considered by an investor before investing in company. The awareness of this education leads the investor to take right decision before investing in any kind of security. This also helps the SEBI objectives from preventing public from making very risky and unsystematic investment. 12] From the fifth question I conclude that people believe in the expert knowledge provided by the market intermediaries like portfolio manager mutual fund and brokers and not on their own knowledge. As all the market intermediaries are controlled but the SEBI it assures quality services and advises to be provided to the investors. 13] From the sixth question I conclude that people I India are low risk bearer and they want regular returns. The people investing in the debt market are more than the people investing in the equity market. For this purpose SEBI

Has been set up to make the companies and the market intermediaries work efficiently. 14] From the first answer I conclude that all the market intermediaries have to register themselves with SEBI. SEBI registers all the market intermediaries with an intention of having full control over the market intermediaries.

CHAPTER 6. SUGGESTIONS AND RECOMMENDATIONS

SPECIFIC: GENERAL:

CHAPTER 6. SUGGESTIONS AND RECOMMENDATIONS

SPECIFIC:
1.

All the intermediaries have to be checked properly for the purpose of investors benefit. Some sources should be there for direct interaction between SEBI and investor.

2.

3. The scamps like Dabba exchange should be prevented as it leads to be lots of losses for investors. 4. Lacking areas of SEBI control. GENERAL: Further research can be carried out in 1. Study of all objectives of SEBI. 2. Study of registration of SEBI. 3. Study of work shop by SEBI. 4. All the intermediaries can be identified and studied in detail. 5. SEBI control over the intermediaries.

BIBLIOGRAPHY
3

BOOKS: Taxman, 2005, SEBI MANUAL LM bhole, financial institution and marketing M.Y.Khan, third edition financial services Third edition, stock exchange Laymans guide for investment GN bhajpai aaa9 third edition 2006)stock market book, Mumbai.

NEWSPAPER: The economic times Times of India WEBSITE: WWW.sebi govt.in www.money control.com www.motilaloswal.com

ANNEXURE I
3

QUESTIONERIRE

1.

Do the SEBI guidelines provide the exact way of performing your work?

2. SEBI has full authority control over your functioning?

3. Does SEBI want you to register yourself?

4.

Do SEBI guidelines create rigidity in the process of your work?

5. Does SEBI provide any way through which u can give your grievances to SEBI? 6. Does SEBI provide any way through which you can give your grievances to SEBI?

7. Write in short how to get registration?

QUESTIONER FOR INDIVIDUAL INVESTOR

1. Name of intermediary through whom you invest?

2. You invest or interact regularly or sometimes?

3.

Are you aware of SEBI guidelines available for investors protection?

4. Are you aware of investors education information provided by SEBI? 5. Who do you think is the most reliable source of information for investing? 6. In which instrument do you normally invest?