Inamdar Pawar Mehul Khandelwal (08) IT Poonam Sharaf (29) IMSR Rajdhani Gupta (04) IT Sameer Sahu (27)

IMSR

SEBI regulates

Primary Market

Secondary Market

Mutual Funds

Foreign Institutional Investment

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

1.

Entry norms
a) Track record of dividend payment for minimum 3 yrs preceding the issue.

b) Already listed companies - when post-issue net worth becomes more than 5 times the pre-issue net worth.
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 lac of the net capital offer made to the public.

e) Banks 2 yrs of profitability for issues above par, Offer documents to companies.

2. Promoters contribution
Should not be less than 25% of the issued capital. Receiving of promoters contribution. Lock in period as per SEBI (3yrs). Cases of non-under written public issues.

3. Disclosure
Draft prospectus Unaudited financial results

4. Allocation of shares Minimum application of shares Reservation for small investors Allotment of securities

5. Market intermediaries Licensing of merchant bankers Licensing of underwriters, registrars, transfer agents, etc., Merchant bankers net worth Rs.5 crs

Reforms in the secondary market:1. Governing board 2. Infrastructure 3. Settlement & clearing 4. Debt market 5. Price stabilization 6. Delisting

1. Governing board

60% of brokers in arbitration, disciplinary & default committees For trading members 40% representation
On-line screen based trading terminals

2. Infrastructure

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.

10

4.

Debt market segment

Regulates thru SEBI (depository &

participants) regulation Act 1996. Listing of debt instruments Investment Range for FIIs can be differ.

11

5.

Price stabilization Division to monitor the unusual movements in prices. Monitor prices of newly listed scrip from the first day of trading. Imposing of special margins of 25% on purchase in addition to regular margin. Price bands

12

6. Delisting
On voluntary de-listing from regional stock exchanges buy offer to all share holders Promoters to buy or arrange buyers for the securities 3 yrs listing fees from companies are to be kept in Escrow A/c with the stock exchange.

13

According to the 1995 regulations, FIIs should hold certificate granted by SEBI to trade in Indian stock market. To grant the certificate the applicant should 1. Have track record, professional & competence record, financial soundness, general reputation of fairness and integrity. 2. Regulated by an appropriate foreign regulatory authority. 3. Permission under the provisions of FERA Act 1973. (FEMA-2006) Valid up to 5 yrs. 14

Is an agency appointment of the custodian Maintenance of accounts Submission of semi-annual reports (SEBI & RBI) Inspection of accounts
SEBI Guidelines:-

Foreign brokers can operate only on behalf of registered FIIs. Execution of orders for sale and purchase of securities are done by a member of an Indian stock exchange Time stipulation for transaction b/w custodian & member of ISE is 48 hrs.

15

Regulation:Under mutual consent of the shareholders As per the ceilings Allotment on the highest price (26 weeks) Permitted up to 15% of the equity within the ceiling Holdings of a single FII increased from 5% to 10% of the equity of a company

16