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i) SEBI for Capital Market Activities

ii) IRDA for Insurance Activities

iii) RBI for Banking & Finance

iv) PFRDA for Provident Fund / Investment

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It mainly relates to

i) Memorandum of Association (Objects / Capital Structure)

ii) Articles of Association (Board/Meetings/Powers/Duties etc.)

iii) Issue of Capital (at par / premium / discount)

iv) Calls on Shares

v) Voting Rights

vi) Prospectus

vii) Right Issue / Debenture Issue

viii) Allotment of Shares & issue of Share Certificate

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It provides apparatus for

i) Regulation of Stock Markets Requisition,

Inquiries, Supervision, Annual Reports,
Clearing Corp., Bye-Laws etc.

ii) Preventing undesirable transactions in securities

iii) Corporatization and Demutualization of S/E

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Main elements are

i) Recognition of Stock Exchange

ii) Qualification for Membership

iii) Contract between Members of Recognized Stock Exchange

iv) SEBI Nominee

v) Audit of Members¶ Account

vi) Inquiries

vii) Submission of Periodical Reports

viii) Listing of Securities

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i) Creation of environment for raising money from Capital Market
ii) Maintain Liquidity & Safety of Securities in the Market
iii) Protection of Investors¶ interest
iv) Promote Development and Regulate Securities Market

 V
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i) Market Transparency through Disclosure Standards
ii) Fixing corporate Governance Standards
iii) Market Safety through margin system & surveillance
iv) Market Surveillance
- Policy Formation for Surveillance
- Oversee Surveillance System of Stock Exchange
- Prepare Reports/Studies on Market Movement
- Announcement of daily price bands
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SEBI ± An Establishment
i) Chairman Appointed by Govt. (Presently Mr. Bhave)
ii) 2 members Representing MOF
iii) 1 Member Nominated by RBI
iv) 5 Members Nominated by Govt.
(of which atleast 2 are whole-time)

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SEBI manages its affairs through about 24 different Departments
which are functionally demarcated. The main Departments are
Investigation Department, Integrated Surveillance Department,
Enforcement Department, Market Regulation Department, Investment
Management Department (FIIs & Custodian and MF), Market
Intermediatory Regulation and Supervision, Investment Department
(VC + Port Managers), Department of Eco & Policy Analysis,
Corporation Finance Department. Enquiry & Adjudication Department,
Derivatives & New Products Department, Systems Ltd. etc. etc.
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1. Stock Exchange Approval of Bye-Laws and
Registration / Recognition of S/E and periodical
returns.

2. Registration and Regulate

 Stock Brokers / players / intermediaries
 Depositories, DP, Custodian
 Credit Rating Agencies
 Mutual Funds
 VC Funds and Collective Investment Scheme
 FIIS
 Custodians
m " & $

 Prohibits fradulent & unfair trade practices
including insider trading

 Regulate substantial acquisition of shares &

acquisition.

 Product interest of investors & promote education /

training

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 Decide on levy of fees and other charges /
penalties

 Constitution of SAT
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SEBI ± Powers & Functions

SEBI would have the same powers as vested in a Civil Court
under the Code of Civil Procedure in respect of the following
In exercising these powers, the SEBI would have the same
powers as vested in a civil court under the Code of Civil
Procedure, in respect of the following matters, namely:
i) The discovery and production of books of accounts and other
documents, at such place and time as may be specified by it;
ii) Inspection of any books, register and other documents of any
person at any place
iii) Inspection of any books, register, or other document or record of
the company
iv) Issuing commissions for the examination of witnesses or
documents.
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SEBI ± Powers & Functions

The SEBI may, by an order, for reasons to be recorded in writing, in
the interests of investors or the securities market, take any of the
following measures, either pending or on completion of an
investigation/inquiry, namely:
a. Suspend the trading of any security in a recognised stock
exchange.
b. Restrain persons from accessing the securities market and prohibit
any person associated with the securities market to buy, sell or deal
in securities.
c. Suspend any office-bearer of any stock exchange or self-regulatory
organisations from holding such position.
d. Impound and retain the proceeds or securities in respect of any
transaction which is under investigation.
e. Attach Bank Account for one month under specified circumstances.
f. Direct not to dispose of or alienate asset under specified
circumstances.
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SEBI ± Measures Introduced

 Disclosure Norms
 Automation of Stock Exchange Functioning
 Setting-up Depositories
 Depositories Act 1996
 NSDL/CDSL
 Trading Mechanism & Preventing Market
Failures
 Creation of Settlement Guarantee Fund in Stock
Exchanges
 Shortening of settlement time from 15 days to
T+2
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Since 1995, SEBI is empowered to appoint officer (not

below rank of Div. Chief) as adjudicating officer to hold
enquiries, determine penalties with respect to
i) Amt. of disproportionate gain or unfair advantage
made as a result of default\
ii) Loss caused to investor as a result of default
iii) Repeatative nature of default
All sums realised by way of penalties to be credited
to Consolidated fund of India
Penalties are leviable only on being satisfied that the
person has failed to comply with various provisions of
SEBI Rules/Regulations
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1. Failure to furnish information & return Rs. 1 Lac p.d. subject to max. Rs. 1 Cr.
2. Failure to enter into Agreement with Client Rs. 1 Lac p.d. subject to max. Rs. 1 Cr.
3. Failure to redress Investors¶ Grievances Rs. 1 Lac p.d. subject to max. Rs. 1 Cr.
4. For Stock Brokers
- Failure to issue Contract Notes (as per SEBI) Rs. 1 Lac p.d. subject to max. Rs. 1 Cr.

- Failure to deliver securities/make payment Rs. 1 Lac p.d. subject to max. Rs. 1 Cr.

- Charging brokerage in excess of prescribed limit Rs. 1 Lac p.d. or 5 times of excess
charged whichever is higher
5. For Mutual Fund
- Certain Defaults in Case of Mutual Funds/Collective Investment Schemes Default in not
a) Obtaining a Certificate of Registration
b) Complying with the terms and conditions of the Certificate of Registration
c) Failing to make an application for listing of schemes
d) Dispatching the Unit Certificates
e) To refund application money
f) Failing to invest collected money Rs. 1 lac each day such failure
continuous or Rs. 1 Cr.
whichever is less

6. For Asset Management Co.

- Failure to observe Rules/Regulation Rs. 1 Lac p.d. or Rs. 1 Cr. Whichever is
less
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×. Insider Trading
i) Deals in securities on behalf of Rs. 25 Crs. or 3 times of profit
self or others on the basis of whichever is higher
unpublished price-sensitive
information

ii) Communicates price-sensitive information (except required under the Law)

8. Non-Disclosure of Acquisition of shares Rs. 25 Crs. or 3 times of profit

whichever is higher

9. Fraudulent and unfair Track Practices Rs. 25 Crs. or 3 times of profit

whichever is higher
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Securities Appelate Tribund (SAT)

i) Appeal against an order of SEBI or adjudicating officer in 45 days
ii) Governed by The Priciples of Natural Justice and SEBI Act
iii) SAT Not bound by the procedure laid down by the code of Criminal Procedure
iv) SAT is vested with the same powers as vested in a Civil Court in respect of the
following. SAT is deemed to be a Civil Court and procedure would be deemed to
be a judicial proceeding.
* Summoning the attendance of any person and examine him on oath
* Requiring the discovery & production of documents
* Issuing commissions for the examination of witness/document
* Dismissing an application for default or deciding it ex-parte
* Receiving evidence on affidevits
V) No Civil Court would have juridiction to entertain any suit/proceedings which fall
within the powers of SAT/adjudicating officer
VI) No injection can be granted by the Court in respect of any action taken/to be
taken by SAT/adjudicating officer
VII) Appeal against the order of SAT can be filed with the Supreme Court in 60 days.
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ë|)*|$ )ëV+

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 1 or more ombudsman
 Stipendary ombudsman i.e. for specific matter for specific territory
 Complaint can be made within 6 months after approaching the Co.
 $- V|
 To receive complaints against intermediatory/listed Co. for
i) Non-receipt of refund order
ii) Non-receipt of allotment letter
iii) Non-receipt of share-Certificate
iv) Non-receipt of dividend, interest, interest for delayed refumd
v) Non-receipt of Annual Reports, Redemption Amount, Letter
of Offer etc.
 Non-Transfer of Securities by Issuer
 Any grivience of Public Offer/Right/Bonus Issue
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 The complaint can be dismissed if

 Frivolous
 Matter settled by SEBI or ombudsman or any proceedings
are pending/going on or decree/award already passed
 ave settlement by mutual agreement & pass the order in 1 month;
otherwise to hear the case & pass order within 3 months.
 Appeal for review of order can be made by the obligation of payment
with the deposit of ×5% of the obligation of payment.
 SEBI to decide the matter within 45 days & award has to be
implemented within 30 days.
 Compensation with interest @12% can be awarded by
SEBI/ombudsman
 If award is not implemented, the party will be liable or face
suspension/delisting of securities/debarment from accessing
securities market/dealing in securities or an action for
cancellation/suspension of registration.
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.V V V| ) $VV+ V/ 

  
 Merit based regime to Disclosure based regime.
 Disclosure & Investor Protection (DIP) Guidelines
issued.
 Banks/FIs/PSUs allowed to raise funds from Primary
Market.
 Corporate Governance Guidelines issued.
 Guidelines for Private Placements of Debts issued.
 Shares allotted on preferential basis as well as pre-
allotment holding are subject to look-in of 6 months.
 Accounting standards are close to international
standard.
 SEBI promoted Self-Regulatory Organisation (SRO).
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.V V V| ) $VV+ V/ 
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 Pricing determinable by the Market
 System of Proportional allotment introduced.
 Discretionary allotment system to QIB withdrawn.
 Freedom to fix face value of shares below Rs. 10/- per share only in
cases where the issue price is Rs. 50/- or more


 Mutual Funds encouraged, both in Public & Private sector.
 Separate allocation of 5% to domestic MF within QIB category.

V  " 
 Allocation to retail investor increased from 25% to 35%


 FIIs allowed to invest in primary issues within the Sectoral
limits(including G-Sec).
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 Order driven, fully automatic, screen based trading
introduced.
 Corporatisation & demutualisation of S/E notified.
 Regular Inspection of Stock Exchange.
 Stock Exchange Traded Derivatives introduced.
 Comprehensive Surveillance system.

i 
 Guidelines issued on Listing Agreement between Stock
Exchange and Corporates.
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 Mandatory registration
 Capital adequacy norms specified for the brokers.
 Brokers¶ Inspection




 Settlement Cycled shortened to T+2.
 Prohibition of fraudulent & unfair trade practices including insider
trading.
 Regulation on Substantial Acquisition of Shares & Take-Overs.
 Margin Trading, Short Selling and Securities lending / borrowing
schemes introduced.
 Comprehensive risk management system (Capital adequacy, trading
& exposure limit, margin requirement, on-line position monitories,
automatic disablement of terminals) put in place.
 Comprehensive surveillance system.
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 Depositories Act enacted
 Guidelines on Corporate Governance issued.
 Settlement and Trade Guarantee Fund/Investor Protection Fund set-
up.
 Securities Appellate Tribunals set-up.

* 
 MF & FII to enter Unique Client Code pertaining to the present
entity, at the order entry level, and enter the UCC for individual
Schemes/Sub accounts on the post-closing session.
 Straight through Processing introduced and made mandatory for
institutional trades.
 FIIs allowed to invest in Indian Capital since 1992.
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SEBI Securities Market Regulations & Guidelines in Force
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1. SEBI (Stock Brokers and Sub-Brokers Regulations) 2. SEBI (Prohibition of Insider Trading) Regulations
3. SEBI (Merchant Bankers) Regulations 4.SEBI (Portfolio Managers) Regulations
5. SEBI (Registrars to an Issue and Share Transfer Agents) Regulations
6. SEBI (underwriters) Regulations ×. SEBI (Debenture Trustees) Regulations
8. SEBI (Bankers to an Issue) Regulations 9. SEBI (Foreign Institutional Investors) Regulations
10. SEBI (Custodian of Securities) Regulations 11. SEBI (Depositories and Participants) Regulations
12. SEBI (Venture Capital Funds) Regulations 13. SEBI (Mutual Funds) Regulations
14. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations
15. SEBI (Buy-Back of Securities) Regulations 16. SEBI (Credit Rating Agencies) Regulations
1×. SEBI (Collective Investment Schemes) Regulations
18. SEBI (Foreign Venture Capital Investors) Regulations
19. SEBI (Procedure for Board Meeting) Regulations 20.SEBI (Issue of Sweet Equity) Regulations
21. SEBI (Procedure for olding Equity by Enquiry Officer and Imposing Penalty) Regulations.
22. SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations
23. SEBI (Central Listing Authority) Regulations 24. SEBI (Ombudsman) Regulations
25. SEBI (Central Database of Market Participants) Regulations
26. SEBI (Self-Regulatory Organisation) Regulatory 2×. SEBI Intermediaries Regulation 2008
28. SEBI Securitised Debt Instrument Regulation, 2008.
29. SEBI Issue and Listing of Debt Instruments Regulation, 2008

 
 
1. SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines
2. Guidelines for opening of Trading Terminals Abroad
3. SEBI (Disclosure & Investor Protection) Guidelines
4. SEBI (Delisting of Securities) Guidelines
5. SEBI (STP Centralised ub and STP Service Providers) Guidelines
6. Comprehensive Guidelines for Investor Protection Fund/Customer Protection Fund at Stock Exchanges

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1. Securities Lending Scheme
2. SEBI (Informal Guidance) Scheme
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a) The Articles of Association must permit it

b) Authorisation by a special resolution in general meeting
c) Ceiling of 25% of paid-up capital & Free Reserves.
d) Ratio of Debt : Equity not to exceed 2:1.
e) Buy-back by not through subsidiary/investment Companies.
f) Not allowed in case of default in payment of deposit, Term Loan,
Debenture redemption/Preference share

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 Existing shareholders on proportionate basis
 Open Market
 Odd Lots
 Employees, pursuant to a scheme of stock option/sweet equity issued for consideration
other than cash
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Tender Offer : Offer by a Co. of Buy-Back through Letter of Offer, from
the holders of securities on proportionate basis.
Odd-lot : Provisions of Tender offer apply.
Open Market : Through Stock Exchange and book building process

0 $

 Special resolution in General Meeting of shareholders OR
 Through a Board Resolution
 A copy of special Resolution to be filed with SEBI/Concerned S/E
within × days of the date of passing resolution.
 In case of Board Resolution, a public announcement should be
preceded by a notice within two days & copy with explanatory
statement to be field with SEBI.

1  
  
An offer by a Co. of Buy-Back through Letter of Offer from the
holders of the securities on proportionate basis.
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The explanatory Statement/Public Announcement should discuss

 Max. price of Buy-Back
 Quantum of Buy-back
 Details of Promoters¶ Transactions in last 6 months
 Offer to remain open for Min. 15 days & Max. 30 days
 The date of offer should not be earlier than × days or later than 30 days from the
specified date
 Offer to reach shareholders before opening date
 In case of non-fulfillment of obligations by the Co. the enscrow a/c to be forfeited by
SEBI
 The Co. to pay consideration within × days from acceptance of offer
 Security Certificates to be destroyed within 15 days of acceptance and certificate to
be issued to SEBI

×.    
The buy back from the OPEN Market may be through S/E and book-building
process.
The Buy-Back through a Stock Exchange can be made only on a Stock
exchange with nation wide trading terminals and through the order matching
mechanism. The maximum price at which the buy-back would be made should be
specified. Information on a daily basis regarding purchases for the buy-back should
be given to the Stock Exchange and published in a national daily on a fortnightly
basis and every time an additional 5 percent of the buy-back has been completed.
The provisions pertaining to the extinguishment of certificates in the case of a tender
offer are also applicable in this method.
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The public announcement in case of buy-back through book

building should contain a detailed methodology of the book building
process, the manner of acceptance, the details of the bidding
centers and so on. The offer should remain open for 15-30 days.
The final (highest) buy-back price, based on the acceptance
received, should be paid to all holders whose shares/securities have
been accepted for buy-back. The provisions pertaining to the
verification of acceptances, opening of a special account, payment
of consideration and extinguishment of certificates, applicable to a
tender offer, are also applicable to this method.