m 6
 is the regulator for the Securities

Market in India. It was formed officially

by the Government of India in 1988 with
SEBI Act 1992 being passed by the
Indian Parliament. Chaired by C B
Bhave, SEBI is headquartered in the
popular business district of Bandra-Kurla
complex in Mumbai, and has Northern,
Eastern, Southern and Western regional
offices in New Delhi, Kolkata, Chennai
and Ahmedabad.
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Section 11 of the SEBI Act specifies the
functions as follows:
1. Regulatory Functions:
a) Regulation of stock exchange and self
regulatory organization.
b) Registration and regulation of stock
brokers, sub-brokers, registrar to all
issue, merchant bankers, underwriters,
portfolio managers and such other
intermediaries who are associated with
securities market.
c)Registration and regulation of the
working of collective investment
schemes including mutual funds.
d)Prohibition of fraudulent and unfair
trade practices relating to securities
market.
e)Prohibition of insider trading in
securities.
f)Regulating substantial acquisition of
shares and take over of companies.
2. Development functions
a) Promoting investors education.
b) Training of intermediaries.
c) Conducting research and published
information useful to all market
participants.
d) Promotion of fair practices. Code of
conduct for self regulatory
organizations.
e) Promoting self regulatory
organizations.
A depository is a form of custodial
service where the securities are kept
in an electronic form.
Investors who desire to participate in a
depository have to open a duly
introduced account with a depository
participant.
The account can be opened with zero
balance.
m The investor who then hands over the
shares for dematerialization, i.e. share
certificates are destroyed and an
equivalent number of securities are
credited in the electronic holdings of
that investor.
m The participant is the representative of
the investors in the depository system.
m He in return intimates them regarding
the status of their holdings from time
to time.
m ¦
  are the financial
securities whose value is derived from
another ³underlying´ financial security.
m Options, futures, swaps, structured
notes are all examples of derivatives.
m Derivatives can be used for protecting
against financial risk, or can be used to
speculate on the movement of
commodity or security prices.
m The types of derivatives are options
and futures.

0 

 A futures contract is one where there
is an agreement between two parties
to exchange any asset or currency or
commodity for cash at a certain future
date, at an agreed price.
 Both the parties to the contract must
have mutual trust in each other.
 It takes place only in organized futures
markets and according to well
established standards.
ÿ  
As the very name implies, an option
contract gives the buyer an option to
buy or sell an underlying asset(stock,
bond, currency, commodity etc.) at a
predetermined price on or before a
specified date in future.



In an options contract, the seller is
usually referred to as a ³writer´ since
he is said to write the contract.
m There are 2 basic forms of options
    provides the holder with
the right to buy 100 shares of the
underlying stock at the strike price,
and
    provides the holder with
the right to sell 100 shares of the
underlying stock at the strike price.