1. The Securities and Exchange Board of India (SEBI)

2. INTRODUCTION SEBI(Securities and Exchange Board of India) was constituted on April 12,1988 as a non-statutory body It is an apex body to develop and regulate the stock market in India SEBI is the regulator for the securities market in India, originally set up by the Government of India in 1988,it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament.

3. SEBI Bhavan, Mumbai Headquarters U.K.SINHA Chairman, SEBI Logo of SEBI

4. 4 Objectives of SEBI To protect the interest of the investors in securities To promote the development of securities market To regulate the securities market

5. FUNCTIONS Section 11 of the SEBI Act, there are mainly two types of functions. They are; 1.Regulatory Functions 2.Developmental Functions

6. (a). Regulation of stock exchange and self regulatory organizations. (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. Regulatory Functions

7. Cont….. (d). Prohibition of fraudulent and unfair trade practices relating to securities market. (e). Prohibition of insider trading in securities. (f). Regulating substantial acquisitions of shares and take over of companies.

8. (a). Promoting investor’s 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. Developmental Functions

9. SEBI GUIDELINES FOR CAPITAL MARKET  Guidelines for new issues made by new company  New issues made by private limited companies and closely held companies  Listing of shares on the O.T.C  Underwriting  Composite issues  New financial instrument  Reservation in issues  Deployment of issue proceeds  Minimum interval between two issues

10. (a).Issue of bonus shares after any public/rights issue is subject to the condition that no bonus shall be made which will dilute the value or rights of holders of debenture, convertible fully or partly. (b).There should be a provision in the Articles of Association of the company for issue of bonus shares. 4.Guidelines to issue of Bonus Shares

11. Contd… (c). The bonus is made out of free reserves built out of the genuine profits or share premiums collected in cash only. (d). No bonus issue can be made within 12 months of any public issue/rights issue. (e). A company which announces bonus issue after the approval of the Board of Directors must implement the proposals within a period of six months from the date of such proposal and shall not have the option of changing the decision

12. 5.Guidelines for Rights Issue Where composite issues are made by listed companies, they can be issued at different prices. Gaps between the clearance dates of right issues and public issues should not exceed 30 days. If right issues of listed companies exceed Rs.50 lakhs, issue should be managed by an authorized merchant banker.

13. Underwriting of right issues is not mandatory but as per SEBI Rules right issues can be underwritten. No preferential allotment shall be made along with the right issues. If the company doesn’t receive minimum subscription (90% of the issue amount) within 120 days from the date of opening issue, the entire subscription should be refunded within 128 days with interest @ 15 % p.a. for delay.. Contd….

14. Within 45 days of closure of rights issue, a report in the prescribed form along with compliance report duly signed by the statutory auditor should be forwarded to SEBI. (c). Companies making rights issues are now permitted to dispatch an abridged letter of offer, containing disclosures as required in the abridged prospectus. However, such companies may provide the detailed letter of offer to any shareholder upon request. Contd….

15. (d). Again, companies that have filed a draft offer document with full disclosures can now come out with further capital issues even before the shares pertaining to the document are listed on the brochures. All listed companies making rights issue shall issue an advertisement in at least two All India newspapers about the dispatch of letters of offer, opening date, closing date etc. Contd….

16. 6. Guidelines to Debentures (a).The amount of working capital debenture should not exceed 20% of the gross current asset. (b). The debt equity ratio should not exceed 2:1. (c). The rate of interest can be decided by the company. (d). Normally debentures above seven years cannot be issued. (e). Debentures issued to public have to be secured and registered. (f) Credit rating is compulsory for all the debentures except those issued by public sector companies.

17. INVESTOR PROTECTION Design to protect the investors from the malpractice of companies, brokers etc. COMPLAINTS OF RESOURCES: SOURCES: (a).Against Member (b).Against Companies

18. COMPLAINTS AGAINST MEMBERS GRIEVENCE PROCEDURE: a)Arbitration proceedings b)Special committee c)Disciplinary proceedings

19. Complaints against companies They are in the nature of non-receipt of allotment letters, dividends, interest etc Clearance is slow SEBI has now powers to penalize companies violating the listing norms

20. GUIDELINES TO NEW INVESTORS Deal with registered member Deals are done in the trading ring Give specific orders to buy or sell Insist on contract notes Make sure your deal is registered with the stock exchange Collect settlement table Keep separate records of dealings Execute periodic settlements of dues Ensure that shares bought are transferred in your name Complain to grievance cell in case of delay

21. SEBI GUIDELINES FOR IPO’s IPO’s of small company Size of the public issue Promoter contribution Collection centers for receiving applications Regard to allotment of shares Timeframe for the issue and post issue formalities Dispatch of refund orders Relaxation to public issue by infrastructure companies

22. SEBI REFORMS ON STOCK EXCHANGE (a).Compulsory audit and inspection (b).Transparency in the prices (c).Accounts are to be kept separate (d).BOD has to be reconstituted (e).Capital adequacy (f).Guidelines for dealings of FFIs (g).New guidelines for corporate members