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8/8/2019 Copy of Securities and Exchange Board of India
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SECURITIES AND EXCHANGE BOARD
OF INDIA
As a part of III
semester I unit ofFIMS
forDepartment of Management Studies
Nigama Engineering College
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DISCUSSION CONTAINS
SEBI INTRODUCTION
SEBI ORGANISATION
SEBI OBJECTIVES
SEBI FUNCTIONS
SEBI GUIDELINES
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SEBI - INTRODUCTION
PRIOR TO SEBI:
During II World War : Defence Rules of India, 1943
After II World War : Capital Issues (control) Act, 1947
Objectives:
Growth of companies with sound structure.
To avoid overcrowding of public issues.
Ensuring investment in conformity withfive year plan objectives.
To ensure healthy growth of capital markets.
SECURITIESCONTRACTS (REGULATIONS)ACT, 1956
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Malpractices in Securities Market
Manipulation of securities prices.
Price rigging.
Insider trading.
Delay in settlement.
SEBI - INTRODUCTION
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Deficiencies in Market
Lack of diversity in Financial Instruments.
Disclosure of Financial Information.
Prepondence of Speculative Trading.
Poor liquidity.
Lack of control over brokers.
SEBI - INTRODUCTION
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Securities and Exchange Board of India was originally founded
on 12th April, 1988 but it was replaced by passing a separate
act, in parliament on 4th April, 1922.
Jurisdiction: Government of India.
Employees: 525
SEBI - INTRODUCTION
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SEBI ORGANISATION
SEBI ACTprovidesSIX members asstatutory board:
3 Members central government.
1 Member RBI
2 Members experienced
Primary market department.
Issue management & intermediaries department.
Secondary market department.
Institutional investment department.
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SEBI - OBJECTIVES
Toprotectthe interest ofinvestor.
To regulatethesecurities market
Topromoteefficientservices by brokers.
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SEBI - FUNCTIONS
Regulatory Functions:
Regulatesstockexchange.
Regulatesstock brokers and others
Registration ofinvestmentschemes.Developmental Functions:
Promotes investorseducation
Training.
Research and publish ofinformation. Promoting code ofconduct.
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SEBI - GUIDELINES
For Primary Market:
New company.
New company started by existing company: 5year track is to be
maintained and its contribution is 50% in equity i n new company.
Private and closely held companies.
Existing listed companies: 50% on first Rs. 100 crores, 40% on Rs.
200 crores and 30% on 300 crores and 15% on remaining.
Public issue
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SEBI - GUIDELINES
For Secondary Market:
StockExchange:
Board ofDirectors ofStockexchange has to constituted.
Working hours forstockexchanges havebeen fixed uniformly.
All stockexchanges have to inform about transaction with in 24 hrs.
Brokers:
3Registration is compulsory
3Compulsory audit of brokers book.
3No broker is allowed to underwrite more than 5%
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SEBI - GUIDELINES
For Foreign Institutional Investors:
Allowed to invest in primary and secondary markets..
The holding in single FII in a company will not exceed the ceiling
of5% of the equity capital of the company.
FII has to pay concessional tax of 10% on LTCG and 20% on
STCG.
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For Debentures
Amount of working capital debenture should not exceed 20% 0f
gross current assets.
DebtEquity ratio should not exceed 2:1.
Normally debentures above seven years should notbe issued
Debenture trust deed must be completed within six months from
public issue.
SEBI - GUIDELINES
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