Fii Sebi Guidline Impact on Indian Capial Market Final

Embed Size (px)

Citation preview

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    1/17

    Institute of Management & ComputerInstitute of Management & ComputerStudies (IMCOST), Thane, MumbaiStudies (IMCOST), Thane, Mumbai

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    2/17

    Name Seat No. Course

    MANIGANDAN

    MUDHALIAR

    F091025 MFM

    RAJESH MAITY F091021 MFM

    SUMIT DAS F091006 MFM

    Presented by

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    3/17

    INTRODUCTION

    The Securities and Exchange Board of India (SEBI) is the regulator

    for the securities market in India.

    It was formed officially by the Government of India in 1992 withSEBI Act 1992 being passed by the Indian Parliament. SEBI is

    headquartered in the business district of Bandra-Kurla complex in

    Mumbai, and has Northern, Eastern, Southern and Western regional

    offices in New Delhi, Kolkata, Chennai and Ahmadabad.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    4/17

    OBJECTIVES OF SEBI

    1. To protect the interest of the

    investors in securities.

    2. To promote the development of

    securities market.

    3. To regulate the securities market.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    5/17

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    6/17

    Promoting investors education and training ofintermediaries in securities market.

    Regulating the business in stock exchange and any

    other securities market

    Prohibiting insiders trading in securities.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    7/17

    SEBIregulates

    Primary

    Market

    Secondary

    Market

    Mutual

    Funds

    ForeignInstitutional

    Investment

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    8/17

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    9/17

    FII include:FII include:--1. Overseas pension funds.1. Overseas pension funds.

    2. Mutual funds.2. Mutual funds.

    3. Investment trust.3. Investment trust.

    4. Asset management company.4. Asset management company.

    5. Nominee company.5. Nominee company.

    6. Bank.6. Bank.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    10/17

    Cont.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    11/17

    On 17.10.07. The benchmark Sensex had fallen by 1,507.71

    points and touched 17,544.15 as soon as the opening of the

    market. Nifty had fallen by 524.15 points to touch 5,143.90. Asthe circuit filters were triggered, trading was suspended for an

    hour.

    At the end of the day, Sensex closed at 18,715.82, down 336.04

    The turmoil in the markets was caused by a SEBI proposal to

    regulate the foreign inflows through Participatory Notes.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    12/17

    SEBI issued a discussion paper on 16.10.07 and the proposals areas follows:

    1. FIIs and sub-accounts will not issue/renew PNs issued againstderivatives. They have to wind up their current positions over 18months.

    2. Sub-accounts can not issue PNs; have to wind up their currentpositions over 18 months .

    3. FIIs with more than 40% of assets in PNs will issue PNs onlyagainst redemption/cancellation

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    13/17

    Currently, 34 FIIs and their sub-accounts issuePNs and the notional value of outstanding PNshas risen from Rs 31,875 crore (March 2004)to Rs 3,53,000 crore (August 2007),constituting 51.6% of Assets under custody ofall FIIs/sub-accounts. The value of outstandingPNs with underlying as derivatives stands at

    Rs 1,17,071 crore, approximately 30% of totalPNs outstanding. The notional value ofoutstanding PNs, excluding derivatives asunderlying, is 34.5% of AUC.

    STATUS

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    14/17

    PP--NotesNotes areare financialfinancial instrumentsinstruments usedused byby investorsinvestors oror hedgehedge fundsfundsthatthat areare notnot registeredregistered withwith thethe SecuritiesSecurities andand ExchangeExchange BoardBoard ofofIndiaIndia toto investinvest inin IndianIndian securitiessecurities.. IndianIndian--basedbased brokeragesbrokerages buybuy IndiaIndia--basedbased securitiessecurities andand thenthen issueissue participatoryparticipatory notesnotes toto foreignforeign

    investorsinvestors..

    AnyAny dividendsdividends oror capitalcapital gainsgains collectedcollected fromfrom thethe underlyingunderlying securitiessecuritiesgogo backback toto thethe investorsinvestors.. ParticipatoryParticipatory notesnotes areare likelike contractcontract notesnotes..TheseThese areare issuedissued byby FIIsFIIs toto entitiesentities thatthat wantwant toto investinvest inin thethe IndianIndianstockstock marketmarket butbut dodo notnot wantwant toto registerregister themselvesthemselves withwith thethe SEBISEBI..

    SEBISEBI waswas notnot veryvery happyhappy aboutabout participatoryparticipatory notesnotes becausebecause theythey havehavenono wayway toto knowknow whowho ownsowns thethe underlyingunderlying securities,securities, itit fearedfeared thatthathedgehedge fundsfunds actingacting throughthrough participatoryparticipatory notesnotes willwill causecause economiceconomicvolatilityvolatility inin India'sIndia's exchangesexchanges..

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    15/17

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    16/17

    Exemption from attaching copy of RBI approval with each

    market lots.

    Allowed to invest in unlisted stocks of any company.

    Allowed to invest up to 100% in debt instruments.

    Mandatory to settle transactions thru dematerialized mode forFIIs having securities more than Rs.10 cr.

  • 8/3/2019 Fii Sebi Guidline Impact on Indian Capial Market Final

    17/17

    THANK YOU