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8/17/2019 PPT on 1st Topic on Corplorate Law
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CORPORATE LAW
PROF.SANDEEP G.
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SEBI
SEBI is the regulator for the Securities Market in India.
In 1988 SEBI was established by the Governent of India through anexecutive resolution, and was subse!uently u"graded as a fullyautonoous body #a statutory Board$ in the year 1992 with the
passing of the Securities and Exchange Board of India Act #SEBI%ct$ on &'th (anuary 199).
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*haired by *.B. Bhave+ SEBI is head!uartered in the "o"ular business
district of B,* in Mubai+ and has -orthern+ Eastern+ Southern and
estern regional offices in -ew /elhi+ ,olkata. *hennai+ and%hadabad.
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SEBI- PREAMBLE
0he reable of the SEBI describes the basic functions of the
Securities and E2change Board of India as
“…to protect the interests of investors in securities and to
pro!ote the develop!ent of, and to regulate the securities !ar"et
and for !atters connected therewith or incidental thereto#
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SEBI- Basic objectives
0o "rotect the interests of investors in securities. 0o "roote the develo"ent of Securities Market.
0o regulate the securities arket.
3or atters connected therewith or incidental thereto.
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Cont…It has fraed bye5laws+ risk identification and risk anageent
systes for *learing houses of stock e2changes+ surveillance systeetc.
% arket Inde2 is a convenient and effective "roduct because of the
following reasons65 It acts as a baroeter for arket behavior7
5 It is used to benchark "ortfolio "erforance7 5 It is used in derivative instruents like inde2 futures and
Inde2 o"tions
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Cont… 0wo broad a""roaches of SEBI is to integrate the securities arketat the national level+ and also to diversify the trading "roducts+ so that
there is an increase in nuber of traders including banks+ financialinstitutions+ insurance co"anies+ utual funds+ "riary dealers etc.to transact through the E2changes.
In this conte2t the introduction of derivatives trading through Indian
Stock E2changes "eritted by SEBI in )''' is a real landark.
SEBI has enoyed success as a regulator by "ushing systeicrefors aggressively and successively.
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SEBI- Responsibilities SEBI has to be res"onsive to the needs of three grou"s+ which
constitute the arket6 5 0he issuers of securities 5 0he investors 5 0he arket interediaries.
SEBI has three functions rolled into one body !uasi legislative+!uasi5udicial and !uasi5e2ecutive. 5 It drafts regulations in its legislative ca"acity 5 It conducts investigation and enforceent action in its
e2ecutive function and it "asses rulings and orders in its udicial ca"acity.
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SEBI
%egulating the business in stock e2changes and any other securities
arkets.
egistering and regulating the wor"ing of stoc" &ro"ers, su&'&ro"ers,share transfer agents, &an"ers to an issue, trustees of trust deeds+registrars to an issue+ erchant bankers+ underwriters+ "ortfolio anagers+
investent advisers and such other interediaries who ay be associatedwith securities arkets in any anner.
egistering and regulating the wor"ing of the depositories, custodians ofsecurities, foreign institutional investors+ credit rating agencies and such
other interediaries as the Board ay+ by notification+ s"ecify in this behalf.
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Cont… egistering and regulating the working of venture ca"ital funds andincluding utual funds.
rooting and regulating self5regulatory organisations.
rohibiting fraudulent and unfair trade "ractices relating tosecurities arkets.
rooting investors: education and training of interediaries ofsecurities arkets.
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Cont…
rohibiting insider trading in securities.
egulating substantial ac!uisition of shares and take5over ofco"anies.
*alling for inforation fro+ undertaking ins"ection+ conductingin!uiries and audits of the stock e2changes+ utual funds+ other "ersons associated with the securities arket interediaries and self5regulatory organi4ations in the securities arket.
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Cont… *alling for inforation and record fro any bank or any otherauthority or board or cor"oration established or constituted by or under
any *entral+ State or rovincial %ct in res"ect of any transaction insecurities which is under investigation or in!uiry by the Board.;
erforing such functions and e2ercising such "owers under the"rovisions of the %ct as ay be delegated to it by the *entral
Governent fro tie to tie.
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Cont…
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Cont…(he Board !a$, ta"e an$ of the following !easures) Sus"end the trading of any security in a recogni4ed stock e2change.
estrain "ersons fro accessing the securities arket and "rohibit any"erson associated with securities arket to buy+ sell or deal in securities.
Sus"end any office5bearer of any stock e2change or self5 regulatoryorgani4ation fro holding such "osition.
I"ound and retain the "roceeds or securities in res"ect of anytransaction which is under investigation.
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T$an% &ou…'
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Cont… %ttach for a "eriod not e2ceeding one onth+ one or ore bankaccount or accounts of any interediary or any "erson associatedwith the securities arket in any anner involved in violation of anyof the "rovisions of this %ct+ or the rules or the regulations ade thereunder.
/irect any interediary or any "erson associated with the securities
arket in any anner not to dis"ose of or alienate an asset foring "art of any transaction which is under investigation.
0he Board ay take any of the easures in res"ect of any listed "ublic co"any or a "ublic co"any which intends to get its
securities listed on any recogni4ed stock e2change where the Boardhas reasonable grounds to believe that such co"any has beenindulging in insider trading or fraudulent and unfair trade "racticesrelating to securities arket.