...In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place of Government Control, a statutory and autonomous regulatory board with defined responsibilities, to cover both development & regulation of the market, and independent powers have been set up. Paradoxically this is a positive outcome of the Securities Scam of 1990-91. The basic objectives of the Board were identified as: * to protect the interests of investors in securities; * to promote the development of Securities Market; * to regulate the securities market and * for matters connected therewith or incidental thereto. Since its inception SEBI has been working targetting the securities and is attending to the fulfillment of its objectives with commendable zeal and dexterity. The improvements in the securities markets like capitalization requirements, margining, establishment of clearing corporations etc. reduced the risk of credit and also reduced the market. SEBI has introduced the comprehensive regulatory measures, prescribed registration norms, the eligibility criteria, the code of obligations and the code of conduct for different intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers,...
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...SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) * INTRODUCTION : * Stock market regulation was a pre-independence phenomenon in India. * During the II World War period provisions were made to check the flow of capital into production of essential commodities. * These rules continued after the war and culminated into the Capital Issues (Control) Act, 1947. For the purpose of this act an office of the Controller of Capital Issues was set up which was vested with the powers to approve the kind of instruments, size, timing and premium of issue. * It was proved over time that the provisions in the CIC Act were totally inadequate to regulate the growing dimensions of capital market activity. * This led to the enactment of Companies Act and Securities Contracts(Regulation) Act in 1956.For the first time during the 6th five year plan period. * The securities market showed a potential not only to mobilize savings of the household sector but also to allocate it with some degree of efficiency for industrial development. * This gave birth to new intermediaries and institutions in the security market and thereby created new investment opportunities and awareness among the investors. * Under these circumstances, the govt felt the need for setting up of an apex body to develop and regulate the stock market in India. * Eventually, the Securities and Exchange Board of India (SEBI) was set up on April 12, 1988. it took four years for the govt...
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...Indian Depository Receipt means any instrument in the form of a depository receipt created by Domestic Depository in India against the underlying equity shares of issuing company. “Domestic Depository” means custodian of securities registered with SEBI and authorised by the issuing company to issue Indian Depository Receipts. Overseas Custodian Bank means a banking company which is established in a country outside India and has a place of business in India and acts as custodian for the equity shares of issuing company against which IDRs are proposed to be issued by having a custodial arrangement or agreement with the Domestic Depository or by establishing a place of business in India. Process involved in issue of India Depository Receipts (IDRs) The following flowchart describes the IDRs process : Issuing Company (company incorporated outside India delivers equity shares to Overseas Custodian) Overseas Custodian Bank (instructs Domestic Depository to issue depository receipts in respect of shares held) Domestic Depository (issues Depository Receipts to Indians against the equity shares of the company incorporated outside India) Indians (i.e. investors of IDR issue) Foreign shares being traded in Indian Exchanges in IDR form ADVANTAGES OF THE IDR Benefits to the Issuing Company • It provides access to a large pool of capital to the issuing capita. • It gives brand recognition in India to the issuing company. • It facilitates acquisitions in India. • Provides...
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...THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 No.15 of 1992 [4th April, 1992.] An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto. Be it enacted by Parliament in the Forty-third Year of the Republic of India as follows: ? ? ? ? ? ? ? ? ? ? CHAPTER I (Preliminary) CHAPTER II (Establishment Of The Securities And Exchange Board Of India) CHAPTER III (Transfer Of Assets, Liabilities, etc., Of The Existing Securities And Exchange Board To The Board) CHAPTER IV (Powers And Functions Of The Board) CHAPTER V (Registration Certificate) CHAPTER VA (Prohibition Of Manipulative And Deceptive Devices, Insider Trading And Substantial Acquisition Of Securities Or Control) CHAPTER VI (Finance, Accounts And Audit) CHAPTER VIA (Penalties and Adjudication) CHAPTER VIB (Establishment, Jurisdiction, Authority and Procedure of Appellate Tribunal CHAPTER VII (Miscellaneous) CHAPTER I PRELIMINARY Short title, extent & commencement. 1. (1) This Act may be called the Securities and Exchange Board of India Act, 1992. (2) It extends to the whole of India. (3) It shall be deemed to have come into force on the 30th day of January, 1992. Definitions. 2. (1) In this Act, unless the context otherwise requires, (a) "Board" means the Securities and Exchange Board of India established under section 3; (b) "Chairman"...
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...SEBI guidelines pertaining to the Issue of Debentures are as follows:- * Issue of FCDs having a conversion period more than 36 months will not be permissible, unless conversion is made optional with “put” and “call” option. • Compulsory credit rating will be required if conversion is made for FCDs after 18 months. • Premium amount on conversion, the conversion period, in stages, if any, shall be pre-determined and stated in the prospectus. • The interest rate for above debentures will be freely determinable by the issuer. • Issue of debenture with maturity of 18 months or less are exempt from the requirement of appointing Debenture Trustees or creating a Debenture Redemption Reserve (DRR). • In other cases, the names of the debenture trustees must be stated in the prospectus and DRR will be created in accordance with guidelines laid down by SEBI. • The trust deed shall be executed within six months of the closure of the issue. • Any conversion in part or whole of the debenture will be optional at the hands of the debenture holder, if the conversion takes place at or after 18 months from the date of allotment, but before 36 months. • In case of NCDs/ PCDs credit rating is compulsory where maturity exceeds 18 months. • Premium amount at the time of conversion for the PCD, redemption amount, period of maturity, yield on redemption for the PCDs/NCDs shall be indicated in the prospectus. • The discount on the non-convertible portion of the PCD in case they...
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...Preliminary 4 Chapter II Eligibility Norms for Companies Issuing Securities 9 Chapter III Pricing by Companies Issuing Securities 22 Chapter IV Promoters’ Contribution and Lock-In Requirements 26 Part I Promoters’ Contribution 26 Part II Lock-In Requirements 31 Part III Other Requirements in Respect of Lock-In 34 Chapter V Pre-Issue Obligations 36 Chapter VI Contents of Offer Document 48 Contents of the Prospectus 48 Section I 93 Section II Contents of Abridged Prospectus 102 Section III Contents of the Letter of Offer Section IV Contents Of the Abridged Letter Of Offer 109 Chapter VIA Issue of Indian Depository Receipts (IDRs) 111 General Requirements Part I 111 Part II Disclosures in a Prospectus for IDRs 112 Applicability of provisions of the SEBI (DIP) Guidelines, 2000 123 Part III Part IV Contents of Abridged Prospectus (See Rule 8(i) of the IDR Rules) 123 Chapter VII Post-Issue Obligations 130 Chapter VIII Other Issue Requirements 138 Chapter VIII-A Green Shoe Option 153 Chapter IX Guidelines on Advertisement 158 Chapter X Guidelines for Issue of Debt Instruments 164 Chapter XI Guidelines on Book Building 174 Chapter XI A Guidelines on Initial Public Offers through the Stock 196 Exchange On-Line System (e-IPO) Chapter XII Guidelines for Issue of Capital by Designated Financial 202 Institutions Chapter XII-A Shelf Prospectus 211 Chapter XIII Guidelines for Preferential Issues 212 Chapter XIII-A Guidelines for Qualified Institutions Placement 221 Chapter XIV Guidelines for OTCEI Issues...
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...which is called as Stock Markets. This market enables participants who hold securities to adjust their holdings in response to their assessment of risk and return. They can also sell these securities as per their liquidity needs The securities market has three types of participants 1] issuer of securities 2] investors of securities 3] intermediaries. The issuer and investors are customers of the services rendered by the intermediaries. Those who receive funds in exchange of securities and those who receive securities in exchange of funds often need reassurance that it is safe to do so. This reassurance is provided by laws enforced by regulators. The four main legislations that govern the securities markets : 1. The SEBI Act 1992- which establishes SEBI to protect investors and...
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...MODEL BYE-LAWS CHAPTER-4 CHAPTER - 4 LISTING OF SECURITIES 4. Listing of Securities A company, desirous of listing its securities on the Exchange, shall be required to file an application, in the prescribed form, with the Exchange before issue of Prospectus by the company, where the securities are issued by way of a prospectus or before issue of 'Offer for Sale', where the securities are issued by way of an offer for sale. The company shall be responsible to follow all the requirements specified in the Companies Act, the listing norms issued by SEBI from time to time and such other conditions, requirements and norms that may be in force from time to time and included hereafter in these Bye-laws and Regulations to make the security eligible to be listed and for continuous listing on the Exchange. 4.1 Applications in Respect of New Issues or Offers for Sale or Book-Building 4.1.1 Except when otherwise allowed by the Governing Board or Managing Director or Relevant Authority in any particular case and subject to compliance with such conditions as it or he may impose, tenders or applications for subscription or purchase or book-building in respect of any new issue or offer for sale of any security shall not be submitted unless the issuer or offerer offers to all a fair and equal opportunity for subscription or purchase and on the same terms as to brokerage to all the trading members and unless it is provided that all tenders and applications for subscription or purchase or book-building...
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...Market regulator Sebi today said it has imposed a penalty of Rs 10 lakh on a Manish Mathur for allegedly indulging in fraudulent trading practices in shares of Asian Star Company (ASCL). Sebi has alleged that Mathur acted as a link between the connected entities who orchestrated manipulation in the scrip of ASCL. Sebi said it is imposing a penalty of Rs 10 lakh on Mathur "which will be commensurate with the violations committed by him". Sebi said in a probe it noticed a spurt in the price ASCL shares during the period from October 10, 2008 to November 20, 2008. During the same period the benchmark Sensex had dropped over 19 percent. Sebi said it had observed that certain entities connected to each other had allegedly indulged in circular/reversal synchronised trading in a manner that led to creation of artificial volume in the scrips. Mathur is alleged to have had connections with the entities belonging to Mehta group, Sebi said. These entities had allegedly executed trades through broker Triveni Management Consultancy Services of which Mathur was the CEO, it added. Sebi said it noted that Mathur had acted as a link between the Mehta Group entities, financed their transactions to orchestrate manipulation in the scrip and "thereby connived with the Mehta Group clients in manipulating the price and volume of the scrip of ASCL". Sebi slaps Rs 5 lakh fine on a individual in BGSL trading case * Share 0 * * Share 0 * * * Mumbai...
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...How Sahara Hoodwinked Sebi, RBI and the Supreme Court There are a few business conglomerates in India which are often engulfed in mystery. Their dealings, activities and political affiliations are often discussed in a hush – hush tone by the press and the public. Not a lot is often known about their dealings. A few of such famous business groups include the Sahara Group headed by Mr. Subrata Roy, the Adani Group headed by its reclusive Chairman Gautam Adani and the real estate giant DLF headed by KP Singh. Evolution of the Sahara Pariwar Subrata Roy, is the head of the $10bn (£5.5bn) Sahara Group. Sahara Group has diversified businesses in banking, media and housing sector. Subrata Roy started off in 1978, when he founded Sahara along with three workers in the state of Uttar Pradesh as a small deposits Para-banking business. Today, the group has expanded into a gigantic business conglomerate with roots entrenched in housing, media & entertainment and aviation. Sahara India is in entertainment, newspaper, and raises claim to own around 33,000 acres of real estate across the length and breadth of India. It sponsored the national Cricket team of India for around a decade and intends to further diversify into life insurance, housing finance, consumer products and healthcare. Sahara Group has also built one of the most sought after real estate projects in India, Aamby Valley. The project has witnessed some of the biggest name in Indian entertainment industry and sports arena...
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...The rationale for the establishment of SEBI and a brief detail about the SEBI Act-1992 It all started with the advent of the East India Company (EIC), which started its trading in India in late 18th century. During the tenure of British Raj in India EIC started the concept of shares in India and the system of the banks were introduced. Slowly in the pace of time trading of shares and securities started in the banks and the Town Hall of Mumbai became the epic center of it. With the increasing in trade in stocks the Company act of 1850 was introduced which focused on the limited liability concept which later became the insight for the modern joint stock for company in volume trading. The Civil war which broke out in America in 1861 hampered the trade in Europe and thus Great Depression came into effect. Cotton which was one of the most essential commodities was then exported from India to the various European countries. The demand of cotton trading resulted in the greater gain in margins and premium royalty. The effect of depression gave birth to the concept of the formal market. Many cloth mills factories and companies got sprung up in the region of Ahmedabad with the increasing demand of the cotton textile in Europe. This subsequently gave a push to the stock trading in India. The numbers of brokers in India increased and by 1874 Dalal Street came into existence, where stocks for the various companies were traded in Dalal Street. Dalal Street’s dawn resulted in the formation...
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...CHAPTER-1 INTRODUCTION OF THE STUDY Background of the study: Mutual fund industry in India attaining maturity Even though the capital market attracts people there are several problems associated with it. While investing directly in to capital market one to be careful to judge the valuation of the stock and understand the complexities involved in the stock price fluctuations. So, a person with moderate knowledge of capital market generally prefers to invest in mutual funds. In recent times mutual fund industry in India is growing rapidly and is undergoing tremendous changes. The Indian mutual fund industry has witnessed several structural and regulatory reforms. Different Investment Avenue are available to investors. Mutual fund also offers good investment opportunities to the investors. Like all investment, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of mutual funds schemes while investment decisions. An objective to make the investors aware of functioning of mutual funds, an attempt has been made to provide information in question-answers format which may help the investors in taking investment decisions. Meaning of mutual fund: Mutual fund is a mechanism for pooling the resources by issuing units to the investors...
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...Jet Airways – Etihad Airways Strategic Alliance Jet Airways.com Jet Airways and Etihad Airways are proud to announce the conclusion of the transaction for the subscription of 24 per cent minority equity stake in Jet Airways. This follows all government and regulatory approvals received on the 12th of November 2013. The infusion of foreign direct investment in the Indian aviation sector will result in economies of scale, growth in traffic at Indian airports and will create job opportunities across the aviation and tourism sectors. It will greatly benefit all our stakeholders whilst significantly benefitting our guests who will now have access to a more expanded global network, enhanced connectivity for tourists, business travellers, and the wider travelling public. India is one of the largest and fastest-growing markets in the world. Through this association, Jet Airways and Etihad Airways will both be strengthened as will be the economies of India and the UAE. By linking our two networks and adding new flights, new routes and more code-share options, travel to, from and within India will become more accessible/ convenient. Etihad Airways and Jet Airways will combine their network of 130 destinations, with Jet Airways establishing a Gulf gateway in Abu Dhabi and expanding it’s reach through Etihad Airways’ growing global network. Under the strategic partnership, both airlines will gradually expand existing operations and introduce new routes between India and Abu Dhabi thus...
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...Sub Section‐ I Issues by Indian Companies in India This sub‐section attempts to cover the basic concepts and questions related to issuance of securities by unlisted Indian companies1 offering the shares to public and by listed Indian companies2. For full particulars of laws governing primary markets, please refer to the Acts/Regulations/Guidelines appearing in the Legal Framework Section . FAQs are presented under following 12 broad headings. 1. Different kinds of issues 2. Types of offer documents 3. Issue requirements 4. Pricing of the issue 5. Understanding book building 6. Investment in Public/Rights issues 7. Categories of Investors 8. Intermediaries involved in the issue process 9. Guide to understand an offer document 10. SEBI’s role in an issue 11. New terms 12. Additional information 1 2 “Unlisted Company” means a company which is not a listed company. “Listed Company” means a company which has any of its securities offered through an offer document listed on a recognized stock exchange and also includes Public sector Undertakings whose securities are listed on a recognized stock exchange. 1 1. Different kinds of issues What are the different kinds of issues which can be made by an Indian company in India? Primarily, issues made by an Indian company can be classified as Public, Rights, Bonus and ...
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...------------------------------------------------- Regulators In India * Reserve Bank of India(RBI) * Securities Exchange Board in India(SEBI) * Insurance Regulatory Development Authority(IRDA) * Financial Intelligence Unit (FIU) * FSDC OVERVIEW A regulator is a public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity. An independent regulatory agency is a regulatory agency that is independent from other branches or arms of the government. Regulatory agencies deal in the area of administrative law—regulation or rulemaking (codifying and enforcing rules and regulations and imposing supervision or oversight for the benefit of the public at large). The existence of independent regulatory agencies is justified by the complexity of certain regulatory and supervisory tasks that require expertise, the need for rapid implementation of public authority in certain sectors, and the drawbacks of political interference. Some independent regulatory agencies perform investigations or audits, and some are authorized to fine the relevant parties and order certain measures. Regulatory agencies are usually a part of the executive branch of the government, or they have statutory authority to perform their functions with oversight from the legislative branch. Their actions are generally open to legal review. Regulatory authorities are commonly set up...
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