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8/3/2019 Ppt on SEBI by Shashank Vashist
1/19
Presented by :-
Shashank vashist
PGDM
3rd sem
8/3/2019 Ppt on SEBI by Shashank Vashist
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ESTABLISHMENT
12th April 1988.
Statutory recognition on 31st January
1992, by an ordinance of thepresident of India.
Established as a surveillance body.
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OBJECTIVES
Protect the interest of investors in securities. Promote the development of capital market by
ensuring flow of saving in it. Promote development of the securities market
with the reasonable regulation thereof. Facilitates companies to raise their finances atminimum cost along with fair practices.
Prohibit insider trading in securities. Restrict transaction pertaining to acquisition of
shares & take over of companies. Impose monetary penalties on capital marketintermediaries & other participants for a rangeof violations.
Exercises the power as may be delegated to itby the government.
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Function of SEBI
Regulating the business in stock exchangeand any other securities market
Registering and regulating the workings of
intermediaries associated with securitiesmarket
Registering and regulating the working ofcollective investment schemes includingmutual funds
Promoting and regulating self-regulatoryorganizations
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Cont.
. Promoting investors education andtraining of intermediaries in securitiesmarket
Prohibiting insiders trading insecurities
Regulating substantial acquisition of
shares and take-over of companiesCalling for information, undertakinginspection, conducting enquiries andaudits of the stock exchanges,
intermediaries and self-regulatory
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Organization of SEBI
Departments
Primary Mkt. dept.
Issue Mgt. & Intermediaries Dept.
Secondary Mkt. dept.
Institutional Invt.Advisory
Committees
Departments
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SEBI Regulates.
SEBI
regulates
Primary
Market
Secondary
Market
Mutual
Funds
ForeignInstitutional
Investment
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SEBI & Primary Market
Measures undertaken by SEBI:-
Entry norms
Promoters contribution
Disclosure
Book building
Allocation of shares
Market intermediaries
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Conti..
1. Entry normsa) Track record of dividend payment for minimum
3 yrs preceding the issue.b) Already listed companies - when post-issue
networth becomes more than 5 times the pre-issue networth
c) For Manufacturing company not having suchtrack recordappraise project by a publicfinancial institution or a scheduled commercialbank.
d) For corporate body5 public shareholders forevery Rs.1 lakh of the net capital offer made tothe public
e) Banks2 yrs of profitability for issues abovepar.
Offer documents to companies.
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Conti..
2. Promoterscontribution
Should not be less than 20% of the issuedcapital.
Receiving of promoters contribution.
Lock in period as per SEBI.
Cases of non-under written public issues.
3. Disclosure
draft prospectusUn audited financial results
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Conti..
4.Book buildingSEBI recommends two-tier under writing system
One of the mode of public issue thru prospectus.
Role of syndicate members and book runners.
Minimum 30 centers.5. Allocation of shares
Minimum application of shares
Reservation for small investors
Allotment of securities
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Conti..
6. Market intermediariesLicensing of merchant bankers
Licensing of underwriters, registrars, transferagents, etc.,
Merchant bankers net worthRs.5 croresSegregate fund based from fee based activities.
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SEBI & Secondary Market
Reforms in the secondary market:-
1. Governing board
2. Infrastructure3. Settlement & clearing
4. Debt market
5. Price stabilization
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Conti..
1. Governing board
Brokers and non-brokers representation made50:50
60% of brokers in arbitration, disciplinary &default committees
For trading members 40% representation
2. Infrastructure
On-line screen based trading terminals
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Conti..
3. Settlement & clearing
Weekly settlements
Auctions for non-delivered shares within 80days of settlement
Advice to set up clearing houses, clearingcorporation or settlement guarantee fund
Warehousing facilities permitted by SEBI.
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Conti..
4. Debt market segment
Regulates thru SEBI (depository & participants)regulation Act 1996.
Listing of debt instruments
Invt. Range for FIIs
Dual rating for above Rs.500 million
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Conti..
5. Price stabilizationDivision to monitor the unusual movements inprices.
Monitor prices of newly listed scrip from the firstday of trading.
Circuit breaker system and other monitoringrestrictions could be applied
Imposing of special margins of 25% on purchasein addition to regular margin.
Price filtersPrice bands
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ADVANTAGES
Fair deals to investors , informedchoices & decision.
Regulating malpractices of companymanagement.
Builds investors confidence insecurities through efficient , orderly &
clean markets.
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