Security and exchange boardof India

Securities Market Regulatory Body in India

Anand Kumar (DM08009)

Avinash kumar (DM08017)

Ruchi pathak (IB08053)

Seema pandey (IB08032)

SEBI Bhavan, Mumbai Headquarters of SEBI

Content

• Introduction• Preamble• About chairperson• Board members• Function of the board• Function of SEBI• Role of SEBI in global meltdown

Content

• Hierarchy of SEBI• SEBI with NRIs• Grievance handling• Types of grievances• Listing• Basic requirement for listing• Steps of listing

INTRODUCTION

• SEBI is the Regulator for the Securities Market in India.

• Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament.Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad.

Preamble

“…..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”

Mr. P Chidambram with bull statue

ABOUT CHAIRPERSON

• Chandrasekhar Bhaskar Bhave is the 6th chairman of the Securities Market Regulator.

• Prior to taking charge as Chairman SEBI, he had been the chairman of NSDL (National Securities Depository Limited) ushering in paperless securities.

• Prior to his stint at NSDL, he had served SEBI as a Senior Executive Director.

• He is a former Indian Administrative Service officer of the 1975 batch.

Board members

The board comprises of :Mr. CB Bhave - Chairman , SEBI

Mr. KP Krishnan - Joint secretary, ministry of finance

Mr. Anurag goel - Secretary, ministry of corporate affairsDr. G Mohan Gopal -Director, national judicial academy, Bhopal

Contd.

Mr. M S sahoo - Whole time member SEBIDr. K M Abraham - Whole time member SEBIMr. Mohandas pai - Director, infosysMr. Prashant saran - Whole time member SEBI

Functions Of The Board

a. The Board is responsible for the securing the interests of investors in securities and to facilitate the growth of and to monitor the securities market in an appropriate manner.

b. To monitor and control the performance of stock exchange and derivative markets.

Function contd…

c. Listing and monitoring the functioning of stock brokers, sub brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and others associated with securities markets by any means.

Function contd…

d. Monitoring and Controlling the functioning of venture capital funds and mutual funds.

e. Forbid unjust and dishonest trade practices in the

security markets and forbid insider trading in the security market.

f. Undertake periodic audits of stock exchanges,

mutual funds, individuals and self regulatory organizations associated with the security market.

Functions and Responsibilities of SEBI

SEBI has to be responsive to the needs of three groups, which constitute the market:

The issuers of securities The investors the market intermediaries.

Functions and Responsibilities contd.

SEBI has three functions rolled into one body 1. Quasi legislative2. Quasi executive3. Quasi judicial Though this makes it very powerful, there is

an appeals process to create accountability. There is a Securities Appellate Tribunal which is a three member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court.

Contd…

SEBI -success as a regulator by

• pushing systemic reforms aggressively and successfully

(e.g. the quick movement towards making the markets electronic and paperless rolling settlement).

• SEBI has been active in setting up the regulations as required under law.

Indian timings with US timings

Role in global meltdown

• SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco.It had increased the extent and quantity of disclosures to be made by indian corporate promoters.

• More recently, inlight of the global meltdown,it liberalised the takeover code to facilitate investments by removing regulatory strictures.

SEBI HIERARCHY

Shri C B BhaveCHAIRMAN

chairman@sebi.gov.in

Shri M S SAHOOEXECUTIVE DIRECTOR

(Whole Time Member)msahoo@sebi.gov.in 

Dr. K M ABRAHAM Whole Time Member abraham@sebi.gov.in

Shri PRASHANT SARANWhole Time Memberpsaran@sebi.gov.in

Shri MS Sahoo

Legal affair dept.

Enforcement dept.

Market Intermediaries Regulation and Supervision Dept.

Derivatives and New Products Dept.

Office of Investor Assistance and Education

General Services Dept.

Board Matters

RTI Act including hearing of appeals under RTI Act

Parliament Questions Cell

Dr. K M ABRAHAM

Corporation Finance Department

Market Regulation Department

Investigations DepartmentIntegrated Surveillance Dept.

Vigilance Cell

Office of International Affairs

Information Technology Department

Shri PRASHANT SARAN

Investment Management Department - Division of Funds (Portfolio Managers, Venture Capitals, etc.)

Department of Economic and Policy Analysis

Regional Offices

Investment Management Department-Division of Foreign Institutional Investors (FIIs) and Custodians

Investment Management Department - Division of Funds (Mutual Funds)

Division of Collective Investment Schemes

Enquiry and Adjudication Department

Non-Resident Indian (NRI) Savings and Investments

Most NRIs living in the United States have the option of utilizing saving and investments in US and also in India as well. From the U.S, they can save or invest in India's:

• Bank accounts • Investments in securities/shares of, and deposits with,

Indian firms/companies • Investments in immovable properties in India (Source: Reserve Bank of India - India's Central Bank

and Investors Education and Information)

SEBI Protects NRIs

The SEBI has been mandated to protect the interests of investors in securities and to promote the development of and to regulate the securities market so as to establish a dynamic and efficient Securities Market contributing to Indian Economy.

SEBI strongly believes that investors are the backbone of the securities market. They not only determine the level of activity in the securities market but also the level of activity in the economy.

When Things Go Wrong

In the event of any grievance one should first approach the concerned company/ intermediary against whom they have a grievance.

However, one may not be satisfied with their

response. Therefore, they should know whom he should turn to, to get his grievance redressed.

GRIVIANCE HANDELING

SEBI takes up grievances related to issue and transfer of securities and non-payment of dividend with listed companies.

In addition, SEBI also takes up grievances

against the various intermediaries registered with it and related issues.

Types of grievances

• Refund Order/ Allotment Advise.• Non-receipt of dividend.• Non-receipt of share certificates after

transfer.• Debentures.• Non-receipt of letter of offer for rights.

TYPES OF GRIVIANCES

• Collective Investment Schemes• Mutual Funds/ Venture Capital Funds/ Foreign

Venture Capital Investors/ Foreign Institutional Investors/ Portfolio Managers, Custodians.

• brokers/ securities Lending intermediaries/ merchant bankers/ Registrars and Transfer Agents/ Debenture Trustees/ Bankers to Issue/ Underwriters/ Credit Rating Agencies/ Depository Participants.

TYPES OF GRIVIANCES

• Securities Exchanges/ Clearing and Settlement Organizations/ Depositories.

• Derivative Trading• Corporate Governance/ Corporate

Restructuring/ Substantial Acquisition and Takeovers/ Buyback / Delisting / Compliance With Listing Conditions.

Listing

It refers to the

admission of the security of a public limited company on a recognized stock exchange

for trading.

Merits of listing

• Liquidity• Best prices• Regular information.• Periodic reports• Transferability• Income tax benefit• Wide publicity

Demerits

• Listed Co.’s are subjected to various regulatory measures of the stock exchanges and SEBI.

• Essential information has to be submitted by the listed Co.’s to the stock exchanges.

Contd…

• AGM. Annual reports have to be sent to large number of shareholders. This creates unnecessary expenditures.

• Public offer itself is an expensive exercise. But this is a pre- requisite for the company’s shares to be listed.

Minimum Listing Requirements for new companies

a. Companies have been classified as large cap companies and small cap companies. A large cap company is a company with a minimum issue size of Rs. 10 crores and market capitalization of not less than Rs. 25 crores. A small cap company is a company other than a large cap company.

In respect of Small Cap Companies

The minimum issue size shall be Rs. 3 crores

Steps of Listing

1.Submission of Letter of Application2.Payment of Listing Fees Initial Listing Fees Rs.20,000 Annual Listing Fees

(i) Companies with paid-up capital upto Rs. 5 crores Rs. 10,000

(ii) Above Rs. 5 crores and upto Rs. 10 crores Rs. 15,000

(iii) Above Rs. 10 crores and upto Rs. 20 crores Rs. 30,000

Companies which have a paid-up capital of more than Rs. 20 crores will pay additional fee of Rs. 750/- for every increase of Rs. 1 crore or part thereof. 

Steps contd…

3.Collection of Listing Fees – HDFC bank4. Trading Permission - SEBI6. Advertisement – No adv. of over

subscription / any thanking note in news paper

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