SECURITIES & EXCHANGE BOARD OF INDIA
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Established on April 12, 1988.
The SEBI is a body of 6 members- The Chairman, Two members from Central Government, Two members who are professionals and One member from the RBI.
Role of SEBI in Capital Market
SEBI’s Principal Tasks To regulate the business in Stock Exchage & other Securities Market. To register & regulate the working of Capital market intermediaries. To register & regulate the working of Mutual Funds. To promote & regulate Self-regulatory Organization.
To prohibit fraudulent unfair trade practices in Security Market.
To promote investors education & training to intermediaries of Capital Market. Prohibit insider training in Securities. Regulate acquisition of shares & takeover of companies. Performs others functions too.
SEBI in Capital Market
New SEBI guidelines were issued. Guidelines for First Issue of New Company.
Guidelines for the New issues made by the Private Limited Company.
Guidelines for Issue to the public by existing Company. The terms & conditions of the New Instruments. Disclose the arrangement of the amount received by issuing of Shares.
Public issue by the existing listed companies & the calculation of NAV & Market price.
Credit rating is compulsory in case of convertible debentures. Minimum Interval criteria. Bonus issues.
Debenture maturity period and redemption.
Disclosure of application amount raised through issue of shares. Issues to Promoters, Shareholders & Employees.
To protect the interest of Investors.
To regulate the Securities Market & ensure fair practices.
To promote efficient services. To facilitate an efficient mobilization & allocation of resources.
SEBI Functions (Sec 11 of SEBI Act)
Regulatory Functions: Regulates Stock Exchanges. Registration & regulation of Stock Brokers etc., Registration & regulation of various Schemes.
Prohibition of unfair trade practices.
Prohibit insider trading in securities. Regulating acquisitions & takeovers.
Developmental Functions: Promotes investors education.
Training of Intermediaries.
Conducting research & published information. Promotion of Fair practices. Promoting self-regulatory organizations.
Call periodical Returns. Call for any information from Stock Exchanges.
Direct enquiries of the affairs of Stock Exchanges.
Power to grant approval to the bye-laws of recognized Stock Exchange.
Power to make or amend the bye-laws.
Power to compel listing of Securities by Public Companies.
Power to control & regulate Stock Exchanges.
Power to grant registration to market intermediaries. Power to levy fees or other charges. Power to regulate FII etc.,
SEBI Guidelines With regard to
First Issue of New Company
Issue of Shares to public only by New Company. New Company set up by an existing Company. A draft prospectus containing disclosure will be examined by the SEBI.
Bonus Issue/Right Issue.
Bonus issue is made out of free reserve. Reserves are not capitalized.
Calculation of residual value.
The residual reserve should be at least 40% of increased paid-up capital. The capital reserve created will not form any part of Balance Sheet. The bonus issue is not made unless the partly paid Shares are fully paid.
Speculative Trading & Distribution of Turnover. Market Abuses.
Book Building Process. Features of Book Building Process. - Pre-issue Cost & Risk. - Participation of Institutional Investors. - Determination of Price of the Securities. - Person responsible for Book Building. - Time Period of Book Building Process. • Green Shoe Option.