SEBI Role and Functions
SEBI Role and Functions
SEBI Role and Functions
FUNCTIONS
K.K.Jindal
Why do we need a regulatory body for
Investor protection in India?
India is an ` informationally ' weak market
Portfolio Managers
Every new scheme launched by a mutual fund needs to be filed with SEBI
and SEBI reviews the document in regard to the disclosures contained in
such documents.
SEBI also has the authority to initiate penal actions against an erring MF.
In case of a change in the controlling interest of an asset management
company, investors should be given at least 30 days time to exercise their
exit option.
FUNCTIONS OF SEBI
D) Promoting & Regulating Self Regulatory Organizations
– Stock Watch System, which has been put in place, surveillance over
insider trading would be further strengthened.
If the issue size is more than Rs. 20 crores, merchant bankers are required to file
prospectus at SEBI, Mumbai office.
Broker’s Code
The four-part model, which was recommended by the M R Mayya
committee
The market regulator would hold the remote control on the management of
the exchanges by approving nominations of 60 per cent non-broker
members of an exchange board.
The offer price shall have a floor price, which will be the average of 26 weeks
traded price preceding the date of the public announcement. The final offer price
shall be determined as the price at which maximum number of shares has been
offered.
After the final price is determined based on the book-building process, the promoter
or the acquirer will have to make a public announcement of the final price and
communicate to the exchanges from which the delisting is sought to be made within
two working days.
Further, the number of bidding centres shall not be less than 30, including all the
stock exchange centres, which should have at least one electronically-linked
computer terminal each.
In case the promoter does not accept the above price, he should not make an
application to the exchange for delisting of the securities, as per the guidelines.
Instead, he shall ensure that the public shareholding is brought up to the minimum
limits specified under the listing conditions within six months.
Pre-issue networth of the co. should not be less than Rs.1 crore in last 3
out of last 5 years with minimum networth to be met during
immediately preceding 2 years
The issue size (i.e. offer through offer document + firm allotment +
promoters’ contribution through the offer document) shall not exceed
five (5) times its pre-issue networth.
all steps for completion of the necessary formalities for listing and
commencement of trading at all stock exchanges where the securities are to
be listed are taken within 7 working days of finalization of basis of
allotment.
RECOMMENDATIONS ON
CORPORATE GOVERNANCE
If an institution wishes to appoint a director on the board of a company, it
should be approved by the shareholders of the company. Such a person is
not to be considered an independent director.
companies should lay down a code of conduct for all the board members
and the senior management of company.
Enhancing disclosures
In most case only the minimum information required under the
Companies Act is made available
The manner in which the swap ratio is fixed and what the
management thinks of the same is largely taken for granted.