Amrit Pai Sushil Ingle Anand Lihinar

AMRIT PAI
SUSHIL INGLE
ANAND LIHINAR
OBJECTIVES
 Protect the interest of investors in securities.
 Promote the development of securities market by ensuring flow
of saving in it.
 Facilitates companies to raise their finances at minimum cost
along with fair practices.
 Framing Rules and Regulations
 Effective mobilization and allocation of resources
 Innovations and Improvement
 Prevents malpractices and manipulations

SECURITIES MARKET
SECURITIES
CAPITAL DEBT DERIVATIVES

MARKET MARKET MARKET
 Equities Bonds Forwards
 Preference Debentures Futures
shares Money Market Options
 Mutual
Funds
PARTICIPANTS
 Stock Exchanges
 Stock Brokers & Sub-Brokers
 Bankers to an Issue
 Registrar to an Issue
 Merchant Bankers
 Underwriters
 Portfolio Managers
 Credit Rating Agencies
 Mutual Funds
 FIIs
 Venture Capitalists
SEBI FUNCTIONS
 Regulation of business in the stock exchanges
All stock exchanges are required to be Body

Corporates
 The exchange provides a fair, equitable and
growing market to investors.
 The exchange’s organisation, systems and practices
are in accordance with the Securities Contracts
(Regulation) Act (SC(R) Act), 1956
SEBI FUNCTIONS
 Registration And Regulation Of Mutual Funds,
Venture Capital Funds & Collective Investment
schemes
 AMFI-Self Regulatory Organization-'promoting and
protecting the interest of mutual funds and their unit-holders,
increasing public awareness of mutual funds, and serving the
investors' interest by defining and maintaining high ethical
and professional standards in the mutual funds industry'.
 Every mutual fund must be registered with SEBI and
registration is granted only where SEBI is satisfied with the
background of the fund.
 SEBI has the authority to inspect the books of accounts,
records and documents of a mutual fund, its trustees, AMC
and custodian where it deems it necessary
SEBI FUNCTIONS
 SEBI (Mutual Funds) Regulations, 1996 lays down the provisions
for the appointment of the trustees and their obligations
 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 has also laid down advertisement code to be followed by a

mutual fund in making any publicity regarding a scheme and its
performance
 SEBI also has the authority to initiate penal actions against an erring
MF.
SEBI FUNCTIONS
Promoting & Regulating Self Regulatory Organizations
 In order to effectively execute its responsibilities, it

would be required to be structured, organized, managed
and controlled such that it retains its independence, while
continuing to perform a genuine market development role
Prohibiting Fraudulent And Unfair Trade Practices

in the Securities Market
SEBI is vested with powers to take action against these

practices relating to securities market manipulation and
misleading statements to induce sale/purchase of
securities.
SEBI FUNCTIONS
Prohibition Of Insider Trading
 Stock Watch System, which has been put in place, surveillance
over insider trading would be further strengthened.
Investor Education And The Training Of Intermediaries

 SEBI distributed the booklet titled “A Quick Reference Guide
for Investors” to the investors
 SEBI also issued a series of advertisement /public notices in
national as well as regional newspapers to educate and caution
the investors about the risks associated with the investments in
collective investment schemes
 SEBI has also issued messages in the interest of investors on
National Channel and Regional Stations on Doordarshan.
SEBI FUNCTIONS
 Inspection and enquiries
Any book or register or other document or record of any
public listed company or a public company which intends to
get its securities listed on any recognized stock exchange
 Regulating substantial Acquistion of Shares and Take- Overs
 Performing such functions and exercising such powers under

SCRA, 1956 as may be delegated to it by the Central
Government
 Conducting Research for above purposes

VETTING BY SEBI
 A company cannot come out with public issue unless Draft Prospectus is
filed with SEBI. Prospectus is a document by way of which the investor
gets all the information pertaining to the company in which they are going
to invest. It gives the detailed information about the Company, Promoter /
Directors, group companies, Capital Structure, Terms of the present issue
etc.
 A company cannot file prospectus directly with SEBI. It has to be filed
through a merchant banker. After the preparation of prospectus, the
merchant banker along with the due diligence certificates and other
compliances and sends the same to SEBI for Vetting.
 SEBI on receiving the same scrutinizes it and may suggest changes within
21 days of receipt of prospectus
 The company can come out with a public issue any time within 180 days
from the date of the letter from SEBI or if no letter is received from SEBI,
within 180 days from the date of expiry of 21 days of submission of
prospectus with SEBI
 If the issue size is upto Rs. 20 crores then the merchant bankers are required
to file prospectus with the regional office of SEBI falling under the
jurisdiction in which registered office of the company is situated.
 If the issue size is more than Rs. 20 crores, merchant bankers are required to
file prospectus at SEBI, Mumbai office.
QUALITY OF DECISIONS
Accounting, audit quality
 The plethora of inter-corporate investments, intra-company and
intra-group transactions, guarantees and contingent liabilities are
areas where there is room for considerable concern.
 Price manipulation, informed trading and insider trading with key
operators/investors is now routine. This is an area that is difficult to
tackle for any regulator. But over the last ten years, SEBI has taken
action on such price manipulation in just two cases (Bayer ABS and
Amara Raja Batteries). Here, too, the penal action has hardly been
stringent
THANK YOU

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AMRIT PAI

 Effective mobilization and allocation of resources

 Innovations and Improvement

 Prevents malpractices and manipulations

CAPITAL DEBT DERIVATIVES

 Credit Rating Agencies

All stock exchanges are required to be Body

 Every new scheme launched by a mutual fund needs to be filed with

 SEBI has also laid down advertisement code to be followed by a

 In order to effectively execute its responsibilities, it

Prohibiting Fraudulent And Unfair Trade Practices

SEBI is vested with powers to take action against these

Investor Education And The Training Of Intermediaries

 Regulating substantial Acquistion of Shares and Take- Overs

 Performing such functions and exercising such powers under

 Conducting Research for above purposes

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