...The rationale for the establishment of SEBI and a brief detail about the SEBI Act-1992 It all started with the advent of the East India Company (EIC), which started its trading in India in late 18th century. During the tenure of British Raj in India EIC started the concept of shares in India and the system of the banks were introduced. Slowly in the pace of time trading of shares and securities started in the banks and the Town Hall of Mumbai became the epic center of it. With the increasing in trade in stocks the Company act of 1850 was introduced which focused on the limited liability concept which later became the insight for the modern joint stock for company in volume trading. The Civil war which broke out in America in 1861 hampered the trade in Europe and thus Great Depression came into effect. Cotton which was one of the most essential commodities was then exported from India to the various European countries. The demand of cotton trading resulted in the greater gain in margins and premium royalty. The effect of depression gave birth to the concept of the formal market. Many cloth mills factories and companies got sprung up in the region of Ahmedabad with the increasing demand of the cotton textile in Europe. This subsequently gave a push to the stock trading in India. The numbers of brokers in India increased and by 1874 Dalal Street came into existence, where stocks for the various companies were traded in Dalal Street. Dalal Street’s dawn resulted in the formation...
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...MODEL BYE-LAWS CHAPTER-4 CHAPTER - 4 LISTING OF SECURITIES 4. Listing of Securities A company, desirous of listing its securities on the Exchange, shall be required to file an application, in the prescribed form, with the Exchange before issue of Prospectus by the company, where the securities are issued by way of a prospectus or before issue of 'Offer for Sale', where the securities are issued by way of an offer for sale. The company shall be responsible to follow all the requirements specified in the Companies Act, the listing norms issued by SEBI from time to time and such other conditions, requirements and norms that may be in force from time to time and included hereafter in these Bye-laws and Regulations to make the security eligible to be listed and for continuous listing on the Exchange. 4.1 Applications in Respect of New Issues or Offers for Sale or Book-Building 4.1.1 Except when otherwise allowed by the Governing Board or Managing Director or Relevant Authority in any particular case and subject to compliance with such conditions as it or he may impose, tenders or applications for subscription or purchase or book-building in respect of any new issue or offer for sale of any security shall not be submitted unless the issuer or offerer offers to all a fair and equal opportunity for subscription or purchase and on the same terms as to brokerage to all the trading members and unless it is provided that all tenders and applications for subscription or purchase or book-building...
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...MARKETS IN INDIA MONEY MARKET Money market is a market for debt securities that pay off in the short term usually less than one year, for example the market for 90-days treasury bills. This market encompasses the trading and issuance of short term non equity debt instruments including treasury bills, commercial papers, bankers acceptance, certificates of deposits, etc. In other word we can also say that the Money Market is basically concerned with the issue and trading of securities with short term maturities or quasi-money instruments. The Instruments traded in the money-market are Treasury Bills, Certificates of Deposits (CDs), Commercial Paper (CPs), Bills of Exchange and other such instruments of short-term maturities (i.e. not exceeding 1 year with regard to the original maturity) CAPITAL MARKET Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges. Capital market can be divided into Primary and Secondary Markets. PRIMARY MARKET In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors. Secondary market could be either auction or dealer market. While stock exchange is the...
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...1.1. Introduction Mutual Funds in India – History The concept of Mutual Funds in India emerged as success as early as 1990s, when Government allowed public sector banks and institutions to launch mutual funds schemes. Unit Trust of India was the first Mutual Fund in India set-up in the year 1963 Security and exchange Board of India (SEBI) act was passed in the year 1192. The objectives of SEBI are - to regulate security market and protect the interests of investor community. It is regulatory institution which is responsible for formulating policies and guidelines for operation of mutual funds in India. Mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds. In fact, many people think investing means buying mutual funds. After all, its common knowledge that investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a savings account, but, for most people, that's where the understanding of funds ends. It doesn't help that mutual fund salespeople speak a strange language that is interspersed with jargon that many investors don't understand. Originally, mutual funds were heralded as a way for the little guy to get a piece of the market. Instead of spending all your free time buried in the financial pages of the Wall Street Journal...
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...SECURITIES What is meant by ‘Securities’? The definition of ‘Securities’ as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government. What is the function of Securities Market? Securities Markets is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc. Further, it performs an important role of enabling corporates, entrepreneurs to raise resources for their companies and business ventures through public issues. Transfer of resources from those having idle resources (investors) to others who have a need for them (corporates) is most efficiently achieved through the securities market. Stated formally, securities markets provide channels for reallocation of savings to investments and entrepreneurship. Savings are linked to investments by a variety of intermediaries, through a range of financial products, called ‘Securities’. Which are the securities one can invest in? Shares Government Securities Derivative products Units of Mutual Funds etc., are some of the securities investors in the securities market can invest in...
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...THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT 1992 Firms and institutions can raise medium and long term funds by issuing securities. Securities issued can be tradable or non-tradable. Tradable securities include corporate securities(shares & debentures), govt securities, public securities, bonds, units of mutual fund, are tradable securities i.e. transferable . Non-transferable securities include bank deposits , company deposits, loans and advances of bank & financial institutions and post office certificates & deposits Capital market can be classified into primary & secondary markets Primary markets : provides for channel for sale of new securities. The issuer of securities(create and sell) new securities in the primary market to raise funds, either through public issue or private placement. If the issue is made to particular class of people it is called a private placement Secondary markets : Deals with securities already issued or offered to the public in the primary market. Thus secondary market facilitates exchange of securities of listed companies which is called as Stock Markets. This market enables participants who hold securities to adjust their holdings in response to their assessment of risk and return. They can also sell these securities as per their liquidity needs The securities market has three types of participants 1] issuer of securities 2] investors of securities 3] intermediaries. The issuer and investors are customers of the...
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...THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 No.15 of 1992 [4th April, 1992.] An Act to provide for the establishment of a Board 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. Be it enacted by Parliament in the Forty-third Year of the Republic of India as follows: ? ? ? ? ? ? ? ? ? ? CHAPTER I (Preliminary) CHAPTER II (Establishment Of The Securities And Exchange Board Of India) CHAPTER III (Transfer Of Assets, Liabilities, etc., Of The Existing Securities And Exchange Board To The Board) CHAPTER IV (Powers And Functions Of The Board) CHAPTER V (Registration Certificate) CHAPTER VA (Prohibition Of Manipulative And Deceptive Devices, Insider Trading And Substantial Acquisition Of Securities Or Control) CHAPTER VI (Finance, Accounts And Audit) CHAPTER VIA (Penalties and Adjudication) CHAPTER VIB (Establishment, Jurisdiction, Authority and Procedure of Appellate Tribunal CHAPTER VII (Miscellaneous) CHAPTER I PRELIMINARY Short title, extent & commencement. 1. (1) This Act may be called the Securities and Exchange Board of India Act, 1992. (2) It extends to the whole of India. (3) It shall be deemed to have come into force on the 30th day of January, 1992. Definitions. 2. (1) In this Act, unless the context otherwise requires, (a) "Board" means the Securities and Exchange Board of India established under section 3; (b) "Chairman"...
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...form of a depository receipt created by Domestic Depository in India against the underlying equity shares of issuing company. “Domestic Depository” means custodian of securities registered with SEBI and authorised by the issuing company to issue Indian Depository Receipts. Overseas Custodian Bank means a banking company which is established in a country outside India and has a place of business in India and acts as custodian for the equity shares of issuing company against which IDRs are proposed to be issued by having a custodial arrangement or agreement with the Domestic Depository or by establishing a place of business in India. Process involved in issue of India Depository Receipts (IDRs) The following flowchart describes the IDRs process : Issuing Company (company incorporated outside India delivers equity shares to Overseas Custodian) Overseas Custodian Bank (instructs Domestic Depository to issue depository receipts in respect of shares held) Domestic Depository (issues Depository Receipts to Indians against the equity shares of the company incorporated outside India) Indians (i.e. investors of IDR issue) Foreign shares being traded in Indian Exchanges in IDR form ADVANTAGES OF THE IDR Benefits to the Issuing Company • It provides access to a large pool of capital to the issuing capita. • It gives brand recognition in India to the issuing company. • It facilitates acquisitions in India. • Provides an exit route for existing shareholders. Benefits...
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...FINANCING ENVIRONMENT IN INDIA: A CRITICAL REVIEW S No | Topic | Page No | 1. | Executive Summary | 2 | 2. | Financial Instruments | 3 | 3. | Financial Markets | 4 | 4. | Financial Intermediaries | 5 | 5. | The Regulatory Environment | 6 | 6. | The Way Forward | 9 | Executive Summary 1. Corporate finance is used to collectively identify the various financial dealings undertaken by a corporation. Ideally, corporate finance is the division of the company that is mostly concerned with the financial operations of the company. In some businesses, corporate finance primarily focuses on raising money for ventures and projects. For other corporations and investment banks, corporate finance concentrates on analysis of corporate buyouts and other decisions. The core functions of corporate finance are making wise use of the financial resources available to the company. Corporate finance may also take on many different aspects of the overall management of the finances of the company. The functions may also include managing of investments like acquisition and selling stocks, bonds, and other investment ventures pertaining to other companies. It may also involve creating and managing the process for issuing shares of stock or offering corporate bonds to generate resources for expansion projects. 2. The pattern of corporate financing in India has been different throughout its economic history. The outline of corporate financing in India has been determined by the...
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...opportunity to undergo my Summer Internship program for six weeks. My project work based on Compliance Requirements in the Stock Exchange was prepared on the study of various compliance requirements that the members need to comply with and the inspection procedures followed in the Exchange. I was extremely pleased to work in BSE’s friendly atmosphere. My sincere thanks to the Inspection Department of the BSE; who have contributed by helping me and providing me with valuable information. This has enabled me to complete my project on time. I express my immense gratitude to my mentor and project Guide Mr. Mitesh Thakkar who guided me throughout the project and also to Mr. Yogesh Bambardekar and Mr. Pankaj Guptan and P.K Ramesh who extended their help whenever required. Executive Summary One of the most dynamic fields of business is the Capital Market. It is considered one of the most promising and emerging markets in the world. This is because of the sea change that that the market has undergone from the early 90’s. The market is now automated, transparent and self-driven. The Indian Financial system is regulated by two governing agencies under the Ministry of Finance. These are the Reserve Bank of India and the Securities Exchange Board of India. The Capital Market is governed by acts like the Securities Contract (Regulation)...
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...In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place of Government Control, a statutory and autonomous regulatory board with defined responsibilities, to cover both development & regulation of the market, and independent powers have been set up. Paradoxically this is a positive outcome of the Securities Scam of 1990-91. The basic objectives of the Board were identified as: * to protect the interests of investors in securities; * to promote the development of Securities Market; * to regulate the securities market and * for matters connected therewith or incidental thereto. Since its inception SEBI has been working targetting the securities and is attending to the fulfillment of its objectives with commendable zeal and dexterity. The improvements in the securities markets like capitalization requirements, margining, establishment of clearing corporations etc. reduced the risk of credit and also reduced the market. SEBI has introduced the comprehensive regulatory measures, prescribed registration norms, the eligibility criteria, the code of obligations and the code of conduct for different intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers,...
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...across 57 countries worldwide. Kana Software has its headquarters in California. It provides customer service solutions using cloud computing network to about 900 enterprises and mid-market organisations, which includes 250 government agencies all over the world. RBI Issued Norms for Currency Swap Window The Reserve Bank of India issued norms for currency swap window from Mumbai. The Reserve Bank also cleared that the facility of currency swap would be made available to scheduled commercial banks (excluding regional rural banks) for fresh Foreign Currency Non-Resident Bank (FCNRB) deposits, which would be mobilised for a minimum tenure of three years. The Reserve Bank also mentioned that the deposits can be made in any permitted currency, but the swaps would be made available only in dollars. The Swap Window would remain functional and under operations on all working days at Mumbai on daily basis but a particular bank can access the facility of currency swap only once in a week. The Swap Window would remain operation from 10 September to 30 November 2013. th th Currency Swap A foreign exchange agreement between the two institutions for exchange aspects of a loan in one current for equivalent aspects of an equal in net present value loan in another currency is Currency Swap. SEBI Barred 34 Entities of Capital Market for Fraudulent Dealings SEBI barred 34 entities from the capital market for fraudulent dealings in the shares of 12 companies. It also restrained, Sunil...
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...Corporation • KYC – Know your customer • LAMPS – Large Sized Adivasi Multipurpose societies • LERMS – Liberalised Exchange Rate Management System • LIC – Life Insurance Corporation of India • MCA – Ministry of Company affairs • MIS – Management Information System • MICR – Magnetic Ink Character Recognition • NABARD – National Bank for Agriculture and Rural Development • NBFC – Non Banking Finance Companies • NEFT – National Electronic Funds Transfer • NPA – Non Performing assets • NRE – Non Resident External account • NRI – Non Resident Indian • NSE – National Stock Exchange • OLTAS – Online tax accounting system • OMO – Open market operations • PACS – Primary Agricultural Credit Societies • PDO – Public Debt Office • PIN – Personal Identification Number • QIB – Qualified Institutional Buyers • RBI – Reserve Bank of India • RDBMS – Relational Database Management System • REC – Rural Electrification Corporation • RFC – Resident Foreign Currency • RIDF – Rural Infrastructure Development Fund • RRB – Regional Rural Bank • RTGS – Real Time Gross Settlement • RWA – Risk Weighted Assets • SBI – State Bank of India • SCB – Scheduled Commercial Bank • SDR – Special Drawing Rights • SEBI – Securities and Exchange Board of India • SFMS - Structured Financial Messaging Services • SHG – Self Help Group • SIDBI – Small Industries Development Bank of India • SIDC – State Industrial Development Corporation • SJSRY –Swarna Jayanthi Shahari Rozgar Yojana • SLR – Statutory...
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...------------------------------------------------- Regulators In India * Reserve Bank of India(RBI) * Securities Exchange Board in India(SEBI) * Insurance Regulatory Development Authority(IRDA) * Financial Intelligence Unit (FIU) * FSDC OVERVIEW A regulator is a public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity. An independent regulatory agency is a regulatory agency that is independent from other branches or arms of the government. Regulatory agencies deal in the area of administrative law—regulation or rulemaking (codifying and enforcing rules and regulations and imposing supervision or oversight for the benefit of the public at large). The existence of independent regulatory agencies is justified by the complexity of certain regulatory and supervisory tasks that require expertise, the need for rapid implementation of public authority in certain sectors, and the drawbacks of political interference. Some independent regulatory agencies perform investigations or audits, and some are authorized to fine the relevant parties and order certain measures. Regulatory agencies are usually a part of the executive branch of the government, or they have statutory authority to perform their functions with oversight from the legislative branch. Their actions are generally open to legal review. Regulatory authorities are commonly set up...
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...RESERVE BANK OF INDIA (RBI) INTRODUCTION: The Reserve Bank of India (RBI) is the Central Bank of the country. It was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Reserve Bank was started as share-holders bank with a paid-up capital of Rs.5 crores. On establishment it took over the function of management of currency from the Government of India and power of credit control from the Imperial Bank of India. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. PREAMBLE: The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." ORGANIZATION OF THE RESERVE BANK: 1. Central Board 2. Local Board 3. Board for Financial Supervision 4. Board for Payment and Settlement Systems 1. CENTRAL BOARD: The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. • Appointed/nominated for...
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