SECURITIES EXCHANGE BOARD OF INDIA 1992

Objects of the Act: The basic objects of the Act are given as follows:

(a) To protect the interest of the investors in securities.

(b) To promote the development of a securities market.

(c) To regulate the securities market.

(d) To provide for matters connected therewith or incidental thereto.

The general superintendence, direction & management of the affairs of the

board shall vest in a board of members which may exercise all powers & perform
all actions that may be done by the board.

POWERS & FUNCTIOS OF THE SEBI

SEBI board may take such measures as it deems fit. These measures may
provide for the following

(e) Regulating business in the stock exchange any other securities market,

(f) Registering & regulating the work of stock brokers, sub-brokers,

registers to the issue, merchant bankers to the issue ,underwriters,
portfolio managers, investment advisors & such intermediaries who
may be associated with the securities market in any manner

(g) Registering & regulating the working of collective investment schemes

including Mutual Funds.

(h) Promoting and regulating self regulatory orgns

(i) Prohibiting fraudulent & unfair trade practices relating to the securities
market.

(j) Promoting investors education & training of intermediaries of security

markets.

(k) Prohibiting insider trading in securities.

(l) Regulating substantial acquisitions of shares and takeover of companies.

(m) Calling for info., undertaking inspection, conducting enquiries and

audits of stock exchanges, intermediaries and self regulating orgns un
the securities markets.

It has introduced registration norms, eligibility criteria, code of conduct and

obligations for different intermediaries such as bankers to the issue, merchant
bankers, brokers, credit Rating Agencies, underwriters and etc. It has framed
bye-laws, risk identification and risk management systems for clearing houses of
stock exchanges

MANAGEMENT OF SEBI

It shall consists of following members

(n) A Chairman. (2) Two members from amongst the officials of the
Finance & Law ministries of the central Govt. (3) Two other members
to be appointed by the central Govt.

S.E.B.I (ICDR) Regulations (SEBI-Issue of Capital & Disclosure

Requirements)2009.

FOR PUBLIC ISSUE OF EQUITY SHARES OR ANY OTHER SECURITY CONVERTIBLE

IN TO EQUITY SHARES

GENERAL CONDITIONS: - For IPO & Follow on public offer & Rights issues..

(o) Any issuer offering specified securities through a public issue or rights
issue shall satisfy the conditions laid down in these regulations at the
time of filing draft offer documents with the board & at the time of filing
final offer document with the R.O.C. or designated exchange

(p) No issuer shall make a public issue or rights issue of specified securities

(q) If the issuer, any of its promoter, directors are debarred from
accessing the capital market by the board. Or on the order / directions of
the board.

(r) If the issuer of convertible debt instruments is in the list of willful

defaulters published by the R.B.I. for a period of 6 months.

(s) Unless it has made an application for listing of specified securities on a

recognized stock Exchange

(t) Unless it has made an agreement with a Depository for demat of

securities already issued or proposed to be issued.

(u) Unless it has fully paid up shares of existing partly paid shares or
forfeited.

(v) Unless firm arrangement of finance through verifiable means towards

75% of the stated finance have been made..
 APPONITMENT OF MERCHANT BANKER & OTHER
INTERMEDIARIES:-

(a) The issuer shall appoint one or more merchant bankers & shall also appoint
other intermediaries in consultations with the lead merchant banker to carry
out the obligations relating to the issue.

(b) The issuer shall enter in to agreement with lead merchant banker to comply
with the legal provisions to the issue. Further in case of A.S.B.A. process the
issuer shall take cognizance of the deemed agreement of issuer with Self
Certified Syndicate Banks. It means a banker to the issue registered with the
board which offers facilities of application supported by block amount(ASBA)

ASBA means an application for subscription to a public issue/rights issue, along

with an authorization to self certified syndicate bank to block the application
money in a bank account.

(4) In case of an issue through the book building process the issuer shall
appoint syndicate members at all collections centers.

(5) The lead merchant banker appointed by the issuer in the book built issue
shall act as the lead book runner.

FILING OF OFFER DOCUMENT:- (1) No issuer shall make (a) Public issue or (b)
a Rights issue where the aggregate value of the specified securities offered is Rs
50 lakhs or more unless a draft offer document has been filed with the board
through the lead merchant banker at least 30 days prior to the registering the
prospectus, red-herring prospectus or shelf prospectus with the R.O.C.

(2) The issuer& lead merchant banker shall carry out the changes/observations
made by the board before registering the prospectus with the R.O.C.

(3) IN PRINCIPLE APPROVAL:- The issuer shall obtain in – principal approval

from the Recognizes stock exchange in which the specified securities are listed
and having nationwide trade terminals.

DOCUMENTS TO BE SUBMITTED BEFORE OPENING OF THE ISSUE:- The lead

merchant banker shall submit (a) a copy of the agreement between the issuer
& the lead merchant banker.

(b) A copy of the interse allocation of the responsibilities of each merchant

banker.

(c) A due diligence certificate in prescribed form

(d) A due diligence certificate from the debentures trustee in case of issue of
convertible debts. Instruments.
 (e) A due diligence certificate after opening of the issue but before closing of the
issue for subscription

DRAFT DOCUMENT TO BE MADE PUBLIC:- The draft 0ffer document filed with
the board shall be made public for comments for at least 21 days from the
date of such filing by hoisting it on the web-sites of the board & Recognized
stock exchange where the specified securities are listed.

DESPATCH OF DOCUMENTS:- The lead merchant banker shall dispatch all

issue materials including forms for A.S.B.A. & the offer document to the
designated stock exchanges, syndicate members, underwriters & bankers to
the issue.

MINIMUM SUBSCRIPTION:- 1) If the minimum subscription to the issue is

not received up to 90% through the offer document then all the subscription money
shall be refunded within a period of 15 days of the closure of the issue in case the
issue is not underwritten & if the issue is underwritten within a period of 70 days of
the closure of t issue.

ALLOTMENT/refund & payment of interest: - 1) the issuer & merchant banker

shall ensure that specified securities are allotted and/or application money is
refunded within a period of 15 days from the closure of the issue. Else the issuer
shall have to refund the money with interest @15 % per annum.

CONDITIONS FOR INITIAL PUBLIC OFFER/ FURTHER PUBLIC OFFER.

Eligibility Criteria:- In accordance with SEBI(Issue of Capital & Disclosure

Requirements)Regulations2009 an issuer may make initial public offer, if it
satisfies the following conditions :----

(a) NET TANGIBLE ASSET OF ATLEAST THREE CRPRE RUPEES: The issuer
company has at least 3 crore rupees in each of the preceding 3 full years of
which not more than 50% are held in monetary assets. If such monetary assts
are more than 50%, then the issuer has made firm commitments to utilize
such excess monetary assets in its business or project.

(b) TRACK RECORD DISTRIBUTABLE PROFITS FOR ATLEAST THREE OUT OF FIVE
YEARS PRECEDING.

In terms section 205 of the companies Act1956.

(c) MINIMUM NET WORTH;- The issuer company has a net worth of at least one
crore rupees in each of the preceding three full years.

(d) QUANTUM OF ISSUE;- The aggregate of the proposed issue & all previous
issues made in the same financial year in terms of issue size does not exceed
five times its pre-issue net worth as per the audited balance sheet of the
preceding financial year.

(e) EFFECT OF CHANGE IN NAME OF THE COMPANY; - If the company has

changed its name within the last one year, at least 50% of the revenue for
the preceding one full year has been earned by it from the activity indicated
by the new name.

ALTERNATE ELIGIBILITY CRITERIA;- An issuer not satisfying any of the above

criteria, may make an initial public offer if (a) the issue is made through the
book building process & the issuer undertakes to allot at least 50% of the net
offer to public to Qualified Institutional Buyers % to refund full subscription
monies , if it fails to make allotment to the Q.I.B

OR.

At least 15 % of the cost of the project is contributed by scheduled

commercial banks/Public Financial Instts. Of which not less than 10% shall
come from the appraisers and the issuer undertakes to allot at least 10% if
the net offer to the public to Q.I.B. and to refund monies if it fails to allot the
securities to the Q.I.B...

(c) The minimum post – issue face capital of the issuer is 10 crores or The
issuer undertakes to provide market making for at least two years from the
date listing of the specified securities, subject to the following;-

(i) The market makers offer buy % sell quotes for a minimum depth of 300
specified securities % ensure that the bid-ask spread for their quotes does
not exceed at any time 10%.

(ii) The inventory of the market maker as on the of allotment of the specified
securities shall be at least 5% of the proposed issue.(iii) I.P.O.GRADING;-
The issuer has obtained grading for the I.P.O.from at least one Credit
Rating Agency registered with the board.

(iii)