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..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
Two members from amongst the officials of the ministry of the central Govt. dealing with finance and administration of the Companies Act 1956.
Raje Kumar (Joint Secretary, Min. of Finance ) Naved Masood (Secretary, Min. of Corp. Affaires)
Five other members of whom at least 3 shall be the whole time members to be appointed by the central Govt.
Prashant Saran Rajeev Kumar Agarwal S Raman Whole time member Whole time member Whole time member
V. K. Jairath Magya
Prakash Chandra
Member appointed
Part time member
The term of office and conditions of services Removal of member from office
Meetings
The SEBI Act, 1992 has entrusted with two functions, they are
Regulatory Function
Development Function
Regulation of stock exchange and self regulatory organizations. Registration and regulation of stock brokers, subbrokers, Registrars to all issues, merchant bankers, underwriters, portfolio managers etc.
Registration and regulation of the working of collective investment schemes including mutual funds. Prohibition of fraudulent and unfair trade practices relating to securities market.
Prohibition of insider trading
Promoting investors education Training of intermediaries Conducting research and publishing information useful to all market participants. Promotion of fair practices Promotion of self regulatory organizations
Power of inspection Power of court Powers in the interests of securities market Powers regarding protection of investors Power to issue directions
Powers of investigation Power to cease and desist proceedings Registration of stock brokers, sub-brokers, share transfer agents etc. Prohibition of manipulative and deceptive devices
Failure to furnish information Failure to enter into agreement to clients Failure to redress investors grievances Defaults in case of mutual funds Failure to observe rules and regulations by an asset management company
Default in case of stock brokers Insider trading Non-disclosure of acquisition of shares and takeovers Fraudulent and unfair trade practices
11
Insider trading
Companies must buy back at least 50 per cent under new SEBI rules
Approval for rules and regulations Approval for filing criminal complaints No autonomy
Capital Market
Capital Market
The market where investment instruments like bonds, equities and mortgages are traded is known as the capital market. The primal role of this market is to make investment from investors who have surplus funds to the ones who are running a deficit. The capital market offers both long term and overnight funds.
Classification
Ownership securities
Creditorship securities
Equity shares
Preference shares
Deferred shares
Debentures
Bonds
It Is Related With New Issues Following are the methods of raising capital in the primary market: i) Public Issue
Secondary Market
The secondary market is that market in which the buying and selling of the previously issued securities is done.
The transactions of the secondary market are generally done through the medium of stock exchange.
The chief purpose of the secondary market is to create liquidity in securities.
It creates liquidity It comes after primary market It encourage new investments Aids in financing the industry Ensures safe & fair dealing.
Provides regular information about the value of security. Helps to observe prices of bonds and their interest rates. Offers to investors for their assets. Secondary markets bring together many interested parties. It keeps the cost of transactions low.
Depository System
Meaning
The term Depository means a place where a deposit of money, securities, property etc. is deposited for safekeeping under the terms of depository agreement. A depository is an organization, which assists in the allotment and transfer of securities and securities lending. The shares here are held in the form of electronic accounts i.e. dematerialized form and the depository system revolves around the concept of paper-less or scripless trading.
C ONTD .
It holds the securities of the investors in the form of electronic book entries avoiding risks associated with paper
Securities & Exchange Board of India Act 1992 The SEBI(Depositories and Participants) Regulations, 1996 Bye laws of depository
Depositories in India
Presently there are two Depositories working in India:
It was registered by the SEBI on June 7 1996 as Indias first Depository to facilitate trading and settlement of securities in the demat form. It is promoted by IDBI, UTI, NSE
It commenced its operations during Feb. 1999 and was promoted by Stock Exchange Mumbai in association with Bank of Baroda, Bank of India, SBI and HDFC Bank
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Depository Depository Participant (DP) Securities, Issuers and Registrars and Share Transfer Agents Stock Exchanges and Stock Brokers Clearing Corporation/ Clearing House and Clearing Members
Banking system
Investors
Dematerialization Rematerialization Settlement of trades in dematerialized securities Account transfer Pledge and hypothecation Stock lending and borrowing Account freezing Nomination
http://articles.economictimes.indiatimes.com
Financial Institutions and Markets by Shashi K. Gupta, Neeti Gupta and Nisha Agarwal Moneycontrol.com