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SECURITIES & EXCHANGE

BOARD OF INDIA
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About SEBI
Established on April 12, 1988.
The SEBI is a body of 6 members- The
Chairman, Two members from Central
Government, Two members who are
professionals and One member from the RBI.
Role of SEBI in Capital Market

SEBI’s Principal Tasks


To regulate the business in Stock Exchage &
other Securities Market.
To register & regulate the working of Capital
market intermediaries.
To register & regulate the working of Mutual
Funds.
To promote & regulate Self-regulatory
Organization.
To prohibit fraudulent unfair trade practices in
Security Market.
To promote investors education & training to
intermediaries of Capital Market.
Prohibit insider training in Securities.
Regulate acquisition of shares & takeover of
companies.
Performs others functions too.
SEBI in Capital Market
New SEBI guidelines were issued.
Guidelines for First Issue of New Company.
Guidelines for the New issues made by the Private
Limited Company.
Guidelines for Issue to the public by existing
Company.
The terms & conditions of the New Instruments.
Disclose the arrangement of the amount received by
issuing of Shares.
Public issue by the existing listed companies & the
calculation of NAV & Market price.
Credit rating is compulsory in case of convertible
debentures.
Minimum Interval criteria.
Bonus issues.
Debenture maturity period and redemption.
Disclosure of application amount raised through issue of
shares.
Issues to Promoters, Shareholders & Employees.
SEBI Objectives
To protect the interest of Investors.
To regulate the Securities Market & ensure fair
practices.
To promote efficient services.
To facilitate an efficient mobilization &
allocation of resources.
SEBI Functions (Sec 11 of SEBI
Act)
Regulatory Functions:
Regulates Stock Exchanges.
Registration & regulation of Stock Brokers etc.,
Registration & regulation of various Schemes.
Prohibition of unfair trade practices.
Prohibit insider trading in securities.
Regulating acquisitions & takeovers.
Developmental Functions:
Promotes investors education.
Training of Intermediaries.
Conducting research & published
information.
Promotion of Fair practices.
Promoting self-regulatory organizations.
SEBI Powers
Call periodical Returns.
Call for any information from Stock Exchanges.
Direct enquiries of the affairs of Stock Exchanges.
Power to grant approval to the bye-laws of recognized
Stock Exchange.
Power to make or amend the bye-laws.
Power to compel listing of Securities by Public
Companies.
Power to control & regulate Stock Exchanges.
Power to grant registration to market intermediaries.
Power to levy fees or other charges.
Power to regulate FII etc.,
SEBI Guidelines With regard to

First Issue of New Company

Issue of Shares to public only by New Company.


New Company set up by an existing Company.
A draft prospectus containing disclosure will be
examined by the SEBI.
Bonus Issue/Right Issue.
Bonus issue is made out of free reserve.
Reserves are not capitalized.
Calculation of residual value.
The residual reserve should be at least 40% of increased
paid-up capital.
The capital reserve created will not form any part of
Balance Sheet.
The bonus issue is not made unless the partly paid Shares
are fully paid.
Future Challenges
Speculative Trading & Distribution of Turnover.

Market Abuses.
Recent Trends
Book Building Process.
Features of Book Building Process.
- Pre-issue Cost & Risk.
- Participation of Institutional Investors.
- Determination of Price of the Securities.
- Person responsible for Book Building.
- Time Period of Book Building Process.
• Green Shoe Option.