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 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.
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  ' ÀSEBI) formed
under the SEBI Act, 1992 with the prime objective of
 *rotecting the interests of investors in securities,
 Makes rules and regulations for the securities market.
 It tries to develop the securities market.
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ù Every mutual fund must be registered with SEBI and registration is

granted only where SEBI is satisfied with the background of the
fund.
ù 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
 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.

 Regulations have been laid down regarding listing of funds, refund

procedures, transfer procedures, disclosures, guaranteeing returns etc

 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 has prescribed norms / restrictions for investment management with a

view to minimize / reduce undue investment risks.

 SEBI also has the authority to initiate penal actions against an erring MF.

 In case of a change in the controlling interest of an asset management

company, investors should be given at least 30 days time to exercise their
exit option.
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 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.
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 SEBI distributed the booklet titled ³A 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 Doordarshanx
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SEBI¶s *rincipal 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.
*rohibit insider training in Securities.
Regulate acquisition of shares & takeover of
companies.
*erforms others functions too.
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New SEBI guidelines were issued.
Guidelines for First Issue of New Company.
Guidelines for the New issues made by the *rivate
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.
*ublic 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 *romoters, Shareholders & Employees.
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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.
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Speculative Trading & Distribution of Turnover.

Market Abuses.
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 Can ask any intermediary or market participant
for information
 Inspect books of depository participants ,
issuers or beneficiary owners .
 Suspend or cancel registration issued to
foreign institutional investors
 Suspend or cancel the registration of errant
portfolio managers .
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 A company cannot come out with public issue unless '0 /
is
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is filed with
SEBI. *rospectus 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, *romoter / 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.