ppt on investor
TRANSCRIPT
1. What is Investment?2. Who is an Investor?3. Investor Avenues for Investor4. Types of Investor5. Investor Rights & Obligation6. Legislature Governing Capital Market and
International Market in India7. Compliances for the benefit of Investor8. Investor Protection available in India9. Investor Grievance Redressal cell10.Case Law (Oral Discussion)
INDEX
Needs of Investment Earn return on your idle
resources Generate a specific goal in
life Make a provision for an
uncertain future
Golden Rules for investment Invest early Invest regularly Invest for long tern and not
for short term
WHAT IS INVESTMENT?
INVESTMENT IS MONEY YOU EARN PARTLY SPENT AND THE REST SAVED FOR MEETING FUTURE EXPENSE.
WHO IS AN INVESTOR?AN INVESTOR IS A PERSON WHO ALLOCATES CAPITAL WITH THE
EXPECTATION OF A FUTURE FINANCIAL RETURN.
Individuals gambling in games of chance.
Individual investors (including trusts on behalf of individuals, and umbrella companies formed by two or more to pool investment funds)
Collectors of art, antiques, and other things of value
Angel investors (individuals and groups)
Sweat equity investor
Venture capital and private equity funds, which serve as investment collectives on behalf of individuals, companies, pension plans, insurance reserves, or other funds.
Businesses that make investments, either directly or via a captive fund
Investment trusts, including real estate investment trusts
Mutual funds, hedge funds, and other funds, ownership of which may or may not be publicly traded (these funds typically pool money raised from their owner-subscribers to invest in securities)
Sovereign wealth funds
Retail investor Institutional investor
TYPES OF INVESTORS THERE ARE TWO TYPES OF INVESTORS
‘Qualified Institutional Buyer’ shall mean: public financial institution scheduled commercial banks; mutual funds; foreign institutional investor
registered with SEBI; multilateral and bilateral development
financial institutions; venture capital funds registered with
SEBI. foreign Venture capital investors
registered with SEBI. state industrial Development
Corporations. insurance Companies registered with
the Insurance Regulatory and Development Authority (IRDA).
provident Funds with minimum corpus of Rs. 25 crores & pension Funds with minimum corpus of Rs. 25 crores)
Qualified Institutions Placement means when listed issuer issues equity share or securities convertible into equity shares to Qualified Institutions Buyer only in terms of provision of chapter VIII of SEBI (ICDR) Regulations, It is called a QIP.
Qualified Institutional Buyer
Qualified Institutional Placement
FOREIGN INVESTORS
Venture capitalist – SEBI registered foreign venture capital investor can invest in an Indian venture capital undertaking or venture capital fund. Foreign Institutional Investor - Foreign Institutional Investor can individually purchase up to 10% and collectively up to 24% of the paid share capital of an Indian company.(this limit of 24% of the paid-up share capital can be increase to sectoral cap/statutory limit to Indian company by passing Board resolution/shareholder resolution as applicable) Non resident Indians - NRI may, without limit, purchase on non-repatriation basis:
Entry Strategies for Foreign Investor By Incorporating a Company under Companies Act 1956/2013 (as applicable) A wholly owned subsidiary Joint venture CompanyBy Unincorporated Company Liaison office Project office Branch office
INVESTOR RIGHTS & OBLIGATIONS
Investor’s RightsRight to: Get a copy of KYC and other
documents executed. Get best price. Get contract note for trades
executed. Get the details of charges levied. Receive funds and securities on
time. Receive statement of accounts from
trading member. Ask for settlement of accounts. Suing a company for wrongful acts
e.g.class-action lawsuit. Inspect Corporate Books and
records
Obligation to: Read Risk Disclosure Document. Possess a valid contract or
purchase/sale note Deliver securities with valid
documents and proper signatures. Execute Know Your Client (KYC)
documents and provide supporting documents.
Understand the voluntary conditions being agreed with other party
Pay funds and securities for settlement on time.
Investor’s Obligations
The Securities Exchange Board of India Act, 1992
The Securities Contract (Regulation) Act, 1956
The Depositories Act, 1996
The Companies Act and Rules
Consolidated FDI Policy Ministry of Finance
Notification Circular issued by GOI
Foreign Currency Exchangeable Bonds Scheme, 2008
FCCB and Ordinary Share Scheme 1993 as amended
Reserve Bank of India, Regulations / Circulars issued by RBI
Companies Act & Rules Listing Agreement
Legis lat ion governing Indian Capi ta l Market
Legis lat ions governing International Market
COMPLIANCES FOR THE BENEFIT INVESTOR
Control over Issue Capital: A major initiative of liberalization was the repeal of the Capital Issues (control) Act, 1947 in May 1992. In the interest of Investors, SEBI issued Disclosure and Investor protection (DIP) guidelines.
Establishment of Regulator: To provide assurance that it is safe to undertake transaction in securities market
Screen Based Trading (SBTS): where member can punch into the computer quantities of securities and the price at which he likes to transact and transaction is executed as soon as it finds a matching sale or buy order from a counter party.
Risk Management: A number of measure were taken to manage the risks in the market so that the participant are safe and market integrity is protected. The trading cycle varied from 14 days for specified securities to 30 days for others and settlement took another fortnight. Olling Settlement on T+5 basis was introduced in phases. All scrips moved to rolling settlement from December 2001. T+5 gave way to T+3 from April 2002 and T+2 from April 2003.
Depositories Act: The earlier settlement system gave rise to settlement risk. This was dude to the time taken for settlement and due to the physical movement of paper, Easy transferability of shares.
Derivatives: To assist market participants to manage risks better through hedging, speculation, and arbitrage.
Security Market Awareness: In January 2003, SEBI launched a nation-wide Securities Market Awareness Campaign that aims at educating investors about the risks associated with the market as well as the rights and obligation of investors.
Corporate Governance: To improve the standards of Corporate Governance, SEBI amended Clause 49 of the Listing Agreement. The major changes in the new clause 49 include amendments/additions to provisions relating to definition of Independent Director, strengthening the responsibilities of audit committee, improving quality of financial disclosure, including those pertaining to related party transactions and proceeds from public/rights/preferential issue, requiring board to adopt formal code of conduct, requiring CEO/CFO certification of financial statements and improving disclosure to shareholders. Certain non-mandatory clauses like whistle blower policy and restriction of the term of Independent Directors have also been included.
Debt Listing Agreement: in order to further develop the corporate debt market, SEBI prescribed a model debenture listing agreement for all debenture securities issued by an issuer irrespective of the mode of issuance
Minimum Public Shareholding: in order to maintain uniformity and also for the purpose of continues listing, it was decided to amend SEBI (DIP) Guidelines, 2000 providing minimum public shareholding of 25% in case of all listed entities barring few exceptions.
Gold Exchange Traded Funds in India - SEBI appointed
committee for introduction of Gold Exchange Traded Fund in India. The SEBI mutual fund regulations,1996 were amended notification was issued on January 2006 permitting mutual funds to introduce GETFs in India subject to certain investment restrictions.
Guidelines for issue of Indian Depository Receipts (IDRs) - SEBI Issued Guidelines on disclosures and related requirements for companies desirous of issuing IDRs in India. SEBI also prescribed the listing agreement for entities issuing IDRs.
Mandatory requirement of PAN for opening and operating Demat Accounts – PAN was made mandatory for all demat accounts, opened after April 01, 2006, pertaining to all categories including minors, trusts, foreign corporate bodies, banks, corporates, FIIs and NRIs.
Grading of Initial Public offering (IPOs) – Grading of all IPO was mandatory. The grading would be done by credit rating agencies, registered with SEBI. The grading would be disclosed in the prospectus, abridge prospectus and in every advertisement for IPOs.
Setting up of SME Exchange: SEBI decided to put in place a framework for setting up new exchange or separate platform of existing stock exchange having national wide terminal of SME.
Business Responsibility Reports – SEBI Inserted clause 55 in the Equity Listing Agreement, mandating inclusion of Business Responsibility Reports as part of Annual Report.
Separate link is available on Ministry of Corporate Affairs - http://www.iepf.gov.in/ empowering business and protecting investor. Where in investor services compliance relating to unpaid & unclaimed dividend, debenture, deposits
INVESTOR
PROTECTION
SEBI has commenced processing of Investor grievance against the intermediaries in a centralized web-based complaint redressal system, ‘SCORES’ at http://scores.gov.in
The rating symbols and definitions of CRA was standardize
The KYC registration Agency (KRA) Regulations were notified. Code of conduct, Data security etc.
Information of companies to be placed on website, Separate tab is provided for on the companies website.
Ministry of Corporate affairs provide separate portal for protection of investor and investor awareness Programme.
http://investindia.gov.in promoting foreign investments in India in a focused, comprehensive, and structured manner while acting as a first reference point to provide quality input and support services to the prospective foreign investors.
SEBI provide platform for investor at SCORE http://scores.gov.in/ where investor can register their Complaint.
Ministry of Corporate Governance provide separate link for investor protection and awareness http://www.iepf.gov.in/
http://investindia.gov.in/ this portal is particularly made for promoting foreign investment in India. To provide quality input and support services to the prospective foreign investor.
For Insurance Companies IRDA has provided grievance cell https://www.irda.gov.in two separate form are available one is for General Insurance& Health and other is for Life Insurance.
For Mutual Fund units, Association of Mutual Funds In India provide redressal of investor grievance through SEBI Redressal system (SCORES) Platform.
INVESTOR GRIEVANCE REDRESSAL SCHEME
