sebi[1][1]. ppt
TRANSCRIPT
Securities Exchange Board of India Act, 1992
Simplified By :-
Arvind Kohli FCS, FICA
199/7 Urban Estate, Gurgaon 122001
Tel:- 91 (95124) 2325184; 9811026619
e-mail: [email protected]
HISTORY SEBI was set up by MOF on 12th April 1988 on basis of Patel Committee’s Report, which recommended to set up apex body for regulating the activities of SE’s on lines of SEC of USA and Securities and Investment Board of UK.
SEBI ordinance, 1992 was promulgated on 21st Jan, 1992. SEBI Bill, 1992 was passed by both houses of Parliament and President’s assent was granted on 4th April, 1992 deemed to have come into force w.e.f. 31st Jan, 1992.
OBJECTIVES OF THE ACT
Establishment of Board
--To protect the interests of investors in securities;
--To promote the development of securities market;
--To regulate the securities market; and
--The matters connected therewith or incidental thereto.
SECURITIES MARKET - CONSTITUENTS THEREOF
The issuers of securities
The investors
The intermediaries for e.g. Stock Exchanges, Portfolio Manager, Mutual Funds, Underwriters, Registrar to an issue and STA, Debenture Trustee, Bankers to an Issue, Stock Brokers and Sub- Brokers, FIIs, Depositories and Participants, Custodian of Securities, Credit Rating Agencies, Collective Investment Scheme, Venture Capital Funds
BROAD SCHEME OF THE ACT
1. Establishment of the SEBI
2. Powers and functions of the Board (SEBI)
3. Registration certificate
4. Finance, Accounts, Audit
5. Penalties and Adjudications
6. Establishment, jurisdiction, Authority and Procedure of Appellate Tribunal
7. Miscellaneous
1. ESTABLISHMENT OF SEBI
A. SECTION 3 ESTABLISMENT OF SECURITIES AND EXCHANGE BOARD OF INDIA
B. SECTION 4 MANAGEMENT OF THE BOARD
C. SECTION 5 TERMS OF OFFICE AND OTHER CONDITIONS
D. SECTION 6 REMOVAL OF MEMBER
E. SECTION 7 MEETINGS
F. SECTION 7A MEMBERS INTERESTED
G. SECTION 8 VACANCIES ETC. NOT TO INVALIDATE PROCEEDINGS
2. POWERS AND FUNCTIONS OF SEBI Section 11
1. Regulating the business in Stock Exchanges and other securities market.
2. Registration and regulation of the working of intermediaries, depositories, participants, custodians of securities, FII’s, credit rating agencies, venture
capital fund, collective investment schemes including mutual funds.
3. Promoting and regulating self-regulatory organizations
Contd………
4. Prohibiting of fraudulent, unfair trade practices and insider trading relating to
securities market5. Providing investor education and training of
intermediaries of securities market6. Prohibiting in securities7. regulating substantial acquisitions of shares
and takeover of companiesFor accomplishing each of the above functions, SEBI has framed Rules.
POWERS AND FUNCTIONS OF SEBI Contd.
Sec. 11(A) Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting money
for issue of securities
Sec. 11B Power to issue directions
Sec. 11C Investigation
Sec. 11D Cease and desist proceedings
Sec. 12A Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control.
WIDEST POWERS IN RELATION TO SECURITIES MARKET
The following measures either pending investigation or an inquiry or on completion of such investigation or inquiry-
1. suspend trading of any security on any recognized stock exchange
2. restraint persons from accessing securities market i.e. to buy sell or deal in securities.
3. suspend any office bearer of any stock exchange.
impound and retain the proceeds of securities in respect of any transaction, which is under investigation.attach bank accounts of an intermediary or any person.direct intermediary or any person associated with the securities market not to dispose of or alienate an asset.
5. PENALTIES AND ADJUDICATION
PENALTIES FORFailure to furnish information,
returnFailure of any person to enter into
any agreement with clientFailure to redress investor
grievanceDefaults in case of mutual fundsFailure to observes R&R by AMCQuantum 1Cr. – 25 Cr.
Default in case of Stock BrokersFor Insider TradingFor non disclosure of Acquisitions
and takeoversFor Fraudulent and Unfair Trade
Practices
SECURITIES APPELLATE TRIBUNAL
ONLY ORDERS PASSED BY SEBI AFTER AMENDMENT ACT OF 1999
WITH IN 45 DAYS
ENTRUSTED WITH POWERS OF CIVIL COURT
RIGHT TO LEGAL REPRESENTATION
ORDERS APPEALABLE TO SUPREME COURT
SEBI: Various Rules and Regulations relating to
Intermediaries
Merchant BankersPortfolio ManagerMutual FundsUnderwritersRegistrar to an issue and STADebenture TrusteeBankers to an Issue
Stock Brokers and Sub-BrokersFIIsDepositories and ParticipantsCustodian of SecuritiesCredit Rating AgenciesCollective Investment SchemeVenture Capital Funds
Disclosure and Investor Protection Guidelines,2000 (Rules abolished and new Rules ISSUE OF CAPITAL AND DISCLOSURE REGULATIONS 2009 WERE implemented.)
Since there are Specialised institutions for the same, it is outside the scope of present discussions .
Employees Stock Option Scheme and Employees Stock Purchase Scheme
Substantial Acquisition of Shares and Takeover Reulations,1997 - 75% of SEBI FUNCTION ARE BASED ON THIS AREA ONLY
Prohibition of Insider Trading Regulations
Buy Back of Securities
SEBI: Various Rules and Regulations relating to specific actions
SEBI: SUBSTANTIAL ACQUISITION AND TAKEOVER REGULATIONS – MAIN
PROVISIONS
Reg. 3 Applicability of the Regulation – Exemptions from the applicability of Regulations 10-12.Reg. 6 Transitional provision Reg. 7 Acquisition of 5% and more shares of a
company Reg. 8 Continual disclosures - 10, 14, 55 & 74%Reg. 10 Acquisition of 15% or more shares or
voting rights of any company. Reg. 11 Consolidation of holdings Reg. 12 Acquisition of control over a company .