SEBI

A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Commerce (Banking and Insurance)
Under the Faculty of Commerce

By

Durgavati Jayprakash Gupta

Under the Guidance of

Mrs.Vasanthi Shenoy

Shri. Vishnu Waman Thakur Charitable Trust's

Bhaskar Waman Thakur College of Science,
Yashvant Keshav Patil College of Commerce,
Vidhya Dayanand Patil College of Arts,
VIVA College
(NAAC ACCREDITED-'B' Grade, CGPA 2.69)

Academic Year 2018 - 2019

 Shri. Vishnu Waman Thakur Charitable Trust's
Bhaskar Waman Thakur College of Science,
Yashvant Keshav Patil College of Commerce,
Vidhya Dayanand Patil College of Arts,
VIVA College
(NAAC ACCREDITED-'B' Grade, CGPA 2.69)

Certificate
This is to certify that Ms. Durgavati Jayprakash Gupta has worked and duly
completed her Project Work for the degree of Bachelor in Commerce (Banking
and Insurance) under the Faculty of commerce in the subject of Financial /
management and his project is entitled, “SEBI” under my supervision.

I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree or
Diploma of any University.
It is her own work and fact reported by her personal finding and investigation.

Name of Guiding Teacher & Signature

Seal of the
College Mrs.Vasanthi Shenoy

Date of submission:

Signature
External Examiners
 Declaration by learner

I the undersigned Ms. Durgavati Jayprakash Gupta here by declare that the work
in this project work title “SEBI ” forms my own contribution research work carried
out under the guidance of Mrs. Vasanthi Shenoy .
Is a result of my own research work and has not been previously submitted to any
other University for any other Degree/ Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name of Learner & Signature

Durgavati Jayprakash Gupta

Certified by

Mrs. Vasanthi Shenoy

 Acknowledgment

To list who all have helped me is difficult because they are so numerous and
the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me
chance to do this project.
I would like to thank my Principal, A.P. Pandey And Vice Principal Mrs.
Prajakta Paranjape for providing the necessary facilities required for
completion of this project.
I take this opportunity to thank our Coordinator Dr. Roshani Nagar for her
moral support and guidance.
I would also like to express my sincere gratitude towards my project guide
Mrs. Vasanthi Shenoy whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.
 INDEX
Sr. no Title Page no
1 INTRODUCTION OF SEBI 1-7
1.1 Introduction
1.2 SEBI Department
1.3 Preamble
1.4 History

2 OBJECTIVES 8
3 SEBI 9 - 49
3.1 Functions of SEBI
3.2 Powers of SEBI
3.3 Board members of SEBI
3.4 Importance of SEBI
3.5 SEBI Guidelines
3.6 NSE (National Stock Exchange)
3.7 BSE (Bombay Stock Exchange)
3.8 BSE V/S NSE

4 CONCLUSION 50
5 BIBLIOGRAPHY 51
 1. INTRODUCTION OF SEBI
1.1 Introduction

The security and exchange board of India was established by the government of
India on 12 April 1988 an interim administrative body to promote orderly and healthy
growth of the securities orderly healthy growth of the securities market and to protect
investor‟s rights. It is functioning under administrative control of ministry of finance.
The SEBI was given statutory status on 30th January 1992 through and ordinance later
it was replaced by an act parliament, securities and exchange board of India act 1992.

During 1980s, there was tremendous growth in the capital market due to
increasing participation of public. This led to many malpractices like Rigging of
prices, unofficial premium on new issues, violation of rules and regulations of stock
exchanges and listing requirements, delay in delivery of shares etc. by the brokers,
merchant bankers, companies, investment consultants and others involved in the
securities market. This resulted in many investor grievances. Because of lack of
proper penal provision and legislation, the government and the stock in exchanges
were not able to redress these grievances of the investors. This (necessitated a need
for a separate regulatory body, and hence Securities and Exchange Board of India was
established and the Securities and Exchange Board of India (SEBI), in its endeavor to
protect the interests of investors in general, has formulated the SEBI (Prohibition of
Insider Trading) Regulations, 2015 under the powers conferred on it under the SEBI
Act, 1992.

These regulations were notified on 15th January, 2015 and shall come into
force with effect from 120th Day from the date of its notification from 15th May,
2015. These regulations shall be applicable to all companies whose shares were listed
on recognized stock exchanges in India. It is mandatory in terms of the Regulations
for every listed company to formulate a Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information. In order to comply with the
mandatory requirement of the Regulations, it was necessary to formulate a specific
Code of Fair Disclosure for Goldstone Technologies Limited (hereinafter referred to

1
as „the Company‟) for use by its Promoters, Directors, Officers, Employees, and
Connected Persons.

This document embodies the Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information to be adopted by the Company
and followed by its Directors, Officers, Employees and Connected Persons. The Code
seeks to ensure timely, fair and adequate disclosure of price sensitive information to
the investor community by the Company to enable them to take informed investment
decisions with regard to the Company‟s Securities. Capital Issues (Control) Act 1947
was repealed in May 1992.

The Securities and Exchange Board (SEBI) is the designated regulatory body
for finance and markets in India. The primary function of the board is to protect the
interests of the investors in securities and promote and regulate the securities market.
SEBI has laid the ground rules for investors to become aware of the functioning of the
mutual funds by providing necessary information. They serve to simplify the broad
spectrum of mutual fund schemes that may often seem quite confusing to the
investors. The guidelines on the merger and consolidation of mutual fund schemes
issued by SEBI are aimed at simplifying the process of comparing various mutual
fund schemes that are on offer by fund houses.

The SEBI utilizes three functions to meet its objectives, protective,

developmental, and regulatory .The functions of SEBI can be divided into three
parts are Regulatory function, Development Function ,Protective function.
SEBI regulating the business in stock exchanges and any other securities
markets and Registering and regulating the working of stock brokers, sub-
brokers, share transfer agents, bankers to an issue, trustees of trust deeds,
registrars to an issue, merchant bankers, underwriters, portfolio managers,
investment advisers and such other intermediaries who may be associated with
securities markets in any manner.SEBI Registering and regulating the working of
venture capital funds and collective investment schemes, including mutual funds.
Promoting and regulating self-regulatory organizations. Prohibiting fraudulent
and unfair trade practices relating to securities markets.
Promoting investors education and training of intermediaries of
securities markets. Prohibiting insider trading in securities. Regulating

2
substantial acquisition of shares and takeover of companies. Calling for
information from, undertaking inspection, conducting inquiries and audits of the
stock exchanges, mutual funds, other persons associated with the securities
market, intermediaries and self-regulatory organizations in the securities
market.Performing such functions and exercising such powers under the
provisions of the Securities Contracts (Regulation) Act, 1956, as may be
delegated to it by the Central Government.Levying fees or other charges for
carrying out the purposes of this section.Conducting research for the above
purposes.Performing such other functions as may be prescribed.
It is the duty of the Board to protect the interests of investors in securities
and to promote the development of and to regulate the securities market, by such
measures as it thinks fit.
SEBI Committees are Technical Advisory Committee ,Committee for review
of structure of market infrastructure institutions ,Members of the Advisory Committee
for the SEBI Investor Protection and Education Fund ,Takeover Regulations Advisory
Committee, Primary Market Advisory Committee (PMAC) ,Secondary Market
Advisory Committee (SMAC),Mutual Fund Advisory Committee ,Corporate Bonds &
Securitization Advisory Committee.

The SEBI is managed by its members, which consists of following:

a) The chairman who is nominated by Union Government of India.

b) Two members, i.e. Officers from Union Finance Ministry.

c) One member from The Reserve Bank of India.

d) The remaining 5 members are nominated by Union Government of India, out of

them at least 3 shall be whole-time members.

1.2 SEBI Departments

SEBI regulates Indian financial market through its 20 departments.

 Commodity Derivatives Market Regulation Department (CDMRD)

 Corporation Finance Department (CFD)

3
  Department of Economic and Policy Analysis (DEPA)

 Department of Debt and Hybrid Securities (DDHS)

 Enforcement Department – 1 (EFD1)

 Enforcement Department – 2 (EFD2)

 Enquiries and Adjudication Department (EAD)

 General Services Department (GSD)

 Human Resources Department (HRD)

 Information Technology Department (ITD)

 Integrated Surveillance Department (ISD)

 Investigations Department (IVD)

 Investment Management Department (IMD)

 Legal Affairs Department (LAD)

 Market Intermediaries Regulation and Supervision Department (MIRSD)

 Market Regulation Department (MRD)

 Office of International Affairs (OIA)

 Office of Investor Assistance and Education (OIAE)

 Office of the Chairman (OCH)

 Regional offices (ROs)

1.3 Preamble

The Preamble of the Securities and Exchange Board of India describes the basic
functions of the Securities and Exchange Board of India as.

"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".

4
1.4 History

During 1980s, there was tremendous growth in the capital market due to
increasing participation of public. This led to many malpractices like Rigging of
prices, unofficial premium on new issues, violation of rules and regulations of stock
exchanges and listing requirements, delay in delivery of shares etc. by the brokers,
merchant bankers, companies, investment consultants and others involved in the
securities market.This resulted in many investor grievances. Because of lack of proper
penal provision and legislation, the government and the stock in exchanges were not
able to redress these grievances of the investors. This (necessitated a need for a
separate regulatory body, and hence Securities and Exchange Board of India was
established.

Securities and exchange board of India (SEBI) was first established in the
year 1988 as a non-statutory body for regulating the securities market . It became an
autonomous body by the government of India on 12 may 1992 and given statutory
power in 1992 with SEBI Act 1992 being passed by the Indian parliament. SEBI has
its headquarters at the Bandar kurla complex in Mumbai and has another four.

1) Northern - New Delhi.

2) Eastern - Kolkata.

3)Southern – Chennai.

4)Western – Ahmedabad.

It has opened local offices at Jaipur and Bangalore and is planning to open
offices at Patna, Kochi ,Guwahati and Bhubaneshwar in financial year 2013-2014.

Controller of capital issues was the regulatory authority before SEBI came
into existence , it derived authority from the capital issues(control)act 1949.After
amendment of 1999 collective investment scheme brought under SEBI. Securities
and exchange board of India (SEBI) was first established in the year 1988 as a
non-statutory body for regulating the securities market.

5
 The chairman who is nominated by Union government of India. One member
from the reserve bank of India .the remaining five member are nominated by union
government of India , out of them at least three shall be whole-time members.

SEBI (Securities Exchange Board of India) got established in the early 1990s
and Capital Issues (Control) Act 1947 was repealed in May 1992. SEBI issued
Disclosure & Investment Protection (DIP) guidelines which allowed eligible issuers to
issue securities at market determined rates. A screen Based trading system was
introduced to cut down on time, cost, risk of error and fraud resulting in improved
operational efficiency. Margin Trading & Sec Lending mechanism was rationalized
on Mar 19, 2004, thereby promoting liquidity in the market. Depositaries Act 1996
was passed to ensure transferability of securities with speed, accuracy & security.
Securities Contracts (Regulation) was amended in 1995 to lift the ban on options in
securities and derivative trading took off in June 2000 on both BSE and NSE
exchanges. The trading cycle has also improved from being 15 December 2001 to 13
April 2002 and then was modified to 12 in April 2003. There are total 20 Regional
branches of SEBI in India.

Ajay Tyagi was appointed chairman on 10 January 2017, replacing U K

Sinha, and took charge of the chairman office on 1 March . Senior Indian
Administrative Service (IAS) officer Ajay Tyagi is the current chairman of markets
regulator Securities and Exchange Board of India (SEBI). A 1984 batch IAS officer of
Himachal Pradesh cadre, he has handled capital markets division in the finance
ministry. Tyagi has diverse experience at the Centre. It was officially established by
The Government of India in the year 1988 and given statutory powers in 1992 with
SEBI Act 1992 being passed by the Indian Parliament.

Controller of Capital Issues was the regulatory authority before SEBI came
into existence; it derived authority from the Capital Issues (Control) Act,
1947.Initially SEBI was a non statutory body without any statutory power.

However in the year of 1995, the SEBI was given additional statutory power
by the Government of India through an amendment to the Securities and Exchange
Board of India Act, 1992.In April, 1988 the SEBI was constituted as the regulator of
capital markets in India under a resolution of the Government of India.

6
The SEBI is managed by its members, which consists of following:

a) The chairman who is nominated by Union Government of India.

b) Two members, i.e. Officers from Union Finance Ministry.

c) One member from The Reserve Bank of India.

d) The remaining 5 members are nominated by Union Government of India, out of

them at least 3 shall be whole-time members.

It has recently opened local offices at Jaipur and Bangalore and is planning to
open offices at Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh in Financial
Year 2013 – 2014.

Control of capital issues was introducated under the defence of India act 1939
to channel resources to support the war effort and in April 1937 this was replaced by
capital issues(Continuance of control) Act .Stock exchange started getting regulated
only when Bombay securities contract control act was enacted in 1925 and later on
the recommendation of AD Gorwala committee, securities contract (Regulation) Act,
1956 was enacted.

7
 2. OBJECTIVES

1) Project based learning not only provides opportunities for students to

collaborate or drive their own learning but it also teaches them skills such as
problem solving and help to develop additional skill.
2) Getting information about the regulation and limitation of the SEBI, National
stock exchange, Bombay stock exchange, SEBI guideline.
3) Creates awareness among the young generation regarding SEBI.SEBI play an
important role in modern generation.
4) To furnish information for further research work on SEBI.
5) Scholar can refers this regarding there project work.
6) To understand the terms and conditions regarding exchange of security, SEBI,
NSE (National stock exchange), BSE (Bombay stock exchange).

8
 3. SEBI

3.1 Functions

The security and exchange board of India was established by the government of
India on 12 April 1988 an interim administrative body to promote orderly and healthy
growth of the securities orderly healthy growth of the securities market and to protect
investor‟s rights. It is functioning under administrative control of ministry of finance.
The SEBI was given statutory status on 30th January 1992 through and ordinance later
it was replaced by an act parliament, securities and exchange board of India act 1992.
The SEBI utilizes three functions to meet its objectives, protective, developmental,
and regulatory.

The functions of SEBI can be divided into three parts:

(1) Regulatory function

(2) Development Function

(3) Protective function.

1) Regulatory Functions:

The main objective of SEBI was to regulate the functioning of the stock exchange and
the securities market.

• Registration: One of the regulatory functions performed by SEBI is the registration

of the brokers, sub-brokers, agents and other players in the market. Registration of
collective mutual schemes and Mutual Funds is also done by SEBI.

• Regulating the Work: SEBI regulates the working of the stock brokers, underwriters,
merchant bankers and other market intermediaries. It frames rules and regulations for
the working of the intermediaries. SEBI also regulates the takeover bids by the
companies. It conducts regular enquires and audits of stock exchange and
intermediaries.

• Regulation by Legislation: SEBI performs and exercise various other powers which
are delegated by the Government of India under the Securities Contracts Act, 1956.
Besides, it levies fee or other charges for carrying out the purposes of the Act.

9
2) Development Functions:

• Training: SEBI promotes the training and development of the intermediaries of the
securities market in order to promote healthy growth of the securities market.

• Research: By conducting research in the required and important areas of the

securities market, SEBI publishes useful information. This helps the investors and
other market players to make wise investment decisions.

• Flexible Approach: SEBI has adopted a flexible and adaptive approach such
permitting internet trading, IPOs, etc. Such measures promote the development of
capital market.

3) Protective Functions

• Prohibition: SEBI prohibits fraudulent and unfair trade practices. It prevents the
spreading of misleading and manipulative statements which are likely to affect the
working of the securities market. SEBI educates the investors by providing them
valuable information regarding various securities and companies so as to enable them
to make wise investment decisions.

• Checks on Insider Trading: Insider trading refers to a situation where an individual

connected with the company leaks out crucial information regarding the company.
Such information may adversely affect its share prices. SEBI keeps a strict check on
such insider trading.

• Promotion and Protection: SEBI encourage fair trade practices and promotes a code
of conduct for the intermediaries. It undertakes step for investor protection and
education. It also checks the manipulation of price of securities.

• Financial education for Investors

SEBI conducts various online and offline seminars through various mediums to
educate the traders and investors. This education starts from basics of financial market
and covers money management as well. SEBI makes sure that these are prevented
beforehand by enforcing its bye-law guidelines.

10
3.2 Powers of SEBI

1. Powers relating to stock exchanges & intermediaries

SEBI has wide powers regarding the stock exchanges and intermediaries dealing in
securities. It can ask information from the stock exchanges and intermediaries
regarding their business transactions for inspection or scrutiny and other purpose.

2. Power to impose monetary penalties

SEBI has been empowered to impose monetary penalties on capital market

intermediaries and other participants for a range of violations. It can even impose
suspension of their registration for a short period.

3. Power to initiate actions in functions assigned

SEBI has a power to initiate actions in regard to functions assigned. For example, it
can issue guidelines to different intermediaries or can introduce specific rules for the
protection of interests of investors.

4. Power to regulate insider trading

SEBI has power to regulate insider trading or can regulate the functions of merchant
bankers. SEBI play an important role in insider trading. SEBI conducts various online
and offline seminars through various mediums to educate the traders and investors.

5. Powers under Securities Contracts Act

For effective regulation of stock exchange, the Ministry of Finance issued a

Notification on 13 September, 1994 delegating several of its powers under the
Securities Contracts (Regulations) Act to SEBI.

SEBI is also empowered by the Finance Ministry to nominate three members on the
Governing Body of every stock exchange.

6. Power to regulate business of stock exchanges

SEBI is also empowered to regulate the business of stock exchanges, intermediaries

associated with the securities market as well as mutual funds, fraudulent and unfair
trade practices relating to securities.

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3.3 Board Members of SEBI

1) Shri Ajay Tyagi

Chairman,SEBI,

Member Appointed under section4(1)(d) of SEBI act 1996

2) Shri S.K Mohanty

Whole-Time Member,SEBI

Member Appointed under section4(1)(d) of SEBI act 1996

3) Shri Gurumoorthy Mahalingam

Whole-Time Member,SEBI

Member Appointed under section4(1)(d) of SEBI act 1996.

4) Ms.Madhabi Puri Buch

Whole-Time Member,SEBI

Member Appointed under section4(1)(d) of SEBI act 1996

5) Ananta Barua

Whole-Time Member,SEBI

Member Appointed under section4(1)(d) of SEBI act 1996

6) Subhash Chandra Garg

Part-time Member,SEBI

Nominated under Section 4(1)(b) of the SEBI act 1992

7) Shri Injeti Srinivas

Part-time Member,SEBI

Nominated under Section 4(1)(b) of the SEBI act 1992

12
8) Shri N.S Vishwanathan

Deputy Governor of RBI

Part-time Member,SEBI

Nominated under Section 4(1)(b) of the SEBI act 1992

9) Arun P.Sathe

Part-time Member,SEBI

Nominated under Section 4(1)(b) of the SEBI act 1992

3.4 Importance of SEBI

 It is the duty of the Board to protect the interests of investors in securities and to
promote the development of and to regulate the securities market, by such
measures as it thinks fit.

 Regulating the business in stock exchanges and any other securities markets.

 Registering and regulating the working of stock brokers, sub-brokers, share

transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue,
merchant bankers, underwriters, portfolio managers, investment advisers and such
other intermediaries who may be associated with securities markets in any
manner.

 Registering and regulating the working of venture capital funds and collective
investment schemes, including mutual funds.

 Promoting and regulating self-regulatory organizations.

 Prohibiting fraudulent and unfair trade practices relating to securities markets.

 Promoting investors‟ education and training of intermediaries of securities

markets.

 Prohibiting insider trading in securities.

13
 Regulating substantial acquisition of shares and takeover of companies.

 Calling for information from, undertaking inspection, conducting inquiries and

audits of the stock exchanges, mutual funds, other persons associated with the
securities market, intermediaries and self-regulatory organizations in the securities
market.

 Performing such functions and exercising such powers under the provisions of the
Securities Contracts (Regulation) Act, 1956, as may be delegated to it by the
Central Government.

 Levying fees or other charges for carrying out the purposes of this section.

 Conducting research for the above purposes.

 Performing such other functions as may be prescribed.

3.5 SEBI Guidelines

SEBI advises certain guidelines in issue of fresh share capital, stock-brokers,mutual

funds, buyback of shares, Investors, sub- brokers, first issue by new companies in
Primary Market, and functioning of secondary markets in order to maintain quality
standards. A few such guidelines of the Securities and Exchange Board of India
(SEBI) are discussed here.

A) Primary Market

Meaning

The Primary Market, also known as a New Issue Market, is where new securities are
issued – it is part of the capital market. The primary market creates new securities and
offers them for sale to the public. A primary market, on the other hand, is the place
where the securities are given by the issuing organization for the first time and the
proceeds go towards the capital of that organization. The primary market creates new
securities and offers them for sale to the public.

14
 SEBI Guidelines for first issue by new companies in Primary Market:

1. A new company which has not completed 12 months of commercial operations will
not be allowed to issue shares at a premium.

2. If an existing company with a 5-year track record of consistent profitability, is

promoting a new company, then it is allowed to price its issue.

3. A draft of the prospectus has to be given to the SEBI before public issue.

4. The shares of the new companies have to be listed either with OTCEI or any other
stock exchange.

B) Secondary Market

Meaning

Secondary market is the market where previously issued securities, such as stocks and
bonds, are traded among investors. It is also the market where investors buy securities
from other investors, and not from the issuing organization. The sale proceeds from
the secondary market go to the investor, and not the issuing company. Secondary
market play important role in securities.

 SEBI guidelines for Secondary market

1. All the companies entering the capital market should give a statement regarding
fund utilization of previous issue.

2. Brokers are to satisfy capital adequacy norms so that the member firms maintain
adequate capital in relation to outstanding positions.

3. The stock exchange authorities have to alter their bye-laws with regard to capital
adequacy norms.

4. All the brokers should submit with SEBI their audited accounts.

5. The brokers must also disclose clearly the transaction price of securities and the
commission earned by them. This will bring transparency and accountability for the
brokers.

15
6. The brokers should issue within 24 hours of the transaction contract notes to the
clients.

7. The brokers must clearly mention their accounts details of funds belonging to
clients and that of their own.

8. Margin money on certain securities has to be paid by claims so that speculative

investments are prevented.

9. Market makers are introduced for certain scrips by which brokers become
responsible for the supply and demand of the securities and the price of the securities
is maintained.

10. A broker cannot underwrite more than 5% of the public issue.

11. All transactions in the market must be reported within 24 hours to SEBI.

12. The brokers of Bombay and Calcutta must have a capital adequacy of Rs. 5 lakhs
and for Delhi and Ahmadabad it is Rs. 2 lakhs.

13. Members who are brokers have to pay security deposit and this is fixed by SEBI.

C) Share Capital

Meaning

Invested money that in contrast to debt capital, is not repaid to the investors in the
normal course of business. It represents the risk capital staked by the owners through
purchase of a company's common stock (ordinary shares) also called equity financing
or share capital.

 SEBI Guidelines for issue of fresh share capital.

1. All applications should be submitted to SEBI in the prescribed form.

2. Applications should be accompanied by true copies of industrial license.

3. Cost of the project should be furnished with scheme of finance.

16
4. Company should have the shares issued to the public and listed in one or more
recognized stock exchanges.

5. Where the issue of equity share capital involves offer for subscription by the public
for the first time, the value of equity capital, subscribed capital privately held by
promoters, and their friends shall be not less than 15% of the total issued equity
capital.

6. An equity-preference ratio of 3:1 is allowed.

7. Capital cost of the projects should be as per the standard set with a reasonable debt-
equity ratio.

8. New company cannot issue shares at a premium. The dividend on preference shares
should be within the prescribed list.

9. All the details of the underwriting agreement.

10. Allotment of shares to NRIs is not allowed without the approval of RBI.

11. Details of any firm allotment in favor of any financial institutions.

12. Declaration by secretary or director of the company.

D) Stock-Brokers and Sub Brokers

 Meaning of stock-broker

A stockbroker is a professional individual who executes buy and sell orders on behalf
of clients for stocks and other securities in a listed market or over the counter, usually
for a fee or commission. Stockbrokers are usually associated with a brokerage firm
and handle transactions for retail and institutional customers alike. Brokerage firms
and broker-dealers are also sometimes referred to as stockbrokers themselves.

 Meaning of sub broker

A 'Sub-Broker' is any person who is not a Trading Member of a Stock Exchange but
who acts on behalf of a Trading Member as an agent or otherwise for assisting
investors in dealing in securities through such Trading Members.

17
 SEBI Guidelines for Stock-brokers & Sub-brokers on Cyber Security

• The stockbroker shall ensure that all ECNs (Electronic Communication) sent
through the e-mail shall be digitally signed, encrypted, non-tamper able and in
compliance with the provisions of the IT Act, 2000. In case, ECN is sent through e-
mail as an attachment, the attached file shall also be secured with the digital signature,
encrypted and non- tamper able form, to enable bulk digital signatures, today the
market is flooded with Auto Signers, which ease the burden of bulk documents
signing at various locations on the pages.

• The stockbroker would be responsible for keeping a backup of all the ECN in a soft
and non-tamper able form as per the compliance provisions of the IT Act, 2000 and as
per the rules/regulations/guidelines issued by SEBI from time to time. The log report
generated by the system at the time of sending the contract notes shall be maintained
by the stockbroker for the specified period under the extant regulations of SEBI/stock
exchanges. The log report would act as a storage for emails that are not delivered to
the client or bounced back.

• If the ECNs have not been delivered to the client or has been rejected by the e-mail
ID of the client, the stock broker shall send a physical contract note to the client
within the stipulated time under the extant regulations of SEBI/stock exchanges and
maintain the proof of delivery of such physical contract notes.

• A stockbroker is eligible for providing Internet-based trading (IBT) and securities

trading using wireless technology that shall include the use of devices such as mobile
phone, laptop with a data card, etc. which use Internet Protocol (IP). The stockbroker
shall comply with all requirements applicable to internet-based trading/securities
trading using wireless technology as may be specified by SEBI & the Exchanges from
time to time.

• The broker shall bring to the notice of client the features, risks, responsibilities,
obligations, and liabilities associated with securities trading through wireless
technology/internet/smart order routing or any other technology should be brought to
the notice of the client by the stockbroker.

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E) Buyback of Shares

Meaning

A buyback is repurchase of shares, means company purchase their own shares from
market which in turn reduces the open share in market .

 SEBI guidelines for buyback for shares are as follow

1) Notice of special resolution:

The notice of special resolution to be passed by the members should contain

explanatory statement giving details of the buy back deal as prescribed in Schedule I
of SEBI Regulations.

2) Buying from Members through Tender offer:

Under this method, the maximum price at which the company intends to buy back the
shares should be indicated in the notice of the general meeting. If the promoters
intend to offer their shares for buy back, details should be given in the notice of the
general meeting. The company should make a public announcement in at least one
English National Daily, One Hindi National Daily and One regional newspaper daily,
all with wide circulation giving details prescribed in Scheduled II of SEBI
Regulations.

The public announcement will mention the „specified date‟ for the purpose of
determining the names of shareholders to whom letters of offer shall be sent. Draft
offer letter giving prescribed details should be submitted to SEBI along-with
prescribed fees, at least 21 days before dispatch of letters of offer to shareholders.
Offer for buy back will remain open for minimum 15 days and maximum 30 days.

Letters of offer should be sent to the members well in advance so as to reach them
before the opening date of the offer. If the acceptances by the shareholders are more
than the number of shares offered to them for repurchase, the actual buy back will be
on proportionate basis. The company shall have to open and maintain an escrow
account with prescribed amount as deposit. Within 15 days of closure of offer for buy
back, payment should be made or regret letters should be sent to the shareholders.

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3) Buyback through Stock Exchange:

In case of buy back of shares through stock exchange route, special resolution of
members should prescribe maximum price at which shares can be bought and the buy
backs shall not be made from promoters or persons having control in the company.
Such persons will not deal in shares in stock exchanges when offer for buy back is
open.The company should appoint a merchant banker. Public announcement should
be made at least 7 days prior to commencement of buy back. A copy of public
announcement is to be filed with SEBI along-with prescribed fee within 2 days of
such announcement.

Companies buying back via stock exchange route must disclose purchases daily.
Details of shares purchased every day should be informed to the stock exchanges.
Payment will be made as per rules of trading in the stock exchanges. The company
will make true and full disclosure in the letter of offer and the public announcement.
Bonus shares will not be announced when the buy- back offer is open. All payments
will be made only by cash or cheque. Buy- back offer will not be withdrawn after
public announcement.

4) The ratio of the aggregate of secured and unsecured debts :

Share buyback is not approved by the SEBI, if the ratio of the aggregate of secured
and unsecured debts of a company are more than twice the paid-up capital and free
reserves.

For example, a company has paid-up capital and free reserves amounting to Rs.
1,00,000 and secured and unsecured debts amounting to Rs. 2,50,000. This company
has proposed buyback of 1000 shares at Rs. 100 each, which will amount to Rs.
1,00,000. In this case, the buyback will not be approved by SEBI because the debt-to-
equity ratio of the company will exceed 2:1 post buy back.

5) Share buyback for decreasing share capital

Typically, share cancellation and share repurchase are two methods for reducing the
share capital of a company. As per SEBI norms, no company has the power to buy
back its shares unless the consequent reduction of its share capital is effected under
section 67 of the Companies Act, 2013.

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6) Modes of buyback:

The buyback of shares can be done via the following means:

(a) Free reserves- If the buyback of shares is made from free reserves, a sum equal to
the nominal value of shares must be transferred to the Capital Redemption Reserve.

(b) Securities premium account- This is the extra money obtained when a company
sells shares above their fair value. The money in this account can be used for share
buyback.

(c) Proceeds of an earlier issue- A company cannot buy back its shares/securities out
of the proceeds of the earlier issue of the same type of share/securities.

7) Restrictions on the purchase of own shares or securities

As per SEBI norms, a company may not be allowed to purchase its own shares
through any subsidiary company and any investment company.

Also, a company with an unhealthy liquidity position may not be permitted to buy
back own shares.

8) Approval for buyback

The company shall not authorise any buyback unless:

a) The buy back is authorised by the Articles of association of the Company

b) A special resolution has been passed in the general meeting of the company
authorising the buy-back. In case if it is a listed company, then the approval should be
made by means of a postal ballot.Moreover, the buy back shares should be free from
the lock-in period.

C) If the quantity of buy back is equal to or less than 10% of the paid-up capital and
free reserves, then the buy back can be made by a Board resolution.

9) Max tenure to complete the buyback process

The process of buyback of shares shall be completed within a period of 1 year from
the date of the passing of the resolution by the board of directors of the company.

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10) Clarification on the timeline for a public announcement

The company authorised to do the buy back of shares shall make a public
announcement within two working days of its declaration.Two days will be from the
date of declaration of results of the postal ballot in the case of a special resolution or
the board of directors resolution.

11) Completion of the buyback

Within 30 days of completion of the buyback of shares, the company shall file a
return containing particulars relating to the buyback with the Registrar of Companies
and the Board according to the format specified in the Companies Act, 2013.

12) Seeking shareholder’s approval

Two types of resolutions, namely an ordinary resolution and a special resolution, are
involved in obtaining approval for buyback from the shareholders. An ordinary
resolution is where at least 51% members are in favor, and a special resolution is
where at least 75% members are in favor of the buyback.

An ordinary resolution is sufficient when the buyback amounts is up to 10% of the

total paid-up equity capital and free reserves of the company, but a special resolution
needs to be passed when the buy back amounts to 25% of the total paid-up capital and
free reserves.

13) Participation of an eligible public shareholder who does not receive the
tender offer/offer form:

To safeguard the interest of the bonafide shareholders, an eligible public shareholder

who does not receive the tender offer or offer form, can participate in the buyback and
tender shares in the manner as provided by the Board.

14. Rights of an unregistered shareholder to participate in the buyback process:

To safeguard the interest of the shareholders, an unregistered shareholder may also

tender his shares for buyback by submitting the duly executed transfer deed for
transfer of shares in his name, along with the offer form & other documents. A
buyback is repurchase of shares, means company purchase their own shares from
market which in turn reduces the open share in market.

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15. Rights of an unregistered shareholder to participate in the buyback process:

To safeguard the interest of the shareholders, an unregistered shareholder may also

tender his shares for buyback by submitting the duly executed transfer deed for
transfer of shares in his name, along with the offer form & other documents as
required for transfer.

F) Investor:

Meaning

An investor is any person or other entity such as a firm or mutual fund who commits
capital with the expectation of receiving financial return. Investors utilize investments
in order to grow their money and provide an income during retirement such as
annuity.

 SEBI Guidelines for protecting interest of investors

The main object of SEBI is not only to regulate stock markets but also to protect the
interest of investors. For this purpose, SEBI has given following guidelines:

1. SEBI has been encouraging investor-education. For this purpose, certain investors‟
associations have been registered.

2. Companies raising public deposits as well as huge capital must undergo credit
rating. Credit rating by an authorized authority gives a fair view about the financial
strength of the organization. For this purpose, there are four credit rating agencies.
They are CRISIL, ICRA, CARE and Duff and Phelps Credit Rating India Pvt. Ltd.

3. SEBI has taken the responsibility of disclosing fair and adequate information for
investors for the purpose of investment decisions.

4. For the benefit of the investors, company has to disclose its capacity utilization,
adverse events and material changes of key personnel.

5. Disclosure on market prices for listed company.

6. Arrangement for disclosing investors grievances and redressal system.

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7. Compulsory disclosure in the prospectus.

8. Contribution by promoters whose name figure in the prospectus.

9. In case of over subscription of any company issue, SEBI representatives will be

present there to look into the allotment process.

10. Setting up of investors grievances cell for handling complaints of investors.

11. SEBI has right to cancel registration of any underwriter who fails to furnish
business details to SEBI.

12. SEBI has made it mandatory for Merchant bankers to attach diligence certificate
with the prospectus for extending their accountability to the investors. The diligence
certificate gives a detailed position of the issue of shares. Only by such a certificate,
the investor can file a case of incorrect statement in the prospectus on erring
companies.

13. There is an advertisement code by SEBI which has to be followed by companies

or investors.

14. To avoid any malpractice in allotment process, SEBI has appointed its
representatives to look into allotment process which boosts the confidence of
individual investors.

15. Underwriters, registrar to issue and share transfer agent and portfolio managers
have been brought under SEBI for the first time.

16. Even the mutual funds have been brought under SEBI and they have to disclose
NPV (Net present value) of units every day which benefits investors.

17. For the benefit of the individual investors, a new scheme called stock invest
account has been introduced in banks. From this stock invest account, the new issue
of shares will be applied. In that, the investor will intimate the stock invest account to
the company issuing the shares.

18. In case of allotment, the company will inform the banker as per SEBI guidelines,
and funds will be released from the stock invest account to the bank.

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G) Mutual Fund

Meaning

A mutual fund is an investment vehicle made up of a pool of money collected from

many investors for the purpose of investing in securities such as stocks, bonds, money
market instruments and other assets. Mutual funds are operated by professional
money managers, who allocate the fund's investments and attempt to produce capital
gains and/or income for the fund's investors. A mutual fund's portfolio is structured
and maintained to match the investment objectives stated in its prospectus.

 SEBI Guidelines for Investing in Mutual Funds

1) The structure of mutual funds as per SEBI guidelines :

The SEBI guidelines define the Guarantor as one who, in his capacity as an individual
or in partnership with a different entity or entities, launches a mutual fund. The role of
the guarantor is to make revenue by putting together a mutual fund and handing it to
the fund manager.

A sponsor sets up the mutual funds as per the guidelines of the Indian Trust Act,
1882, for Public Trust. They are responsible for listing with the SEBI, having
provisions for resource management and ensuring the functioning of the fund takes
place as per the SEBI guidelines.

The Trustee or Trust is established through a trust deed that is implemented by the
sponsors of the funds and is accountable to all the investors of the mutual fund. The
trustee company is regulated by the Indian Companies Act 1956, while the firm and
the board members are overseen by the Indian Trust Act, 1882. The Investment
management of the trust is done through an Asset Management Company which is to
be listed as per the regulations of Companies Act of 1956. A mutual fund is an
investment vehicle made up of a pool of money collected from many investors for the
purpose of investing in securities such as stocks, bonds, money market instruments
and other assets.

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2) Role of SEBI in Mutual Fund Regulations :

As far as Mutual funds are concerned, SEBI makes the policies for mutual funds and
also regulates the industry. It lays guidelines for the mutual funds to safeguard the
investors‟ interest.

Mutual funds are very distinct in terms of their investment strategy and asset
allocation activities. This requires bringing about uniformity in the functioning of the
mutual funds that may be similar in schemes. This will assist the investors in taking
investment decisions more clearly.

To facilitate this standardization and bringing about uniformity in the similar

schemes, the mutual funds have been categorized accordingly as follows.

Equity Schemes, Debt Schemes, Hybrid Schemes , Oriented Schemes

3) Other Schemes :

The categorization and rationalization of mutual funds into these five broad categories
ensures that the mutual fund houses are only able to have one scheme in each sub-
category, with some exceptions. The categorization helps in simplifying the selection
of funds and works in the best interest of the investors by allowing them to evaluate
their risk options prior to making informed decisions about investing in the right
scheme. Following this consolidation of schemes, the investors can take a more
informed decision without much hassle or confusion. In order to fulfill this purpose,
SEBI has come up with some guidelines to help the retail investors in their mutual
funds‟ investment decisions.

4. Key Highlights of SEBI guidelines for Mutual Funds

a. Categorization of schemes into five groups – Equity, Debt, Hybrid, Solution

Oriented, Others

b. To ensure uniformity, large, mid and small cap has been defined clearly

c. There is a lock-in period specified for solution-oriented schemes

d. Permission of only one scheme in each category, except for Index Funds/ Exchange
Traded Funds (ETF), Sectoral/Thematic Funds and Funds of Funds.

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5. SEBI Guidelines to invest in Mutual Funds

SEBI keeps in place the regulatory framework and guidelines that govern and regulate
the financial markets in the country. . It lays guidelines for the mutual funds to
safeguard the investors‟ interest. The guidelines for investors are listed below.

a) Assessment your personal financial situation

Mutual funds present the most diversified form of investment options and therefore
may carry a certain amount of risk factor with it. Investors must be very clear in their
assessment of their financial position and the risk-bearing capacity in the event of
poor performance of such schemes. Investors must, therefore, consider their risk
appetite in accordance with the investment schemes.

b) Obtain researched information on the mutual funds‟ investment schemes

Before venturing into mutual fund investment, it is imperative for you as an investor
to obtain detailed information about the mutual fund scheme option. Having the right
information when required to make the necessary decision is the key to making good
investments. This may help in choosing the right schemes, knowing the guidelines to
follow and also be informed of the investors‟ rights.

c) Diversify your portfolios

Diversification of portfolios allows investors to spread out their investments over

various schemes thereby increasing chances of maximizing profits or mitigating risk
of potentially huge losses. Diversification is crucial to gaining long-term and
sustainable financial advantage.

d) Avoid the clutter of portfolios

Choosing the right portfolio of funds requires managing and monitoring these
schemes individually with care. The investor must not clutter the portfolio and decide
on the right number of schemes to hold so as to avoid overlap and be able to manage
each one of them equally well.

e) Assign a time dimension to the investment schemes

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It is advisable for the investors to assign a time frame to each scheme to encourage the
financial growth of the plan. It may help in containing the volatility and fluctuations
in the market if the plans are maintained stably over a period of time. This scheme is
fashioned to help the investors in the following ways.This may reduce the number of
schemes on offer, thereby, making it comparatively easier to choose. It may have
some schemes get merged with the others.

H) Merchant Banking

Meaning

Merchant banking is a combination of banking and consultancy services. It provides

consultancy to its clients for financial, marketing, managerial and legal matters.
Consultancy means to provide advice, guidance and service for a fee. It helps a
businessman to start a business. It helps to raise (collect) finance. It helps to expand
and modernize the business. It helps in restructuring of a business. It helps to revive
sick business units. It also helps companies to register, buy and sell shares at the stock
exchange. Merchant banking plays an important role in banking and services.

 SEBI Guidelines on Merchant Banking

1) Those with minimum net worth of Rs. 1 crore are authorized to act as Lead
Managers, Managers to the issue.

Minimum net worth of Rs. 50 lakh as co-managers to the issue

Minimum net worth of Rs. 25 lakh as consultant's advisers to the issue

2) The number of Lead Managers to the issue is restricted to 2 for issues less than Rs.
50 crore, 3 for less than Rs. 100 crore and 4 for above 100 crore.

3) Prior permission from SEBI is needed for carrying out Merchant Banking
activities.

4) Merchant banking facilities provide various benefits to the business houses. It also
provides the bankers additional income by way of fees, commission and brokerage. It

28
makes available a large float of funds and provides better corporate image to the
bankers. Merchant banking is a combination of banking and consultancy services. It
provides consultancy to its clients for financial, marketing, managerial and legal
matters.

5) The expertise and advice on the lines of Merchant Banking need to be extended to
small scale industries. It is also essential to try to develop 'cultivators Market' on par
with the capital market. There is also a further need for trained personnel to handle
new challenges in the field of innovative banking in this country".

6) Merchant Banking activities are now being controlled by SEBI because it pertains
to Capital Market Function. Accordingly SEBI licence is required to undertake
merchant banking activity. Banks cannot act as Merchant Bankers now. They can
carry on such activity only through a subsidiary.

I) Corporate Bonds

Meaning

A corporate bond is a debt security issued by a corporation and sold to investors. The
backing for the bond is usually the payment ability of the company, which is typically
money to be earned from future operations. In some cases, the company's physical
assets may be used as collateral for bonds.

 Simplifies Guidelines on Corporate Bonds

In order to facilitate development of a vibrant primary market for corporate bonds in

India, Securities and Exchange Board of India (SEBI) has amended the provisions
pertaining to issuances of Corporate Bonds under the SEBI (Disclosure and Investor
Protection) (DIP) Guidelines. The highlights of the amendments are:

1. For public/ rights issues of debt instruments, issuers will now need to obtain rating
from only one credit rating agency instead of from two as required at present. This is
with a view to reduce the cost of issuances.

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2. In order to facilitate issuance of below investment grade bonds to suit the risk/
return appetite of investors, the stipulation that debt instruments issued through
public/ rights issues shall be of at least investment grade has been removed.

3. Further, in order to afford issuers with desired flexibility in structuring of debt

instruments, it has been decided that structural restrictions such as those on maturity,
put/call option, on conversion, etc currently in place have been done away with.

J) Bonus Shares :

Meaning

Bonus shares are additional shares given to the current shareholders without any
additional cost, based upon the number of shares that a shareholder owns. These are
company's accumulated earnings which are not given out in the form of dividends, but
are converted into free shares.

 SEBI Simplifies Guidelines on Bonus Shares :

1. Provision in Articles of the Association for issue of Bonus Share

The Articles of the Association of the company should contain provisions for the
issue of bonus shares. In the absence of such provisions in the Articles, the company
should pass a resolution to that effect at the general body meeting.

2. Issue of Bonus Share

Bonus issue is capitalization of profit. Bonus shares should be issued from free
reserves created out of genuine profits or share premiums collected.

3. Capitalization of reserve

Any reserve created through revaluation of fixed assets cannot be capitalized.

4. Issuing Bonus

Bonus shares cannot be issued in lieu of dividend.

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5. No Partly paid-up shares

At the time of issuing bonus shares, there should not be partly paid up shares. Bones
issue is capitalization of profit. Bones shares should be issued from free resreves
created out of genuine profits or share premiums collected.

6. Bonus and Right issue

There should be a gap of at least twelve months between the public or right issue and
bonus issue. Bonus shares are additional shares given to the current shareholders
without any additional cost, based upon the number of shares that a shareholder owns.

7. Proposal of bonus issue

The proposal of bonus issue must be implemented within six months from the date of
such approval by the Board of Directors.

8. Payment of statutory dues

There should not be any default on the part of the company in payment of statutory
dues to employees such as provident fund, gratuity, bonus, etc. Similarly, there should
not be default in payment of interest on fixed deposits or interest or principal amount
thereof.

9. Resolution

If the issue of bonus shares results in excess of subscribed and issued capital over the
authorized capital, a resolution will be passed at the general body meeting for
increasing the authorized capital.

10. No bonus issue

No bonus issue will be made if it dilutes the rights of debenture holders whose
debentures are convertible fully or partly.Bonnes shares are additional shares given to
the current sharesholders without any additional cost, based upon the number of share
that a shareholder owns. These are companys accumulated earing which are not given
out in the form of dividends, but are converted into free shares. Bones Shares are very
useful shares.

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k) Initial Public Offer

Meaning

The process of offering shares in a private corporation to the public for the first time
is called an initial public offering (IPO). Growing companies that need capital will
frequently use IPOs to raise money, while more established firms may use an IPO to
allow the owners to exit some or all their ownership by selling shares to the public. In
an initial public offering, the issuer, or company raising capital, brings in
underwriting firms or investment banks to help determine the best type of security to
issue, offering price, amount of shares and time frame for the market offering. IPO
standards for initial public offering.

 SEBI Simplifies Guidelines on Initial Public Offer

1) Provided that the norms of this sub-regulation shall not apply to:

 A public issue brought out during the prevalence of convertible debt instruments
issued through an earlier initial public offer if the conversion price of such
convertible debt instruments was fixed and mentioned in the prospectus of the
earlier issue of convertible debt instruments.
 Outstanding options permitted to employees under an employee stock option
scheme (ESOS) formulated in consonance with the relevant Guidance Note or
Accounting Standards, if any, issued by the Institute of Chartered Accountants of
India (ICAI) in this matter. An issuer making an initial public offer must fulfill
that.
 It has net tangible assets of at least three crore rupees in each of the preceding
three full years (each year of twelve months), of which not more than fifty
percent. are held in monetary assets:
 It has a past record of distributable profits for at least three out of the immediately
preceding five years as per section 205 of the Companies Act, 1956. Thus it shall
be a profit-making company.
 While calculating the distributable profits extraordinary items shall be excluded in
such calculation.

32
 It must have a net worth of at least one crore rupees in each of the preceding three
full years (each year of twelve months).
 The aggregate of the proposed issue and all previous issues made in the same
financial year in terms of issue size must not exceed five times its pre-issue net
worth calculated as per the audited balance sheet of the preceding financial year;
 If it has changed its name during the last one year, at least fifty percent of the
revenue generated for the preceding one full year has been earned by it from the
activity mentioned by the new name.

2) An issuer not fulfilling any of the conditions prescribed in sub-regulation may

make an initial public offer if:

 The issue is made through the book building process and the issuer promises to
allow at least fifty percent of the net offer to the public, qualified institutional
buyers and to refund full subscription amount if it fails to make an allotment to the
qualified institutional buyers.
 At least fifteen percent. Of the cost of the project is contributed by scheduled
commercial banks or public financial institutions, out of which at least ten percent.
Shall come from the appraisers and the issuer guarantees to allow at least ten
percent. of the net offer to the public, to qualified institutional buyers and to
refund full subscription amount if it fails to make the allotment to the qualified
institutional buyers.
 No issuer shall make an initial public offer without obtaining grading for the
initial public offer from at least one credit rating agency registered with the Board.
This has to be as on the date of registering prospectus or red herring prospectus
with the Registrar of Companies. An issuer may make an initial public offer(IPO)
of convertible debt instruments even though he has not undertaken a prior public
issue of its equity shares and further listing thereof.
 An issuer shall not make an allotment pursuant to a public issue if the number of
prospective allottees is below one thousand. Provided that in the case where the
equity shares received on conversion or exchange of fully paid-up compulsorily
convertible securities and also depository receipts are being offered for sale, the
holding period of such convertible securities and that of resultant equity.

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3.6 National Stock Exchange (NSE)

 Introduction

The National Stock Exchange of India Limited (NSE) is the leading stock
exchange of India, located in Mumbai. The NSE was established in 1992 as the first
demutualized electronic exchange in the country. NSE was the first exchange in the
country to provide a modern, fully automated screen-based electronic trading system
which offered easy trading facility to the investors spread across the length and
breadth of the country. Vikram Limaye is Managing Director & Chief Executive
Officer of NSE.

National Stock Exchange has a total market capitalization of more than

US$2.27 trillion, making it the world's 11th-largest stock exchange as of April 2018.
NSE's flagship index, the NIFTY 50, the 50 stock index is used extensively by
investors in India and around the world as a barometer of the Indian capital markets.
Nifty 50 index was launched in 1996 by the NSE. However, Vaidyanathan (2016)
estimates that only about 4% of the Indian economy / GDP is actually derived from
the stock exchanges in India. Unlike countries like the United States where nearly
70% of the GDP is derived from larger companies and the corporate sector, the
corporate sector in India accounts for only 12-14% of the national GDP (as of October
2016). Of these only 7,800 companies are listed of which only 4000 trade on the stock
exchanges at BSE and NSE. Hence the stocks trading at the BSE and NSE account for
only around 4% of the Indian economy, which derives most of its income related
activity from the so-called unorganized sector and households.

Economic Times estimated that as of April 2018, 60 million (6 crore) retail

investors had invested their savings in stocks in India, either through direct purchases
of equities or through mutual funds. Earlier, the Bimal Jalan Committee report
estimated that barely 1.3% of India's population invested in the stock market, as
compared to 27% in USA and 10% in China.NSE was also instrumental in creating
the National Securities Depository Limited (NSDL) which allows investors to
securely hold and transfer their shares and bonds electronically. It also allows
investors to hold and trade in as few as one share or bond. This not only made holding
financial instruments convenient but more importantly, eliminated the need for paper

34
certificates and greatly reduced the incidents of forged or fake certificates and
fraudulent transactions that had plagued the Indian stock market. The NSDL's
security, combined with the transparency, lower transaction prices and efficiency that
NSE offered, greatly increased the attractiveness of the Indian stock market to
domestic and international investors.

The National Stock Exchange of India Ltd. (NSE) is the leading stock
exchange in India and the second largest in the world by nos. of trades in equity
shares from January to June 2018, according to World Federation of Exchanges
(WFE) report.

NSE launched electronic screen-based trading in 1994, derivatives trading (in

the form of index futures) and internet trading in 2000, which were each the first of its
kind in India.

NSE has a fully-integrated business model comprising our exchange listings,

trading services, clearing and settlement services, indices, market data feeds,
technology solutions and financial education offerings. NSE also oversees compliance
by trading and clearing members and listed companies with the rules and regulations
of the exchange.

NSE is a pioneer in technology and ensures the reliability and performance of

its systems through a culture of innovation and investment in technology. NSE
believes that the scale and breadth of its products and services, sustained leadership
positions across multiple asset classes in India and globally enable it to be highly
reactive to market demands and changes and deliver innovation in both trading and
non-trading businesses to provide high-quality data and services to market
participants and clients.

 History

National Stock Exchange of India Limited (NSE) is a nationwide, electronic

exchange offering investors trading facility in a variety of financial instruments which
includes equities, debentures, government securities, derivative products such as
index futures, index options, stock futures, stock options, interest rate futures etc.

35
NSE operates three market segments, the Capital Market segment (CM), Futures &
Options Market segment (F&O) and the Wholesale Debt Market segment (WDM).
NSE is the largest stock exchange in India in terms of traded value in equity, debt and
derivative products. Today NSE's share to the total equity market turnover in India
averages around 69%, whereas, in the futures and options market this share is around
98%. The Exchange has around 1,075 trading members who are connected to the
Exchange through advanced communication technology (VSATs) and leased lines.

NSE's sustained leadership positions across asset classes in the Indian and
global exchange sectors demonstrates the robustness and liquidity of our exchange.

NSE was incorporated in 1992. It was recognised as a stock exchange by SEBI

in April 1993 and commenced operations in 1994 with the launch of the wholesale
debt market, followed shortly after by the launch of the cash market segment.

National Stock Exchange (NSE) was promoted as a new stock market in which
both securities of companies and debt instruments are traded in order to counter the
influence of Bombay Stock Exhange (BSE) and to reduce the influence of certain
powerful intermediaries in the Stock Market. NSE takes into account of the screen
based trading and so it is the most advanced. The success of this stock exchange is
quite evident that within a few years of its promotion, the volume and the value of
transactions have surpassed the Bombay Stock Exchange. Apart from this, the prices
of securities prevailing in National Stock Exchange have its influence on the prices of
securities traded in the Bombay Stock Exchange.

NSE was mainly set up in the early 1990s to bring in transparency in the markets.
Instead of trading membership being confined to a group of brokers, NSE ensured that
anyone who was qualified, experienced and met minimum financial requirements was
allowed to trade. In this context, NSE was ahead of its times when it separated
ownership and management in the exchange under SEBI's supervision. The price
information which could earlier be accessed only by a handful of people could now be
seen by a client in a remote location with the same ease. The paper-based settlement
was replaced by electronic depository-based accounts and settlement of trades was
always done on time. One of the most critical changes was that a robust risk
management system was set in place, so that settlement guarantees could protect
investors against broker defaults.

36
NSE was set up by a group of leading Indian financial institutions at the behest of the
government of India to bring transparency to the Indian capital market. Based on the
recommendations laid out by the Pherwani committee, NSE has been established with
a diversified shareholding comprising domestic and global investors. The key
domestic investors include Life Insurance Corporation of India, State Bank of India,
IFCI Limited, IDFC Limited and Stock Holding Corporation of India Limited. And
the key global investors are Gagil FDI Limited, GS Strategic Investments Limited,
SAIF II SE Investments Mauritius Limited, Aranda Investments (Mauritius) Pte
Limited and PI Opportunities Fund .The exchange was incorporated in 1992 as a tax-
paying company and was recognized as a stock exchange in 1993 under the Securities
Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the Prime Minister
of India and Manmohan Singh was the Finance Minister. NSE commenced operations
in the Wholesale Debt Market (WDM) segment in June 1994. The capital market
(equities) segment of the NSE commenced operations in November 1994, while
operations in the derivatives segment commenced in June 2000. NSE offers trading,
clearing and settlement services in equity, equity derivatives, debt and currency
derivatives segments. It was the first exchange in India to introduce electronic trading
facility thus connecting together the investor base of the entire country. NSE has 3000
leased lines spread over more than 2000 cities across India.

 Features of NSE

 NSE is a fully automated screen-based trading system and it consists of a

wholesale debt market, capital market and derivatives market. The capital market
segment deals with equities, convertible debentures and retail trade in debt
instruments like non-convertible debentures.
 NSE is the first stock exchange in the world which uses communication
technology for trading its securities. It is fully computerised, screen based and
ringless system.
 It allows the investors to trade their securities from their offices or homes through
the network with direct satellite link up.

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 There are transparency dealings. The investor can check the exact price at which
their transactions took place.
 National Stock Exchange is a company promoted BY IDBI, ICCI, LIC and GIC
and its subsidiaries, commercial banks. SBI capital market limited.
 The establishment of the NSE is a major step in upgrading trading facilities for
investors and bringing Indian Financial markets in line with international markets.
The NSE provides the service of trading securities at the same price at any stock
exchange in India.
 There is no trading floor for the National Stock Exchange. Trading is done on the
computer with the help of PC terminals in brokers‟ offices. The NSE brokers link
themselves to the automated quotation system. Brokers are allowed to buy and sell
electronically.
 Press Trust of India publishes information about the owner of the scrips and the
number of scrips owned by a specific person.
 The trading members in the capital market are linked to the computer in Mumbai
through satellite. Likewise, the trading members in the wholesale debt market
segment are linked to the computer in Mumbai.

 The trading members place order with the NSE stating the conditions in terms of
price, time or size. On placement of the order, an order confirmation slip is
prepared. The computer system searches for a match and the deal is struck.

 The identity of the trading members is kept secret.

 When a trade is carried out, the trade confirmation slip is printed at the trading
member‟s work station. The slip furnishes details of price, quantity, code number
of the party, etc.

 After trading, the member is issued a statement showing his net position, the
amount of money he has to send to the clearing bank and the securities he has to
deliver to the clearing house.

 Members should deliver securities and cash on the thirteenth and fourteenth day
of trading respectively. The fifteenth day of trading is the pay out day.

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 The advantage of the automated trading System is that the investor is able to find
the best price for his scrips. Thus, the trading member can do business efficiently.

 NSE introduced internet trading with effect from February 2000. So it is the first
stock exchange in India to provide web-based access to investors to trade directly
on the exchange. The investors place orders through internet through the terminals
of the designated brokers. If the orders get matched, trade takes place and the
investor gets confirmation slips on their PCs. Board of Directors.

 Objectives of NSE

The NSE fulfills the following objectives :

1. The NSE was established in order to offer nation-wide trading facility for equities,
debts and hybrids.

2. Trading in NSE occurs simultaneously along with the regional stock exchanges.
Thus, it intends to facilitate equal access to investors across the country.

3. NSE ensures fairness, efficiency and transparency of securities trading.

4. It aims at shorter settlement cycle and book entry settlement system.

5. NSE also aims at achieving international standards in respect of securities market.

6. NSE made it possible for an investor to access the same market and order book,
irrespective of location and at the same cost as every other investor

 Importance of NSE

NSE successfully fulfilled these functions by establishing the first electronic stock
market of the nation. NSE was instrumental in creating National Securities Depository
Limited (NSDL), the first depository in India, allowing investors to hold and trade
securities electronically. This not only made investing simple, but also provided
increased transparency. The price information that was earlier available only to a
handful of traders present at the exchange, was now widely broadcasted and available

39
to everyone at their own remote location.Before the system introduced by NSE, an
investor who wanted to trade a security not listed on the nearest exchange had to route
orders through a series of correspondent brokers to the appropriate exchange.

This resulted in increased uncertainty and high transaction costs. NSE made it
possible for an investor to access the same market and order book, irrespective of
location and at the same cost as every other investor. NSE trading terminals are now
present in 363 cities and towns across India and can be accessed through brokers from
anywhere on the globe. , the National Stock Exchange (NSE) is the largest stock
exchange in India in terms of total and average daily turnover for equity shares. Being
a pioneer in technology, NSE has a fully-integrated business model to provide high-
quality data and services to market participants and clients. It includes trading
services, exchange listings, indices, market data feeds, clearing and settlement
services, financial education offerings and technology solutions.

NSE ensures that trading and clearing members and listed companies follow the rule
and regulation of exchange. NSE was the first exchange in the country to provide a
modern, fully automated screen-based electronic trading system which offered easy
trading facility to the investors spread across the length and breadth of the country.

The National Stock Exchange of India Limited (NSE) is the leading stock exchange
of India, located in Mumbai. The NSE was established in 1992 as the first
demutualized electronic exchange in the country. The establishment of the NSE is a
major step in upgrading trading facilities for investors and bringing Indian Financial
markets in line with international markets. The NSE provides the service of trading
securities at the same price at any stock exchange in India.

 Board Members of NSE

1) Mr. Vikram Limaye

Managing Director & CEO

2) Mr. Abhay Havaldar

Shareholder Director

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3) Mr. Dinesh Kanabar

Former Dy. CEO of KPMG in India &CEO of Dhruva Advisors LLP

Public Interest Director

4) Mr. Naved Masood

Former Secretary, Ministry of Corporate Affairs Government of India

Public Interest Director

5) Mr. T. V. Mohandas Pai

Chairman of Manipal Global Education Services Private Limited & Former CFO -
Infosys Technologies Limited

Public Interest Director

6) Mr. Prakash Parthasarathy

Former Chief Investment Officer Premji Invest

Shareholder Director

7) Ms. Dharmishta Raval

Advocate & Former Executive Director SEBI

Public Interest Director

8) Ms. Sunita Sharma

LIC Housing Finance Limited, Managing Director

 Mission and Vision:

 Mission

Our mission is to provide our clients with a network of innovative secretarial & legal
solutions. Our entire organization endeavours to exceed the expectations of our clients
in all aspects of service, by;

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• always adding maximum value to their business

• always responding promptly to our clients‟ needs;

• always managing our clients‟ matters in an efficient, caring and proactive

manner;

• always communicating regularly and clearly with our clients; and

• always looking to achieve the end result desired by our clients.

 Vision

We will make use of cutting edge legal and business technologies and methodologies,
to assure that we will continue to deliver the highest quality of professional services to
our clients and we will always strive to incorporate new practice areas and
opportunities so that we can continue to adapt to the growing and ever-changing
needs of our clients. The vision of the exchange is to “Continue to be a leader,
establish a global presence, facilitate the financial well-being of people.

3.7 Bombay Stock Exchange (BSE)

 Introduction

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage,
now spanning three centuries in its 133 years of existence. What is now popularly
known as BSE was established as "The Native Share & Stock Brokers' Association"
in 1875.

BSE is the first stock exchange in the country which obtained permanent recognition
(in 1956) from the Government of India under the Securities Contracts (Regulation)
Act 1956. BSE's pivotal and pre-eminent role in the development of the Indian capital
market is widely recognized. It migrated from the open outcry system to an online
screen-based order driven trading system in 1995. Earlier an Association Of Persons
(AOP), BSE is now a corporatised and demutualised entity incorporated under the
provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and
Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of

42
India (SEBI). With demutualisation, BSE has two of world's best exchanges,
Deutsche Börse and Singapore Exchange, as its strategic partners.

Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector
by providing it with an efficient access to resources. There is perhaps no major
corporate in India which has not sourced BSE's services in raising resources from the
capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed
companies and the world's 5th in transaction numbers. The market capitalisation as on
December 31, 2007 stood at USD 1.79 trillion . An investor can choose from more
than 4,700 listed companies, which for easy reference, are classified into A, B, S, T
and Z groups.

The BSE Index, S&P BSE SENSEX, is India's first stock market index that enjoys an
iconic stature and is tracked worldwide. It is an index of 30 stocks representing 12
major sectors. The S&P BSE SENSEX is constructed on a 'free-float' methodology,
and is sensitive to market sentiments and market realities. Apart from the S&P BSE
SENSEX, BSE offers 21 indices, including 12 sector all indices. BSE has entered into
an index cooperation agreement with Deutsche Borse. This agreement has made S&P
BSE SENSEX and other BSE indices available to investors in Europe and America.
The ETF enables investors in Hong Kong to take an exposure to the Indian equity
market.

The first Exchange Traded Fund (ETF) on S&P BSE SENSEX, called listed on BSE.
It brings to the investors a trading tool that can be easily used for the purposes of
investment, trading, hedging and arbitrage. BSE allows small investors to take a long-
term view of the market.

BSE provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. It has a nation-wide reach with a presence in more than
359 cities and towns of India. BSE has always been at par with the international
standards. The systems and processes are designed to safeguard market integrity and
enhance transparency in operations. BSE is the first exchange in India and the second
in the world to obtain an ISO 9001:2000 certification. It is also the first exchange in
the country and second in the world to receive Information Security Management

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BSE continues to innovate. In recent times, it has become the first national level stock
exchange to launch its website in Gujarati and Hindi to reach out to a larger number
of investors. It has successfully launched a reporting platform for corporate bonds in
India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-
screen aptly named 'BSE Broadcast' which enables information dissemination to the
common man on the street.

In 2006, BSE launched the Directors Database and ICERS (Indian Corporate
Electronic Reporting System) to facilitate information flow and increase transparency
in the Indian capital market. While the Directors Database provides a single-point
access to information on the boards of directors of listed companies, the ICERS
facilitates the corporates in sharing with BSE their corporate announcements. The
Securities and Exchange Board of India (SEBI) has approved the Scheme for
corporatization and demutualization of the stock exchange. The stock market would
become a company limited by shares.The ownership and management of BSE Ltd.
would be separate from the trading rights of the members. The initial membership will

be from cardholders of BSE who will become its share-holder and can also become
their trading members.

A trading member of BSE will also become a trading member of BSE Ltd. After the
organization, they will be only one class of trading members with similarity in rights.
There will be uniforms standards in capital adequacy, deposits and fees.

The governing board would be constituted in a manner that the trading members do
not exceed one fourth of the total strength of the government board. The existing
assets and reserves would be transferred from BSE to BSE Ltd. There would be at
least 51% of equity shares held by public other than the share-holders which have
trading rights.

 History

Bombay stock Exchange was founded by Premchand Roychand. He was one of the
most influential businessmen in 19th-century Bombay. A man who made a fortune in
the stockbroking business and came to be known as the Cotton King, the Bullion King

44
or just the Big Bull. He was also the founder of the Native Share and Stock Brokers
Association, an institution that is now known as the BSE.

While BSE Ltd is now synonymous with Dalal Street, it was not always so. The first
venue of the earliest stock broker meetings in the 1850s was in rather natural environs
under banyan trees - in front of the Town Hall, where Horniman Circle is now
situated. A decade later, the brokers moved their venue to another set of foliage, this
time under banyan trees at the junction of Meadows Street and what is now called
Mahatma Gandhi Road. As the number of brokers increased, they had to shift from
place to place, but they always overflowed to the streets. At last, in 1874, the brokers
found a permanent place, and one that they could, quite literally, call their own. The
new place was, aptly, called Dalal Street (Brokers' Street).

The Bombay Stock Exchange is the oldest stock exchange in Asia. Its history dates
back to 1855, when 22 stockbrokers would gather under banyan trees in front of
Mumbai's Town Hall. The location of these meetings changed many times to
accommodate an increasing number of brokers. The group eventually moved to Dalal
Street in 1874 and became an official organization known as "The Native Share &
Stock Brokers Association" in 1875.

On August 31, 1957, the BSE became the first stock exchange to be recognized by the
Indian Government under the Securities Contracts Regulation Act. In 1980, the
exchange moved to the Phiroze Jeejeebhoy Towers at Dalal Street, Fort area. In 1986,
it developed the S&P BSE SENSEX index, giving the BSE a means to measure the
overall performance of the exchange. In 2000, the BSE used this index to open its
derivatives market, trading S&P BSE SENSEX futures contracts. The development of
S&P BSE SENSEX options along with equity derivatives followed in 2001 and 2002,
expanding the BSE's trading platform.

Historically an open outcry floor trading exchange, the Bombay Stock Exchange
switched to an electronic trading system developed by CMC Ltd. in 1995. It took the
exchange only 50 days to make this transition. This automated, screen-based trading
platform called BSE On-Line Trading (BOLT) had a capacity of 8 million orders per
day. The BSE has also introduced a centralized exchange-based internet trading
system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the

45
BSE platform. Now BSE has raised capital by issuing shares and as on 3 May 2017
the BSE share which is traded in NSE only closed with Rs.999 .

The BSE is also a Partner Exchange of the United Nations Sustainable Stock
Exchange initiative, joining in September 2012.

BSE established India INX on 30 December 2016. India INX is the first international
exchange of India BSE launches commodity derivatives contract in gold, silver.

 Objectives of BSE

Objective of Bombay stock exchange are as follows:

 To promote, develop and maintain a well-regulated market for dealings in

securities.

 To safeguard the interest of members and the investing public having dealings on
the exchange.

 To promote industrial development in the country through efficient resource

mobilisation by way of investment in corporate securities.

 To establish and develop critical and fair practices in securities transactions.

Management of Bombay Stock Exchange

The exchange is professionally managed under the overall direction of the board of
directors, governing body, or executive committee. The board comprises of eminent,
professionals, representatives of trading members and the managing director of the
exchange. The day to day operations of the exchange are managed by the Managing
Director and CEO and an expert management Team of professionals.

 Needs for BSE

BSE is one of the factors Indian Economy depends upon. BSE has played a major role
in the development of the country. Through BSE, Foreign Investors have invested in
India. Due to inward flow of foreign currency the Indian economies have started

46
showing the upward trend towards the development of the country .BSE provides
employment for many people. Trading in BSE is also a business for a few, their
family income depends on it that is the reason why when scandals occur in the stock
market it not only affects the companies listed but also affects many families. In the
few extreme cases, it is observed that the bread winner of a family tends to suicide
due to the losses occurred .In most of major industrial cities all over the world, where
the businesses were evolving and required investment capital to grow and thrive,
stock exchanges acted as the interface between Suppliers and Consumers of capital.
One of the key advantages of the stock exchanges is that they are efficient medium for
raising resources and channeling savings from the general public by the way of issue
of Equity / Debt Capital by joint stock companies which are listed on stock
exchanges.. It provides safety and security in the capital market mechanism to ensure
investor protection. It provides financial assistance up to Rs. 1 crore to recognized
investor associations for their development expenditure towards investor protection
measures. It has set up an Investor Assistance centre in many cities.These centres
provide redressal of investor grievances and information and other facilities to
investors.

 Board Members of BSE

1) Shri Ashiskkumar Chauhan - Managing Director and CEO

2) Justice Vikramajit Sen - Public Interest Direct

3) Shri Sumit Bose - Public Interest Direct

4) Shri S.S Mundra - Public Interest Direct

5) Shri David Wright - Public Interest Direct

6) Shri Umakant Jayaram - Public Interest Direct

7) Dr Sriprakash Korthai - Shareholder Director

8) Smt.Usha Sangwan - Shareholder Director

9) Smt.Rajeshree Sabhavis - Shareholder Director

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 Functions of BSE

1) Measure of safety and fair dealing:

The stock exchange operate a regulatory framework seeks to protect the interest of
investors. The rules, regulations and bye-laws of a stock exchange, which are
approved by the central government that are meant to ensure that a reasonable
measure of safety is to provided to investors and transacations take place in
competitive conditions which are fair to all concerned.

2) Flow of capital in the most profitable channels:

Companies which have more profitable investment opportunities are normally able to
raise substantial funds through the stock market that whereas companies which do not
have such opportunities are normally not able to do so. As a result the stock market
facilitates the direction of the flow of capital in the most profitable channels.

3) Guidance of cost of capital :

The market value of the securities of company are required for computing its cost of
capital. Such values can be obtained from stock market quotation . Hence the stock
market offers guidance on cost of capital.

4) Inducement to companies to raise their standard of performance:

When the equity capital of a company is listed on a stock exchange the performance
of the company is reflected in the market price of the equity stock which is readily
available for publice consumption.

5) Act of magic:

Most of the investors are interested in short- term investment. The requirements of
companies are, however, long –term in nature. Negotiability and Transferability of
securities, through the stock markets, it is possible for companies to obtain their long -
term requirements from investors with short – term horizons. BSE is one of the
factors Indian Economy depends upon. BSE has played a major role in the
development of the country. Through BSE, Foreign Investors have invested in India.
Due to inward flow of foreign currency the Indian economies have started showing
the upward trend towards the development of the country .

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3.8 Difference between BSE and NSE

contents BSE NSE

Establishment BSE was founded in1875 NSE was found in 1992
Position Ascertained BSE has been the most NSE is considered to be
ancient stock exchange the largest stock
of Asia. exchange.

Products Offered BSE facilitates trading in NSE facilitates trading

equity, currencies, debt equity derivatives, debt
instruments, derivatives and currency derivatives
and mutual funds . segments.

Vision of Exchange The vision of the The vision of the

exchange is to “Emerge exchange is to
as the premier Indian “Continue to be a leader,
stock exchange with establish a global
best-in- class global presence, facilitate the
practice in technology, financial well-being of
products innovation and people”.
customer service”.

Benchmark index Sensex is the benchmark Nifty is the benchmark

index and comprises of index and Comprises of
30 companies. 50 companies.

Managing Director and Mr.Ashishkumar Mr. Vikram Limaye

CEO Chauhan

Position in the world BSE is 10th largest stock NSE is 11th largest stock
exchange. exchange.

Website reference www.bseindia.com www.nseindia.com

49
 4. CONCLUSION
SEBI was established in the year 1998 and gives statutory powers on 12
APRIL 1992 through the SEBI Act 1992.SEBI was set up with the main purpose of
keeping a check on malpractices and protect the interest of investors.

The security and exchange board of India was established by the government
of India on 12 April 1988 an interim administrative body to promote orderly and
healthy growth of the securities orderly healthy growth of the securities market and to
protect investors rights.

The SEBI utilizes three functions to meet its objectives, protective,

developmental, and regulatory .The functions of SEBI can be divided into three parts
are Regulatory function, Development Function ,Protective function. SEBI
regulates Indian financial market through its 20 departments. . SEBI has its
headquarters at the Bandra kurla complex in Mumbai and has another four. Northern
- New Delhi ,Eastern – Kolkata ,Southern – Chennai, Western – Ahmedabad.

SEBI advises certain guidelines in issue of fresh share capital, first issue by
new companies in Primary Market and functioning of secondary markets in order to
maintain quality standards.

Securities and Exchange Board of India (SEBI) was established in 1988.

Primary role at that time was to observe the market but SEBI had no power to control
anything. It was a non-statutory body. To give it powers, Union Government of India
passed SEBI Act 1992. On 12 April 1992 SEBI became an autonomous body with
statutory powers.

SEBI is also empowered to regulate the business of stock exchanges,

intermediaries associated with the securities market as well as mutual funds,
fraudulent and unfair trade practices relating to securities and regulation of acquisition
of shares and takeovers of companies

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 BIBLIOGRAPHY

Books:

 SEBI Guidelines in Mutual funds book – BHARAT.

 Manual of SEBI – BHARAT.

Website

www.investopedia.com

www.wikipedia.org

www.sebi.gov.in

www.google.co.in

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