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Structure of Indian Securities Market SEBI

The document discusses the structure of the Indian securities market and the roles of money markets, capital markets, and SEBI. It provides details on money market instruments like treasury bills, certificates of deposits, commercial papers, and banker's acceptances. It also discusses the primary market where new securities are issued, and the secondary market which provides liquidity for existing securities. Finally, it outlines SEBI's role in regulating the securities market and protecting investors, as well as its functions like prohibiting insider trading and regulating substantial acquisitions.

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AJ Suri
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466 views21 pages

Structure of Indian Securities Market SEBI

The document discusses the structure of the Indian securities market and the roles of money markets, capital markets, and SEBI. It provides details on money market instruments like treasury bills, certificates of deposits, commercial papers, and banker's acceptances. It also discusses the primary market where new securities are issued, and the secondary market which provides liquidity for existing securities. Finally, it outlines SEBI's role in regulating the securities market and protecting investors, as well as its functions like prohibiting insider trading and regulating substantial acquisitions.

Uploaded by

AJ Suri
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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STRUCTURE OF INDIAN

SECURITIES MARKET &


SEBI FUNCTIONS AND
ROLE
Money Market
 It is a market purely for short-terms funds or financial assets called near
money.

 It deals with financial assets having a maturity period less than one year only.

 It is not a single homogeneous market, it comprises of several submarket like


call money market, acceptance and bill market.

 The component of Money Market are the commercial banks and NBFC (Non
Banking Financial Companies)
Instrument of Money Market

1. Treasury Bills
 T-bills are the most marketable money market security.

 They are issued with three-month, six-month, and one-year maturities.

 T-bills are so popular among money market instruments because of


affordability to the individual investors.
2. Certificate of Deposit (CD)

 A CD is a time deposit with a bank.

 Like most time deposit, funds cannot be withdrawn before maturity.

 The main advantage of CD is their safety.

 CD’s have specific maturity date, interest rate and it can be issued in any
denomination.
3. Commercial Paper (CP)

 CP is a short term unsecured loan issued by a corporation typically financing


day to day operation.

 CP is very safe investment because the financial situation of a company can


easily be predicted over a few months.

 Only company with high credit rating issues CP’s.


4. Banker’s Acceptance

 A banker’s acceptance is a short-term credit investment created by a non-


financial firm.

 They are guaranteed by a bank to make payment.

 Acceptance are traded at discounts from face value in the secondary market.
Role of capital market in resource allocation

• Link between savers and investors


• Encouragement to saving
• Encouragement to investment
• Promotes Economic Growth
• Stability in security prices
• Benefits to investors
Role of capital market in capital formation

• Mobilisation of saving and acceleration of capital formation


• Raising long term capital
• Promotion of industrial growth
• Ready and continuous market
• Technical assistance
• Reliable guide to performance
• Proper channelization of funds
• Provision of variety of services
Primary Market

 It is the part of capital market that deals with issuing of


new securities. Companies, government or public sector
institution can raise fund through sale of new stock. This
is the market for new long term equity capital.

 The primary market is the market where the securities are


sold for the first time. Therefore it is also called the new
issue market (NIM).This is typically done through
investment bank or financial intermediaries.
Features Of Primary Market

•In a primary issue, the securities are issued by the company


directly to investors.
•The company receives the money and issues new security
certificates to the investors.
•Primary issues are used by companies for the purpose of
setting up new business or for expanding or modernizing the
existing business.
•The primary market performs the crucial function of facilitating
capital formation in the economy.
Methods Of Floating New Issue

• Public Issue:
It is an invitation by company to the public to
subscribe to the securities offered like IPO, FPO, etc.
• Right Issue:
It involves selling of securities to existing
shareholders in proportion to their current holding.
• Private Placement:
It is sale of securities privately by company to
selected group of investors.
Secondary Market

 A secondary market is a marketplace where already


issued securities – both shares and debt – can be bought and
sold by the investors. So, it is a market where investors buy
securities from other investors, and not from the issuing
company.

 Gives liquidity to all investors. Any seller in need of cash can


easily sell the security due to the presence of a large number of
buyers
Products Deal in Secondary market
Why Secondary Market???
• It comes after primary market
• It encourages new investment
• Aids in financing the industry
• Ensures safe and fair dealing
• It has a particular place.
Guess who???
Excellent quotes By Warren Buffett

• On Earning: “ Never depend on single income. Make


investment to create a second source”.
• On Spending: “ If you buy things you don’t need, soon you will
have to sell things you need”.
• On Taking Risk: “ Never test the depth of water with both feet”.
• On Investment: “ Don’t put all your eggs in one basket”.
• On Expectation: “ Honesty is very expensive gift. Don’t expect
it from cheap people”.
SEBI INTRODUCTION
• Securities and Exchange board come into existince on
january 30 ,1992
Role of SEBI
• Protection of interest of investor.
• Promoting growth of security market.
• Promoting fair dealings
• Monitoring the activities of stock exchange,mutual fund
and merchant bankers.
SEBI GOVERNS SECURITIES MARKET
• SEBI ACT ,1992
• SECURITIES CONTRACTS ACT,1956
• DEPOSITRIES ACT,1996
MAJOR FUNCTIONS OF SEBI
• Prohibiting insider trading in securities.
• Regulation substantial acquisition of shares and take over
of companies.
• Power to make inspection.
PRESENTED BY
AJAY SHAH
UMANG KAPIL
KARAN SINGH
KUNAL PANDEY

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