SEBI IN CAPITAL MARKET ISSUES

Topics: Stock market, Stock exchange, Stock Pages: 10 (1918 words) Published: November 18, 2013


Accounting and Finance
for Managers

LESSON

17

SEBI IN CAPITAL MARKET ISSUES

CONTENTS
17.0 Aims and Objectives
17.1 Introduction
17.2 Objectives of the SEBI
17.3 Entity of SEBI
17.4 Organisational Grid of the SEBI
17.5 Powers and Functions of SEBI
17.6 Role of SEBI
17.6.1 Promoter’s Contribution
17.6.2 Disclosures
17.6.3 Book Building
17.6.4 Allocation of Shares
17.6.5 Market Intermediaries
17.6.6 Debt Market Segment
17.6.7 Brokers
17.6.8 Suspension of a Broker
17.6.9 Recent Developments
17.7 Critical Review of SEBI
17.8 Let us Sum up
17.9 Lesson-end Activity
17.10 Keywords
17.11 Questions for Discussion
17.12 Suggested Readings

17.0 AIMS AND OBJECTIVES

This lesson is intended to discuss the role of SEBI in regulating the Indian capital market. After studying this lesson you will be able to:
(i) describe objectives behind instituting SEBI
(ii) know the organisational structure of SEBI
(iii) understand powers and functions of SEBI
(iv) examine the role of SEBI in Indian financial market

17.1 INTRODUCTION

During the late 80, the GOI decided to replace the Controller of Capital Issues Act, by way of inducting the Securities Exchange Board of India, in order to introduce the regulatory environment in the Indian capital market, to pave way for the promotion of congenial and conducive climatic condition for the investing public. Hence the Government

of India has instituted the supreme authority SEBI to monitor and control the proceedings of the capital market in the country.

17.2 OBJECTIVES OF THE SEBI

To replace the office of the following major acts of implementation and to attain the following objectives:
Control of Capital Issues Act (1947)
The Companies Act (1956) - issue, allotment of the securities and disclosures Securities contract regulation Act (1956) - to control over the stock exchanges

In May, 1992 - the controller of issue of capital, pricing of the issues, fixing premia and rates of debentures were ceased in operation, provided the SEBI was promulgated.
Protecting the interest of the investors
Promoting the development of the securities market
Regulating the securities market

17.3 ENTITY OF SEBI
It was registered with the common seal and with the power to acquire, hold and dispose any property
Power to sue or to be sued in its own name
The Head office is situated in Mumbai; in addition the regional offices were established in the following metropolitan cities viz Kolkata, Chennai and Delhi, to monitor and control the capital market operations across the country

17.4 ORGANISATIONAL GRID OF THE SEBI

Six members in the committee
Headed by the chairman
One member each from the ministries of Law and Finance
One member from the officials of Reserve Bank of India
Two nominees from the central government
It contains 4 different departments viz Primary department, Issue management and intermediaries department, Secondary department and Institutional Investment department

17.5 POWERS AND FUNCTIONS OF SEBI

Section 11 of the Act Chapter IV highlights the Powers and Functions of SEBI Regulating the business of the stock exchanges
Regulating the role of the intermediaries
Registering and regulating of depositories, participants and custodian of securities, credit rating agencies
Regulating of mutual funds and venture capital funds
Prohibiting the unfair trade practices
Prohibiting of insider trade activities
Regulating substantial takeovers and acquisitions
Frequent conduct of research activities

SEBI in Capital Market Issues
l
To conduct any enquiry which warrants the situation to safeguard the interest of the investors

241

Accounting and Finance
for Managers

Civil Court Procedure 1908: The SEBI has been given additional powers and functionswith reference to Civil Court Procedure 1908 to regulate the capital market in addition to the above enlisted powers and...
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