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THE GAZETTE OF INDIA EXTRAORDINARY [PART II-Sec 1] MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 29th May, 2007/Jyaistha 8, 1929 (Saka) The following Act of Parliament received the assent of the President on the 28th May, 2007, and is hereby published for general information:-

THE SECURITIES CONTRACTS (REGULATION) AMENDMENT ACT, 2007

No. 27 OF 2007 [28th May, 2007.]

An Act further to amend the Securities Contracts (Regulation) Act, 1956.

BE it enacted by Parliament in the Fifty-eighth Year of the Republic of India as follows:-

Short title 1. This Act may be called the Securities Contracts (Regulation) Amendment Act, 2007.

Amendment of section 2. 2. In section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (hereinafter referred to as the principal Act), in clause (h), after sub-clause (id), the following sub-clause shall be inserted, namely:-

"(ie) any certificate or instrument (by whatever name called), issued to an investor by any issuer being a special purpose distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable, including mortgage debt, as the case maybe;".

Insertion of new section 17A. 3. After section 17 of the principal Act, the following section shall be inserted, namely:-

Public issue and listing of securities referred to in sub-clause (ie) of clause (h) of section 2.

17 A. (1) Without prejudice to the provisions contained in this Act or any other law for the time being in force, no securities of the nature referred to in sub-clause (ie) of clause (h) of section 2 shall be offered to the public or listed on any recognised stock .exchange unless the issuer fulfils such eligibility criteria and complies with such other requirements as may be specified by regulations made by the Securities and Exchange Board of India.

(2) Every issuer referred to in sub-clause (ie) of clause (h) of section 2 intending to offer the certificates or instruments referred therein to the public shall make an application, before issuing the offer document to the public, to one or more recognised stock exchanges for permission for such certificates or instruments to be listed on the stock exchange or each such stock exchange.

(3) Where the permission applied for under sub-section (2) for listing has not been granted or refused by the recognised stock exchanges or any of them, the issuer shall forthwith repay all moneys, if any, received from applicants in pursuance of the offer document, and if any such money is not repaid within eight days after the issuer becomes liable to repay it, the issuer and every director or trustee thereof, as the case may be, who is in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at the rate of fifteen per cent. per annum.

Explanation.- In reckoning the eighth day after another day, any intervening day which is a public holiday under the Negotiable Instruments Act, 1881, (26 of 1881) shall be disregarded, and if the eighth day (as so reckoned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday.

(4) All the provisions of this Act relating to listing of securities of a public company on a recognised stock exchange shall, mutatis mutandis, apply to the listing of the securities of

the nature referred to in sub-clause (ie) of clause (h) of section 2 by the issuer, being a special purpose distinct entity.

Amendment of section 23. 4. In section 23 of the principal Act, in sub-section (1), in clause (c), for the word and figures "section 17", the words, figures and letter "section 17 or section 17A" shall be substituted.

Amendment of section 31. 5. In section 31 of the principal Act, for sub-section (2), the following sub-section shall be substituted, namely:-

"(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:-

(a) the manner, in which at least fifty-one per cent. of equity share capital of a recognised stock exchange is held within twelve months from the date of publication of the order under sub-section (7) of section 4B by the public other than the shareholders having trading rights under subsection (8) of that section;

(b) the eligibility criteria and other requirements under section 17 A.".

___________

K. N. CHATURVEDI, Secy. to the Govt. of India

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Securities and Exchange Board of India (SEBI) is a board (autonomous body) created by the Government of India in 1988 and given statutory form in 1992 with the SEBI Act 1992. Its head office is in Mumbai, and other offices in Chennai, Kolkatta and Delhi. SEBI is the regulator of Securities markets in India. It is chaired by Mr. M. Damodaran, a respected civil servant credited with turning around large public sector companies from near death scenarios, including the famous Unit Trust of India. The Board comprises whole time members and outside members (representing the finance ministry, RBI and experts). The present whole time members are Mr. G Anantharaman, Dr. TC Nair and Mr. VK Chopra. Below the Board, the staff/officers of the organization are led by Executive Directors (EDs). The present EDs are Mr. RK Nair, Ms. Usha Narayanan, Mr. Sandeep P Parekh and Mr. P. K. Nagpal. Also, Mr. MS Ray, a senior IRS officer on deputaion, is an Officer on Special Duty (equivalent to an ED). The organisational structure of SEBI can be found under the SEBI website by clicking on the RTI Act 2005 at the top.(no direct link) SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts rules in its legislative capacity, it conducts enquiries and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountibility. There is a Securities Appeallate Tribunal which is a three member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court(where important questions of law arise. SEBI has had a mixed history in terms of its success as a regulator. Though it has pushed systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless), it lacked the legal expertise, till recently, needed to sustain prosecutions/enforcement actions. SEBI has taken its present executive director in charge of enforcement from the market on a contract besides several other officers taken from leading firms and corporates also on contract. It has recently inducted around 40 officers from the five leading law schools in the country. These measures are expected to improve the speed and quality of the success rate of SEBI in courts.

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The Securities and Exchange Board of India (SEBI) has been mandated to protect the interests of investors in securities and to promote development of and to regulate the securities market so as to establish a dynamic and efficient Securities Market contributing to Indian Economy.

SEBI strongly believes that investors are the backbone of the securities market. They not only determine the level of activity in the secur market but also the level of activity in the economy.

However, many investors may not possess adequate expertise/knowledge to take informed investment decisions. Some of them may not aware of the complete risk-return profile of the different investment options. Some investors may not be fully aware of the precautions th should take while dealing with market intermediaries and dealing in different securities. They may not be familiar with the market mecha and the practices as well as their rights and obligations.

In this backdrop, SEBI launched a comprehensive education campaign aimed at creating awareness among investors about securities ma which has been christened Securities Market Awareness Campaign (SMAC) . The motto of the campaign is An Educated Investor is a
Protected Investor.

The campaign was launched at the national level by the then Prime Minister, Shri Atal Bihari Vajpayee, on January 17, 2003. The national launch was closely followed by launches in 12 states.

The structural foundation of the campaign is based on workshops that are being conducted all across the country with the continued and active participation of market participants, market intermediaries, Investors Associations etc., to spread SEBIs message of Invest With
Knowledge.

Workshops

Workshops

SEBI AUDIO-VISUAL CLIP

The workshops are aimed at reaching out to the common investors and are being held At the time of the national level launch, a 4 min primarily in small and medium towns and cities all over the country. At theseaudio-visual clip depicting detailing the theme of th workshops, the aim is to acclimatize the investors with the functioning of the securitiesSecurities Market Awareness Campaign was prepar market, the basic fundamentals of investment and risk management and their rightsthematic audio-visual is played at the various work and responsibilities. You can attend the workshops in your city/town. The message isbeing organised across the country. This short but simple, and lectures and discussions are conducted in your local/regional language, extremely effective audio-visual helps to set the to the workshops. Till date, more than 2188 workshops have been conducted in around 500 cities/towns across the country. FOR DETAILS CLICK HERE

Educative Materials

Investor Website

regional languages on-line or download it in the language of your choice. Advertisements

SEBI has prepared a standardized reading material and presentation material for the workshops. With a view to make information rel In addition, reference guides on topics concerning investors have also been prepared. to the investor available at one plac this dedicated investor website The reference guides/booklets have been translated into Hindi and the workshop material has (http://investor.sebi.gov.in) has bee been translated into 10 major regional languages. You can read the material translated into operationalised.
CLICK HERE.

Internet based response system :

SEBI has prepared simple dos and donts for investors relating to various aspects of the securities market. While these simple messages have been put on the investor website and have been printed in the form of leaflets to be distributed across the country, it was felt that these messages could be spread across the investor base by way of advertisements in newspapers, especially in the regional newspapers. Till date, over 700 advertisements relating to various aspects of Securities Market have appeared in 48 different newspapers/ magazines, covering approximately 111 cities and 9 regional languages, apart from English and Hindi. FOR DETAILS CLICK HERE. All India Radio Campaign on T.V.

A simple and effective internet based response to investor complaints has been set up. O filing of your complaint electronically, an acknowledgement mail would b sent to your specified email address and you will be issued complaint registration number instantaneously. LODGE YOUR
GRIEVANCE HERE

With a view to to use the electronic media to reach out to a With regard to educating investorslarger number of investors, a short cautionary message, in the through the medium of radio,form of a 40 seconds filmlet, has been prepared and the same SEBI Officials regularly participateis being aired on television. WATCH IT HERE IN in programmes aired by All India . Radio.FOR DETAILS CLICK HERE.

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