ARUMUGAM PILLAI SEETHAI AMMAL

COLLEGE
TIRUPATTUR.
(RE-ACCREDITED WITH ‘B+’ GRADE BY NAAC)

DEPARTMENT OF VOCATIONAL EDUCATION

BANKING AND FINANCIAL SERVICES

MINI POJECT REPORT

ON
SEBI

IT SUBMITED BY
A.NEELESH
0520165021

UNDER THE GUIDENCE OF

DR.PANDI DEVI M.A.,M.PHIL.,P.HD

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 ACKNOWLEDGEMENT

I would like to express my special thanks to my class professor

DR.MRS.PANDI DEVI, who gave the golden opportunity to do this
wonderful project of SEBI, also helped me in completing my project. I came
to know about so many new thinks I really thankful to them.
Secondly I would like to thank my parents and friends who helped me a lot
in finalizing this project within the limited time frame.

A.NEELESH
B.voc.,(banking and financial service)

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 CERTIFICATE

This is to certify that the dissertation entitled “SEBI” by A.NEELESH for

the award of the degree of bachelor of vocational in banking and financial
service by the Alagappa university is her original work and that it has not
previously formed the basis for the award of any degree , diploma ,
associateship , fellowship or any other similar title and it represent wholly his
independent work.

DATE :
PLACE :

SIGNATURE OF THE GUIDE

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 DECLARATION

I here by declare that the dissertation entitled “SEBI” submitted for degree
of bachelor of vocational in banking and financial service is my original
work and that it has not previously formed the basis for the award of any
degree , diploma , associateship, fellowship or any other similar title. This
work was done under supervision of DR.M. PANDI DEVI
M.A.,M.PHIL.,PH.D

PLACE :
DATE :

SIGNATURE OF THE
CANDIDATE

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5
1 Introduction
2 History
 3 Objective
4 Function
5 MAJOR ACHIVEMENT
6 Role Of Sebi In Indian Capital Market
7 Promotion And Regulation Of Self Regulatory Organisations
8 Difference Between RBI & SEBI
9 Policies And Programmes
10 Reforms And Development
11 Role Of Sebi In A Public Issue
12 Role Of Sebi In Primary & Secondary Market
 

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INTRODUCTION:
Securities and Exchange Board of India Act (SEBI Act) on 30th
January 1992. In place of Government Control, a statutory and autonomous
regulatory board with defined responsibilities, to cover both development &
regulation of the market, and independent powers have been set up. Government
decided to give it statutory status after Securities Scam of 1990-91.

The basic objectives of the Board were identified as:

 to protect the interests of investors in securities;

 to promote the development of Securities Market;
 to regulate the securities market and
 for matters connected therewith or incidental thereto.

SEBI has introduced the comprehensive regulatory measures, prescribed

registration norms, the eligibility criteria, the code of obligations and the code of
conduct for different intermediaries like, bankers to issue, merchant bankers,
brokers and sub-brokers, registrars, portfolio managers, credit rating agencies,
underwriters and others. It has framed bye-laws, risk identification and risk
management systems for Clearing houses of stock exchanges, surveillance system
etc. which has made dealing in securities both safe and transparent to the end
investor.

Another significant event is the approval of trading in stock indices (like S&P CNX
Nifty & Sensex) in 2000. A market Index is a convenient and effective product
because of the following reasons:

 It acts as a barometer for market behavior;

 It is used to benchmark portfolio performance;
 It is used in derivative instruments like index futures and index options;
 It can be used for passive fund management as in case of Index Funds.

Two broad approaches of SEBI is to integrate the securities market at the national
level, and also to diversify the trading products, so that there is an increase in
number of traders including banks, financial institutions, insurance companies,
mutual funds, primary dealers etc. to transact through the Exchanges. In this
context the introduction of derivatives trading through Indian Stock Exchanges
permitted by SEBI in 2000 AD is a real landmark.
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SEBI appointed the L. C. Gupta Committee in 1998 to recommend the regulatory
framework for derivatives trading and suggest bye-laws for Regulation and Control
of Trading and Settlement of Derivatives Contracts. The Board of SEBI in its
meeting held on May 11, 1998 accepted the recommendations of the committee and
approved the phased introduction of derivatives trading in India beginning with
Stock Index Futures. The Board also approved the "Suggestive Bye-laws" as
recommended by the Dr LC Gupta Committee for Regulation and Control of
Trading and Settlement of Derivatives Contracts.

SEBI then appointed the J. R. Verma Committee to recommend Risk

Containment Measures (RCM) in the Indian Stock Index Futures Market. The
report was submitted in november 1998.

However the Securities Contracts (Regulation) Act, 1956 (SCRA) required

amendment to include "derivatives" in the definition of securities to enable SEBI to
introduce trading in derivatives. The necessary amendment was then carried out by
the Government in 1999. The Securities Laws (Amendment) Bill, 1999 was
introduced. In December 1999 the new framework was approved.

Derivatives have been accorded the status of `Securities'. The ban imposed on
trading in derivatives in 1969 under a notification issued by the Central
Government was revoked. Thereafter SEBI formulated the necessary
regulations/bye-laws and intimated the Stock Exchanges in the year 2000. The
derivative trading started in India at NSE in 2000 and BSE started trading in the
year 2001.

HISTORY OF SEBI:
Securities and Exchange Board of India (SEBI) was first established in 1988
as a non-statutory body for regulating the securities market. It became an
autonomous body on 30 January 1992 and was accorded statutory powers with the
passing of the SEBI Act 1992 by the Indian Parliament. SEBI has its headquarters
at the business district of Bandra Kurla Complex in Mumbai and has Northern,
Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai,
and Ahmedabad respectively. It has opened local offices
at Jaipur and Bangalore and has also opened offices
at Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh 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, 1947.
The SEBI is managed by its members, which consists of the following:

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  The chairman is nominated by the Union Government of India.
 Two members, i.e., Officers from the Union Finance Ministry.
 One member from the Reserve Bank of India.
 The remaining five members are nominated by the Union Government of
India, out of them at least three shall be whole-time members.
After the amendment of 1999, collective investment schemes were brought under
SEBI except nidhis, chit funds and cooperatives.

OBJECTIVE OF SEBI:
Some of the main objectives of SEBI are as follows:

 To protect the rights of the people who are motivated towards investing in
stock markets and create a safe environment for them to invest money
without worry.
 Preventing malpractices and regulating the working of stock exchanges is
another primary objective of SEBI.
 To develop and maintain a specific code of conduct to be followed by the
intermediaries like brokers etc. 
 To ensure the efficient functioning of the capital markets and maintain a
balance between legislated self-monitoring by the securities sector.

FUNCTION OF SEBI:

SEBI has primarily three main functions, namely; Protective function,

regulatory function, and development function, and each of these three further have
their various functions, which we will look at now in detail:

 Protective functions of the SEBI involve the following points: 

 Monitoring rigging of prices means malpractices with the aim of sudden and
abnormal decrease or increase in the stock prices in the market, forcing
people who had invested in facing the loss and backlash. 

 Restricting insider trading refers to the insiders like employees working

within the company who have access to crucial sensitive information and are
involved in purchasing or selling securities, altering the pricing of the
securities. 

 Forbidding unfair and deceptive trading of securities by coming up with laws

and codes of conduct in the securities market

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  It also aims to expand investors’ understanding of strategies to evaluate
investment opportunities better and, therefore, organises offline seminars and
online sessions to raise awareness against important concepts. 

 The regulatory function is to set rules and regulations for the intermediaries
for the efficient functioning of the market:

 A particular code of conduct is implemented on the financial intermediaries

like underwriters, brokers, etc.  

 The workings of the mutual funds are monitored by keeping a close eye on
their business operations.

 It looks over the process of a company’s takeover. 

 It oversees and keeps track of merchant bankers, trustees, stockbrokers, and

other stock exchange members.

 It performs inspections and audits to monitor the functioning of stock

exchanges.

 Development Function refers to the steps undertaken to strengthen the

security markets by using the ever-growing newest technologies of the
country. It involves activities like:

 It provides training to the intermediaries. 

 It is also responsible for engaging with research and research work.

 It involves other functions like incorporating online trading through licensed

brokers.

 It promotes self-regulatory groups and focuses on fair trading with no

misconduct.
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 there with or incidental
there to".
SEBI has to be responsive to the needs of three groups, which constitute the
market:

 issuers of securities
 investors
 market intermediaries
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SEBI has three powers rolled into one body: quasi-legislative, quasi-judicial and
quasi-executive. It drafts regulations in its legislative capacity, it conducts
investigation 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
appeal process to create accountability. There is a Securities Appellate Tribunal
which is a three-member tribunal and is currently headed by Justice Tarun
Agarwala, former Chief Justice of the Meghalaya High Court.[7] A second appeal
lies directly to the Supreme Court. SEBI has taken a very proactive role in
streamlining disclosure requirements to international standards. [8]

Securities and Exchange Board of India (SEBI)

Powers
For the discharge of its functions efficiently, SEBI has been vested with the
following powers:

 to approve by−laws of Securities exchanges.

 to require the Securities exchange to amend their by−laws.
 inspect the books of accounts and call for periodical returns from
recognised Securities exchanges.
 inspect the books of accounts of financial intermediaries.
 compel certain companies to list their shares in one or more Securities
exchanges.
 registration of Brokers and sub-brokers.
♦ SEBI committees

 Technical Advisory Committee

 Committee for review of structure of infrastructure institutions
 Advisory Committee for the SEBI Investor Protection and Education
Fund
 Takeover Regulations Advisory Committee
 Primary Market Advisory Committee (PMAC)
 Secondary Market Advisory Committee (SMAC)
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  Mutual Fund Advisory Committee
 Corporate Bonds & Securitisation Advisory Committee
♦ There are two types of brokers:

 Discount brokers
 Merchant brokers
Eliminate malpractices in security market

Major achievements:
SEBI has enjoyed success as a regulator by pushing
systematic reforms aggressively and successively. SEBI is credited for quick
movement towards making the markets electronic and paperless by introducing
T+5 rolling cycle from July 2001 and T+3 in April 2002 and further to T+2 in April
2003. The rolling cycle of T+2[9] means, Settlement is done in 2 days after Trade
date.[10] SEBI has been active in setting up the regulations as required under law.
SEBI did away with physical certificates that were prone to postal delays, theft and
forgery, apart from making the settlement process slow and cumbersome by
passing Depositories Act, 1996.[11]
SEBI has also been instrumental in taking quick and effective steps in light of the
global meltdown and the Satyam fiasco.[citation needed] In October 2011, it increased the
extent and quantity of disclosures to be made by Indian corporate promoters. [12] In
light of the global meltdown, it liberalised the takeover code to facilitate
investments by removing regulatory structures. In one such move, SEBI has
increased the application limit for retail investors to ₹ 200,000, from ₹ 100,000 at
present.[13]
On the occasion of World Investor Week 2022, SEBI Executive Director Shri G. P.
Garg launched a book on Financial Literacy. This book is a joint effort between
Metropolitan Stock Exchange of India Limited and CASI New York.

ROLE OF SEBI:

 Primary Markets: SEBI has regulated the primary market through

1. The regulation of issuers’ access to market

2. Regulation of information production at the time of issue
3. Regulation of processes and procedures relating to the issuance of securities

 Disclosure: Disclosure standards are not limited to accounting information

but was extended to other issue related communications such as
advertisements.

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  Corporate Governance: SEBI has made a constant effort to improve the
standards of Corporate Governance in India.
 Settlement Systems
 Dematerialization of securities
 Institutionalization of Trading and ownership of securities
 Market Integrity and Insider Trading
 To help in developing the capital market so that the business activities don’t
get hampered
 To bring companies and organizations under its regulation so that the
interests of investors are not harmed
 To curtail unethical trading which includes insider trading also
 To get done the registration of Mutual Funds and Systematic Investment
Plans(SIPs) and all such funds comply with laid down rules and regulations
of Mutual funds and SIPs
 To impart training to market participants on a regular basis.

MEANING OF SEBI:

SEBI:
The Securities and Exchange Board of India was established on April 12,
1992 in accordance with the provisions of the Securities and Exchange Board of India
Act, 1992.  Its main function is to stop fraudulent activities of stock market.
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
An Act to provide for the establishment of a Board 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.

 SEBI INTRODUCTION:
• Formed: 12 April, 1992
• Jurisdiction: Government of India
• Headquarters: Mumbai, Maharashtra
• Employees: 525 (in 2009)
• Website: www.sebi.gov.in
OFFICIAL WEBSITE OF SEBI
 SEBI HEADQUARTER BOARD MEMBERS
 Mr. U. K. Sinha (Chairman)
 Mr. Parshant Saran (Whole-Time member)
 Mr. V. K. Jairath (Member Appointed)
ORGANISATION CHART NAME DESIGNATION :
 Upendra Kumar Sinha Chairman Prashant saran Whole-
Time Member CA.
 T. V. Mohandas Pai Director, Infoysis Joint Secretary,
 Ministry of Dr. Thomas Mathew Finance
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  V. K. Jairath Member Appointed Deputy Governor,
Reserve Anand Sinha Bank of India
 LIST OF FORMER MEMBERS Name From To C. B. Bhave 18 February 2008 18
February 2011
 M. Damodaran 18 February 2005 18 February 2008
 G. N. Bajpai 20 February 2002 18 February 2005
 D. R. Mehta 21 February 1995 20 February 2002
 S. S. Nadkarni 17 January 1994 31 January 1995
 G. V. Ramakrishna 24 August 1990 17 January 1994
 Dr. S. A. Dave 12 April 1988 23 August 1990
 HISTORY OF SEBI  Initially SEBI was a non statutory body without any statutory
power.
 However in 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, 1998 the SEBI was constituted as the regulator of capital market in India
under a resolution of the Government of India.
 ROLE OF SEBI IN MUTUAL FUNDS :
SEBI notified regulations for the mutual funds in 1993. 
SEBI has also issued guidelines to the mutual funds from time to time to protect the
interests of investors.
All mutual funds whether promoted by public sector or
private sector are governed by SEBI.
 ROLE OF SEBI IN IPO :
The rules, regulations and procedures relating to public issues in
India are governed by SEBI.
Any company going public in India should get approval from SEBI
before opening its IPO. Issuer company's lead managers submit the public issue
prospectus to SEBI, provide clarification, make changes to the prospectus suggested by
SEBI and get it approve.
SEBI validate the IPO and make sure that document has enough
information to help investors to take decision before applying shares in an IPO.
 FUNCTIONS OF SEBI:
(1) SEBI performs following functions:
a) Regulating the business in stock exchanges and any other
securities markets.
b) 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, portfolio managers, investment advisers.
 FUNCTIONS Cont…
c) Prohibiting fraudulent and unfair trade practices relating to
securities markets.

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 (2) The duty of the Board to protect the interests of investors in securities and to
regulate the securities market.
(3) Board have some powers as issuing commissions for the examination of
witnesses or documents.
 RESPONSIBILITIES OF SEBI :
SEBI has to be responsive to the needs of three groups, which
constitute the market:
a. the issuers of securities
b. the investors c. the market intermediaries  SEBI has
three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.
 POWERS OF SEBI
 Investigation:
I. inspect the books of accounts and call for periodical returns from
recognized stock exchanges.
II. inspect the books of accounts of a financial intermediaries.
III. compel certain companies to list their shares in one or more stock
exchanges.
 Cease and desist proceedings:
I. prosecute and judge directly the violation of certain provisions of the
companies Act.
 DEPARTMENTS OF SEBI :
1. Market Intermediaries Regulation and supervision Department
(MIRSD)
2. Market Regulation Department (MRD)
3. Derivatives and New Product Department (DNPD)
4. Corporation Finance Department (CFD)
5. Investment Management Department (IMD)
6. Integrated Surveillance Department (ISD)
7. Investigation Department (IVD)
8. Legal Affairs Department (LAD)
PROTECTION GUIDELNES GIVEN BY SEBI :
Eligibility Norms For Companies Issuing Security: No
company shall make any issue of a public issue of securities, unless a draft prospectus has
been filed with the Board, through an eligible Merchant Banker, at least 21 days prior to
the filing of Prospectus with the Registrar of Companies (ROCs).
Pricing By Companies Issuing Securities: A listed company whose equity shares are
listed on a stock exchange, may freely price its equity shares and any security convertible
into equity at a later date, offered through a public or rights issue.
Pre issue Obligations:
The standard of due diligence shall be such that the merchant banker
shall satisfy himself about all the aspects of offering, veracity and adequacy of disclosure
in the offer documents.
Contents of Offer Document:

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 Prospectus shall also contain all material information which shall be
true and adequate so as to enable the investors to make informed decision on the
investments in the issue.
 RECENT NEWS ABOUT SEBI (Oct 3, 2011)  SEBI panel to revisit norms for IPOs,
mutual funds 
• The Securities and Exchange Board of India (SEBI) has decided to go
for a comprehensive review of the primary market processes and norms governing the
mutual fund industry.
• The initial public offer process review will involve further reducing the
time between closure of an issue and listing. At present, listing has to be made within 12
days. To help investors make informed judgment, SEBI has already asked merchant
bankers (issue managers) to reduce the size of the application form for IPOs and disclose
their track record of the issues managed and their performance.
• “We want to review the process further since our basic approach is to
make life easier for retail investors,” top sources in SEBI said. SEBI is also looking at
cutting down the number of days it takes to clear IPO applications.
• SEBI’s role will come after the committee submits its recommendations.
• It has been felt there is a need to improve buying and selling of mutual
fund units on the floor of stock exchanges and expanding the base of investors in mutual
funds.

 In 1988 the securities and exchange board of india was established by government of india through an executive
resolution and was subsequently upgraded as a fully autonomous body (a statutory body) in the year 1992 with the
passing of securities and exchange board of india act (SEBI act) on 30th janury 1992 ESTABLISMENT

 SEBI head quatered in popular business district of bandra- kurla complex in mumbai
  Shall be a body corporate with perpetual succession an common seal with power to acquire hold and
dispose of property.
 HQ will be in Mumbai and may establish offices at other places in India.
 Chairman and members of board will be appointed by the central government.
 Government can prescribe terms of offices and other conditions of service of the board and chairman.
 Primary duties of the board is to protect the interest of the investors. Salient features of SEBI act 1992
  Can undertake inspection of any books.
 Issue commission for the examinations of witness of documents.
 Power to regulate or prohibit issue of prospectus.
 Power to prohibit manipulative and deceptive devices.
 Penalties levied under the act have been enhanced. Amendments
 The primary objective of SEBI is to promote healthy and orderly growth of the securities market and secure investor
protection. The objective of SEBI are as follows:-
 To protect the interest of investors, so that , there is a steady flow of savings
into to the capital market.
 To regulate the securities market and ensure fair practices.
 To promote efficient services by brokers , merchant bankers and financial
intermediaries, so that, they become competitive and professional. Objectives of SEBI
 The SEBI act 1992 has entrusted with two functions they are
1. Regulatory functions and
2. Developmental functions Functions of SEBI
  Regulation of stock exchanges and self regulatory organizations.

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  registration and regulation of stock brokers , sub-brokers , registrars of all
issues, merchant bankers, underwriters, portfolio managers..etc
 Registration and regulation of the working of collective investment schemes
including mutual funds.
 Prohibition of fraudulent and unfair trade practices relating to securities
market.
 Prohibiting of insider trading.
 Regulating substantial acquisition of shares and takeovers of the company.
Regulatory functions
 Promoting investors education.
 Training of intermediaries.
 Conducting research and publishing information useful to all market
participants.
 Promoting of fair practices.
 Promotion of self regulatory organisations. Developmental functions
1. 10.  Power to call periodical returns from recognized stock exchanges .  Power to compel listing of securities
by public companies.  Power to levy fees or other changes for carrying out the purposes of regulation.  Power
to call information or explanation from recognized stock exchanges or their members.  Power to grant
approval to bye-laws of recognized stock exchanges.  Power to control and regulate stock exchanges. Powers
of SEBI
2. 11.  Power to direct enquiries to be made in relation to affairs of stock exchanges or their members.  Power
to make or amend bye-laws of recognized stock exchanges.  Power to grant registration to market
intermediaries  Power to declare applicability of section 17 of the securities contract (regulation) act 1956 in
any state or area to grant licenses to dealers
3. 12.  the board shall consists of following members:- 1. Chairman 2. Two members, one from amongst the
officials of the central government dealing with finance and another from the administration of companies act
of 1956. 3. One members from amongst the officials of the reserve bank of india. 4. five other members of whom
atleast three shall be the whole-time members to be appointed by the central government. Structure of SEBI
4. 13.  code of conduct:- the code of conduct has to be strictly observed and those employees, officers, or
directors of the company who violate the code of conduct will be subject to disciplinary action by SEBI or by the
company.  Duty of officers:- every listed company has to employ a compliance officer who as to report to MD
or CEO of the company.  Security;- confidential files should be protected and kept secure. these pertain to all
files but especially computer files and passwords, which are likely to have sensitive price information. Model
code of conduct
5. 14.  Closed trading window:- every company should have a closed trading window period when no trade take
places. It should be closed period when the annual P&L and b/s have been declared, when dividends have to be
declared and amalgamations have to made.  Open trading window:- SEBI has also provided that trading
windows would open only after 24 hours of making sensitive price available to the public.  Information;- to
avoid insider trading practices each listed company has to provide sensitive information on a continous basis
to the stock exchange.  Problems:- SEBI deals with the problems faced by the investors. These are dealt with
the investor grievance cell.
6. 15.  Investor grievance are usually due to delays in dispatch of allotment letters, refund orders, misleading
statements in advertisements or in the prospectus, delay in transfer of securities, non-payment of interest or
dividend.  These grievance are dealt with either SEBI or department of company affairs. Investor grievance
7. 16.  SEBI issued ombudsman regulation in 2003 to provide fair and transperent system of redressal of
grievance.  These regulation empower an investor to get redressal against both the company and the
intermediaries.  Complaints dealt by ombudsman act are 1. Delays in receiving refund orders, allotment
letters, dividend or interest. 2. Non-receipt of dividend, certificates, bonus shares, annual reports, refunds in
allotment or redemption of mutual fund unit. 3. Non-receipt of letter of offers in respect of buy back of shares
or incase of delisting. 4. Complaints against grievance against intermediaries or listed companies. Ombudsman
8. 17.  To participate and to vote in annual general meetings and right to receive a notice for them or their proxy
to attend the meeting.  To receive dividend, right shares , bonus offers , from the company ,after there
approval of the board.  To receive and inspect minutes of the meeting.  To receive balance sheet , P&L
account , auditors report , and directors report.  To receive allotment letters and share certificates.  To

17
 requisition an extra ordinary general meeting.  To apply for winding up of the company.  To proceed in civil
or criminal proceedings against the company. Rights of investor
9. 18. The expression 'stock market' refers to the market that enables the trading of company stocks (collective
shares), other securities, and derivatives. Bonds are still traditionally traded in an informal, over-the-counter
market known as the bond market. Commodities are traded in commodities markets, and derivatives are
traded in a variety of markets (but, like bonds, mostly 'over-the-counter'). Stock Exchange Market
10. 19.  Acts as sources for companies to raise money.  Clearinghouse for each transaction  Facilitates
economic growth  Indicator of share prices and other assets of a company Importance of Stock Market
11. 20.  Established for the purpose of assisting, regulating and controlling business of buying, selling and dealing
in securities  Provides a market for the trading of securities to individuals and organizations seeking to invest
their saving or excess funds through the purchase of securities  Provides a physical location for buying and
selling securities that have been listed for trading on that exchange  Establishes rules for fair trading practices
and regulates the trading activities of its members according to those rules  Ensure transparency by providing
information to the investor and helps in intelligent decision making about the particular stock based on
information Role and Functions Of Stock Market
12. 21. • Visibility • Market support • Investors confidence • Increased demand for products and services • Overall
increase in profitability Benefits of Listing
13. 22. Stock exchange can delist companies for a number of reasons including :- • Merger with another company •
Solvency problems • Failure to comply with exchange rules Delisting
14. 23.  Availability of information Market efficiency  Prices react quickly to new information  Liquidity  Small
price fluctuations Desirable Characteristics of a stock market
15. 24. • Transaction fees paid by members for each order executed • Fees paid by firms when their securities are
originally listed • Annual fees by firms • Entrance fees from new members • Sale of historic trading and market
information Financing the exchange
16. 25. • Cross border trading • Issuers and investors are expanding their horizons beyond their home markets •
Investors becoming much more demanding Major Challenges for stock exchanges

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