MMPF-006

Master of Business Administration (MBA)

ASSIGNMENT
for
July 2022 and January 2023 sessions

MMPF-006: Management of Financial Services

(Last date of submission for July 2022 session is 31st October, 2022 and for January 2023
session is 30th April, 2023)

School of Management Studies

INDIRA GANDHI NATIONAL OPEN UNIVERSITY
MAIDAN GARHI, NEW DELHI – 110 068
 ASSIGNMENT
Course Code : MMPF-006
Course Title : Management of Financial Services
Assignement Code : MMPF-006/TMA/JULY/2022
Coverage : All Blocks

Note: Attempt all the questions and submit this assignment to the coordinator of your study
centre. Last date of submission for July 2022 session is 31st October, 2022 and for January
2023 session is 30th April, 2023.

1. Study any Stock Exchange of your choice and explain its organizational structure. Also
discuss the recent developments that have taken place in that organization.

2. Explain the meaning and scope of ‘Corporate Advisory Services’. Discuss the different
types of Corporate Advisory Services that are provided.

3. Discuss the guidelines issued by the Securities and Exchange Board of India in 2000 for
regulating the Venture Capital Funds and Venture Capital Companies in India.

4. What do you mean by Risk Management? Discuss the different types of risks faced by the
financial services company and also the need for managing these risks.

5. Discuss the various products that are being offered by a Mutual Fund of your choice to the
investors. Also analyze the schemes offered by the company and comment on the
suitability of these schemes, to which section of Investors?
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MMPF 06- Management of Financial Services

Q1-- Study any Stock Exchange of your choice and explain its organizational structure. Also discuss
the recent developments that have taken place in that organization.?
ANS- Stock Exchange its organizational structure - The first organized stock exchange in India was
started in Bombay in 1875 with the formation of the ‗Native share and Stock Brokers Association‗.
Thus the Bombay Stock Exchange is the oldest one in the country. With the growth of Joint stock
companies, the stock exchanges also made a steady growth and at present these are 23 recognized
stock exchanges with about 6000 stock brokers.
Market is a place where buyers and sellers meet and exchange products. This definition is universal
and applies to all markets. In this unit, we will discuss about the market called capital market. It is a
place, where capital of different types is exchanged. Often individuals like you are lenders or
suppliers of capital. Companies and various other institutions are borrowers or receivers of capital.
The market is organized or divided in two different ways. At a very broad level, the market is divided
into: (a) Short-term Capital Market (money market), and (b) Long-term capital market (also, called
stock market). Another way of classifying the market is: (a) I~tstitutional Market, and (b) Direct
Market. As an investor you can deal with the market in different ways. Let us understand the market
from individual's perspective.
The secondary market is the segment in which outstanding issues are traded and thus provide

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liquidity. Investors, who seek both profitability and liquidity, need both primary ind secondary
markets. There is thus a direct and complementary interface between the primary and secondary

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markets. Secondary market exists both for short-term
(money market) securities and long-term securities. It exists for debt, equity and a Op e r a t i o ns
and Services variety of hybrid securities. While the secondary market activities in money market

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securities are conducted over phone or through market makers, the trading is more organized for
long -term securities and conducted through stock exchanges. Buying and selling securities in

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secondary market is fairly simple. Investors have to open an account with a member of stock
exchange and then place orders through the member. For an orderly functioning of stock market, a
set of institutions is required. The role of these institutions assumes importance in securities
marKcet because the market deals with high value financial. assets. Institutions connected with
securities markets are Stock Exchanges, Members of Stocks Exchanges (popularly called brokers),
Clearing Corporation, Depository www.nsdl.co.in and www.centraldepository.co~n. Transfer Agents
and Securities and Exchange Board of India (SEBI) www.sebi.gov.in)
Technology has converted stock exchanges into a virtual institution. Earlier, there was an importance
for the physical location of stock exchange because it was a place where brokers or their assistailts
negotiate the prices (outsiders can hear only some noise but brokers understand the meaning) and
enter into transactions on behalf of their client -investors. Since the telecommunication was very
poor in India, one or two stock exchanges have been opened up in every state to cater the investors
of the region. India is one of the few countries with a large rlulnber of stock exchanges. Thanks to
development in telecommunication and information technology, the physical constraint was
removal during the last few years. National Stock Exchange today has its presence everywhere in the
country. Bombay Stock Exchange has also expanded its network. Many other stock exchanges are
finding it difficult to compete with these two principal stock exchanges and trying to come together
and create new business. This new development has improved transparency of operations and
brought down the cost. Today, stockbrokers are operating from their office through computer
network and investors can see the price at which the transactions are settled. Internet based stock
broking www.icicidirect.co~n or www,5paisa.com) allows investors to enter into transactions by
themselves without contacting their brokers directly, Competition has brought down the brokerage
from 2% to around 0.5% and today the brokerage rate in India is one of the lowest in the world. This
transformation has taken place in a matter of few months.
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National Stock Exchange (NSE)
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The total systems solutions adopted by NSE involves a technology which is the stateof-art. The base
line software adopted by the NSE is already functioning in a number of exchange, viz., Vancouver,
Mexico, Istanbul, and Caracas. This software has been developed and improved significantly by the
NSE with the help of Tata Consultancy Services. The satellite communication network that is in the
process of implementation will enable NSE not only to integrate the national market but also
provide access to investors abroad as and when it is facilitated by policy changes. The brokers can sit
in their own offices and trade on the system which offers versatile trading solutions. The trading
software provides all the options which are available on a trading floor or through telephone trades.
The screen provides entire market information at the press of a button which the existing telephone
trade or trading floor cannot provide instantaneously. As the system provides for concealment of the
identity of a market information continuously on a real time basis, it is a significant improvement
over all the existing traditional trading systems. The screen gives all the required information about
the depth of the market, the types of orders floating into the system, the best buy order value, the
best buy price, the best sell price, the order value available at the best sells price, the last traded
price, all previous trade that have taken place, outstanding orders of the concerned trading member,
etc. Informations are dynamically updated. As market participants sit in their own offices they have
all advantages of the back office support and facility to get in touch with their constituents.
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1-- Traditional Structure of stock Exchanges

The stock exchanges in India can be classified into two broad groups on the basis of their legal
structure.They are;
1. Three stock exchanges which are functioning as association of person‗s viz., BSE, ASE and Madhya
Pradesh Stock Exchange.
2. Twenty stock exchanges which have been set up as companies, either limited by guarantees or by
shares. They are
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Bangalore Stock Exchange
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Bhubaneswar Stock exchange
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Calcutta Stock Exchange
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Cochin Stock Exchange
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Coimbatore Stock Exchange
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Delhi Stock Exchange
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Gauhati Stock Exchange
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Hyderabad Stock Exchange

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Interconnected Stock Exchange

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Jaipur Stock Exchange
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Ludhiana Stock Exchange
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Madras Stock Exchange
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Magadh Stock Exchange
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Mangalore Stock Exchange
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National Stock Exchange
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Pune Stock Exchange
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OTCEI
2-- Demutualization of Stock Exchanges
The transition process of an exchange from a ―mutually-owned‖ association to a company ―owned
by Shareholders‖ is called demutualization.
Demutualization is transforming the legal structure, of an exchange from a mutual form to a
business corporation form. In a mutual exchange, the three functions of ownership, management
and trading are intervened into a single group. It means that the broker members of the exchange
are owners as well as traders on the exchange and further they themselves manage the exchange.
These three functions are segregated from one another after demutualization.
The demutualised stock exchanges in India are;
1. The National Stock Exchange (NSE)
2. Over the Counter Exchange of India (OTCEI)

3-- Corporatization of Stock Exchanges

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The process of converting the organizational structure of the stock exchange from a non-corporate
structure to a corporate structure is called Corporatization of stock exchanges. As stated earlier,
some of the stock exchanges were established as ―AssociationinIndia of like BSE, ASE and MPSE.
Corporatization of these exchanges is the process of converting then into incorporated companies.

Developments that have taken place in that organization

In advanced economies, stock exchanges were traditionally established as memberowned
organisations or government institutions. Since the mid-1990s, however, most stock exchanges have
been transformed into privately owned for-profit corporations. Today, all major stock exchange
operators in advanced economies have their shares listed and traded on their exchanges, while the
mutual form based on brokers’ membership has almost disappeared. In emerging markets, stock
exchanges were often established in the form of state-owned corporations and their transformation
into listed corporations has been more gradual. While the stock exchanges in Brazil and Mexico are
now listed companies, those in Turkey and Saudi Arabia are still run as state-owned enterprises.
Furthermore, the largest emerging market stock exchanges, which are in the People’s Republic of
China, operate as semi-public institutions and are membership institutions directly governed by the
China Securities Regulatory Commission (CSRC).
During this transformation, there have been a large number of mergers and acquisitions (M&A) in

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the stock exchange industry, involving companies from sectors such as electronic trading platforms,
financial information providers, financial index providers, data management and asset management.
Figure 4.1 shows the number of M&A transactions in the stock exchange industry between 2000 and

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2014. The figure covers a total of 169 buy-side deals and mergers involving publicly listed stock
exchange operators. In 26 of these transactions, a stock exchange acquired an equity stake in

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another stock exchange or stock exchange group. In 18 cases, the stock exchange acquired a 100%
or majority stake and in eight cases, a minority stake. There were an additional 19 transactions
where stock exchanges acquired an exchange that was trading securities and derivatives other than

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stocks. After 2005, a significant number of buy-side deals, with respect to related businesses such as
information technology and post trade services, can be observed
Mark Twain once divided the world into two kinds of people: those who have seen the famous
Indian monument, the Taj Mahal, and those who haven't. The same could be said about investors.
There are two kinds of investors: those who know about the investment opportunities in India and
those who don't. Although India's exchanges equate to less than 3% of the total global market
capitalization as of 2020, upon closer inspection, you will find the same things you would expect
from any promising market.
Almost of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since
1875 The NSE, on the other hand, was founded in 1992 and started trading in 1994. However, both
exchanges follow the same trading mechanism, trading hours, and settlement process.
As of November 2021, the BSE had 5,565 listed firms, whereas the rival NSE had 1,920 as of Mar. 31,
2021.
Almost all the significant firms of India are listed on both the exchanges. The BSE is the older stock
market but the NSE is the largest stock market, in terms of volume. Both exchanges compete for the
order flow that leads to reduced costs, market efficiency, and innovation. The presence
of arbitrageurs keeps the prices on the two stock exchanges within a very tight range.

Q2-- Explain the meaning and scope of ‘Corporate Advisory Services’. Discuss the different types of
Corporate Advisory Services that are provided.?
ANS- meaning and scope of corporate advisory services - The corporate advisory services are
spread over a vast spectrum of corporate activity. Some of them are very well suited for investment
banks, with the rest finding place with specialist advisory firms. The essence of corporate advisory
services for investment banking relates to Business advisory, Restructuring advisory, Project advisory
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and Merger & Acquisition advisory. Corporate Advisory Services is an umbrella term that
encompasses specialized advice’s rendered to corporate houses by professional advisers such as
accountants, investment banks, law practitioners and host of similar service providers.
With the growing importance of investment banking across the globe, its advisory functions are
beginning to find worldwide acceptance. People are looking at these advisory functions, with
increased confidence. One of such functions is corporate advice. However, these services are spread
over a vast spectrum of corporate activity. Some of them are very well suited for investment banks,
with the rest finding place with specialist advisory firms. The essence of corporate advisory services
for investment banking relates to Business advisory, Restructuring advisory, Project advisory and
Merger & Acquisition advisory. Corporate Advisory Services is an umbrella term that encompasses
specialized advice’s rendered to corporate houses by professional advisers such as accountants,
investment banks, law practitioners and host of similar service providers.
Corporate advisory services are needed to ensure that a corporate enterprise runs efficiently at its
maximum potential through effective management of financial and other resources. It also
rejuvenates old-line companies and ailing units and guides existing units in locating areas/activities
of growth and diversification. Usually, Merchant Bankers provide these services. The corporate
advisory services represent an important component of the portfolio of the activities of merchant
bankers.

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Corporate advisory services, for a business enterprise, include the following services:
1-- provide guidance in areas of diversification based on the Government’s economic and licensing
policies,

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2-- appraising product lines and analyzing their growth and profitability and forecasting future
trends, and rejuvenating old line companies and ailing sick units by appraising their technology and

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processes and restructuring their capital base
The move to help the ailing industrial units is a well thought out service by the merchant bankers
which remained unattended for years. Now the merchant banks in India have recognized this gap

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and started helping ailing companies to overcome their problems. For example Punjab National Bank
has developed special expertise in the area and contemplates to offer help in this sensitive area in
one or more of the following ways, viz. (i) commissioning of diagnostic studies, (ii) assessment of
revival prospects and preparation of rehabilitation plans, schemes of modernization and
diversification, revamping of the financial and organizational structure, (iii) arranging approval of the
financial institutions/banks for schemes of rehabilitation involving financial relief etc. assistance in
getting soft loans from the financial institutions for capital expenditure and the requisite credit
facilities from the bank, (iv) monitoring of rehabilitation schemes, and (v) exploring possibilities of
takeover of sick units and assistance in making consequential arrangement and negotiations with
financial institutions/banks and other interests/authorities involved.
The above areas are only illustrative of the wide field of corporate advisory services, which could
cover any matter worth the benefit for a corporate unit involving financial aspects, governmental
regulations, policy changes and business environmental reshuff1es etc. Thus, the scope of the
corporate advisory services is very vast. Its coverage ranges from the subject areas like manageria1
economics, investment and financial management to corporate Laws and the related legal aspects.
As a managerial economist a merchant banker has to guide its clients on the aspects of
organizational goals, location of the enterprise, size of the organization and scale of operations,
choice of a product and market survey, forecasting of product, cost reduction and cost analysis,
allocation of resources, investment decisions, capital management and expenditure control, pricing
methods and marketing strategy, etc. A merchant banker as a financial and investment expert has to
guide the corporate clients in areas covering financial reporting, project measurement, working
capital management, financial requirements and the sources of finance, evaluating financial
alternatives, rate of return and cost of capital, financial rearrangement, reorganization, mergers and
acquisitions
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Different types of Corporate Advisory Services

Some of the main corporate advisory services can be listed as follows:

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2-- Project Counselling and Pre-Investment Studies

Project counseling services relate to ‘project finance and broadly covers the study of the project and
offering advisory assistance on the project viability and procedural steps for its implementation. It
includes the following aspects; general review of the project ideas/profile, advice on procedural
aspects of project implementation, review of technical feasibility of the project on the basis of the
report prepared by own experts or by the outside consultants, selecting Technical Consultancy
Organization for preparing project reports and market surveys, review of the project reports or
market survey report, preparing project report from financial angle, advice and acting on various
procedural steps including obtaining government consents for implementation of the project. For
project counseling an evaluation of industrial projects is undertaken to compare and evaluate
alternative variants of technology, of raw materials to be used, of production capacity, of location
and of local production versus import. Project evaluation is indispensable because resources are
scarce and alternative opportunities in terms of projects exist for commitment of resources. Project
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selection can only be rational if it is superior to others in terms of its commercial importance (net
financial benefit accruing to owners of project) or its importance to the nation as a whole
3-- Corporate Restructuring
The merchant banks provide their expert services for corporate restructuring. When a company
wants to grow or survive in a competitive environment, it needs to restructure itself and focus on its
competitive advantage. This restructuring could be by way of internal growth or external growth. In
simple words, corporate restructuring is the process by which a company can consolidate its
business operations and strengthen its position for achieving the desired objectives. Corporate
restructuring is done in three different areas. These are:

4--Capital Structuring and Restructuring

Capital structure of a unit is financed by owned capital in the form of promoter’s contribution and
issue of shares and borrowed capital. Net worth represents owned capital and consists of equity
shares and retained profits. Equity share capital, which is the core capital structure of a company,
represents risk capital. Equity shareholders are the owners of the company, have voting rights, have

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a say in the management of the company and possess residuary interest in the company. Equity
shares, however, do not have any right to dividend and the management can skip dividends. The

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main questions on the capital structure decision are an appropriate debt equity ratio and minimizing
cost of capital.

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5--Loan Syndication
Loan syndication service involves making arrangement for financing a large borrower by a number of
financial institutions. Loan syndication is also known as loan procurement and project finance
service. The main task involved in loan syndication is to raise the rupee and foreign currency loans
with the banks and financial institutions both in India and abroad. It also arranges to bridge finance
and the resources for cost escalations or cost over-runs. Broadly, the loan syndication includes the
following acts; (a) estimating the total costs, (b) drawing a financing plan for the total project cost-
conforming to the requirements of the promoters and their collaborators, financial institutions and
banks, Government agencies and underwriters, (c) preparing loan application for financial assistance
from term lenders/financial institutions/banks and monitoring their- progress including the pre-
sanction negotiations, (d) selecting the institutions and banks for participation in financing, (e)
follow-up of the term loan application with the financial institutions and banks and obtaining the
satisfaction for their respective share of participation, (f) arranging bridge finance (g) assisting in
completion of formalities for drawl of term finance sanctioned by institutions expediting legal
documentation formalities, drawing up inter-se agreements etc. prescribed by the participating
financial institutions and banks (h) assessing the working capital requirements, preparing the
necessary application for submission to the bankers and assisting in negotiating for the sanction of
appropriate facilities.
6-- Liaison with Foreign Collaborators and making preparation for Joint Ventures
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Merchant banks help locate foreign collaboration and joint venture partners abroad. They seek to
advise on local laws, product risk, Government regulations regarding shareholdings, exchange
relation, taxation, dividends, incentives and subsidies etc. They also provide guidance on negotiating
foreign financial and technical collaboration agreements with the framework of government policies,
rules and regulations, assistance in the formation of corporate ventures in India in collaboration with
suitable foreign parties
7-- Raising Foreign Currency Loans Euro issues, Foreign Currency Convertible Bonds etc
Merchant Banks in India do provide foreign currency finance as merchant banking services in the
following manner: (a) export-import trade finance, (b) Eurocurrencyloans, (c) Indian joint ventures
abroad, and (d) foreign collaborations. The main areas covered under export 48 finance are as
follows: viz. (i) assistance in study of the turnkey and construction contract projects, (ii) assistance in
formulation of the application for working group, liaison with RBI. ECGC and other institutions, (iii)
syndication of various types of guarantees, letters of credit, pre-shipment credit, deferred post-
shipment credit, bridge loans and other credit facilities, and (iv) assistance in opening and operating
bank accounts abroad. The main areas of import finance are as follows: viz. (i) arranging foreign
currency loans under buyer’s credit scheme for importing goods, and (ii) arranging deferred
payment guarantees under suppliers credit scheme for importing capital goods. Foreign banks
operating in India through their merchant banking departments are rendering significant services in

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respect of foreign currency loans. For example Grindlays Bank has a worldwide specialization in
foreign currency finance covering supplier/buyer credit.
8-- Mergers and Acquisitions

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These are specialized services, which the merchant banks have to provide according to the
individual requirement of their clients. These services includes advice and assistance in negotiating

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acquisitions and mergers where confidentiality is of the utmost essence, expert valuation to
determine the quantum and nature of consideration and assistance on related legal documentation,
official approval, tax matters, etc, management audits to identify areas of corporate strength and

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weaknesses to help formulate guidelines and directions for future growth plans, and exploratory
studies on a global basis, to locate overseas markets, foreign collaborations and prospective joint
venture associates.
Mergers and amalgamations inter-alia seeks to carry capital reorganization of the business
enterprises. Merchant bankers’ help is generally sought on the capital reorganizations and mergers,
guidance on and assessment of the financial factors. Merchant Banks advise on acquisition
propositions after careful examination of all aspects namely balance sheet, articles of associations,
provision of company laws, rules and guidance of trade chambers, the issuing house associations etc.
besides accountants estimates of total assets and legal assistance in drafting. The merchant bankers
usually guide takeover bids, where the Offer is made to the shareholders of different classes of
shares and loan capital of the company involved in such transaction who have their legal rights
requiring legal consideration. Making them aware of their legal rights and interests becomes the
central point of focus for the merchant banker to advice the client company
9-- Making Valuation and Revaluation of Assets
One of the problems in analyzing a potential merger involves determining the value of the acquired
firm. The value of a firm depends not only upon its earnings but also upon the operating and
financial characteristics of the acquiring firm. It is, therefore; not possible to place a single value for
the acquired firm. Instead a range of values is determined that would be economically justifiable to
the prospective acquirer. The two firms negotiate the final price within this range. To determine an
acceptable price for a corporation, a number of factors, quantitative as well as qualitative, are
relevant. However, placing a value on qualitative factors is difficult such as managerial talent, strong
sales staff, excellent production department, and so on. Therefore, the focus of determining the
firm’s value is on several quantitative variables. The quantitative factors relate to (a) the value of the
assets and (b) the earnings of the firm. Based on the assets value and earnings, these factors include
book value, appraisal value, market value and earnings per share.
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10-- Consultancy for Rehabilitation of Sick Industrial Units

Corporate advisory services include providing help and guidance to the sick industrial units to
overcome their problems. For example Industrial Finance Corporation of India, which inaugurated its
merchant banking division at its Head Office at New Delhi on July I, 1986, envisaged to provide
consultancy to ailing and sick industrial units in addition to other services like Counseling, Issue
Management and Credit Syndication, etc. Merchant banking services to ailing or sick industrial units
would cover the activities of following description:

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10--Other Corporate Advisory Services

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The corporate advisory services as explained above do not cover all the services rendered by
merchant banks to the corporate world. In fact there cannot be a finite list of these services. As new

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problems come up there would be a need for a new kind of corporate advice, which would solve
those problems. Some merchant banks would take up the challenge and gear up their activities for

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providing the needed corporate advice. This leads to the emergence of new corporate advisory
services. Therefore it can be rightly said about merchant banks, “ merchant banks are the
institutions which identify and solve corporate problems”. In addition to the corporate advisory
services explained above the merchant banks may also provide the following services to the
corporate world:

Q3- Discuss the guidelines issued by the Securities and Exchange Board of India in 2000 for
regulating the Venture Capital Funds and Venture Capital Companies in India?
ANS- Securities and Exchange Board of India in 2000 for regulating the Venture Capital Funds and
Venture Capital Companies in India - For the purposes of seeking registration under these
regulations, the applicant shall make an application to the Board in Form A along with the
application fee as specified in Part A of the Second Schedule to be paid in the manner specified in
Part B thereof. One of the essential pre-requisites for the setting up of an industrial enterprise is
timely and adequate availability of finance. This problem becomes more acute when an
entrepreneur is a new and unknown technocrat, who possesses innovative ideas to develop a new
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product, but lacks his own capital which is essential to turn his ideas into a successful commercial
venture. Finance required for such purpose is more risky in nature, because the innovative ideas of
the entrepreneur have not been tried on a commercial scale. On the other hand, if the venture
proves successful, it has potential for high returns. Usual sources of finance cannot be tapped by the
entrepreneurs for lack of availability of funds from his own sources. In such circumstances Venture
Capitalist comes to his rescue by providing risk bearing capital, which is widely known as Venture
Capital. Venture Capital may be broadly defined as long-term investment in business, which has
potential for significant growth and financial returns. This is usually provided in the form of equity
apart from conditional loans and conventional loans. Venture Capitalists is thus not a financier only,
but bears the risk as well. His return from the enterprise depends upon the extent of the success
achieved by it. The most distinguishing feature of Venture Capital is that it meets the needs of a
business wherein the probability of loss is quite high because of the uncertainties associated with
the enterprise, but the returns expected are also higher than normal. The entrepreneur intends to
enter into an untrodden field. Thus, the Venture Capitalist invests in a business where uncertainties
have yet to be quantified into risks. Venture Capital is thus termed as high risk, high return capital
The venture capital funds and venture capital companies in India were regulated by the Guidelines
issued by the Controller of Capital Issues, Government of India, in 1988. In 1995, Securities and
Exchange Board of India Act was amended which empowered SEBI to register and regulate the

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Venture Capital Funds in India. Subsequently, in December, 1996 SEBI issued its regulations in this
regard. These regulation replaced the Government Guidelines issued earlier. The SEBI guidelines, as
amended in 2000, are as follows:

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Today’s global scenario of trade and communication, the tide of offshore investments is at a hike.
There is an immense increase in the investments made by different countries to foreign countries to
increase efficient trade and commerce relationship and to enhance the economy of one’s own
country. Looking at the status of investments in India by foreign investors, there has been quite an
increase in the venture capital investments resulting in favourable amendments in the rules
governing these investments to enhance effective trade relationships between India and foreign
countries.

The investments by a foreign investor in Indian Venture Capital Undertakings (VCU) and Venture
Capital Funds (VCF)are governed by Foreign Exchange Management regulations and Securities
Exchange Board of India regulations. The foreign country investing in the Venture Capital in India is
called as the Foreign Venture Capital Investor (FVCI).

The term FVCI has been defined under the SEBI (Foreign Venture Capital Investor) Regulations 2000
to mean:

“an investor incorporated or established outside India, which proposes to make investments in
venture capital fund(s) or venture capital undertakings in India and is registered under the FVCI
Regulations”

Therefore it is mandatory for a foreign investor that it should have got itself registered with SEBI
before it proceeds to make investment in Venture Capital Company of India. According to the
definition given in Foreign Exchange Management (Transfer or Issue of Security by a person Resident
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Outside India) Regulations, 2000, FVCI means an investor incorporated and established outside India
and which proposes to invest money in Venture Capital Funds or Venture Capital Undertaking in
India and is registered with SEBI.

Q4- What do you mean by Risk Management? Discuss the different types of risks faced by the
financial services company and also the need for managing these risks.?
ANS- Risk Management - Risk management is the process of identifying, assessing and controlling
financial, legal, strategic and security risks to an organization’s capital and earnings. These threats, or
risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities,
strategic management errors, accidents and natural disasters.If an unforeseen event catches your
organization unaware, the impact could be minor, such as a small impact on your overhead costs. In
a worst-case scenario, though, it could be catastrophic and have serious ramifications, such as a
significant financial burden or even the closure of your business.To reduce risk, an organization
needs to apply resources to minimize, monitor and control the impact of negative events while
maximizing positive events. A consistent, systemic and integrated approach to risk management can
help determine how best to identify, manage and mitigate significant risks .
The term financial services is broadly understood to include banking, insurance, housing finance,
stock broking and investment services. The services include fundbased as well as fee-based services.

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In fund-based services, the firm raises equity, debt and deposits and invests in securities or lends to
those who are in need of capital. In fee-based services, the financial service firms enable others to
raise capital from the market or exchange financial assets and risk with other participants of the

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market. In the US and other developed western economies, the financial services sector has grown
rapidly over the post-war period and now represents a significant portion of total economic activity.

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In India too, during the last few years especially after the liberalisation process was initiated, the
financial services sector has grown rapidly. Institutions and markets within the financial services
sector play a major role in the operation of the economic system. Today, it is difficult to run the

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economy without this sector.
The financial services industry primarily deals with financial claims. When a company deals with
financial claims, there is always a chance for default which in turn affects the performance of the
company. The risk in financial services industry is very high as the chances of default by those who
sold financial claims are very high. The default could arise due to several reasons. We can broadly
classify them into two categories for easy understanding. The default could be due to failure of the
person from whom financial service company has taken the financial claim. It could also be due to
changes in interest rate in the market that reduces the value of existing financial claims. As these
events arise outside the company, they can be grouped under external sources. There are internal
reasons that cause default in meeting the financial liability. For example, the financial services
company which is in different activities may take higher risk in some activities that affect the
company as a whole. There could also be mismatching in the assets and liabilities of the bank. These
reasons could be grouped under internal sources
Different types of risks faced by the financial services company
The different sources of risk for various financial services firms have been discussed. They could now
be broadly classified under the following six heads:
1-- Credit Risk
Many of the financial services firms like banking, credit cards, lease and hirepurchase are involved in
fund based business. The credit risk affects the fund based activities of the financial services. This
risk arises in evaluating the proposals for lending. While credit rating, either by credit rating
institutions or internally, helps to quantify the risk, the percentage of non-performing assets
measures the impact of credit risk on the firms. Many financial institutions started using new models
to measure credit risk. Models such as KMV (distance to default) and Credit Metrics are widely used
2--- Asset-Liability Gap Risk
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This risk also applies to firms doing fund based services. Since funds raised from external sources
play a major role in the fund based activities, the duration of the liability is an important variable
which needs to be considered while lending. For example, if a firm gives a five year loan against a
deposit for two years, there is a mismatch between the liability (funds received) and asset (funds
lent). If this mismatch exceeds a predetermined level, it may lead to a cash out situation.
3-- Due-Diligence Risk
Merchant banking companies and other financial services firms which are offering fee based
services like merger and acquisition have to exercise due diligence in their operations. This due
diligence may have to be provided to the regulatory agencies or to their client. For example, the SEBI
regulation on Merchant Banking requires the lead manager to provide a due-diligence certificate in
the prescribed form before the public or rights issue opens for subscription. In the event of any lapse
or mistake noticed in the due diligence subsequently, it will affect the financial services firm which
has provided the due-diligence certificate in different ways. While in some cases, the financial
services firm may be required to pay compensation for the loss incurred, it may also lead to
suspension or cancellation of registration.
4-- Interest Rate Risk
This risk affects the firms which are in fund based activities. The interest rate risk arises when there
are frequent changes in the interest rates in the market. Though, we had a fairly stable interest rate

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regime prior to economic and financial sector reforms, the interest rates are volatile in the last five
years. The financial services industry are exposed to interest rate risk in their (a) treasury operations,
(b) lending and (c) resource mobilisation. As the market value of the fixed income securities has an

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inverse relationship with the market interest rates, the market value of current holding will decline
when the interest rate in the market increases. Though it may not result in immediate loss unless the

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securities are sold, accounting prudence and regulatory requirements call for provision, for such
losses. Similarly, the loan portfolio of banking and leasing companies is affected when the market
interest rate increases when there is no clause for revision of interest rates. Often, the banking and

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leasing companies revise the interest rates for the existing deposit holders also when there is a steep
increase in the interest rates (other wise, the deposit holders will opt for premature withdrawals and
then reinvest the money to receive the revised interest rate) but they may not be in a position to
make similar adjustment in the interest rates on their loan portfolio unless the loan agreement
contains a provision for revising the interest rates. This increased cost will have an impact on the
profitability.
5-- Market Risk
Financial services firms which are in the investment business or investing a part of the funds in
securities are exposed to the market risk. This risk arises on account of changes in the economy and
all securities are affected. Though firms can develop efficient portfolio through diversification
process, it could help them to reduce the unsystematic risk. The market risk otherwise known as
systematic risk cannot be eliminated. There are several measures of market risk. Recently, many
financial institutions use value at risk (VaR) measure to understand the amount that the firm would
loose if there is a major change in the market factor at a predetermined probability level. The top
management of the financial institutions may say that it doesn’t want to expose more than 6% of the
total capital to risk if there is a major change in the market factor. In other words, the management
wants to ensure that there is 99% probability that the loss doesn’t exceed more than 6% of capital in
the event of major change in the market factor. If it does happens, then efforts are made to reduce
the risk. It may be possible to reduce the systematic risk through derivative products but the firm
has to incur a cost to get this benefit. In the absence of such derivative products in India at this
moment, all firms which are holding investments are exposed to the market risk. While investment
companies, mutual funds and others offering portfolio management services are affected most by
this source of risk, the impact of this risk is limited to other financial services firms. You would
appreciate the importance of this risk if you look into the current status of mutual funds and
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companies offering mutual funds in India. All these firms were doing well prior to 1992 but after the
securities scam, all of them have lost investors confidence.
6-- Currency Risk
Firms which are dealing in foreign exchange currencies are exposed to this source of risk. Banks,
financial institutions and money changers are few financial services firms which are normally
affected by this source of risk. This risk arises because of changes in the currency values which in
turn was determined by the fundamental economic strength of the two countries and short-run
demand and supply gap. These firms are affected by currency risk when they hold currencies or
liabilities in the form of either forward contract or interest/principal payment. When the Rupee
depreciates, it affects those who are holding foreign currency liabilities and when the Rupee
appreciates, it affects those who are holding foreign currency. Other financial services are also
affected from this source of risk if they have borrowed money in the international capital markets or
raised foreign currency loan. As and when derivatives in foreign currency transactions are allowed,
firms which take position in derivative markets will also be affected from this source of risk.

MANAGEMENT OF RISK
It may not be feasible to start any venture without taking risk. Risk is an integral part of any business
and the reward or profit is directly proportional to the risk undertaken. In the case of financial

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services industry, the firms deal with financial claims which are by nature risk products. Many
financial services firms voluntarily create products that transfer risk from others to itself in order to
earn a return. An example would be useful to understand this concept. Suppose a firm has payment

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obligation to an overseas supplier and a sum of $100,000 is to be paid at the end of 3 months from
today. The firm is now exposed to currency risk. A financial services company may be willing to enter

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into a forward contract with the firm so that the firm can transfer the currency risk to the financial
services company. The product that has been traded is currency risk and the financial service
company is doing this transaction mainly to earn forward cover premium. Having taken the currency

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risk from the firm, the financial services company cannot remain silent. It has to now manage the
risk in order to avoid the negative impact of the transaction. Financial services companies assume
such risks under the assumption that they are capable of managing the risk much better than others
like the firm which was earlier exposed to currency risk. In fact, the success of the financial services
firms depends on their ability to identify the risk associated with different financial and trade
dealings in the market, devise a product to transfer the risk and develop a strategy to manage the
risk. All the three factors are equally important. In the previous sections, we have discussed sources
of risk that applies to different types of financial services firms and grouped them under six broad
headings namely, credit risk, asset-liability risk, due-diligence risk, interest rate risk, market risk and
currency risk. We will now discuss different strategies available to manage these risks in this section.
1-- Managing Credit Risk
The first step in the process of managing credit risk is the quantification of credit risk the firm is
exposed to. The quantification is done through credit rating. You have several options in quantifying
the credit risk. You can rely on rating assigned by the external rating agencies on the borrower or
commission the services of the external rating agencies to do the rating for you. Though we have
three rating agencies at present which are primarily rating major borrowers in the market, it is
expected that new rating agencies will emerge in the market especially to rate medium and small
scale companies and individuals. You can also have an in-house credit appraisal or rating division to
rate the credit worthiness of the borrower. For example, public sector banks assign health codes to
the loan accounts. While credit rating helps the banks and other lenders to assess the credit
worthiness of the borrowers, it may not be possible for the lenders to be selective in sanctioning the
loans only to the high quality borrowers. While on the one hand, this strategy will limit the proposals
that come to the firm, on the other hand, the income will also be lower as interest rate and credit
rating of the borrowers are inversely related. The firm can adopt the following strategy in managing
the credit risk. The steps involved in this strategy are:
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Desirable Loan Portfolio: The starting point could be to develop a desirable loan mix which consists
of different categories of the borrowers. If you want to be a aggressive lender in the market, you can
allocate more funds to lower credit rating borrowers. On the other hand, if you want to be
conservative, then allocate minimum funds to lower credit rating borrowers and maximum funds to
higher credit rating borrowers. Aggressiveness need not always result in loss. For example, you can
allocate more funds to lower credit rating borrowers but you can screen the borrower carefully and
the quality of assets available as security in order to select the best from this group.
Continuous Monitoring: This is more important in managing the credit irrespective of the policy the
firm has adopted while sanctioning the loans. In other words, it is important even if the lender was
conservative in sanctioning the loans and restrict the loans only to borrowers whose ratings are high.
There are several cases where the credit rating has gone down significantly and you will regularly see
such reports in the news papers. After the south-east Asian crisis and the default of few non-banking
finance companies in India, the Indian rating agencies are closely monitoring the ratings assigned
and revise them frequently. This continuous monitoring requires flow of information from the
borrowers and also from the market and the firm has to develop necessary mechanism to collect
such information from the borrowers and the market intelligence system. Since the performance of
the borrowers deteriorate over a period, the monitoring system in force should give early warning
and thus assumes a crucial role in the credit risk management. This monitoring system could be a

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simple subjective assessment of the information collected from the borrowers and market or it
could be a sophisticated econometric or statistical model.
Action on Doubtful and Bad Debts: The moment the monitoring system raises some doubts about

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the loan account, action need to be initiated to recover the loans. First thing that needs to be done is
to check the assets, movable or immovable, that are given as a security to avail the loan. If the asset

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value is found to be inadequate, then demand is to be made for additional security. Along with this
process, it is also useful to offer a good discount to motivate the borrowers to prepay the loan. If
there are specialised agencies dealing with the recovery of doubtful and bad loans, the lender could

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discount such loan accounts with them to collect back at least the principal. If the debt has become
bad, there is no question of managing the credit risk but it requires certain administrative actions
like taking possession of the assets provided as security or filing claims with the official liquidator.

2-- Managing Asset-Liability Gap Risk

Since this is relatively a new concept though we have briefly discussed in the earlier sections, it
requires elaborate discussion. First, let us consider the situation where this problem of asset-liability
risk is least. Assume we are in a stable interest rate regime. Now consider the balance sheet of a
financial services company which has some fund based services like, banking, leasing, etc. You will
notice that the assets and liabilities are equal since these two shall be equal under double-entry
booking system. Now position yourself as finance manager of the company and check what is your
role to maximise the return. You will see that assets of your company will bring income and you have
to reward the liabilities. The spread between the two is the net income to the company. Thus your
focus will be normally restricted to spread management. While you are concentrating on the spread
management, the credit manager and deposit manager concentrate on their respective functions
namely bringing and assessing new credit proposals (asset management) and deposit mobilisation
(liability management). The business runs well if each one of you achieve higher results and the need
for co-ordination is not felt in a stable interest rate regime. But the moment you relax this condition
of stable interest rate regime, you require a co-ordinated approach in managing all the three key
variables namely asset, liability and spread. Such a co-ordinated approach is known as Asset-Liability
Management (ALM). Since interest rates are already started moving freely in the market, the ALM is
one of the key issues of discussion today for several banks and other financial services companies.
The basic problem in ALM is the difficulty in repricing the assets due to reputation, customer
relationship and market conditions. The problem is aggravated due to repricing of liabilities before
the assets. For instance, on the basis of 14%, 3-year deposit, a leasing company may have contracted
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7 year lease at an effective rate of 18%. The spread of 4% is good in the normal condition. Suppose
the deposit interest rate now moves up to 17%. This revision in the deposit rate could be due to
general increase in the deposit rates in the market or downgrade in the credit rating of the leasing
company or both. The depositor who has initially invested money at 14% for three years will now
demand higher interest rate or prefer preclosure of the deposit. Though the leasing company could
reject the preclosure request, in the interest of long-term relationship with the customers, it has to
either refund the deposit or revise the interest rate to 17%. As floating rate notes and deposits or
deposits with call and put options will soon come to the market, a substantial part of the liabilities
would automatically be repriced
The actual management of assets and liabilities focuses on controlling ‘gap’ between the Rate
Sensitive Assets (RSA) and Rate Sensitive Liabilities (RSL). The rate sensitive instrument is one which
can mature or priced, upward or downward when the market interest rates are changed. The four
key building blocks of ALM are : (1) measurement of gap i.e. determining the amount of assets and
liabilities being repriced, (2) estimating the rates at which the repricing takes place, (3) Projecting
future income, and (4) testing different strategies.

Q5- Discuss the various products that are being offered by a Mutual Fund of your choice to the
investors. Also analyze the schemes offered by the company and comment on the suitability of

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these schemes, to which section of Investors?
ANS- Various products that are being offered by a Mutual Fund to the investors - Different
investment avenues are available to investors. Mutual funds also offer good investment

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opportunities to the investors. Like all investments, they also carry certain risks. The investors should
compare the risks and expected yields after adjustment of tax on various instruments while taking

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investment decisions. The investors may seek advice from experts and consultants including agents
and distributors of mutual funds schemes while making investment decisions.With an objective to
make the investors aware of functioning of mutual funds, an attempt has been made to provide

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information in question-answer format which may help the investors in taking investment decisions.
Mutual Fund is an important segment of the financial system. Mutual Fund is a nonfund based
special type of institution which acts as an investment conduit. It is essentially a mechanism of
pooling together the savings of a large number of investors for collective investments with an
avowed objective of attractive yields and appreciation in their value. A Mutual Fund is a Financial
Service Organisation that receives money from shareholders, invests it, earns returns on it, attempts
to make it grow and agrees to pay the shareholder cash on demand for the current value of his
investment. A Mutual fund offers investors a proportionate claim on portfolio of assets that
fluctuates in value with the value of the assets that make up the intermediaries portfolio. It is rather
difficult to give a comprehensive concept of a mutual fund. What is a mutual fund is better
understood by the functions it performs and role it plays. It is a non-depository financial
intermediary. Mutual funds are mobiliser of savings, particularly from the small and household
sectors, for investments in stock and money markets. Mutual funds mobilise funds by selling their
own shares also known as units.
Mutual funds can survive and thrive only if they can live up to the hopes and trust of their individual
members. These hopes and trust echo the peculiarities which support the emergence and growth of
such institutions irrespective of the nature of economy where these are to operate. Mutual funds
come to the rescue of those people who do not excel at stock market due to certain mistakes
committed on their part. Such mistakes can be viz., lack of sound investment strategies,
unreasonable expectations of making money, untimely decisions of investing or disinvesting, acting
on the advise given by others, putting all their eggs in one basket, i.e., failure to diversify. Mutual
funds are characterised by many advantages that they share with other forms of investments and
what they possess uniquely themselves. The primary objectives of an investment proposal would fit
into one or combination of the two broad categories i.e. income and Capital gains. How mutual fund
is expected to be over and above an individual in achieving these two said, objectives, is what
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attracts investors to opt for mutual funds. Mutual fund route offers several important benefits.
Some of these are

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Analyse the schemes offered by the company the suitability of these schemes, to which section of
Investors-
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Schemes of mutual funds refer to the products they offer to investors. Investors are to choose out of
such schemes as per their objectives of earnings. Mutual funds adopt different strategies to achieve
these objectives and accordingly offer different schemes of investments as per the need of investors.
Schemes can be grouped as under:
1-- Operational Classification
Open Ended Schemes: Such schemes accept funds from investors by offering its units on a
continuing basis. Such fund even stands ready to buy back its securities at any time. It implies that
the capitalisation of the fund is constantly changing as investors sell or buy their shares or units
(shares in USA, unit in India). Further, these shares or units are normally not traded on the stock
exchange. Open ended schemes have comparatively better liquidity despite the fact that these are
not listed. The reason is that investor can any time approach mutual fund for sale of such units. No
intermediaries are required. Moreover, the realisable amount is certain since repurchase is at a price
based on declared net asset value. No minute to minute fluctuations in rates haunt the investors. In
such funds, option to reinvest its dividend is also available
Close Ended Schemes: Such schemes have a definite period after which their units are redeemed.
Unlike open-ended funds, these funds have fixed capitalisation, i.e. their corpus normally does not
change throughout their tenure. While open ended funds are repurchased or sold directly by mutual
funds on the basis of NAV, the close ended fund units being quoted on the stock exchanges are

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traded amongst the investors in the secondary market. Their price is determined on the basis of
demand and supply in the market. Their liquidity depends on the efficiency and understanding of the
engaged broker. Their price is free to deviate from the NAV, i.e., there is every possibility that

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market price may be above or below its NAV. From management point of view, managing close
ended scheme is comparatively easy since fund managers can evolve and adopt long term

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investment strategies depending on the life of the scheme. Need for liquidity arises after
comparatively longer period, i.e. normally at the time of redemption. There is a variant of close
ended scheme known as Interval Scheme. It is basically a close ended scheme with a peculiar feature

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that every year for a specified period (interval) it is made open. Prior to and after such specified
interval the scheme operates as close ended. During the said period mutual fund is ready to buy or
sell the units directly from or to the investors.

2-- Return-Based Classification

To meet the diversified needs of investors, the mutual fund schemes are designed accordingly.
Basically, all investments are made to earn good returns. Returns expected are in the form of regular
dividends or capital appreciation or a combination of these two. In the light of this fact, mutual fund
schemes can also be classified into three categories on the basis of returns
Income Funds: For Investors who are more curious for regular returns, Income Funds are floated.
Their object is to maximise current income. Investment is made in fixed income securities like bonds
debentures. Such funds distribute periodically the income earned by them. These funds can further
be splitted up into two categories i.e. those that target constant income at relatively low risk and
those that attempt to achieve the maximum income possible, even with the use of leverage.
Obviously the higher the expected return, the higher the potential risk of the investment.
Growth Funds: Such funds aim at appreciation in the value of the underlying Mutual Funds
investments through capital appreciation. Such funds invest in growth oriented securities i.e. in
shares of companies which can appreciate in long run. Growth funds are also known as Nest eggs or
Long haul investments. An investor who selects such fund should be able to assume a higher than
normal degree of risk.
Conservative Fund: The funds with a philosophy of all things to all issue offer document announcing
objectives as: (1) to provide a reasonable rate of return. (2) to protect the value of investment and,
(3) to achieve capital appreciation consistent with the fulfillment of the first two objectives. Such
funds which offer a blend of all these features are known as conservative fund. These are also
known as middle of the road funds. Such funds divide their portfolio in common stocks and bonds in
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a way to achieve the desired objectives. Such funds have been most popular and appeal “to the
investors who want both growth and income.
3-- Investment-Base Classification
Mutual funds may also be classified on the basis of securities in which they invest. Basically, it is
renaming the sub-categories of return-base classification
Equity Fund: Such funds, as the name implies, invest most of their investible funds in equity shares
of companies and undertake the risk associated with the investment in equity shares. Such funds are
clearly expected to outdo other funds in a rising market, because these have almost all their capital
in equity. A special type of equity fund is known as ‘Index Fund’ or ‘Never beat market fund’. These
are known as Index funds since these funds transact only those scrips which are included in any
specific index e.g., the scrips which constitute the BSE-30 Sensex or 100 shares National index. Due
to the overall poor performance of managed funds this type of fund has emerged. The fund consists
of a portfolio designed to reflect the composition of some broad based market index and it is done
by holding securities in the, same proportion as the index itself. The portfolio of the index fund is
constructed in exactly the same proportion with respect to rupees involved. The value of such index
linked funds will go up whenever the market index goes up and conversely, it will come down when
the market index comes down. Such fund is not to beat a specific index but is to match that index.
These funds have comparatively lower operating costs.

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Bond Fund: Such funds have their portfolio consisting of bonds, debentures, etc. This type of fund is
expected to be very secure with a steady income but with little or no chance of capital appreciation.
Obviously risk is low in such funds. In this category we may come across the funds called Liquid funds

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which specialise in investing short-term money market instruments. The emphasis is on liquidity and
is associated with lower risks and low returns.

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Balanced Fund: The funds which have in their portfolio a reasonable mix of equity and bonds are
known as balanced funds. Such funds will put more emphasis on equity share investments when the
outlook is bright and will tend to switch to debentures when the future is expected to be poor for

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shares, majority of funds fall in this category, of course, their mix- proportion varies
Fund of funds (FOF): It is a mutual fund scheme that invests in other mutual funds schemes instead
of investing in securities. Such schemes are prevalent in international markets. These schemes can
have different investment patterns and investment strategies as disclosed in offer documents. The
investors may invest their funds in those FOF schemes which meet their investment objectives
instead of investing in different schemes of a mutual fund and keeping track of their NAVs. Such FOF
schemes may invest in other sector specific schemes or those schemes which have more weightage
of certain stocks and can exit from those schemes when growth prospects of those sectors are not
good. The investors putting their money in one sector specific scheme may not be able to decide
when to exit.
4-- Sector-Based Classification
There are number of funds that are directly investing in a specified sector of an economy. While such
funds do have the disadvantage of low diversification by putting all their eggs in one basket, the
policy of specialising has the advantage of developing in the fund managers an intensive knowledge
of the specific sector in which they are investing. The specialised sectors can be (i) gold and silver, (ii)
real estate, (iii) specific industry say oil and gas companies, (iv) off-shore investments, etc
5-- Leverage-Based Classification
Some mutual funds broad base their investible funds by borrowings from the market and then make
investments thereby making leverage benefits available to the mutual fund investors. Such funds are
known as ‘leveraged funds’. It depends on the regulating provisions in a country whether borrowings
are allowed or not. Normally leverage funds use short sale, which allows the management of the
fund to avail the advantage of declining markets in order to realise gains in the portfolio. Leverage
funds also use options specifically call options.
6-- Other Funds
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There are some other types of schemes which do not fit into the above given classifications. Some of
such funds are mentioned here. There are ‘load funds’ and ‘no-load funds’. In load funds, the mutual
funds charge a fee over and above the net asset value from the purchaser. In No load funds no load-
fee is charged because little sales efforts are made to promote the fund’s sales except through direct
advertising. Mutual funds schemes can also be designed to offer some tax exemption. Besides these,
there are money market mutual funds which interact only in money market. Off-shore mutual funds
(also known as regional or country funds) are the funds mobilising funds abroad for deployment in
local market. Many mutual funds abroad have floated property funds, art funds, commodity funds,
energy funds, etc.
Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing
funds in securities in accordance with objectives as disclosed in offer document.Investments in
securities are spread across a wide cross-section of industries and sectors and thus the risk is
reduced. Diversification reduces the risk because all stocks may not move in the same direction in
the same proportion at the same time. Mutual fund issues units to the investors in accordance with
quantum of money invested by them. Investors of mutual funds are known as unitholders.
The profits or losses are shared by the investors in proportion to their investments. The mutual
funds normally come out with a number of schemes with different investment objectives which are
launched from time to time. A mutual fund is required to be registered with Securities and Exchange

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Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

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