वािषक िरपोट

Annual Report
2022-23

भारतीय प्रितभूित और िविनमय बोडर्

Securities and Exchange Board of India
ANNUAL
REPORT
2022 - 23

भारतीय प्रतिभूति और विनिमय बोर्ड

Securities and Exchange Board of India
 This Report is in conformity with the format as
per the Securities and Exchange Board of India
(Annual Report) Rules, 2021, notified in Official
Gazette on March 12, 2021
 MEMBERS OF
THE BOARD
(As on March 31, 2023)

Appointed under Section 4(1)(a) of the SEBI Act, 1992 (15 of 1992)

MADHABI PURI BUCH

Chairperson

Appointed under Section 4(1)(d) of the SEBI Act, 1992 (15 of 1992)

S. K. MOHANTY
Whole Time Member

ANANTA BARUA
Whole Time Member

ASHWANI BHATIA
Whole Time Member

ANANTH NARAYAN G
Whole Time Member

DR. V. RAVI ANSHUMAN

Professor
Indian Institute of Management
Bangalore

Nominated under Section 4(1)(b) of the SEBI Act, 1992 (15 of 1992)

AJAY SETH
Secretary,
DEA, Ministry of Finance
Government of India

DR. MANOJ GOVIL

Secretary,
Ministry of Corporate Affairs
Government of India

Nominated under Section 4(1)(c) of the SEBI Act, 1992 (15 of 1992)

M. RAJESHWAR RAO
Deputy Governor
Reserve Bank of India
 MEMBERS OF
THE BOARD
(As on March 31, 2023)

MADHABI PURI BUCH

Chairperson

S. K. MOHANTY ANANTA BARUA ASHWANI BHATIA ANANTH NARAYAN G

Whole Time Member Whole Time Member Whole Time Member Whole Time Member

AJAY SETH DR. MANOJ GOVIL M. RAJESHWAR RAO DR. V. RAVI ANSHUMAN
Secretary Secretary Deputy Governor Professor
DEA, Ministry of Finance Ministry of Corporate Affairs Reserve Bank of India Indian Institute of Management
Government of India Government of India Bangalore
 Chairperson, Whole Time Members and
Executive Directors

(Left to Right)

Sitting: Shri Ashwani Bhatia, Whole Time Member; Shri S. K. Mohanty, Whole Time Member;
Ms. Madhabi Puri Buch, Chairperson; Shri Ananta Barua, Whole Time Member;
Shri Ananth Narayan G, Whole Time Member.

Standing: Executive Directors: Shri Pramod Rao, Shri Manoj Kumar, Shri Sujit Prasad,
Shri G. P. Garg, Shri Anand Rajeshwar Baiwar, Shri Amarjeet Singh,
Shri S.V.M.D Rao, Ms. Ruchi Chojer, Ms. Yatri Dave Vitekar (Chief Vigilance Officer),
Shri V. S. Sundaresan, Ms. G. Babita Rayudu, Shri B. Rajendran
EXECUTIVE DIRECTORS (As on March 31, 2023)

SVMD Rao Corporation Finance Department, General Services Department [Establishment

Division and Treasury & Accounts Division].

Amarjeet Singh Market Regulation Department including Regulation of Commodity Derivatives

Market, Department of Economic and Policy Analysis-2, Office of International
Affairs and RBI Interface.

Sujit Prasad Investigation Department and Department of Economic and Policy Analysis-1

Anand R Baiwar Market Intermediaries Regulation and Supervision Department and Recovery &
Refund Department (including work related to PACL Committee). RTI Appellate
Authority for all the matters except matter related to Market Intermediaries
Regulation and Supervision Department, Recovery & Refund Department and
PACL.

V S Sundaresan Integrated Surveillance Department and Regional & Local Offices.

G Babita Rayudu Legal Affairs Department and Enforcement Department-2.

G. P. Garg Enforcement Department-1 and Special Enforcement Cell , Office of Investor

Assistance and Education, Information Technology Department , General Services
Department – [Facilities Management Division , Protocol & Security Division and
Official Language Division ], Board Cell, RTI & PQ Cell and matters relating to
National Institute of Securities Markets .

Manoj Kumar Investment Management Department and Internal Inspection Department.

Pramod Rao Department of Debt and Hybrid Securities and Enquiry and Adjudication Department.

B Rajendran Alternative Investment Fund and Foreign Portfolio Investors Department, RTI
Appellate Authority for matter related to Market Intermediaries Regulation and
Supervision Department, Recovery & Refund Department and PACL.

Dr. Ruchi Chojer Human Resources Department and Corporation Finance Investigation Department.

Yatri Dave Vitekar Chief Vigilance Officer

CHIEF GENERAL MANAGERS (As on March 31, 2023)

Amit Pradhan On Deputation

N. Hariharan Communication Division, Enquiries and Adjudication Department and Board Cell
Jayanta Jash Enforcement Department - 1
Parag Basu Human Resources Department, Chief Financial Officer – Treasury and Accounts
Division, Establishment Division
Barnali Mukherjee Enquiries and Adjudication Department
Sunil Jayawant Kadam Posted to NISM - Registrar
Santosh Kumar Shukla On Deputation
Jeevan Sonparote Corporation Finance Department
Biju S Enforcement Department - 2
Anita Kenkare Regional Director – Southern Regional Office
Santosh Kumar Sharma Office of Investor Assistance and Education, PQ Cell, Central Public Information
Officer
Avneesh Pandey Information Technology Department
Sharad K. Sharma Market Intermediaries Regulation and Supervision Department
G. Ramar Enquiries and Adjudication Department
D. Sura Reddy Recovery and Refund Department
Deepak A. Trivedi Market Intermediaries Regulation and Supervision Department
Biranchi Narayan Sahoo Investigation Department
Shashikumar Valsakumar Alternative Investment Fund and Foreign Portfolio Investors Department and
Office of International Affairs
Aliasgar S. Mithwani Integrated Surveillance Department
Asha Shetty Enquiries and Adjudication Department
K. Saravanan Corporation Finance Department
Maninder Cheema Investigation Department
Harini Balaji Department of Debt and Hybrid Securities
Debashis Bandyopadhyay Market Regulation Department
Prasanta Mahapatra Investigation Department
D.V. Sekhar Legal Affairs Department - 2
Anitha Anoop Quasi-Judicial Cell - 1
Krishnanand Raghavan Office of Investor Assistance and Education - IAD
B.J. Dilip Regional Director – Western Regional Office
Manojan Karayi Information Technology Department
Sanjay C Purao Corporation Finance Investigation Department
Rajesh Kumar Dangeti Regional Director – Northern Regional Office
Vijayakrishnan G Legal Affairs Department -1
Geetha G Quasi-Judicial Cell - 2
G Ram Mohan Rao Regional Director – Eastern Regional Office
M Suresh Kumar GSD- Facilities Management Division
S Madhusudhanan Vigilance Department
Anindya Kumar Das PACL Committee
Amit Tandon Alternative Investment Fund and Foreign Portfolio Investors Department
Aparna Thyagarajan Internal Inspection Department
Deep Mani Shah Posted to NISM
Sahil Malik Enquiries and Adjudication Department
Prabhas Kumar Rath Department of Economic and Policy Analysis
Shahvir Tehmtan Jungalwala Integrated Surveillance Department

On April 12, 2023 SEBI turned 35. As we look back
to the years gone by, we see 35 years of continuous,
collaborative efforts at nurturing a securities market
ecosystem which strives to facilitate cost effective,
transparent and sustainable capital formation for
the country. We experienced 35 years of constant
learning and evolution: to grow from a fledgling
regulator with teething troubles to a mature regulator
with domain expertise, to progress from being a
follower of standards to a standard setter, from being
a taker of ideas to being a facilitator of innovation
and initiator of ideas.
As the Indian economy and capital markets were
evolving, so was the world around us. People,
their needs and aspirations, technology, lifestyle,
opportunities for growth – have all evolved and
morphed into forms and manifestations which
could not have been imagined three decades
ago. As we reflect upon the 35-year journey of the
market ecosystem and SEBI’s three-fold mandate
of Development of the Markets, Regulation of the
Markets and Protection of Investor Interest, our
thoughts are centered on the core of all that we do
as a Market Regulator – to nurture and maintain a
securities market that facilitates capital formation
and in which investors can repose their trust.
CHAIRPERSON’S
STATEMENT
Capital formation : The primary objective of the
securities market is facilitation of capital formation.
Success of regulatory interventions, whether through
policy or administration, is reflected in the success of
markets in efficient raising and allocation of capital in
a sustainable manner. SEBI’s commitment to nurture
a securities market ecosystem which facilitates
efficient capital raising, in a timely, transparent and
sustainable manner, will remain unchanged. The
focus on developing and nurturing a market which
provides for more and more channels of capital
raising and deployment, which encourages more
and more capital raisers and capital providers to
access the securities markets, and which is flexible
and scalable to cater to the needs of different types
of participants shall continue.
Trust is the primary currency of any market place; and
capital markets are no different. Trust of the market
participants is the litmus test of SEBI’s commitment
to nurture the securities market ecosystem and we
remain conscious of it at all times. Towards building
and maintaining the trust and confidence in the
securities market, SEBI has focused on the following:
Transparency and disclosures: The key
philosophy behind the regulatory regime adopted
by SEBI is of empowering the market participants
to take informed decisions by providing them with
relevant, comprehensive and correct information in
a timely manner. Information asymmetry needs to be
minimized, in both substance and in form. Disclosures
mandated for listed companies and mutual funds
are focused on addressing the risk of information
asymmetry in the market. Initiatives are being
implemented to make as much of this information
machine readable as possible, including disclosures
in XBRL format. With increasing adoption of Artificial
Intelligence (AI) by market participants, we expect
that more and more “easy-to-consume” and relevant
analysis of data will become available to investors,
thereby enabling them to make informed investment
decisions, faster and better.
Smooth functioning of the markets: Participants,
whether issuers or investors, would not appreciate a
platform which is cumbersome to use, or breaks down
often, or is inconsistent in performance. Investors
demand simple to use trading user interfaces, on-
time settlement of trades, safety and verifiability of
their holdings, systems and processes that mitigate
operational risks by design. Issuers desire platforms
that facilitate speedy fund raising, provide for ease
of regulatory compliance, give access to a large
number and varied types of investors and have
transparent processes for issuance of securities.
For the securities market to be the natural choice for
issuers and investors to meet, it is critical that these
systems meet the expectations of both issuers and
investors.
Therefore, continuous evolution of the norms and
standards for Business Systems, as well as Business
Continuity Protocols and Disaster Recovery for
entities providing securities market services are and
will remain an area of focus for SEBI. In particular,
resources are being committed to ensuring the
deployment and use of effective cyber security
tools across the markets, in Market Infrastructure
Institutions (MIIs) and various market intermediaries
as well as in SEBI itself.
In fact, the Indian securities market is increasingly
becoming the standard setter for risk mitigated
trading and settlement systems in the global arena,
by adoption of business process re-engineering.
We transitioned to a T+1 settlement cycle in the
equity market, which has increased the efficiency
of settlement and reduced the risk of outstanding
trades to be settled, well ahead of both developed
and emerging markets. Towards implementation of
complete client level segregation of collateral, we
have implemented a system of pledge repledge of
securities collateral. The system imparts transparency
of “ownership” and “usage” of securities collateral at
each layer in the clearing and settlement ecosystem
(client, trading member, clearing member, clearing
corporation) thereby safeguarding client collateral
from misuse by and default of intermediaries.
In the coming year, we expect to see the launch
of more facilities that are global ­firsts, such as the
Investor Risk Reduction Access (IRRA) platform –
a special window for facilitating investors to directly
access the Stock exchanges in the event there is
signi­ficant downtime of broker, and a SaaS based
model for Clearing Corporations to deal with Cyber
security events.
Mitigation of structural risks: Investors desire
fair and equitable treatment in their dealings with
service providers and transparency in all associated
commercial arrangements. Lessons learned and
wisdom gained over 35 years have reinforced our
conviction that the best form of risk mitigation for
the securities market is the structural elimination of
these risks, rather than reliance on good conduct by
participants or enforcement actions.
Naturally, not every risk can be eliminated. Risk
of market movement and therefore loss of value
cannot be eliminated. Risk of payment default by a
corporate borrower cannot be eliminated. However,
risks arising out of structural vulnerabilities in the
market ecosystem can be mitigated to a large extent
and it is SEBI’s constant endeavor to do so.
Pledge-repledge mechanism to safeguard client
securities posted as collateral, framework for trading
supported by blocked amount to prevent misuse
of client funds (ASBA-like for secondary market:
to be effected by January 01, 2024), validation of
pay-in instructions for transfer of securities from
client account to broker pool account, etc. are some
examples of such measures.
Protection from wrongdoing: Protection to investors
from misinformation, information asymmetry, market
misconduct, misleading averments by regulated
entities and intermediary fraud is a key factor to
retaining the trust of investors in the securities
market.
Market Surveillance by the Exchanges and by SEBI
seeks to detect market misconduct in the form of
front running, insider trading, price manipulation etc.
Inspections of market intermediaries seek to detect
fraud or misrepresentations to clients, including
averments of assured returns. Enforcement action
in respect of the same seeks to create a deterrent
so as to protect the investors from such misconduct.
Over the last year, capability has been built within
SEBI in terms of adoption and usage of new
technology and analytical tools, which has made
identification of misconduct cases, which otherwise
would have missed the human eye, relatively
easier. Notwithstanding the challenges in terms of
evidencing, adoption of technology and analytics
has made it very difficult for fraudsters to hide price
manipulation, front running or insider trading.
However, so long as greed remains a human
sentiment, fraud cannot be completely eliminated
from any market ecosystem. While Regulations and
regulatory actions act as deterrent to wrong doing,
true investor protection will largely depend on the
level of investor awareness and education that is
inculcated in citizens, helping them to be responsible
investors.
Investors need to be aware that markets are
fundamentally subject to risk and that anyone
offering assured returns or profits is not only violating
the law, but perpetrating fraud on them. Last year
SEBI had concluded a study that showed that
individual investors trading in the F&O segment of
the market, had a 90% probability of making losses.
This information, updated from time to time, is
being mandated as a risk disclosure by brokers to
their clients, to mitigate the risk of misinformation
in the markets and inducement to indulge in highly
speculative trading by promising instant profits.
Governance: If investor confidence is a ship on
rolling seas, information is the navigator’s compass
and good governance its anchor. The disclosure
based regime adopted for the Indian securities
market underpins the importance of good governance
practices by issuers.
As the operations of listed entities become more
and more global and multi-faceted, their holding
structures, funding structures and business
transactions become more and more complex.
In most areas, the interests of the promoters and
minority shareholders are aligned. However, in
respect of Related Party Transactions (RPTs), there
can be significant misalignment of interest. It would
not be in the interest of anyone if, either investors
become fearful of investing because of anxiety about
governance, or if the greed of conflicted parties
were to manifest in the form of fraud on minority
shareholders.
In the last few years, SEBI has passed numerous
enforcement orders with regard to serious governance
lapses in listed companies. Most of these had their
roots in RPTs. It thus became imperative for SEBI
to ensure greater transparency in such transactions
so that Audit Committees, Boards and investors can
take informed decisions in respect of RPTs.
It is our hope that better disclosures taken together
with the requirement of shareholder approval for
decisions which impact shareholder value, will
lead to greater stakeholder engagement and better
governance practices by corporates.
Prudential Norms: For markets to grow, innovation
in products and product delivery are an absolute
must. However, any new product launched in the
securities market will also need to have appropriate
controls and prudential norms depending on whether
the same is offered to the public and small investors
or whether the same is offered to large, sophisticated
investors.
For example, the prudential norms and investment
guidelines for Mutual Fund schemes are fairly
stringent. The same for Portfolio Management
Services are relatively relaxed, with some flexibility to
investors to approve either tighter or relaxed norms,
if they so prefer. On the other hand, AIFs have a
lot of flexibility in terms of the prudential norms and
investment guidelines applicable to them, particularly
for Large Value AIFs.
It is the responsibility of the Regulator to put in place
prudential norms and investment guidelines, which
are commensurate with the risk in the investments
and possible regulatory arbitrage. We remain
committed to facilitating innovation in our markets, by
following the philosophy of calibrated risk mitigants
and prudential norms, while protecting both investors
and markets from structural vulnerabilities.
So, what are our learnings?
In all the regulatory interventions by SEBI, it is
imperative to balance its key objectives. Development
of market, manifested as a wider bouquet of
products and participants is important. Flexibility
and ease of doing business for market participants
is important. Protecting the interest of investors
through regulations and investor awareness is
equally important. Prudential norms for investments
and mitigants for structural vulnerabilities are also
important. Balancing these objectives is the key
driver of what we need to do.
We need to facilitate new products and services with
appropriate risk mitigation measures. We need to
bring complete clarity in the regulations so that the
risk of inadvertent non-compliance is minimized and
we need to facilitate simplified processes so that
the cost of compliance is minimized. SEBI stands
committed to this.
Collaboration and Co-creation: Balancing the
objectives of market development with market
regulation, and that of investor protection with
ease of doing business is challenging. The only
way that we can meet this challenge is through a
continued commitment to a consultative approach
in policy making. Stakeholder inputs are taken
for all proposals for regulatory interventions. Our
Advisory Committees and Working Groups comprise
members who are highly capable and bring both
knowledge and perspective to our policy making. Key
proposals are also placed for public consultation. We
remain committed to carrying forward this culture of
collaboration and co-creation.
We take this opportunity to assure the market – you
already hold the invitation card to the opportunity
to collaborate and co-create with us. Corporates,
market participants and all our stakeholders are
requested to share with us, their proposals and
suggestions for making the Indian securities market
the standard setter amongst all global markets.
Segmented approach to regulation: Every
investor in the market does not have the same
risk appetite or return expectation. Nor does every
investor have the same level of understanding of the
various investment products offered in the securities
market. Similarly, every issuer in the market does
not have the same risk profile. It is seen that having
a ‘one size fits all’ approach to regulating securities
markets causes market participants and investors to
lose capital raising flexibility or investment flexibility
and tends to increase the compliance requirements
on issuers. This is because, in a ‘one size fits all’
approach, the compliance requirements would need
to cater to the protection of interests of the least
sophisticated investor, which is the small, retail
investor, for perhaps the highest risk products.
SEBI has been progressively moving towards a
segmented approach to regulations. For example,
SEBI has put in place a framework for accredited
investors, a category of investors far more
sophisticated than regular investors that require
less regulatory protection. Products offered to such
investors can have a relatively light touch regulation.
Relaxations to the regulatory framework provided
for Large Value Alternative Investment Funds is an
example of such a segmented approach.
Another parameter being considered by SEBI for
adoption of segmented approach is the level of
complexity of the offering. For example, regular
Mutual Fund schemes which raise money from
public have to comply with a number of regulations.
Considering that in regular Mutual Funds, investment
decisions are at the discretion of the fund manager
and that, lakhs of small investors trust Mutual Funds
for their investments, these Mutual Funds have
stringent requirements including high AMC net worth,
experienced investment team, etc. However, if a
Mutual Fund desires to offer only passive investment
products such as exchange-traded funds (ETFs) and
index funds—where investment decisions are not
discretionary, but tied to changes in the underlying
benchmark index, then there is a case to provide
them a regulatory framework which has fewer
compliance requirements. SEBI is currently engaged
with the Mutual Fund industry to introduce ‘MF Lite’
for such entities.
We believe that greater adoption of such a segmented
approach can facilitate development of the market
and ease of doing business without compromising
the basic tenets of investor protection and risk
mitigation in the market ecosystem.
Glide path for policy implementation: Regulatory
frameworks for issuers of listed securities and various
business activities in the securities markets have been
evolving continuously, sometimes in response to
problems, leading to new compliance requirements,
at other times creating new opportunities for market
participants.
Listed Companies: Compliance requirements for
listed companies arising out of SEBI Regulations
do not seek to change the business models of the
companies. That would not be within the regulatory
ambit of SEBI. Instead our regulations for listed
companies focus on disclosures and governance
processes.
When there are new disclosure requirements or
new governance norms, sufficient time is given
to the Corporates to put in place systems and
practices that will allow a smooth adoption of the
new requirements. For example, when regulations in
respect of Related Party Transactions (RPTs) were
amended in November 2021, the same were made
effective with a glide path. The less stringent norms
were made effective from April 01, 2022. The more
stringent norms were made effective only after a
further period of one year, from April 1, 2023.
Further, it is expected that with the increased adoption
of technology, compliance processes would become
simpler and easier for companies.
Intermediaries and regulated entities: In
addition to disclosures and governance processes,
regulations for intermediaries, Funds and other
regulated entities such as MIIs also cover eligibility
criteria for these entities and prudential norms
for their operations. In the ordinary course, only
intermediaries and regulated entities having a large
number of clients or those exposed to high levels of
risk are required to adopt certain new compliance
requirements as compared to those with a small
number of stakeholders.
For instance, only Qualified Registrars to an Issue
and Share Transfer Agents (QRTAs) need to
comply with the enhanced regulatory requirements
mandated for them. Similarly, enhanced obligations
and responsibilities on Stock Brokers were made
applicable only to Qualified Stock Brokers (QSBs).
Further, these entities were given a roadmap for
compliance to enable them to equip themselves for
the same.
It has been a considered view of SEBI that, unless
the regulatory changes are meant to halt a brewing
crisis, the compliance requirements may be adopted
by the market in a staggered manner, and not detract
from the efficient functioning of the market. Entities
at higher risk are required to adopt the compliances
within a short time period while those with limited risk
may be given more time.
Technology as an enabler: Technology brings
access to modern tools and methods to increase
productivity and efficiency at reduced costs. It also
acts as a catalyst for competition, as even small
participants can enter and operate in the markets
on an equal footing alongside established players.
The most significant strides that were made in the
securities market over the years were those facilitated
by technology and by reimagining how the markets
would function. Dematerialization of Shares, Screen
based Trading, ASBA for IPOs, Aadhaar based KYC,
Mobile based Share Trading, Online investment
in Mutual Funds and Instantaneous information
dissemination are amongst the numerous milestones
that have today made the Indian Securities Market
a robust, accessible and trustworthy destination for
millions of our citizens.
Perhaps the magic of technology that has sustained
over the years is its ability to balance investor
convenience, risk management and cost management
by the service providers, all at the same time. More
often than not, technology offers solutions that do
not require trade-offs. Thus, we see technology as
the perfect tool to assist the market ecosystem and
SEBI itself in achieving the otherwise difficult task of
managing multiple mandates. It will continue to be
SEBI’s endeavor to encourage and enable, wherever
possible, adoption of technology driven solutions to
foster better investor service, mitigation of structural
vulnerabilities, better governance and compliance by
issuers and regulated entities.
In the coming years, one of the key focus areas for
SEBI will continue to be the facilitation of financial
inclusion in the securities market. We expect that
technology will enable financial products and
services offerings to be made available in a cost-
effective manner, in every nook and corner of the
country, without compromising on risk management
and prudential norms as may be necessary.
We continue to learn…
As the economy and society evolve, so too will
markets. To ensure that the evolving markets
continue to function in manner that does not deviate
from the basic principles of fair market conduct, the
legal and regulatory framework within which markets
operate must also continue to evolve.
We take on board our learnings of the last three and a
half decades. We celebrate the power of technology
and what it has been able to deliver to millions of
our citizens in terms of access to a robust market
ecosystem. We commit to continuing on our journey
to balance our three-fold mandate of development
of the markets, regulation of the markets and
protection of investor interest. We re-affirm that,
while the features and manifestations of regulatory
interventions may change, the guiding principles
of transparency, fairness and inclusiveness shall
remain the same. So that the markets emerge, year
after year, safer, faster, stronger – together!
CONTENTS
List of Box Items................................................... ii

List of Tables ....................................................... iii

List of Charts........................................................ viii

List of Abbreviations ........................................... ix

1 INTRODUCTION 1 6 FOREIGN PORTFOLIO INVESTORS 115

1.1 Year in Review 1 AND FOREIGN VENTURE CAPITAL
INVESTORS
1.2 Performance Highlights 7
1.3 Looking Forward 11 6.1. Foreign Portfolio Investors 115
6.2. Foreign Venture Capital Investors 120
2 REVIEW OF FINANCIAL MARKETS 18
2.1 Economy 18 7 CREDIT RATING AGENCIES 121
2.2 Securities Market 22 7.1 Policy Developments 121
2.3 Commodity Market 26 7.2 Enforcement of CRA Regulations 123
7.3 Market Activity And Trends 123
3 PRIMARY MARKETS 28
3.1 Equity Markets 28 8 PROTECTION OF INVESTOR 126
3.2 Debt Markets and Hybrids 37 INTERESTS
3.3 Corporate Governance and Corporate 43 8.1 Investor Education 126
Restructuring 8.2 Investor Centric Policy Measures 135
3.4 Intermediaries Associated 48 8.3 Redressal of Investors’ Grievances 136
8.4 Investor Protection and Education Fund 141
4 SECONDARY MARKETS 52
4.1 Cash Markets: Equity 52
9 TECHNOLOGY 144
4.2 Debt Markets And Hybrids 63
9.1 Cyber Security and System Resilience 144
4.3 Equity Derivatives Markets 66
9.2 Technology in Securities Market 148
4.4 Commodity Derivatives Markets 69
Ecosystem
4.5 Currency Derivatives 79
9.3 Technology in SEBI 150
4.6 Interest Rate Derivatives Markets 81
9.4 FinTech and RegTech Initiatives 150
4.7 Market Infrastructure Institutions 82
9.5 Other Developments 150
4.8 Intermediaries Associated 87

10 REGULATORY ACTION, SUPERVISION 151

5 FUND MANAGEMENT ACTIVITIES 94 AND ENFORCEMENT
5.1 Mutual Funds 94 10.1 Manner of Overseeing Markets 151
5.2 Alternative Investment Funds 105 10.2 Regulatory Actions 164
5.3 Portfolio Managers 109 10.3 Litigations 173
5.4 Collective Investment Schemes 111 10.4 Amendments to Regulations 184
5.5 Real Estate Investment Trusts and 111 10.5 New Regulations (Aims and Objectives) 186
Infrastructure Investment Trusts
10.6 Progress or Impact Assessment of the 186
5.6 Risk Management Measures 113 New Regulations/Rules

i
 11 INTERNATIONAL ENGAGEMENTS 189 12.8 Other Initiatives 196
11.1 International Engagements having 189 12.9 Sources of Funds and Expenditure 196
implications for Indian markets
13 ORGANIZATIONAL MATTERS 198
11.2 Issues Highlighted during various 191
Engagements 13.1 SEBI Board 198
13.2 Audit Committee 199
12 NATIONAL INSTITUTE OF SECURITIES 193 13.3 Human Resource Activities 199
MARKETS 13.4 Research, Data Initiatives and Systemic 205
12.1 Academic Programs 193 Stability
13.5 Promotion of Official Language 210
12.2 Training Programs 193
13.6 Internal Inspection Department 212
12.3 Research and Publications 194
13.7 Vigilance Cell 212
12.4 Conferences 194
13.8 RTI Activities 213
12.5 Investor Education and Financial Literacy 194
13.9 Parliament Questions Cell 214
12.6 Certification of Associated Persons in 195
Securities Markets 13.10 Fees and Other Charge 215
12.7 Continuing Professional Education (PE) 195 13.11 Sources of Funds and Major Areas of 217
Program Expenditure
13.13 Other Offices/Matters 218

LIST OF BOX ITEMS

Chapter 3: Primary Markets 5.2 Development of Passive Funds: An 96
3.1 Enhancing Transparency in IPOs: 29 Enabling Regulatory framework
Disclosure of Key Performance 5.3 Reduction in Timelines for Redemption 97
Indicators Pay-out and Dividend Payment
3.2 Sustainable Finance in Indian Capital 37 5.4 Performance of Portfolio Management 109
Markets: Green Bonds and Beyond Services: A New Approach for
3.3 Online Bond Platform Providers: 38 Benchmarking and Reporting
Widening the Regulatory Ambit for
Investor Protection
3.4 Improving Transparency and 39 Chapter 10: Regulation, Supervision and Enforcement
Participation through Electronic Book 10.1 Search and Seizure Operations : 154
Provider Platform : Review of Regulatory Unearthing market misconduct through
Provisions social media
3.5 Disclosure of Material Events: Ensuring 44 10.2 Leveraging Technological Innovation 156
Consistency and Uniformity and Data: Revamp of approach for
3.6 Rationalizing Buyback Mechanism for 45 supervision of Market Infrastructure
Efficient Price Discovery Institutions

Chapter 4: Secondary Markets

Chapter 13: Organizational Matters
4.1 Building Safe and Efficient Markets 58
13.1 Windfall Gains through Futures and 206
for Investors: Implementation of T+1
Options? Findings of Study on Profits
Settlement
and Losses of Individual Traders in
4.2 Strengthening Governance of MIIs 85
Futures and Options Segment
Chapter 5: Fund Management Activities 13.2 Data Democratization and 209
5.1 Investor Convenience and Protection 94 Standardization in Indian Securities
through Execution Only Platforms for Market
Direct Plans

ii
LIST OF TABLES

Chapter 2: Review of Financial Markets 3.15 Buy-back Cases 48

Global Economy and Financial Markets 3.16 Scheme of Arrangement 48
2.1 Global Macro Economic Trends 20
2.2 Return in Local Currency Terms across 23
Major Markets Registration of Intermediaries and Regulatory Approvals
2.3 Trend in Trailing PE Ratios of Nifty 50 vis- 24 3.17 Status of Registration of Intermediaries 50
à-vis Global Indices and Median Time for Approval
2.4 10-Year Government Bond Yields across 24 3.18 Registered Intermediaries Associated with 51
major markets the Primary Market
2.5 Movement of Commodity Indices during 26
2022-23 Chapter 4: Secondary Markets
Trends in Secondary Stock Markets
Chapter 3: Primary Markets 4.1 Exchange-wise Trading Statistics for Cash 55
Segment
Resource Mobilisation Trends: Equity Issues
4.2 Turnover of Top-10 Cities in the Cash 56
3.1 Resource Mobilisation through Public and 33
Segment
Rights Issues
4.3 Select Ratios Relating to the Stock Market 56
3.2 Size-wise Resource Mobilisation 33
4.4 Delivery Statistics 57
3.3 Industry-wise Resource Mobilisation 34
3.4 Resource Mobilisation through Qualified 35
Institutional Placement Depository Statistics
3.5 Size-wise Resource Mobilisation through 36 4.5 Depository Statistics 59
Qualified Institutional Placements 4.6 Depository Statistics: Debentures/ Bonds 59
3.6 Resource Mobilisation through 36 and Commercial Papers
Preferential Allotments
3.7 Time taken for Regulatory Approval of 36
Delisting and Suspension
Applications for Public Issues
4.7 Details on Suspended Scrips 60
4.8 Details on Delisted Scrips 61
Resource Mobilisation Trends: Debt Issues 4.9 Surveillance Measures 61
3.8 Resource Mobilization through Public 42
Issues and Private Placement
Concentration of Trading in Cash Segment
3.9 Size-wise resource mobilization through 42
4.10 Share of Participants in Annual Cash 62
Public Issues
Market Turnover
3.10 Industry-wise resource mobilization 43
4.11 Mode of Trading in the Cash Market 62
through Public Issues
4.12 Share of Top-100 Brokers/Securities in 62
3.11 Commercial Papers Listed 46
Annual Cash Market Turnover
4.13 Top 10 Brokers in the Cash Segment 63
Corporate Restructuring Trends
3.12 Trends in Open Offers 46 Trading in Corporate Debt Markets
4.14 Participant-wise share in Corporate Bond 63
3.13 Status of Draft Letters of Offers for Open 47
Trades at NSE
Offers
4.15 Settlement of Corporate Bonds 65
3.14 Exemption applications under Regulation 47
11 of Takeover Regulations 4.16 Activity and Trends on Request for Quote 65
Platform

iii
Trading Statistics in Equity Derivatives 4.38 Segment-wise Clearing Members/ Self 92
4.17 Trends in the Equity Derivatives Segment 66 Clearing Members
4.18 Top 10 Brokers in the Equity Derivatives 69 4.39 Registered Depository Participants 93
Segment 4.40 Registered Intermediaries 93
4.41 Median Time Taken for Approval of 93
Commodity Derivatives Registrations for Intermediaries
4.19 Domestic Commodity Indices 71
4.20 Permitted and Traded Contracts at 74
Domestic Exchanges Chapter 5: Fund Management Activities
4.21 Turnover of Commodity Derivatives 75 Resource Mobilisation by Mutual Funds
Market 5.1 Mutual Funds Registered with SEBI 99
4.22 Participant-wise Share in Turnover of 76 5.2 Mutual Fund Schemes Launched 99
Commodity Derivatives Market 5.3 Sector-wise Resource Mobilisation 100
4.23 New Commodity Derivatives Contracts 76 5.4 Scheme-wise Resource Mobilisation and 101
Approved Assets under Management
4.24 Physically Delivered Quantity 77 5.5 Asset Class-wise deployment of funds 102
4.25 Warehouse Capacity Utilisation at 77 5.6 Mutual Fund Scheme-wise Annual 102
Exchanges Returns
4.26 Discontinued/suspended Commodities 79 5.7 Trends in Transactions on Stock 103
contracts Exchanges by Mutual Funds
5.8 Unit Holding Pattern of Mutual Funds 104

Currency Derivatives Defaults/restructuring/Unclaimed Funds

4.27 Trends in the Currency Derivatives 80 5.9 Number of Defaults and Restructurings in 104
Segment Debt Securities
4.28 Product-wise Market Share in Currency 80 5.10 Quantum of Unclaimed Amount with 105
Derivatives Segment Mutual Funds
4.29 Participant-wise Share in Currency 81
Derivatives Segment
Alternative Investment Funds
5.11 Number of Registered AIFs 107
Interest Rate Derivatives
5.12 Category-wise Investment by AIFs 107
4.30 Trends in Interest Rate Derivatives 81
5.13 Instrument-wise Deployment of Funds by 108
4.31 Participant-wise Share in Interest Rate 82 AIFs
Derivatives

Portfolio Management Services

Market Infrastructure Institutions 5.14 Registered Portfolio Managers 110
4.32 Ownership Pattern of Stock Exchanges 83 5.15 Assets Managed by Portfolio Managers 110
4.33 Ownership Pattern of Depositories 84 5.16 Total Fund Inflows/ Outflows under 111
Portfolio Management Services
Registered Intermediaries and Regulatory Approvals
4.34 Registered Stock Brokers 90 Real Estate Investment Trusts and Infrastructure
4.35 Classification of Stock Brokers 91 Investment Trusts
5.17 REITs and InvITs 113
4.36 Registered Clearing Members 91
5.18 Net Asset Value of REITs and InvITs 113
4.37 Classification of Clearing Members 92

iv
Chapter 6: Foreign Portfolio Investors and Foreign Chapter 10: Regulation, Enforcement and Supervision
Venture Capital Investors Inspections
Foreign Portfolio Investment/Foreign Venture Capital 10.1 Inspection of Stock Brokers and 157
Investment Depository Participants
6.1 Net Investment of FPIs 117 10.2 Inspections of Stock Brokers by Stock 157
6.2 Assets of FPIs in India 117 Exchanges
6.3 Sector-wise Distribution of FPI Equity 118 10.3 Inspections of Entities Associated with 158
Assets Fund Management Activities
6.4 Country-wise Number of FPIs and AUC of 119 10.4 Inspections of other entities associated 158
FPIs with Securities Market
6.5 Foreign Investment Limits in Corporate 119
Bonds
Investigations
6.6 Value of ODIs/ PNs 120
10.5 Nature of Investigation Cases 159
6.7 Cumulative Net Investments by FVCIs 120
10.6 Fraudulent and Unfair Trade Practices 160
Cases
Chapter 7: Credit Rating Agencies 10.7 Nature of Investigation Cases Taken-up 160
and Completed
7.1 Defaults Reported by CRAs 125

Chapter 8: Protection of the Investor Interests Enforcement Proceedings

Investor Awareness Programmes and Campaigns 10.8 Type of Enforcement Actions Taken 161

8.1 Investor Awareness Programmes 127 10.9 Age-wise Analysis of Enforcement Actions 162
Conducted u/s 11, 11(4), 11B & 11D of the SEBI Act,
8.2 Resource Person programmes and 132 1992 Proceedings
Regional Seminars 10.10 Age-wise Analysis of Enquiry Proceedings 162
8.3 Key Messages published during World 132 by Designated Authority
Investor Week 10.11 Age-wise Analysis of Enquiry Proceedings 163
by Designated Member
10.12 Age-wise Analysis of Enforcement Actions 163
Investor Grievance Redressal
- Adjudication Proceedings
8.4 Status of Investor Grievances Received 137
10.13 Age-wise Analysis of Enforcement Actions 163
and Redressed
- Prosecution Proceedings
8.5 Type/category of complaints 138
10.14 Nature of Violation in Section 164
8.6 Region wise investors complaints received 139 11/11(4)/11B/11D Proceedings
and resolved 10.15 Enquiry Reports Submitted against 164
8.7 Status of Review Complaints 140 Intermediaries/Institutions
8.8 Complaints/ Arbitration cases with Stock 141 10.16 Interim Orders and Final Orders based on 165
Exchanges related to Trading Members Nature of Violations
8.9 Complaints/Arbitration cases with Stock 141
Exchanges related to Listed Companies
Regulatory Actions
10.17 Action taken against MIIs and/or their 165
Investor Protection Funds: Inflow and Utilisation Associated Entities
8.10 Inflow into SEBI IPEF 142 10.18 Actions taken/initiated against Entities 165
Associated with Fund Management
8.11 Inflow into Investor Protection Funds of 142
Activities
MIIs
10.19 Regulatory Actions against Other Entities 166
8.12 Utilization of SEBI Investor Protection and 143
Education Fund 10.20 Snapshot of Adjudication Orders Passed 166

v
10.21 Adjudication Orders passed against 167 Chapter 11: International Engagements
Intermediaries/Institutions 11.1 Issue-Specific Information Exchange with 190
Foreign Regulators /Organisations
Recovery and Refunds 11.2 Regulatory Assistance under the MoUs 191
10.22 Recovery Proceedings by SEBI 167
10.23 Category-wise Pending Recovery 168
Chapter 12: National Institute of Securities Markets
Certificates
12.1 Kona Kona Shiksha Programmes 194
10.24 Break-up of Difficult to Recover Cases 168
10.25 No. of Matters Pending before Various 169 12.2 E-learning Courses at NISM 195
Fora 12.3 NISM Certifications 196
10.26 Status of Refunds made by SEBI 170
12.4 Continuing Professional Education 196
10.27 Refunds made to the PACL Investors 171 Programmes
12.5 Sources of Funds and Expenditure: 197
Prosecution 2022-23
10.28 Prosecutions Launched 171
10.29 Nature of Violations in Prosecutions 171 Chapter 13: Organisational Matters
Launched SEBI Board and Human Resources
10.30 Region-wise Data on Prosecution Cases 172 13.1 Composition of SEBI Board 198
Launched and Pending
13.2 Board Meetings during 2022-23 199
10.31 Nature of Prosecution Cases Launched 172
13.3 Grade-wise Distribution of Staff Members 200
10.32 Number of Prosecution Cases decided by 172
13.4 Staff Members-Retired/ Resigned/ 200
the Courts
Deceased
13.5 Age-wise Distribution of Staff Members 201
Settlement and Compounding 13.6 Qualification-wise Distribution of Officers 201
10.33 Settlement Applications Filed with SEBI 173 13.7 Staff Members-Promotions 201
10.34 Settlement Schemes 173 13.8 Region-wise Distribution of Staff 202
10.35 Compounding Applications Filed by the 173 Members
Accused in Criminal Courts

RTIs and PQs

Litigation Statistics 13.9 Trends in RTI applications and First 214
10.36 Status of Appeals before SAT 174 Appeal to SEBI Appellate Authority
10.37 Status of Litigation before Supreme Court 174 13.10 Trends in Appeals before Central 214
Information Commission
10.38 Status of Litigation before High Courts 174
13.11 Session-wise details of Parliament 214
10.39 Status of Litigation before Other Forums 175 Questions
10.40 Fora-wise Status of Cases 175
Income and Expenditure
13.12 Fees and Other Charges 216
13.13 Sources of Fund and Major Areas of 217
Expenditure

vi
LIST OF CHARTS

Chapter 1: Introduction 3.2 Trends of Fund Mobilisation through 32

Equity
1.1 Facilitating Corporate Financing through 1
Primary Market 3.3 Resource Mobilisation through SME IPOs 35
1.2 Fund Mobilization Across Segments 2 3.4 Size-wise Resource Mobilisation by SME 35
Issuers
1.3 Growing Alternative Investment Fund 3
Ecosystem 3.5 Trends of Fund Mobilisation through Debt 41
Issues
1.4 Mutual Funds: Preferred Investment 4
Vehicle
1.5 PMS: Growth in Wealth Management 4 Chapter 4: Secondary Markets
1.6 Trends in Benchmark Indices 4 4.1 Movement of Stock Market Benchmark 53
1.7 India VIX 4 Indices
4.2 Movement of India VIX 53
1.8 Turnover Across Products 5
4.3 Annualized Volatility of Major Stock 54
1.9 Rise in Demat Accounts 5 Markets
1.10 Mutual Fund Net Investments 6 4.4 Annual Variation in Major Indices 54
1.11 Foreign Portfolio Flows 6 4.5 Forward Price to Earnings Ratio 57
4.6 Monthly Trends in Trades - Request for 65
Quote Platform
Chapter 2: Review of Financial Markets
4.7 Product-wise Share in Equity Derivatives 67
2.1 Composite Leading Indicator 18 Segment of NSE
2.2 Trend in Real GDP Growth Rates and 21 4.8 Instrument-wise Share in Index Futures 68
Inflation Rates of India vis-à-vis AEs and and Options at NSE
EMDEs 4.9 Participant-wise Share in the Equity 68
2.3 GST Revenue and Electricity Supply 22 Derivatives Segment
2.4 Realized Volatility on Nifty 50 Returns vis- 22 4.10 Mode of Trading in the Equity Derivatives 69
à-vis MSCI Indices Segment of NSE
2.5 Nifty 50 Returns vis-à-vis MSCI Indices 23 4.11 Movement of IMF Commodity Price 70
Indices
2.6 Trailing PE Ratios of Nifty 50 vis-à-vis 24
4.12 Trends in Domestic and Global Commodity 72
MSCI Indices
Indices
2.7 Movement of Sovereign Yields of US and 25
4.13 Variation in Futures Closing Prices 73
India
2.8 Movement of USD-INR, Dollar Index and 25 4.14 Divergence between Domestic and 74
MSCI EM Currency index International Commodity Prices
2.9 FPI Flows in Equities across Select 25 4.15 Distribution of Trading Activity in 78
Markets Commodity Derivatives
2.10 Movement of S&P GSCI TR Index 26 4.16 Trends in Global Currency Movement 79

2.11 Movement of MCX iCOMDEX Composite 26

2.12 Movement of MCX iCOMDEX Indices 27 Chapter 5: Fund Management Activities
5.1 Mobilisation of Resources by Mutual 99
Funds
Chapter 3: Primary Markets 5.2 Deployment of Funds (Debt) 102
3.1 Trends of Fund Mobilisation through 28
5.3 Deployment of Funds (Equity) 102
Equity and Debt

vii
5.4 Trends in Transactions on Stock 103 Chapter 8: Protection of the Investor Interests
Exchanges by Mutual Funds
8.1 Reach of World Investor Week-2022 133
5.5 Sector-wise Deployment of Funds by 108
8.2 Reach of Global Money Week-2023 133
AIFs
8.3 Status of Pending Complaints 137
5.6 Trends in AUM and Clients in PMS 111
8.4 Pending Actionable Grievances on 138
SCORES
Chapter 6: FPIs and FVCIs 8.5 No. of Calls attended at Toll-free Helpline 140
6.1 Trend in Net Investments by FPIs 116
8.6 Utilization of Investor Protection Funds of 143
6.2 Trends in Instrument-wise Net Investment 117 Stock Exchanges
by FPIs 8.7 Utilization of Investor Protection Funds of 143
Depositories

Chapter 7: Credit Rating Agencies

7.1 Proportion of Fresh Ratings Issued by 123 Chapter 9: Technology
CRAs
9.1 Reported Events under Cyber Swachhta 146
7.2 Rating Downgrades 124 Kendra
7.3 Rating Upgrades 124
7.4 Outstanding Ratings Distribution 125

This report can also be accessed via the internet at:

SEBI > Reports & Statistics > Publications > Annual Reports
(https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=4&ssid=80&smid=101)
Conventions used in this Report

` : Rupees
Lakh : Hundred thousand
Crore : Ten million
Million : Ten lakh
Billion : Thousand million/hundred crore
NA : Not Available
Na : Not Applicable
p.a. : Per annum

Differences in total are due to rounding off and sometimes they may not exactly add up to hundred percent.
Source of Charts and Tables is SEBI, wherever the same is not mentioned.

viii
ABBREVIATIONS
AEs Advanced Economies CSO Central Statistics Office
AIFs Alternative Investment Funds CTO Chief Technology Officer
ALeRTS Advisory Committee for Leveraging CVO Chief Vigilance Officer
Regulatory and Technology Solutions CVC Central Vigilance Commission
AMCs Asset Management Company/ Companies CY Calendar Year
AMFI Association of Mutual Funds in India DA/DM Designated Authority/ Designated Member
AML/CFT Anti Money laundering/Combating of DDPs Designated Depository Participants
Financial Terrorism
DDPI Demat Debit and Pledge Instructions
ANMI Association of National Exchanges Members
of India DEA Department of Economic Affairs

AO Adjudicating Officer DFIs Domestic Financial Institutions

APRC Asia- Pacific Regional Committee DJIA Dow Jones Industrial Average

ARCL AMC Repo Clearing Limited DP(s) Depository Participant(s)

ASBA Application Supported by Blocked Amount DPI Deemed Public Issue

ASM Additional Surveillance Measure DT(s) Debenture Trustee(s)

AUC Assets Under Custody DTR Difficult to Recover

AUM Assets Under Management EBM Electronic Book Mechanism

B30 Beyond 30 EBP Electronic Book Provider Platform

BRSR Business Responsibility and Sustainability ED Executive Director

Reporting EFD Enforcement Department
C&AG Comptroller & Auditor General of India EGM Extraordinary General Meeting
CCs Clearing Corporations EGR Electronic Gold Receipts
CDS Credit Default Swaps EMDE(s) Emerging Market and Developing Economies
CDSL Central Depository Services (India) Limited EOPs Execution Only Platforms
CE Credit Enhancement ESG Environment Social Governance
CEO Chief Executive Officer ESOPs Employee Stock Options
CFT Countering Financing of Terrorism ETCD Exchange Traded Commodity Derivatives
CGM Chief General Manager ETF(s) Exchange Traded Fund(s)
CIC Central Information Commission EWG Early Warning Group
CIRP Cyber Incidents Reporting Portal F&O Futures and Options
CIS Collective Investment Scheme FPI(s) Foreign Portfolio Investor(s)
CMs Clearing Members FPO Further Public Offering(s)/Farmer Producer
CoTs Commodity Trainers Organisation

CPI Consumer Price Inflation FSB Financial Stability Board

CPIO Central Public Information Officer FSDC Financial Stability Development Council

CPMI Committee on Payments and Market FVCI(s) Foreign Venture Capital Investor(s)
Infrastructures GCF Gross Capital Formation
CRA(s) Credit Rating Agency/Agencies GDP Gross Domestic Product

ix
GNI Gross National Income JPY Japanese Yen
GoI Government of India KMP Key Managerial Personnel
GSM Graded Surveillance Measure KPI Key Performance Indicators
GST Goods and Services Tax KRA KYC Registration Agency
HRMS Human Resource Management System KYC Know Your Client
HUF Hindu Undivided Family LEI Legal Entity Identifier
GVA Gross Value Added LODR Listing Obligations and Disclosure
IAs Investment Advisers/Investor Associations/ Requirements
Investment Approach LPCC Limited Purpose Clearing Corporation
IBC Insolvency and Bankruptcy Code MCCIL Metropolitan Clearing Corporation of India
ICAI Institute of Chartered Accountants of India Limited

ICC Internal Complaints Committee MCX Multi Commodity Exchange

ICCL Indian Clearing Corporation Limited MCXCCL Multi Commodity Exchange Clearing
Corporation Limited
ICDR Issue of Capital and Disclosure
Requirements MF Mutual Fund

ICSI The Institute of Company Secretaries of India MeitY Ministry of Electronics and Information
Technology
ID(s) Independent Director(s)
MFAC Mutual Fund Advisory Committee
IFRS International Financial Reporting Standards
MIIs Market Infrastructure Institutions
IFSC International Financial Service Centre
MoSPI Ministry of Statistics and Programme
IID Internal Inspection Department Implementation
IIP Index of Industrial Production MoU Memorandum of Understanding
ILDS Issue and Listing of Debt Securities MSEI Metropolitan Stock Exchange of India Limited
ILMDS Issue and Listing of Municipal Debt MTF Margin Trading Facility
Securities
NAV Net Asset Value
IMF International Monetary Fund
NBFC Non-Banking Finance Company
INR Indian Rupee
NCD Non-Convertible Debenture
InvIT Infrastructure Investment Trust
NCDEX National Commodity and Derivatives
IPEF Investor Protection and Education Fund Exchange Limited
ISD Issue Summary Document/Integrated NCFE National Centre for Financial Education
Surveillance Department
NCCL National Commodity Clearing Limited
ISIN International Securities Identification Number
NCIIPC National Critical Information Infrastructure
IOSCO International Organisation of Securities Protection Centre
Commissions
NCL NSE Clearing Limited
IPEF Investor Protection and Education Fund
NCLT National Company Law Tribunal
IPO Initial Public Offer
NCLAT National Company Law Appellate Tribunal
IRD Interest Rate Derivatives
NCS Non-Convertible Securities
IRRA Investor Risk Reduction Access
NCRPS Non-Convertible Redeemable Preference
ISD Integrated Surveillance Department/Issue Shares
Summary Document
NISM National Institute of Securities Markets
ISO Illiquid Stock Options
NPOs Non-Profit Organisations
IT Information Technology
NPS National Pension System

x
NRI(s) Non-Resident Indian(s) RTA Registrar and Share Transfer Agent
NSDL National Securities Depository Limited RTI Right to Information
NSE National Stock Exchange of India Limited SAST Substantial Acquisition of Shares and
OBPPs Online Bond Provider Platforms Takeovers

OCBs Overseas Corporate Bodies SAT Securities Appellate Tribunal

ODI(s) Off-shore Derivatives Instrument(s) SBs Stock Brokers

ODR Online Dispute Resolution SCM Self-Clearing Member

OECD Organisation of Economic Co-operation and SCN Show Cause Notice

Development SCORES SEBI Complaints Redress System
OFS Offer for Sale SCRA Securities Contracts (Regulation) Act, 1956
OIP Office of Informant Protection SDD Structured Digital Database
OLP Official Language Policy SEBI Securities and Exchange Board of India
OPEC Organization of Petroleum Exporting SECC Stock Exchanges and Clearing Corporations
Countries SGF Settlement Guarantee Fund
OTC Over the Counter SIP Systematic Investment Plan
P/E Ratio Price-Earnings Ratio SMEs Small and Medium Enterprises
PE Private Equity SMARTs Securities Market Trainers
PFUTP Prohibition of Fraudulent and Unfair Trade S&P GSCI TR S&P GSCI Total Return
Practices
SoA Scheme of Arrangement
PIT Prohibition of Insider Trading
SOP Standard Operating Procedure
PMI Purchasing Manager’s Index
SSE Social Stock Exchange
PMLA Prevention of Money Laundering
STPI Securities Transaction Price Index
PMS Portfolio Management Services
TMs Trading Members
PoA Power of Attorney
TRM Tri-Party Repo Market
QIB(s) Qualified Institutional Buyer(s)
UPSI Unpublished Price Sensitive Information
QIP(s) Qualified Institutions' Placement(s)
USD United States Dollar
QRTA(s) Qualified Registrars to an Issue / Share
Transfer Agents UTs Union Territories

QSBs Qualified Stock Brokers VAPT Vulnerability Assessment and Penetration

Testing
RA Research Analyst
VCF(s) Venture Capital Fund(s)
RBI Reserve Bank of India
VCPs Value Chain Participants
REs Regulated Entities
VIX Volatility Index
REIT Real Estate Investment Trust
VRR Voluntary Retention Route
RFQ Request for Quotes
WFE World Federation of Exchanges
RP(s) Resource Person(s)
WTM Whole Time Member

xi
xii
 Chapter 1 Introduction

Chapter 1:
Introduction

1.1 YEAR IN REVIEW

The year 2022-23 started under the shadow
of on-going geopolitical developments, with
their impact felt across global commodities and
financial markets, disrupting supply chains.
The year was also marked by the efforts from
the Central Banks to rein in inflation, amid
concerns of recession. Towards the end, the
year also witnessed unfolding of turbulence in
the global banking industry. These challenging
geo-political and macroeconomic conditions
negatively influenced global securities markets.
Nevertheless, Indian capital markets, backed
by growth prospects of the domestic economy,
India’s strong macroeconomic fundamentals,
and the strength of the domestic investor base,
exhibited resilience during the year.
1.1.1 Resource Mobilization in Indian
Capital Markets
The Indian capital markets facilitated resource
mobilization amounting to ` 9.8 lakh crore in
2022-23, a rise of 4.6 percent over 2021-22.
Funds were raised from the market by corporates/
infrastructure entities for their financing needs
using instruments such as equity (public, rights,
preferential, QIP), debt (public and private
placement), Alternative Investment Funds
(AIFs), Real Estate Investment Trusts (REITs)
and Infrastructure Investment Trusts (InvITs).
Of the total resources mobilized during the year,
equity and debt segments accounted for ` 9.2
lakh crore of capital formation (Chart 1.1).

Chart 1.1: Facilitating Corporate Financing through Primary market

12 2,500
Funds Raised (` lakh crore)

10
2,000
Number of Issues

8
1,500
6
1,000
4

500
2

0 0
2018-19 2019-20 2020-21 2021-22 2022-23

Equity-Public Equity- Private Debt-Public

Debt-Private Equity- No. of Issues Debt- No. of Issues

1
 Annual Report 2022-23
A. Equity Issues: There was moderation
in fund raising activity through equity
issues during 2022-23 as compared to
the previous fiscal (Chart 1.2). Volatility
in the secondary markets, uncertain
Chart 1.2: Fund Mobilization Across Segments
10
9
8
7
` lakh crore
4
3
down, 32%
2
0
Equity
2021-22
B. 
Corporate Bond Markets: Private
placement of debt remained the primary
driver of resource mobilization in the debt
segment, witnessing rise of 28 per cent
in funds raised during 2022-23, relative to
the previous fiscal year. During the year,
` 7.1 lakh crore was mobilized through
private placement on the Electronic Book
Provider Platform (EBP). Cost-efficient
private placement boosted fundraising
through this mechanism. To improve
liquidity and participation, the face value
of debt securities issued on private
placement basis was reduced to ` 1 lakh
from existing ` 10 lakh with effect from
January 2023.
C. 
Alternative Investment Funds: AIFs have
emerged as one of the rapidly growing
segments of the investment landscape,
2
macroeconomic environment and
relatively subdued performance of many
listed equities slowed down resource
mobilization through public issuance of
equities.
up, 11%
up, 27%
Debt Total
2022-23
with significant growth witnessed in terms
of commitments raised, funds raised
and investments made since 2018-19.
Expanding pool of domestic high net worth
individual investors, flexibility to invest in
varied sectors, need for optimization of
returns, and increasing risk appetite of
investors have been facilitating the growth
of AIFs. During 2022-23, the commitment
raised by AIFs logged a growth of 30 per
cent to ` 8.34 lakh crore from ` 6.41 lakh
crore at the end of 2021-22 (Chart 1.3).
The amount of funds raised and investment
made increased by 16.5 per cent and 19
per cent respectively in 2022-23. Category
2 AIFs accounted for 73 percent of the
overall funds raised by AIFs. During the
year, 203 new AIFs were registered, taking
the number of registered AIFs to 1,088 at
the end of 2022-23.

Chart 1.3: Growing Alternative Investment Fund Ecosystem
8.3
` lakh crore
6.4
4.5
2.8
3.7
1.3
Commitments Raised
2018-19 2019-20
Note: The above numbers are cumulative net figures at the end of each financial year
D. Infrastructure financing through REITs
and InvITs: REITs and InvITs have
continued to witness interest from the
market with three new InvIT registrations
and one new REIT registration during
2022-23. Total registered entities now
stand at 20 for InvITs and five for REITs.
The net asset value being managed by
REITs stood at ` 70,614 crore whereas for
InvITs it was ` 1,76,957 crore as on March
31, 2023. Total funds raised by InvITs
during the year 2022-23 stood at ` 6,360
crore.
1.1.2 Asset Management Ecosystem
Over a span of last five years, the Indian
asset management ecosystem has undergone
a significant transition. The assets under
management (AUM) of the mutual fund (MF)
Chapter 1 Introduction
3.7 3.4
2.3 2.0
3.1
1.1 2.8
1.9 1.5
Funds Raised Investments Made
2020-21 2021-22 2022-23
industry grew at a rapid pace since 2018-19. As
on March 31 2023, AUM of MF industry stood
at ` 39.4 lakh crore and the number of mutual
fund accounts/folios was 14.57 crore, of which
the unique number of folios was 3.77 crore.
Encouraging investment flows through SIPs and
rising investments from B30 cities contributed
significantly to this growing AUM. Expansion
of asset base during the year was also driven
partly by steady rise in passive investing, with
doubling of net inflows to index funds.
The assets managed by portfolio managers
have also been steadily rising during the last five
years to ` 27.9 lakh crore by the end of 2022-23.
The customized nature of PMS services, rise in
HNIs and their need for diversification beyond
traditional investment products have contributed
to gradual rise in portfolio management services.
3
 Annual Report 2022-23

Chart 1.4: Mutual Funds: Preferred Investment Chart 1.6: Trends in Benchmark Indices
Vehicle of Investors

45 16 70000 20000
40 14 18000
60000

No. of Folios in Crore

35 16000
12
AUM in ` lakh crore

30 50000 14000
10
25 40000 12000
8 10000
20
6 30000 8000
15
10 4 20000 6000
2 4000
5 10000
2000
0 0
2018-19 2019-20 2020-21 2021-22 2022-23 0 0
9 0 1 2 3
-1 -2 -2 -2 -2
AUM (as at the end of the FY) ar ar ar ar ar
M M M M M
No. of Folios (as at the end of the FY)
Sensex Nifty 50 (RHS)

Chart 1.5: PMS: Growth in Wealth Management Chart 1.7: India VIX

30 90

25 80
70
20 60
` lakh crore

15 50
40
10
30
5 20
10
0
0
- 19 -20 -21 -22 -23 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
18 19 20 21 22
20 20 20 20 20
India VIX
AUM (as at the end of the FY)

1.1.3 Secondary Market A slew of global geo-political and challenging

Following two years of exceptional performance, macroeconomic conditions unfolded during the
the equity markets took a breather in 2022-23, year, which impacted the markets. During the
with the benchmark indices Nifty 50 and Sensex first three quarters of the fiscal, Indian equity
ending the year on a flat note, posting -0.6 markets exhibited resilience and outshone the
and 0.7 per cent returns respectively, over the global peers. Albeit, the performance of domestic
previous fiscal’s close. equity markets moderated in the last quarter.

4
 Chapter 1 Introduction

The fiscal was also marked by intermittent The Sensex too experienced a wide range of
volatility, with the Nifty 50 registering its all-time movement between 50,921 and 63,583 during
high of 18,812 and intra-year low of 15,293. the year.

Chart 1.8: Turnover Across Products

450 40,000

Equity Derivatives - ` lakh crore

400 35,000
350 30,000
300
` lakh crore

25,000
250
20,000
200
150 15,000
100 10,000
50 5,000
0 0
2018-19 2019-20 2020-21 2021-22 2022-23

Cash Segment Commodity Derivatives

Currency Derivatives Equity Derivatives (RHS)

During 2022-23, Indian derivatives market
displayed significant growth in contrast to the
cash market. While the cumulative trading
turnover of the equity cash segment declined by
20 per cent in 2022-23 as compared to 2021-
22, the equity derivatives segment witnessed a
rise of 119 per cent in notional turnover over the
period, primarily led by proprietary traders and
individual investors.
Keeping in view the burgeoning market for
equity derivatives and the huge influx of
individual investors into the derivatives market
over the past few years, SEBI, in following its
mandate of investor protection and orderly
development of markets, carried out a study
to analyze the trading by individual investors
with regard to net profit/loss incurred by them
in the equity F&O segment. By showing that
nearly 9 in 10 individual traders lost money in
derivatives markets, the findings corroborated
the need for informed and responsible investing
and dealing in derivatives markets. There was
significant trading activity in currency and
commodity derivative markets too, with the
trading turnover of the respective markets
rising by 60 and 50 per cent during 2022-23,
as compared to 2021-22.

Chart 1.9: Rise in Demat Accounts

14 4
11.4
12
10 3
8
2
6
3.6
4 1
2
0 0
2018-19 2019-20 2020-21 2021-22 2022-23
Total Demat Accounts (in crore) New Demat Accounts added (RHS) (in crore)

5
 Annual Report 2022-23
Though demat accounts continued to rise to
11.4 crore in 2022-23, the incremental additions
slowed down, possibly on account of base effect,
intermittent market fluctuations and subdued
trend in new listings on the Main Board.
In what was a major trendsetting achievement
for Indian capital markets, all listed equities in
the domestic stock markets completed transition
to T+1 settlement cycle in 2022-23, a move that
would bring significant capital efficiencies to
investors and improve risk management in the
secondary market.
1.1.4 Institutional Fund Flows
Uncertain global environment, withdrawal of
economic stimulus measures and interest rate
Chart 1.10: Mutual Fund Net Investments
8.0
6.0
5.1
4.0
` lakh crore
2.8
2.0
1.1
0.0
-2.0
2019-20 2020-21 2021-22 2022-23
MF-Debt
MF-Equity
MF-Total (Data in Labels)
hikes by the Central Banks led to fluctuations
in FPI flows throughout the year. The trend of
FPI outflows from Indian markets which started
in second half of the previous fiscal continued
during first quarter of 2022-23. However, since
Q2 of 2022-23, FPI flows to Indian markets
started to turn positive with bouts of moderate
selling. On a whole, FPIs pulled out ` 37,632
crore from Indian equities during 2022-23, a
73.1 per cent decline in outflows as compared to
2021-22. Strong domestic liquidity continued to
serve as a cushion for the Indian markets, with
domestic institutional investors investing a net
of ` 2.55 lakh crore in the Indian cash markets in
2022-23, as against net FPI outflows of ` 61,754
crore from equity cash market through the stock
exchange route.
Chart 1.11: Foreign Portfolio Flows
2.8
2.7
2.1
1.4
` lakh crore
0.7
0.0
1.2
-0.3 -0.4
-0.7
-1.2
-1.4
2019-20 2020-21 2021-22 2022-23
FPI-Debt
FPI -Equity
FPI-Total (Data in Labels)
6

1.2 PERFORMANCE HIGHLIGHTS
In line with the commitment towards its
mandate of investor protection, development
of the markets and regulation of the markets,
SEBI carried out its regulatory functions of
policymaking, investor education, supervision
and surveillance of the Indian securities market
ecosystem throughout the year.
1.2.1 Policy Making Process at SEBI: SEBI
has 20 specialized Advisory Committees across
functional domains, comprising experienced
domain experts, who advise SEBI on the
intricacies of proposed policy changes and
through whom consultation papers are vetted,
keeping in view the interests of multiple
stakeholders. During 2022-23, 90 meetings
of these Advisory Committees were held, in
which 302 agenda items were deliberated.
In line with the ongoing practice of involving
various stakeholders of the securities market
ecosystem in the policy-making process, a total
of 33 consultation papers were floated for public
comments during 2022-23. Besides, 11 reports
were also submitted internally during the year
under the aegis of working groups/committees
constituted for specific purpose. During 2022-
23, 65 agenda items were deliberated in
the meetings of the SEBI Board, of which
implementation of 40 decisions have been
completed and the remaining are at various
stages of execution.
1.2.2 Policy Measures: In order to adapt to
the ever-changing market environment and to
address representations from various market
participants, SEBI floated several new policies
while refining the existing ones through issue
of circulars, regulations and amendments. In
2022-23, SEBI rolled out 163 policy measures,
which inter alia include, 27 measures for
primary markets (equity and hybrid securities),
40 for secondary markets, 39 for corporate debt
markets, 27 for asset management (including
7
Chapter 1 Introduction
AIFs), 22 for intermediaries and 4 each for FPIs
and investor grievance resolution. Some of the
significant policy measures during 2022-23 are
listed below:
A.  nhancing Transparency: In a bid to
E
overcome the deficiency in traditional
valuation methods of IPOs and to facilitate
information symmetry between pre-IPO
and public investors, SEBI mandated
disclosure of Key Performance Indicators
(KPIs) and price per share of issuer
based on past transactions and past fund
raising from the investors. In order to
facilitate better information dissemination
for stakeholders, the concept of filing of
an Issue Summary Document (ISD) was
introduced in respect of issuers/ listed
entities with the stock exchanges. Further,
SEBI introduced a transparent policy for
providing relaxation from considering
market price based parameters to
determine open offer price in the case of
disinvestment of PSU companies.
B. 
Corporate Governance and Disclo-
sures: Committed to furthering corporate
governance standards in listed entities
by empowering shareholders, periodic
shareholder approval mechanism was
introduced for any director serving on the
board of a listed entity to address the issue
of board permanency, and an alternative
flexible mechanism for appointment/
removal of independent directors
through majority of minority approval. In
a bid to address inadequate, inaccurate,
misleading and delayed disclosures of
material events by listed entities, uniform
quantitative thresholds for determining
materiality of events were introduced.
Further, to check rumour mongering in
the market, SEBI mandated verification
of market rumours by listed entities in a
phased manner.
 Annual Report 2022-23
C. Safe Markets for Investors: In order to
ensure smooth functioning of the markets,
a number of new developmental and
regulatory measures have been initiated,
along with refinement of existing policies.
SEBI directed the MIIs to set up an
Investor Risk Reduction Access platform,
a contingency service aimed at protecting
the investors, in the event of disruption
of services at a trading member’s end,
from losses arising out of outstanding
positions, especially during volatile market
conditions. Demat Debit and Pledge
Instruction mechanism was introduced
for transfer and pledging/re-pledging
of clients’ securities, to curb possible
misuse of client’s Power of Attorney by
stock brokers. Taking into account the
concentration of trading activity among
few stock brokers and the far-reaching
impact of any disruption in the services
they offer on the securities market, SEBI
designed a framework for designating a
stock broker as Qualified Stock Broker
(QSB) and laid out enhanced obligations
and responsibilities for these QSBs.
Further, to strengthen the governance
of MIIs, SEBI has carried out various
amendments to the Securities Contracts
(Regulation) (Stock Exchanges and
Clearing Corporations) Regulations, 2018
and SEBI (Depositories and Participants)
Regulations, 2018. With a view to
enhance liquidity and market depth in
the commodities derivatives market,
SEBI allowed the participation of FPIs in
Exchange Traded Commodity Derivatives.
A comprehensive risk management
framework was issued for Electronic Gold
Receipts segment.
D. Corporate Bonds: With the objective
of giving impetus to the corporate bond
markets, in terms of increased participation
and liquidity enhancement, SEBI permitted
8
stock brokers to participate on Request for
Quote (RFQ) platform on behalf of clients,
directed AIFs to undertake at least 10
per cent of their secondary market trades
through the RFQ platform and allowed
them to participate in credit default swaps
market.

Pertaining to the EBP platform, the
concept of Anchor Investor was brought-
in to assist an issuer in assessing
demand for its issuance, the book building
process for private placement of debt
was modified to address the concerns of
fastest finger first and to provide a level
playing field for the bidders. Further, in
order to enable the operationalization of
Limited Purpose Clearing Corporation
(LPCC), necessary amendments of SECC
regulations have been carried out, in line
with the requirements of the Repurchase
Transactions (Repo) (Reserve Bank)
Directions, 2018 and Payment and
Settlement Systems Act, 2007.
E. Sustainable Finance: In the backdrop of
increasing interest in sustainable finance
around the globe, SEBI reviewed the
regulatory framework pertaining to green
debt securities. The scope of definition
of green debt security was enhanced
by including new modes of sustainable
finance in relation to pollution prevention
and control, eco–efficient products etc.,
and the concept of blue, yellow and
transition bonds was introduced. Further,
the regulatory framework for green debt
securities was strengthened, laying out
responsibilities of the issuers of such
securities and asking issuers to appoint
a third party reviewer for the post-issue
management of the use of proceeds, to
undertake and disclose impact reporting,
in line with the updated Green Bond
Principles recognized by IOSCO.

F. Mutual Funds: During the year, the
Mutual Fund industry too witnessed a
series of developmental and regulatory
policy initiatives, which inter alia included
review of existing regulatory framework for
sponsors of mutual funds, permitting new
categories of sponsors and the concept
of Self Sponsorship, rolling out new ESG
category for AMCs to launch schemes
on ESG related factors. With a focus on
unit holder protection, SEBI specified core
roles and responsibilities of trustees of
mutual funds.
Regulatory framework for “Execution Only
Platforms” for direct plans of MF schemes
was introduced with a view to improve
ease of doing business for the EOPs.
Further, SEBI came out with some major
policy initiatives for the development of
the passive fund ecosystem, some of
which were mandating the maintenance of
tracking error below a specified threshold,
introduction of ELSS in passive fund
category etc.
1.2.3 Investor Protection: SEBI’s regulatory
framework is founded on the underpinning idea
that a well-informed investor is a better protected
investor. Investor education and awareness
continued to be the bedrock of SEBI’s pursuits
over the past thirty years of its regulatory
trajectory. With the influx of retail investors
into the securities market in the recent years,
the need for investor education and awareness
became more imperative, particularly to sensitize
the first time investors. During 2022-23, SEBI
continued to undertake its investor awareness
and education activities. In 2022-23, SEBI
conducted 649 regional seminars in association
with MIIs, 10 regional seminars in association
with AMFI and several programmes under
the aegis of Investor Associations, Securities
Market Trainers and Commodities Derivatives
Trainers for investor education and awareness.
SEBI also joined hands with various domestic
9
Chapter 1 Introduction
and international organizations and participated
in several global and national events in solidarity
with the broader goals of investor protection.
Timely resolution of investor grievances is crucial
for enhancing investors’ faith and confidence in
the securities market. Taking cognizance of the
same, SEBI has been taking various regulatory
measures to expedite the redressal of investor
grievances. The number of pending actionable
grievances has been steadily declining over
the years due to expeditious disposal by SEBI.
Out of 34,752 complaints received during 2022-
23, 88.1 per cent were e-complaints. During
2022-23, 39,062 complaints were redressed,
which included 4,290 complaints pending for
regulatory action from previous year."
1.2.4 Cybersecurity: Cybersecurity continues
to remain among the top priorities of SEBI.
During the year, SEBI conducted its first
quarterly cybersecurity Table Top Exercise,
aimed at analyzing the cyber incident response
and recovery plans at SEBI regulated entities
(REs). A framework for adoption of cloud
services was also issued during the year,
highlighting the key risks and mandatory controls
which REs need to put in place before adopting
cloud computing. For the purpose of analyzing
the cybersecurity posture of the key REs, SEBI
sought and received Vulnerability Assessment
and Penetration Testing (VAPT) report from
REs viz., MIIs, QRTAs, KRAs, top ten brokers
and top three AMCs. Further during 2022-23,
the Cyber Incidents Reporting Portal (CIRP)
functionality was extended to stock brokers,
mutual funds, portfolio managers and RTAs.
1.2.5 Regulatory Approvals: During 2022-23,
SEBI processed 114 offer documents out of 140
applications for public issuances with SEBI. 26
applications remained pending with SEBI as on
March 31, 2023, as compared to 49 at the end
of 2021-22. Of the 108 draft letters of offer for
open offers processed by SEBI during the fiscal,
observations were issued in respect of 92 letters
 Annual Report 2022-23
of offer and 16 draft letters of offer are pending
with SEBI for issuance of observation letter
as on March 31, 2023. Of the 22 exemption
applications under takeover regulations filed with
SEBI, six applications were granted exemption
from open offer during the year.
With regard to intermediaries, new registrations
were granted to 53 portfolio managers, 9
merchant bankers, 2 each of RTAs and Banker
to Issue, 1 mutual fund, 8 Online Bond Platforms
(OBPs), 3 InvITs and 1 REIT during 2022-23.
1.2.6 Supervision of MIIs: In line with SEBI’s
thrust on leveraging cutting edge technological
innovations and data-driven decision-making to
accomplish the basic functions as laid out in the
preamble of the SEBI Act 1992, SEBI embarked
on the path to integrate technology in the
inspection process of MIIs during the last year.
The said approach is aimed towards automating
the inspection process and transforming it from
an annual exercise into a toolkit for ongoing
supervision. Towards this end, a utility is
envisaged to be developed by select MIIs to
enable SEBI to assess their compliance as
an entity vis-à-vis the applicable regulatory
requirements.
During 2022-23, comprehensive inspections of
all the MIIs were carried out by SEBI. Special
purpose issue based inspections and off-
site supervision by way of analyzing reports,
filings submitted by the MIIs were also carried
out. Inspections of BSE and NSE were also
done with respect to processing of investor
claims received against defaulter stock brokers,
complaint handling processes of the exchanges
and the IGRC/arbitration proceedings.
1.2.7 Supervision of Mutual Funds: Levera-
ging technology and data for supervisory
processes, SEBI has implemented offsite
surveillance-cum-inspection of mutual funds
whereby data is being received from AMCs
and RTAs of the AMCs on a regular basis.
10
Compliance of various quantitative requirements
are monitored through algorithm based alerts run
on the said data and various actions are initiated
against the AMCs for non-compliance. As on
March 31, 2023, there are 81 alerts deployed
to identify potential cases of non-compliance of
SEBI (Mutual Fund) Regulations, 1996, circulars
and directives issued thereunder, leading to
administrative and enforcement actions (such
as adjudication, warning, letter of displeasure,
amongst others). In addition to the above, onsite
inspection of 24 mutual funds and its respective
RTA operations were initiated in 2022-23.
1.2.8 Supervision of Other Intermediaries:
During the year, SEBI conducted inspections
of 87 stock brokers and 28 DPs, with special
emphasis on themes such as handling of clients’
funds and securities, segregation and timely
settlement of clients’ accounts, and grievance
redressal mechanism. The inspections were
jointly done with exchanges and depositories,
with single consolidated action initiated against
the entity, thereby streamlining inspection
process of intermediaries. Inspections were
conducted for 37 merchant bankers, 13 RTAs,
10 investment advisors, 12 research analysts,
3 KRAs, 4 each of credit rating agencies
and debenture trustees, 17 each of portfolio
managers, AIFs, 9 foreign venture capital
investors, 2 REITs and 3 InvITs.
1.2.9 Market Surveillance: To further augment
its surveillance functions, SEBI constituted
Advisory Committee for Leveraging Regulatory
and Technology Solutions (ALeRTS) during
2022-23, for guidance on various technological
initiatives. To augment the adequacy and
effectiveness of surveillance systems of MIIs,
two indices - Surveillance Adequacy Index (SAI)
and Index for Surveillance Effectiveness (ISE)
- were developed in consultation with the MIIs.
In view of the concerns pertaining to efficacy of
fair price discovery on account of low-free float of
companies, SEBI strengthened the framework

in consultation with the stock exchanges by
imposing stricter price bands on such scrips.
During 2022-23, short term ASM framework
was extended to securities on which derivative
products are available and their corresponding
futures and options contracts. Further, policy
on framework for dealing with unsolicited
messages and videos on social media platforms
was implemented.
To augment its capabilities to unearth market
misconduct, various tools have been deployed
by SEBI to collect and analyze structured and
unstructured data while conducting examination
and investigation in respect of suspicious
market misconduct cases. Digital forensic tools
have been deployed to acquire and examine
the digital data, collected during search and
seizure operations conducted. With adoption
of better data analytics and digital forensic
tools, SEBI has been able to unearth complex
modus operandi and collect digital evidences
as demonstrated in the interim orders passed
during the 2022-23.
During 2022-23, SEBI conducted Search &
Seizure Operations involving 47 entities at 40
locations covering 17 cities across the country.
Pursuant to investigation by SEBI, the orders
passed also mentioned about the Search &
Seizure operations and the evidences obtained
from the seized digital devices.
1.3 LOOKING FORWARD
SEBI would continue harnessing the power
of consultation and cutting edge technologies
to bolster the accessibility, resilience, and
security of the securities market for investor
protection going forward. Further, SEBI would
carry forward its efforts to strike a fine balance
between the regulation and development of
markets. The following initiatives are planned to
be undertaken during 2023-24:
11
Chapter 1 Introduction
1.3.1 S teps towards implementing Budget
Announcements
SEBI would continue to strive to expeditiously
achieve the national priorities of the financial
sector as outlined in the Union Budget. Towards
this end, SEBI’s path to action for the coming
year is as below:
A. To simplify, ease and reduce cost of
compliance, SEBI would commence
comprehensive reviews of various
existing regulations in order to facilitate
development of markets and ease of doing
business.
B. To build capacity of functionaries and
professionals in the securities market and
to recognize award of degrees, diplomas
and certificates, SEBI would develop,
regulate, maintain and enforce norms and
standards for education in the National
Institute of Securities Markets.
1.3.2 Primary Market
In order to further strengthen the framework
for fundraising, SEBI will focus on the following
areas in the forthcoming year:
A. 
Harmonization of disclosure require-
ments under LODR and ICDR: An entity
desirous of making a public offer discloses
information in terms of the SEBI (ICDR)
Regulations. Once listed, disclosure
requirements are mandated through the
SEBI (LODR) Regulations. SEBI plans
to undertake an exercise with a view
to harmonize disclosures made for the
purpose of public offers and continuous
disclosure requirements.
B. Conglomerate Disclosures: While listed
entities are subject to comprehensive
disclosure requirements, the same
levels of disclosures requirements are
 Annual Report 2022-23
not applicable to unlisted companies.
Therefore, there is a need to identify,
monitor and manage the risks introduced
into the securities market ecosystem by
unlisted companies in a conglomerate
with a complex set of listed and unlisted
associates. SEBI plans to facilitate
transparency around the conglomerate
by enhancing the group level reporting of
transactions. Disclosure of details of cross
holding and material financial transactions
within the conglomerate are also some of
the matters that SEBI would examine to be
disclosed on an annual basis.
C.  igital
D Assurance of financial
statements: There is increasing
availability of external information sources
that provide information on the listed entity
and its financial statements. An auditor
may rely on such digital information, from
external information sources in its routine
nature of auditing. SEBI would examine
mandating digital assurance in respect of
financial statements disclosed by listed
entities.
D. Pricing mechanism in case of delisting:
In the ensuing year, SEBI plans to review
the pricing mechanism in case of delisting.
In particular, review of the reverse book
building process and exploring other
alternatives to determine exit price in case
of voluntary delisting would be undertaken.
SEBI also plans to review the compulsory
delisting framework adopted by the stock
exchanges.
E. Review of SEBI (Substantial Acquisition
of Shares and Takeovers) Regulations,
2011: SEBI has formed a committee on
review of Takeover Regulations, which
has been, inter-alia, tasked to review the
current Takeover Regulations in light of
past judicial pronouncements and also
to simplify and strengthen the extant
12
regulations by benchmarking global
practices.
1.3.3 Secondary Market
Furthering its efforts to develop the secondary
markets and to protect the investor interest,
SEBI intends to carry out the following activities
during 2023-24:
A. 
Revamp of approach for supervision
of MIIs: MIIs are the epicenter of capital
market operations and have been entrusted
with responsibilities of oversight of market
activity and their participants. Given their
role and importance, it is imperative that
they practice high standards of governance
which encourages market confidence.
Towards enhancing the oversight
capabilities of SEBI for assessing the
functioning of MIIs vis-à-vis regulatory
requirements, SEBI has initiated a thorough
review of its supervisory approach,
processes and toolkit. Towards this end,
during year 2022-23, various steps have
been taken for automation of supervision,
including online submission of information
by MIIs, construction of data tables and
compliance checks. These measures
would be further strengthened during
year 2023-24, including development of
software utilities by MIIs to facilitate more
effective supervision.
B. External performance evaluation of MIIs
and its Statutory Committees: In order
to assess and evaluate the performance of
an MII on various aspects, it is proposed
to develop a framework for evaluating the
performance of the MIIs and its statutory
committees across various parameters.
This measure is expected to bring in
greater accountability in the functioning of
MIIs.
C.  rading supported by Blocked Amount:
T
In its continuing endeavour to provide

protection to the investors from the possible
default of member (s) (TM/CM), SEBI has
decided to introduce a supplementary
process for trading in secondary market
based on blocked funds in investor’s bank
account, instead of transferring them
upfront to the trading member, thereby
providing enhanced protection of cash
collateral/pay-in. The said facility shall be
provided by integrating the RBI approved
Unified Payments Interface (UPI) mandate
service of single-block-and-multiple-debits
with the secondary market trading and
settlement process.
D. Instantaneous Settlement: In order to
ensure faster settlement of trades and
to reduce the overall risk in the system,
SEBI is examining the possibility of an
optimal mechanism for investors for
instant settlement of trades in case both
the parties to the trade have made 100
per cent early pay-in of funds and/or
securities. A Working Group has been
constituted to examine the feasibility and
if found feasible, recommend operational
modalities for implementation of the same.
E. Introduction of Regulatory Framework
for Index Providers: In the Indian
securities market ecosystem, currently
the index providers function outside the
regulatory purview. In order to address
the regulatory gap and also taking into
view the growing importance of the
benchmarks industry, the Board has, in-
principle, approved the introduction of
regulatory framework for index providers
with the objective of fostering transparency
and accountability in governance and
administration of indices. SEBI is in
the process of introducing a regulatory
framework for index providers mainly
aligned with the IOSCO principles.
13
Chapter 1 Introduction
F. 
Review of Eligibility Criteria of Stock
Derivatives: Derivatives contracts on
stocks can be traded on recognized
stock exchanges only if the underlying
stocks satisfy certain objective criteria.
The last review of the eligibility criteria
for introduction of stocks in derivatives
was done in 2018. Since then, broad
market parameters reflecting the size and
liquidity of the cash market, viz., market
capitalization and turnover have moved up
considerably. Accordingly, it is proposed to
review the eligibility criteria for introduction
and continuation of stocks in the derivatives
segment.
G.  wo-way portability across the Clearing
T
Corporations (CCs): CCs have robust
business continuity framework involving
a Disaster Recovery (DR) Site. In case of
software issues which could impact both
the primary and DR site, a new framework
of business continuity has been designed
for the interoperable exchanges and CCs.
The solution would operate as Software
as a Service (SaaS) model, wherein the
unaffected CC would carry out functions of
other/affected CC. The solution has been
tested in mock environment of CCs by
clearing members and would be rolled out
soon for live market operations.
H. 
Price band formulation for scrips in
Equity Derivatives segment: Scrips
having derivative contracts on them have
dynamic price band both for scrips and
such derivative contracts. These price
bands can be flexed subject to certain
conditions and the trading activity in the
scrip. In order to strengthen volatility
management and minimize information
asymmetry for such scrips and contracts
in equity derivatives segment, SEBI is in
the process of strengthening the existing
 Annual Report 2022-23
framework of price band for these scrips
and their derivatives contracts for more
effective risk management and orderly
trading. The proposed framework would
limit the impact of possible price risk arising
out of sudden extreme market volatility, fat
finger error or issues with systems of a
trading member.
1.3.4 Market Intermediaries
A.  Norms for dealing with unclaimed
funds of clients: In order to ensure
that unclaimed funds of clients lying with
the TMs are returned to the respective
clients in a timely and efficient manner, it
is proposed to have a detailed procedure
for treatment of unclaimed funds of clients
lying with the TMs, in which the TMs shall
make efforts to find out the whereabouts
of the clients for return of such funds. In
case the end client is not traceable despite
the efforts of the TM, the unclaimed funds
would be transferred to investor protection
funds of stock exchanges on periodic
basis.
B. 
Upstreaming of clients’ funds: Under
the proposed framework, clients’ funds
shall be upstreamed by stockbrokers
(SBs)/ non-bank clearing members (CMs)
to Clearing Corporations (CCs) on end of
day basis, so as to ensure that no clients’
funds are retained by SBs/non-bank CMs.
The funds shall be upstreamed only in the
form of cash, lien on FDR, or pledge of
units of mutual fund overnight schemes.
The framework shall not be applicable to
bank-CMs (including custodians that are
banks), and for proprietary funds of SBs/
CMs in any segment. The framework is
proposed to be implemented in a phased
approach.
C. 
Mechanism for prevention and detection
of fraud or market abuse: SEBI (Stock
Brokers) Regulations, 1992 is proposed
14
to be amended to provide systems for
surveillance of trading activities and
internal controls, obligations of notified
stock broker and their employees,
escalation and reporting mechanisms and
whistle blower policy.
D. 
Voting for shareholder proposals
through broker website/apps: In order
to encourage and to make the process
easier for retail investors to participate
in the voting on motions moved by listed
companies, SEBI is proposing to facilitate
various channels for participation such
as website/app of the broker/DP and to
explore the possibility of providing ease
of access to reports of proxy advisors, for
investors to make an informed decision.
1.3.5 Mutual Funds
In order to adapt to the dynamic changes in the
mutual fund asset management ecosystem,
the following key measures are proposed to be
introduced in the forthcoming year:
A. 
Introduction of the Mutual Fund Lite
Regulations: Since the current MF
regulatory framework was built around
active fund management, SEBI is planning
to introduce Mutual Fund Lite regulations
for passive funds, wherein investment
decisions are not discretionary, but tied
to changes in the underlying benchmark
index. These new regulations are expected
to significantly reduce the compliance
requirements of such funds and to foster
innovation in the passive fund ecosystem.
B.  eview of Total Expense Ratio: In
R
order to balance the need for facilitating
financial inclusion, encouraging new
participants, leveraging economies of
scale, encouraging adoption of technology,
discouraging cross-subsidization across
schemes, closing arbitrage opportunities
and curbing malpractices, if any, the

current regulatory provisions applicable for
fees and expenses charged by the mutual
fund schemes will be reviewed.
C. CDS selling by Mutual funds: In order
to provide additional investment products
for the mutual funds, SEBI is considering
to allow mutual funds to sell credit default
swaps (CDS) for the purpose of taking
exposure in synthetic corporate bonds,
i.e., a position created by selling credit
default swap and buying G-Sec/ T-bills.
D. Institutional accountability of individual
misconduct: In order to ensure
institutional accountability of the Asset
Management Companies (AMCs) and
their senior management personnel for
misconduct by respective employees and
other related entities, it is being considered
to mandate AMCs to set up institutional
mechanism for deterrence of possible
market abuse and fraudulent transactions,
and ensuring appropriate escalation and
reporting mechanism.
E. 
Increasing transparency of portfolio
managers including performance
benchmarking: To improve resilience and
transparency regarding Portfolio Managers,
SEBI has specified cyber security and cyber
resilience framework, guidelines regarding
performance benchmarking and valuation
norms, prudential limits for related party
investments and measures to strengthen
the systems of the portfolio managers. In
furtherance of these initiatives, SEBI is
exploring standardization of disclosures by
Portfolio Managers.
1.3.6 Alternative Investment Funds
A. Standardized approach to valuation of
investment portfolio of AIFs: To provide
guidance to AIFs towards a consistent,
transparent and standardized approach
for valuation of their investment portfolios,
15
Chapter 1 Introduction
SEBI is proposing a framework for
valuation of investment portfolios by the
AIFs.
B. 
Option to AIFs to sell unliquidated
investments of a scheme: To provide
flexibility to AIFs to deal with investments
which are not sold due to lack of liquidity
during the winding up process, a proposal
is being considered to enable selling such
investments to a new scheme of the same
AIF i.e., Liquidation Scheme or to distribute
such unliquidated investments in-specie,
in the prescribed manner and subject to
approval of 75 per cent investors by value.
C. 
Issuance of units of AIFs in
dematerialized form: For ease of
monitoring and administration by
stakeholders and for the purpose of
investor protection against operational and
fraud risk, mandatory dematerialization of
units of AIFs is being proposed.
1.3.7 Corporate Bond Markets
A. Voluntary Delisting: Currently, there is no
specific framework for delisting of non-
convertible debt securities in the extant
regulations. In order to address this gap,
SEBI will explore bringing in a framework
for voluntary delisting of debt securities.
B. In order to increase the potential investor
base for the issuers of debt securities
and to further deepen the corporate bond
market, SEBI will consider reviewing
and expanding the definition of Qualified
Institutional Buyers.
C. 
In order to enhance liquidity in the
secondary market for corporate bonds,
a Limited Purpose Clearing Corporation
for repo transactions in corporate bond
has been set up. SEBI will take steps to
operationalize the same.
 Annual Report 2022-23
D. 
Legal Entity Identifier (LEI) is a unique
20-character code to identify legally
distinct entities that engage in financial
transactions. It is designed to create a
global reference data system that uniquely
identifies every legal entity. In 2023-24,
LEI would be introduced for the issuers
who have listed and/ or propose to list non-
convertible securities, securitised debt
instruments and security receipts.
1.3.8 ESG Ratings
In the Indian securities market ecosystem,
currently the ESG Ratings providers function
outside the regulatory purview. Taking into
account the growing importance of ESG ratings
for sustainable development, the Board has,
in-principle, approved the introduction of a
regulatory framework for ESG Ratings providers
with the objective of fostering transparency and
accountability in governance and administration
of ESG Ratings. SEBI is in the process of
introducing the regulatory framework for ESG
Rating providers.
1.3.9 REITs and InvITs
Taking cognizance of the potential of REITs
and InvITs in driving the future of Indian
infrastructure, SEBI would endeavor to further
develop the market for REITs and InvITs in the
coming years through policy measures including
considering bringing in norms for follow-
on offers by REITs and InvITs, introducing
provisions for special rights to unitholders
of REITs and InvITs and establishing self-
sponsored IMs of REITs and InvITs.
1.3.10 Governance, Disclosures and
Monitoring of Listed Entities
SEBI constantly strives to inculcate confidence
in investors by strengthening corporate
governance in listed entities. While aiming to
enhance the quality of disclosures made by
the listed entities, SEBI seeks to rationalize the
disclosure requirements for easy and efficient
compliance by the entities. During the next year,
SEBI plans to undertake:
16
A.  eview of the definition of Unpublished
R
Price Sensitive Information (UPSI):
The current definition of UPSI places the
responsibility of categorizing information
as UPSI on the listed entities, with
an expectation that they will exercise
prudence while categorizing information as
UPSI and, thus, will comply, in-spirit, with
the principles laid under PIT Regulations.
However, it has been observed that, many
a times, an information/event which should
have been categorized as UPSI was not
done so by the listed entity. Thus, in order
to ensure that the process of categorization
of information as UPSI by listed companies
is uniform and to align it with the disclosure
requirements under the SEBI (LODR)
Regulations, the definition of UPSI will be
reviewed.
B. Review of the SEBI (Listing Obligations
and Disclosure Requirements) Regul-
ations, 2015 to strengthen corporate
governance and disclosure requirements
while simultaneously focusing on ease of
process of compliance for listed entities.
1.3.11 Market Surveillance
Committed to continuously enhancing its market
surveillance capabilities to detect fraudulent
trading behavior and market manipulation
practices promptly, SEBI contemplates
evaluating the following initiatives in the
forthcoming year, as per its key mandate to
ensure the safety and integrity of markets:
Regulatory framework for dealing with
Unexplained Suspicious Trading activities:
SEBI, while dealing with the matters related to
contravention of the provisions of the securities
laws, particularly relating to manipulative
and unfair trade practices, insider trading,
front running, pump and dump activity, etc.,
faces challenges in finding direct evidences in
respect of communication of non-public price
sensitive information. In such cases, where the
trading pattern clearly appears to be repeatedly

suspicious, investors would be required to
explain such trading activities. Similar to the
provision in the Income Tax Act on “unexplained
credits”, SEBI would seek to consider provisions
for “unexplained suspicious trading patterns”.
1.3.12 Technology
With an intention to further enhance its techn-
ological and cybersecurity capability, and to better
serve its stakeholders, SEBI plans to undertake
various projects to enhance its IT capacity and
build a fault-tolerant architecture The initiatives
spread under the following heads are intended to
be undertaken in the upcoming year:
A. 
Strengthening Cybersecurity capabi-
lities:
SEBI is in the process of developing a
Cyber Capability Index (CCI) that can
objectively evaluate the cybersecurity
readiness of regulated entities and SEBI
itself.
B. Ease of doing Business Initiatives
i. SEBI is planning to integrate its
e-Registration system with agencies
like DigiLocker and NISM through APIs
to facilitate real-time verification of
information submitted by intermediaries.
ii. SEBI is considering introducing an online
document verification facility to ensure the
authenticity of documents and notices/
letters sent by SEBI.
17
Chapter 1 Introduction
C. Process Streamlining
 In the coming year, SEBI plans to implement
a Geotagging Solution to strengthen the
process of its enforcement activities.
D. 
Investor Protection and Awareness
Initiatives
i. 
Revamp of SCORES: To ensure the
speedy and transparent resolution of
investor grievances, SEBI is undertaking
a revamp of the existing SEBI Complaints
Redressal System (SCORES). The new
SCORES system is being designed
to enable the investors to lodge their
grievances with ease, and to facilitate an
efficient mechanism of grievance redressal
by regulated entities.
ii. Online Dispute Resolution Mech-
anism: In the backdrop of increase in
investor participation in the securities
market in India, and emergence of
technology aided dispute resolution
frameworks, SEBI proposes to harness
Online Dispute Resolution (ODR)
mechanism by expanding the capacity
of the MII administered conciliation and
arbitration mechanism, extending it to
registered intermediaries/REs and their
investors/clients, conducting proceedings
in a hybrid mode, and streamlining
the dispute resolution process and
adoption of other measures to strengthen
enforcement of awards.
 Annual Report 2022-23

Chapter 2:
Review of Financial Markets

The Chapter analyses the economic and
investment environment in India and presents
their comparison with Advanced as well as
some peer Emerging Market Economies.
Furthermore, the chapter presents stress
factors, if any, pertaining to the securities
markets and possible risk factors going forward
as indicated by market signals.
2.1 ECONOMY
2.1.1 Global
There was a downturn in global economic activity
during 2022-23 marked by slowdown in output
growth and rise in inflation, primarily on account
of geo-political tensions in Europe, elevated
commodity prices and supply chain disruptions.
In addition, financial vulnerabilities remained
elevated in China throughout Calendar Year
(CY) 2022 amid stress in the real estate sector
and new COVID-19 outbreaks. Towards the end
of 2022-23, financial conditions turned volatile
due to banking crisis in US and Europe.
Global output growth was estimated to be 3.4
per cent in 2022 compared to 6.3 per cent in
2021. During 2022, growth rates were estimated
to have declined by 2.7 and 2.9 per cent points
in Advanced Economies (AEs) and Emerging
Market, and Developing Economies (EMDEs)
respectively compared to 2021. Global inflation
was estimated to be at 8.7 per cent in 2022
compared to 4.7 per cent in 2021, with higher
inflation across EMDEs compared to AEs.
OECD’s Composite Leading Indicator (Chart 2.1)
remained below 100 and declined continuously
between April 2022 and March 2023.

Chart 2.1: Composite Leading Indicator (OECD)

102
100
98
96
94
92
90
88
M 5

M 6

M 7

M 8

M 9

M 0

M 1

M 2
Se 5

Se 6

Se 7

Se 8

Se 9

Se 0

Se 1

Se 2

3
1

2
-1

-1

-1

-1

-1

-2

-2

-2

-2
p-

p-

p-

p-

p-

p-

p-

p-
ar

ar

ar

ar

ar

ar

ar

ar

ar
M

G-7 G-20

 ote: The composite leading indicator (CLI) is designed to provide early signals of turning points in business
N
cycles showing fluctuation of the economic activity around its long-term potential level. CLI shows short-term
economic movements in qualitative rather than quantitative terms.
Source: OECD

18

2.1.2 India
Amid global uncertainties and economic
sluggishness, Indian economy remained better
placed compared to major large economies as
it posited higher growth rate than most of the
Advanced and Emerging Market Economies.
(According to IMF estimates, Indian economy
witnessed growth of 6.8 per cent during 2022-
2023; while as per MOSPI’s estimates, GDP at
constant (2011-12) prices increased by 7.2 per
cent in 2022-23). Aggregate demand displayed
resilience with Private Final Consumption
Expenditure growing by 7.5 per cent driven
by pick up in discretionary spending. On the
investment front, Gross Fixed Capital Formation
registered a growth of 11.4 per cent backed by
the Government’s thrust on capital expenditure.
Exports grew sharply by 13.8 per cent on
account of easing supply chain pressures
during the second half of 2022-23. From the
supply side, the growth in Gross Value Added
(GVA) was broad based, facilitated by resilience
of primary sector as well as sustained recovery
in industrial and services sectors.
During 2022-23, CPI headline inflation averaged
6.7 per cent with inflation breaching the upper
tolerance band for nine months. Headline
inflation, which stood at 7.8 per cent in April
2022, declined to 6.7 per cent in July and then
rose briefly to 7.4 per cent in September 2022
before easing again to 5.7 per cent in March
2023.
2.1.3 Outlook
On the macro front, IMF forecasts that global
growth will bottom out at 2.8 percent this year
before rising modestly to 3 per cent next year.
Global inflation will fall, though more slowly than
19
Chapter 2 Review of Financial Markets
initially anticipated, from 8.7 per cent in 2022
to 7 per cent in 2023 and 4.9 per cent in 2024
(Table 2.1).
As for near term outlook going forward, global
economy is on the path of gradual recovery
from the pandemic and the geo-political crisis,
following unwinding of supply chain disruptions
and softening of commodity prices (primarily
food and energy prices). However, downside
risks remain owing to sticky core inflation in
many economies, possibility of re-hardening of
commodity prices and uncertainties surrounding
growth of China’s economy.
The macro economic outlook of India looks
relatively favourable. The real GDP in India
is expected to grow at 5.9 per cent during
2023 compared to 1.3 per cent for AEs and
3.9 per cent for EMDEs during 2023. Other
macro parameters in India such as inflation,
investment, fiscal deficit, current account
deficit are within manageable range (Charts
2.2 and 2.3), reflecting relative macro-financial
stability of Indian economy. The recent trend
in other high frequency indicators of economic
activity viz. GST collection and PMI Composite
(Manufacturing plus Services) Index for India
also reflects revival of the economy. The
relative macro strength of Indian economy is
a major factor behind investors, both domestic
and global, looking at Indian stock market as
a favourable investment destination. As for
downside risks, the macro-financial outlook in
India may be influenced by global economic
developments, including recessionary concerns,
outflow of funds from emerging markets and rise
in commodity prices.
 Annual Report 2022-23

Table 2.1: Global Macro Economic Trends (Growth in per cent)

Projections
Parameter/Countries 2021 2022 2023 2024
World Output 6.3 3.4 2.8 3.0
Advanced Economies 5.4 2.7 1.3 1.4
Emerging Market and Developing Economies 6.9 4.0 3.9 4.2
India 9.1 6.8 5.9 6.3
World Consumer Prices 4.7 8.7 7.0 4.9
Advanced Economies 3.1 7.3 4.7 2.6
Emerging Market and Developing Economies 5.9 9.8 8.6 6.5
India 5.5 6.7 4.9 4.4
Investment as a Percentage of GDP
Advanced Economies 22.7 23.2 22.6 22.5
Emerging Market and Developing Economies 33.4 33.4 33.5 33.7
India 31.2 31.6 32.4 33.0
Savings as a Percentage of GDP
Advanced Economies 23.7 23.2 22.9 23.1
Emerging Market and Developing Economies 34.1 34.5 33.6 33.6
India 30.0 29.0 30.3 30.8
General Government net lending/borrowing
(as a Percentage of GDP)
Advanced Economies -7.5 -4.3 -4.4 -4.2
Emerging Market and Developing Economies -5.2 -5.2 -5.8 -5.3
India -8.8 -9.6 -8.9 -8.3
Current Account Balance (as a Percentage of GDP)
Advanced Economies 0.8 -0.5 0.0 0.3
Emerging Market and Developing Economies 0.8 1.4 0.3 0.0
India -1.2 -2.6 -2.2 -2.2
Source: World Economic Outlook, April 2023, IMF

20
 Chapter 2 Review of Financial Markets

Chart 2.2: Trends in Macroeconomic Parameters of India vis-à-vis AEs and EMDEs

a. Growth Rate (Y-o-Y) d. Savings as per cent of GDP

10 36
8 34
6 32
4 30
2
28
0
26
-2
-4 24
-6 22
-8 20
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024

World AEs EMDEs India AEs EMDEs India

e. General Government Net Lending/

b. Inflation Rate (Y-o-Y) Borrowing as per cent of GDP

10 2018 2019 2020 2021 2022 2023 2024

8 8

6 3
4
-2
2
-7
0
2018 2019 2020 2021 2022 2023 2024 -12
World AEs EMDEs India AEs EMDEs India

c. Investment as per cent of GDP f. Current Account Balance as per cent of GDP

36 2018 2019 2020 2021 2022 2023 2024

34 1.5
32 0.5
30
28 -0.5
26
-1.5
24
22 -2.5
20
2018 2019 2020 2021 2022 2023 2024 -3.5

AEs EMDEs India AEs EMDEs India

21
 Annual Report 2022-23

Chart 2.3: Trends in GST Revenue and PMI 2.2.1 Equity Market
Composite Index Taking global cues, volatility in Indian equity
a. Trends in GST Revenue (` crore) markets witnessed spike during the first
quarter of 2022-23. However, volatility declined
180,000 since Q2:2022-23 and has generally remained
160,000 lower than the volatility in global markets
140,000 (Chart 2.4).
120,000 Chart 2.4: Trends in Realized Volatility on Nifty
100,000 50 Returns vis-à-vis MSCI Indices
80,000 100
80
60,000 60
40
40,000 20
0
20,000
18 18 19 19 19 20 20 21 02
1 21 22 02
2 23
-20 -20 -20 -20 -20 -20 -20 -20 l-2 -20 -20 -2 -20
0 ar ug an un ov pr ep eb Ju ec ay ct ar
M A J J N A S F D M O M
Feb-21
Aug-21
Feb-22
Aug-22
Feb-19
Aug-19
Feb-18
Aug-18

Feb-20
Aug-20
Aug-17

Feb-23

Nifty MSCI EM MSCI World

Source: Refinitiv

b. Trends in PMI Composite Index

Equity markets throughout the globe remained
60 weighed down during first two quarters of
2022-23. MSCI World and MSCI EM witnessed
58 cumulative corrections of 22 per cent and 23 per
cent during the first two quarters of 2022-23.
56 Global equities rebounded during Q4:2022-23
on the back of strong performances by equities
54 of AEs and Asia as a result of China’s re-opening
and expectations of slow-down of rate hikes by
52
the Fed (Table 2.2).
50
Nifty 50 outperformed MSCI World and MSCI EM
48
both in local currency and USD terms cumulatively
during the first three quarters of 2022-23 on
22

-22

-22
-23
21

-21

-21
-22
r-22

r-23
y-2

the back of relatively resilient macroeconomic

Jul-
Jul-

Sep

Nov
Nov

Jan
Sep

Jan

Ma

Ma
Ma

trends in India, strong countervailing force

provided by domestic investors, tailwinds from
2.2 SECURITIES MARKET falling commodity prices, decline in inflation
and expectations of slowdown in the pace of
Rising inflationary expectations at the beginning future rate hikes. However, Nifty 50 witnessed
of 2022-23 led to tightening of global financial corrections during January-February 2023, as
conditions as central banks around the globe China’s re-opening on one hand and stretched
hiked interest rates. These factors resulted valuations of Indian equities on the other led to
in corrections in equity markets along with FPI outflows (Chart 2.5).
heightened volatility, hardening in sovereign
yields and rise in dollar index owing to flight to
safety during major part of 2022-23.
22
 Chapter 2 Review of Financial Markets

Table 2.2: Returns in Local Currency Terms across Major Markets

Returns in local currency (%) Annualised Volatility (%)
Country Index
2022-23 2021-22 2022-23 2021-22
France CAC 40 9.9 9.8 18.5 19.3
Germany DAX 8.4 -4.0 19.3 19.6
UK FTSE 100 1.5 11.9 14.4 14.3
South Africa FTSE/JSE AFRICA 0.8 13.6 19.6 16.7
Japan NIKKEI 225 0.8 -4.7 17.3 19.3
China SHANGHAI SE COMPOSITE 0.6 -5.5 15.2 14.3
India Nifty 50 -0.6 18.9 14.4 15.5
USA DOW JONES INDUS. AVG -4.0 5.1 18.9 13.2
Singapore STRAITS TIMES STI -4.4 7.7 10.6 11.8
Hong Kong HANG SENG -7.3 -22.5 28.7 23.9
South Korea KOSPI -10.2 -9.9 17.4 14.4
Taiwan TAIWAN TAIEX -10.3 7.7 18.9 16.2
USA NASDAQ COMPOSITE -14.1 7.4 29.5 20.2
Brazil BRAZIL IBOVESPA -15.1 2.9 21.0 18.7
Source: Refinitiv

Chart 2.5: Trends in Nifty 50 Returns vis-à-vis MSCI Indices

160
150
140
130
120
110
100
90
80
70
60
8

18

19

20

21

22

3
-1

l-1

-1

l-1

-2

l-2

-2

l-2

-2

l-2

-2
v-

v-

v-

v-

v-
ar

ar

ar

ar

ar

ar
Ju

Ju

Ju

Ju

Ju
No

No

No

No

No
M

Nifty 50 (USD) MSCI EM MSCI World

Note: Values of MSCI Indices rebased to 100 as on March 31, 2018.
Source: Refinitiv

Owing to the correction in equity prices, valuation those of Indian benchmark and broad based
as measured by trailing Price Earnings Ratios equity indices, between March 2022 and March
declined for most of the major indices, including 2023 (Table 2.3 and Chart 2.6).

23
 Annual Report 2022-23

Table 2.3: Trends in Trailing PE Ratios of Nifty 50 vis-à-vis Global Indices

As on last trading day
Index
Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
IBOVESPA (Brazil) 7.4 5.5 6.1 6.1 6.0
FTSE 100 (UK) 14.3 12.4 9.7 11.1 11.5
Nikkei (Japan) 15.2 15.2 14.4 14.1 15.4
Dow Jones (USA) 18.2 16.6 15.9 18.7 20.0
Nifty 50 22.9 19.5 20.6 21.8 20.4
Nifty 500 23.7 20.0 21.7 22.9 21.1
MSCI EM 13.0 11.8 10.7 12.4 12.6
MSCI World 19.8 16.4 15.2 16.6 17.7
Source: Refinitiv, NSE

Chart 2.6: Trends in Trailing PE Ratios of Nifty 50 of the AEs surged at both ends of the curve
vis-à-vis MSCI Indices (Table 2.4 and Chart 2.7). Long-term yields
33 rose due to rise in safe haven demand while
28 short-term yields tracked rising interest rate
23 movements. In the EMs, the rise in yields
18 was compounded by strengthening of USD
13 against their currencies. During Oct 2022 to
8 Jan 2023, global yields softened as a result
8

18

19

20

21

22

of expectations of slowdown in future pace

-1
l-1

-1
l-1

-2
l-2

-2
l-2

-2
l-2

-2
v-

v-

v-

v-

v-
ar

ar

ar

ar

ar

ar
Ju

Ju

Ju

Ju

Ju
No

No

No

No

No
M

MSCI World
Source: Refinitiv
2.2.2 Debt Market
Global debt markets were impacted for the
first two quarters of 2022-23 in the wake of
worsening inflationary pressures and the
consequent rate hike stance adopted by
the central banks. Sovereign yields of most
MSCI EM Nifty 50 of rate hikes by the Fed amid signs of easing
inflation trajectory. During March 2023, bond
market dynamics were shaped by regional
bank failures in US and crisis in Credit Suisse
followed by its takeover by UBS. The 10-year
sovereign bond yields across major developed
markets fell in March, while short-term yields
rose on the back of renewed apprehensions of
possible rate hikes in near term.

Table 2.4: 10-Year Government Bond Yields across major markets

Yield as on Average Yield during 2022-23

Country
March 31,2022 March 31,2023 Q1 Q2 Q3 Q4 2022-23
Germany 0.55 2.31 1.09 1.36 2.14 2.34 1.73
US 2.33 3.49 2.93 3.10 3.82 3.65 3.37
UK 1.61 3.49 2.03 2.58 3.56 3.47 2.90
Japan 0.21 0.32 0.24 0.22 0.27 0.44 0.29
Brazil 11.64 12.93 12.43 12.52 12.60 13.13 12.67
India 6.84 7.32 7.30 7.30 7.35 7.36 7.33
China 2.82 2.86 2.82 2.72 2.81 2.91 2.81
Source: Refinitiv

24
 Chapter 2 Review of Financial Markets

Chart 2.7: Trends in Movements of Sovereign Chart 2.8: Trends in Movements of USD-INR,
Yields of US and India Dollar Index and MSCI EM Currency index
9 120 1800
8 1750
7 110
1700
6 100
5 1650
4 90 1600
3 80 1550
2 1500
1 70 1450
0
60 1400
8

18

19

20

21

22

3
-1

l-1

-1

l-1

-2

l-2

-2

l-2

-2

l-2

-2
v-

v-

v-

v-

v-

8
8
18

9
9
19

0
0
20

1
1

M 1
2
2
22

3
ar

ar

ar

ar

ar

ar
Ju

Ju

Ju

Ju

Ju

-1
l-1

-1
l-1

-2
l-2

-2
l-2

2
-2
l-2

-2
No

No

No

No

No
M

v-

v-

v-

v-

v-
ar

ar

ar

ar

ar

ar
Ju

Ju

Ju

Ju

Ju
No

No

No

No

No
M

M
India 10 year G-sec Yield India 1 year G-sec Yield
USA 10 year G-sec Yield USA 1 year G-sec Yield USDINR Dollar Index MSCI EM Currency Index

Source: Refinitiv Source: Refinitiv

Indian G-Sec yields broadly tracked the Chart 2.9: Trends in FPI Flows in Equities across
movement in US treasury yields of corresponding Select Markets
tenor. During Q1:2022-23, yields experienced 45,000
synchronised hardening across maturity profile. 35,000

in USD Millions
25,000
While long-term yields have been influenced by 15,000
5,000
global factors during the current policy tightening -5,000
-15,000
cycle, domestic policy measures seem to have -25,000
-35,000
a larger bearing on short-term rates. -45,000
India Turkey Thailand Taiwan Brazil South Africa South Korea
CY 2019 to CY 2021 (Total) CY 2022 CY 2023
(till March 31, 2023)
Yields and spreads of corporate bonds tracked
the movements of sovereign yields. Globally, Source: Bloomberg
corporate yields hardened during April to
September and displayed a softening bias In line with global trends, India witnessed
thereafter, albeit with some regional variation. FPI outflows during Q1:2022-23. FPI buy-ins
resumed during second and third quarter of
2.2.3 Fund Flows 2022-23 on account of resilient macroeconomic
FPI outflows from EMDEs intensified during trends in the Indian economy, falling commodity
Q1:2022-23, driven by rise in inflation, prices and slowdown in depreciation of Indian
tightening of global financial conditions and rupee. However, this was followed by sell-offs
exchange rate depreciation with respect to the in equities during January and February 2023,
US Dollar (Chart 2.8). However, there was a inter alia, due to possible diversion of some
pattern of differentiation with inflows into several investment towards other Asian economies
commodity exporters. During Q4:2022-23, some following re-opening of China and decline in
of the Asian equities like Taiwan, South Korea weightage of Indian stocks in MSCI EM Index
and China received higher FPI flows owing to and stretched valuations of Indian indices.
portfolio rebalancing following re-opening of
China and increase in weightages of some of In Indian equity market, investments by
these countries in MSCI EM index (Chart 2.9). Domestic Institutional Investors (DIIs) acted as

25
 Annual Report 2022-23

a countervailing force to FPI outflows, rendering
Indian equity market relatively less susceptible
to major corrections following FPI outflows.
During 2022-23, as against net FPI outflows of
`61,754 crore from equity cash market, the net
investments by DIIs amounted to ` 2.55 lakh
crore, including ` 1.82 lakh crore investments
by mutual funds.
The outlook for FPI flows going forward may
be buoyed due to resilient macroeconomic
trends in India and moderating inflationary
expectations. However, outflows may resume in
the event of re-tightening of financial conditions,
resurfacing of inflation and volatility in global
financial markets.
Indian commodity indices on MCX followed a
similar trend. MCX iCOMDEX Composite gained
marginally during April and May of 2022-23
before moderating by 8.5 per cent on a financial
year basis. MCX iCOMDEX Crude Oil gained
by nearly 24 per cent to reach its peak value
in June 2022 before moderating in remaining
quarters. Crude Oil and Natural gas displayed
higher volatility during 2022-23 compared to
other indices on MCX. MCX iCOMDEX Natural
Gas reached its peak value in November 2022,
gaining nearly five times compared to its value
at the start of 2022-23.
Table 2.5: Movement of Commodity Indices
during 2022-23

Index Energy Food Fertilizers Metals &

2.3 COMMODITY MARKETS Minerals
Apr-22 153.2 158.9 293.7 138.1
Global commodity indices gained during first two
May-22 163.6 159.0 259.9 122.5
months of 2022-23, driven primarily by energy
Jun-22 173.5 151.5 253.0 115.7
and agricultural prices (Chart 2.10 and Table
Jul-22 171.8 138.6 240.4 100.2
2.6). Moreover, currency depreciations in many
Aug-22 172.8 136.4 229.6 103.8
countries resulted in higher commodity prices in
Sep-22 158.2 136.6 232.7 97.8
local currency terms. However, most commodity
Oct-22 146.2 137.7 217.9 96.1
prices have retreated from their peaks during
Nov-22 139.4 137.5 201.9 100.9
June 2022, weighed down by recessionary
Dec-22 130.9 135.4 186.6 107.6
concerns and redirection of trade of some key
commodity exports from Russia and Ukraine. Jan-23 119.3 136.0 174.7 114.0
During last quarter, there was moderate rise in Feb-23 110.5 137.5 164.0 112.0
prices of industrial metals following recovery in Mar-23 103.6 134.8 158.0 108.4
China; crude oil remained range bound while Source: World Bank Pink Sheet

there was a significant drop in natural gas prices.

Chart 2.11: Movement of MCX iCOMDEX
Chart 2.10: Movement of S&P GSCI TR Index Composite

4500 150
4000 140
3500 130
3000 120
2500 110
2000 100
1500 90
1000 80
70
8

18

19

20

21

M 2
3
-1
l-1

-1
l-1

-2
l-2

-2
l-2

-2
l-2

2
-2

60
v-

v-

v-

v-

v-
ar

ar

ar

ar

ar

ar
Ju

Ju

Ju

Ju

Ju
No

No

No

No

No
M

18

19

20

21

22

S&P GSCI TR 5-yr Moving Average (S&P GSCI TR)

-1
l-1

-1
l-1

-2
l-2

-2
l-2

-2
l-2

-2
v-

v-

v-

v-

v-
ar

ar

ar

ar

ar

ar
Ju

Ju

Ju

Ju

Ju
No

No

No

No

No
M

Source: S&P Global Index value rebased to 100 as on March 30, 2018
Source: MCX

26
 Chapter 2 Review of Financial Markets

Chart 2.12: Movement of MCX iCOMDEX Indices during 2022-23

MCX iCOMDEX (Bullion, Metal,

MCX iCOMDEX Natural Gas

140 550
130 500

Energy & Crude Oil)

120 450
110 400
100 350
90 300
80 250
70 200
60 150
50 100
2 2 2 2 2 2 2 2 2 3 3 3
-2 -2 -2 -2 -2
2 -2 -2 -2 -2 -2 -2 -2 -2
ar r ay n l g p ct ov ec n b ar
-M - Ap -M -Ju - Ju - Au -Se -O -N -D - Ja - Fe -M
31 30 31 30 31 31 30 31 30 31 31 28 31

MCX iCOMDEX Bullion MCX iCOMDEX Base Metal MCX iCOMDEX Energy
MCX iCOMDEX Crude Oil MCX iCOMDEX Natural Gas

Index values rebased to 100 as on March 31, 2022

Source: MCX

Nonetheless, prices of all major commodity adverse weather events. On the other hand,
groups are expected to remain above pre- downside pressures may emerge in the event of
pandemic levels during CY 2023. Upside risks to materialisation of global recessionary concerns,
commodity prices may emerge from anticipated as weakening of global demand would lead to
supply constraints following output cuts by retreat in commodity prices- particularly in the
OPEC+, disruptions in supply chain in event of prices of energy and metal commodities.
further escalation of geopolitical conflicts and

27
 Annual Report 2022-23
Chapter 3:
Primary Markets
An efficient primary market facilitates capital
formation for the economy by bringing together
corporates / trusts seeking to mobilize resources
to finance productive and social activities and
investors seeking investment opportunities.
Besides, infrastructure financing is imperative
in India’s journey towards being an influential
force in the global economy. While the edifice
of Indian primary markets is built on disclosure-
based and investor protection regime, SEBI
regularly reviews and fine-tunes its regulatory
frameworks so as to adapt it to new business
models and other dynamic changes. The
following sections detail the developments in
primary markets during 2022-23, both in terms
of policy measures and market trends.
Chart 3.1: Trends of Fund Mobilisation through
Equity and Debt (` crore)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0 ensures that the offer document which is
2018-19 2019-20 2020-21
Equity-Public Equity- Private Debt-Public
Note: Equity-Public includes IPO, FPO and Rights issue.
3.1 EQUITY MARKETS
The primary equity markets witnessed heightened
activity in terms of the number of issues during
2022-23. However, the amount raised declined
across public and private modes of mobilisation
as it was weighed down due to high inflation
fuelled by geopolitical uncertainties and the
consequent monetary tightening. Nevertheless,
some highlights of the year included listing of
Life Insurance Corporation of India (LIC), the
largest Initial Public Offering (IPO) so far, in
terms of fund mobilization, and peak listing of
Small and Medium Enterprises (SMEs) in the
last five years. A brief of the developmental and
regulatory policies taken by SEBI for fostering
primary equity markets during 2022-23 is given
below:
3.1.1 Policy Developments
A.  Introduction of Pre-Filing of Offer
Documents: In order to ease the fund
raising process for corporates, pre-filing
of offer documents was introduced as an
alternative mechanism for Main Board
IPOs. Pre-filing mechanism allows issuers
to carry out limited interaction with Qualified
Institutional Buyers (QIBs), without having
to make any sensitive information public.
The issuer is required to make the offer
document public only when it desires
to undertake an IPO. The mechanism
2021-22 2022-23
Debt-Private
put out in the public domain incorporates
SEBI’s initial observations and would
be available to the investors for a period
of at least 21 days, thereby, assisting
them better in their investment decision
making process. Under the normal route,
Red Herring Prospectus (RHP), which
incorporates SEBI’s observations, remains
publicly available for only 3-5 days. In
28
 Chapter 3 Primary Markets

2022-23, two companies have pre-filed
their offer documents with SEBI.
B. 
Disclosure of Key Performance
Indicators: In view of new and emerging
business models adopted by various new
age technology companies, it was felt that
the disclosures under ‘Basis for Issue
Price’ section in offer document need to
be adequately supplemented with the non-
traditional pricing parameters, for realistic
assessment of issuer’s performance by
investors. To address the same, Issue
of Capital and Disclosure Requirements
(ICDR) Regulations were amended to
provide a framework for appropriate
disclosures on Key Performance Indicators
(KPIs) (Box 3.1).

Box 3.1: Enhancing Transparency in IPOs : Disclosure of Key Performance Indicators

SEBI (ICDR) Regulations have a detailed framework for disclosure of financial information that
requires the issuer to disclose audited and restated consolidated financial statements prepared in
accordance with applicable accounting standards for the last three financial years. However, there
was no such framework provided in the ICDR Regulations with respect to disclosure of key perfor-
mance indicators (KPIs). This was disclosed by the issuer companies in a discretionary manner to
suit their purpose. Therefore, the KPIs disclosed in different sections of the offer document may not
get enhanced scrutiny in an objective manner as regulations do not provide for such KPI numbers
to be audited/certified, or defined consistently.
ICDR Regulations under ‘Basis for Issue Price’ section of the offer document only required disclo-
sure on traditional financial parameters such as EPS, P/E, RoNW, NAV etc. Also, details of fund
raising through pre-IPO issuances by company are duly reflected in the Capital Structure section
of offer document. However, to ascertain price per share made to pre-IPO investors of company
at the time of such issuance, an investor needs to compute such information, as the same is not
disclosed directly in the offer document. Also, secondary transactions made by investors during pre-
IPO phase are also not available for disclosure in the offer document.
There has also been increase in filing of offer documents for IPOs by companies not having track
record / not having operating profit in preceding three years, mostly new age technology companies
(NATCs). NATCs generally remain loss making for a longer period before achieving break-even as
these companies in their growth phase opt for gaining scale over profits. Investors are on boarded
on these companies on the premise of future potential. The existing parameters for basis of issue
price were typically descriptive of companies / issuers which are profit making and do not relate
to a company / issuer that is loss making. Thus, these parameters may not aid investors in taking
investment decision w.r.t. loss making issuers.
Therefore, it becomes imperative that the disclosures under ‘Basis for Issue Price’ section, need
to be adequately supplemented with the non-traditional parameters like KPIs as well as disclosure
on pricing of the shares of the issuer company based on past transactions and past fund raising
from investors. Accordingly, ICDR Regulations were suitably amended to provide a framework and
mandate for appropriate disclosures on:
i. Key Performance Indicators (KPI’s) and
ii. Details relating to pricing of shares based on past transactions and past fund raising by
the issuer company (i.e. disclosure of weighted average cost of acquisition(WACA) of such
transactions) under the section ‘Basis for Issue Price’ in the offer document that are relevant
for assessing the issuer’s performance.

29
 Annual Report 2022-23
The enhanced disclosures will benefit investors in the following ways:-
i. Comprehensive information for investors to make informed decisions.
ii. Facilitating information symmetry between pre-IPO investors and public investors.
iii. Overcoming the deficiency in traditional valuation methods which may not be appropriate for
loss making companies.
C. 
Introduction of Issue Summary
Document and Dissemination of Issue
Advertisements: Towards facilitating
better information dissemination
for stakeholders and in line with
recommendation of Market Data Advisory
Committee (MDAC), issuers/ listed entities
have been mandated to file “Issue Summary
Document (ISD)” with stock exchanges in
XBRL format. Further, dissemination of all
advertisements in connection with a public
issue has been mandated in pdf format
on the website of the stock exchanges
from March 01, 2023. ISD is implemented
for IPO, Further Public Offerings (FPOs),
rights issues, preferential issues, Qualified
Institutional Placements (QIPs), American
Depository Receipts (ADRs)/Global
Depository Receipts (GDRs), Foreign
Currency Convertible Bonds (FCCBs) as
well as buy-backs, open offer and voluntary
delisting.
D. Rationalization of Methods for
Complying with MPS Norms: In order to
facilitate listed entities achieve Minimum
Public Shareholding (MPS) compliance,
few of the existing methods have been
reviewed and rationalized and two
additional methods have been introduced.
Under the revised mechanism, through the
open market route, in every financial year,
promoter(s) / promoter group can sell up to
2 per cent of the total paid-up equity share
capital of the listed entity, subject to five
times’ average monthly trading volume of
the shares of the listed entity or can sell
30
upto a maximum of 5 per cent of the paid-
up capital of the listed entity subject to
the condition that the public holding in the
listed entity shall become 25 per cent after
completion of such sale. Further, following
additional methods have been introduced
for achieving MPS compliance:
i. Increase in public holding pursuant to
exercise of options and allotment of shares
under an Employee Stock Option (ESOP)
scheme, subject to a maximum of 2 per
cent of the paid-up equity share capital of
the listed entity.
ii. Transfer of shares held by promoter(s) /
promoter group to an Exchange Traded
Fund managed by a SEBI registered
mutual fund, subject to a maximum of 5
per cent of the paid-up equity share capital
of the listed entity.
E. 
Amendments to the format of
Shareholding Pattern: To enhance
the granularity of disclosures in the
shareholding pattern filed by listed entities,
the format of shareholding pattern to be
filed quarterly by listed entities with the
stock exchanges was amended. Under
public shareholders, 19 new categories
and 3 new sub-categories were added
to capture more granular details /insights
into public shareholding. Disclosure of
a statement has also been mandated in
the shareholding pattern, showing foreign
ownership limits approved by the board of
directors / shareholders of a listed entity
and the limits utilized. It is vital information
for investors who may want to take a

conscious decision for investment in any
company considering its growth prospects
and foreign equity partnership. The revised
format has been made applicable for the
shareholding patterns filed for the quarter
ended September 30, 2022 onwards.
F.  Operationalisation of Social Stock
Exchange: During 2022-23, following steps
were taken towards operationalization of
the SSE:
i. Zero Coupon Zero Principal Instrument
(ZCZP) was notified as a security under
Securities Contracts (Regulation), Act,
1956 on July 15, 2022.
ii. Amendments to the ICDR, LODR and AIF
Regulations were notified, laying down the
regulatory framework for operationalization
of the SSE.
iii. A detailed framework for SSE was laid
down covering the Minimum requirements
to be met by non-profit organisations
(NPOs) for registration with SSE; Minimum
initial disclosure requirements for NPOs
raising funds through the issuance of
ZCZP; Annual disclosure by NPOs on SSE
which have either raised funds through
SSE or are registered with SSE; Disclosure
of Annual Impact Report by all SEs which
have registered or raised funds using SSE;
and Statement of utilization of funds.
iv. Guidelines were prescribed on Governing
Council for SSE specifying aspects related
to its composition and terms of reference.
v. Final approval was granted to BSE and
NSE for their SSE segment.
vi. A SSE Advisory Committee was
constituted under the Chairmanship of Dr.
R. Balasubramanian, Member, Capacity
Building Commission to advise SEBI on
matters relating to SSE. NABARD has
established as Capacity Building Fund
for developing the ecosystem of SSE.
Self-Regulatory Organisations has been
created by ICAI, ICSI and ICMAI in order
31
Chapter 3 Primary Markets
to empanel and regulate social auditors.
Certification program has been launched
by NISM for social auditors.
 s on March 31, 2023, seven NPOs were
A
registered on BSE-SSE. SEBI has also
requested the Government to consider
granting benefits of deduction under
section 80G of the Income Tax Act, 1961
to the holder of ZCZP as available to a
donor (assesse) for the donation made.
G. 
Monitoring of Utilization of Issue
Proceeds: As in the case of public
issues, monitoring of issue proceeds
was mandated for preferential
and QIP issues of size exceeding
` 100 crore vide amendment to ICDR
regulations. This will inform stakeholders
about deployment/ utilization of the funds
raised vis-à-vis the disclosed objectives in
offer document.
H. 
Review of the Approval Process for
Appointment and / or Removal of
Independent Directors: The existing
framework of appointment of Independent
Directors at listed entities, which required
shareholder approval by way of a special
resolution, was found to be problematic
in certain cases when multiple promoter
groups were not in agreement with each
other. Hence to address such scenarios,
an alternative mechanism was put in
place through an amendment to Listing
Obligations and Disclosure Requirements
(LODR) Regulations, 2015 empowering
minority shareholders. Vide the
amendment, approval of all shareholders
by simple majority (as required under
Companies Act) along with approval
by simple majority of non-promoter
shareholders i.e. “majority of minority” has
been prescribed to address such cases.
 Annual Report 2022-23
I. Exemption to Public Sector Companies
from Compliance with the Time-Limit:
It was observed that compliance with time
limit specified in LODR for appointment
of directors was difficult for public sector
companies as the appointment and its
timing depends on the approval by the
Government. Recognizing the same, a
proviso has been inserted to Regulation
17(1C) of the LODR Regulations to
allow public sector companies to obtain
shareholders’ approval for appointment
of directors to the board, in the immediate
next general meeting (EGM/AGM).
J.  lignment of the Definitions in
A in fund raising was possibly influenced by
Regulations: Vide amendments, definition
of Key Managerial Personnel (KMP) and
senior management and their respective
disclosure requirements were aligned
across ICDR Regulations, 2018 and
LODR Regulations, 2015. This will enable
stakeholders to assess the changes in
KMP and senior management from listing
to post listing, on a continual basis.
K.  Other Issue Related Policy Changes:
Some other key amendments to ICDR
regulations during 2022-23 are as under:
i. As hitherto there was no framework for
disclosure of hard underwriting and/or soft
underwriting, same was instituted through
an amendment to ICDR Regulations.
This will provide clarity with respect to
underwriting for shortfall in demand/
subscription to cover subscription risk
(hard underwriting) and underwriting for
shortfall in payment due to rejections to
cover payment risk (soft underwriting).
ii. Amendment to introduce pre-condition that
the issuer has received approval from the
stock exchanges for listing and trading
of all the pre-bonus securities excluding
ESOPs and convertible shares before
announcing the bonus issue.
iii. Amendment prescribing Bonus issue
32
by a listed issuer to be made only in
dematerialised form.
iv. Allowing pension funds which are
associates of the lead manager to
participate as an anchor investor in public
issue.
3.1.2 Market Activity and Trends Observed
A. 
Resource Mobilisation through Public
and Rights Issues: Fund raising through
public issues decreased by almost 50
per cent during 2022-23 compared to
2021-22, which was a peak year in fund
mobilisation through IPOs. The moderation
prevailing economic uncertainties, inflation,
geo political tensions and monetary
tightening – all of which affected companies’
prospective IPO plans as valuations took a
hit. However, there was a significant rise in
number of companies newly listed, as the
number of IPOs increased to 164 in 2022-
23 as compared to 120 during 2021-22. This
was on account of rise in listings in SME
Platform and hence the average size of the
IPOs was comparatively lower declining to
`334 crore as against `938 crore during the
same period. LIC, the largest IPO ever in
India, was listed in 2022-23.
Chart 3.2: Trends of Fund Mobilisation through
Equity (` crore)
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2018-19 2019-20 2020-21 2021-22 2022-23
IPO+FPO Rights Issue Preferential Allotment QIP
Source: BSE and NSE
Further, the number of rights issues also
increased to 73 in 2022-23 as against 43
in 2021-22, however, the amount mobilised
declined significantly in 2022-23 (Table 3.1).
 Chapter 3 Primary Markets

Table 3.1: Resource Mobilisation through Public and Rights Issues

(Amount in ` crore)
Percentage Share
2021-22 2022-23 in Total Amount
Particulars
Raised
No. Amount No. Amount 2021-22 2022-23
1) Public Issues, of which 121 1,12,567 165 59,072 81.0 89.7
A) IPOs of which 120 1,12,552 164 54,772 81.0 83.2
a) OFS* Component 14 21,573 11 29,046 15.5 44.1
b) Fresh Issues 64 6,963 114 3,700 5.0 5.6
c) Both (OFS + Fresh Issues) 42 84,017 39 22,027 60.5 33.5
Breakup of Both (OFS + Fresh Issue)
OFS - 49,479 - 9,264 35.6 14.1
Fresh - 34,538 - 12,763 24.9 19.4
B) FPOs 1 15 1 4,300 0.0 6.5
2) Rights Issues 43 26,327 73 6,751 19.0 10.3
Total (1+2) 164 1,38,894 238 65,823 100.0 100.0

Note: The primary market resource mobilization is inclusive of amount raised on the SME platform
*OFS - Offer for Sale
Source: BSE and NSE

i. 
Sector-wise Resource Mobilisation:
237 companies were from private sector
and one company from the public sector
mobilised resources from primary market
in 2022-23 as compared to 164 companies
from the private sector in 2021-22. In 2022-
23, companies from the private sector
mobilized `45,266 crore constituting 68.8
per cent of the resource mobilisation.
ii. 
Size-wise Resource Mobilisation:
During 2022-23, 84.0 per cent of the
resources amounting to `55,310 crore was
mobilized by 27 issues with size more than
`500 crore (Table 3.2).

Table 3.2: Size-wise Resource Mobilisation

(Amount in ` crore)
Percentage Share
in Total Amount
Issue Size
2021-22 2022-23 Raised
No. Amount No. Amount 2021-22 2022-23
< ` 5 crore 32 111 22 75 0.1 0.1
≥ ` 5 crore & < ` 10 crore 18 136 37 280 0.1 0.4
≥ ` 10 crore & < ` 50 crore 49 1,316 117 3,087 1.0 4.7
≥ ` 50 crore & < ` 100 crore 4 271 15 956 0.2 1.5
≥ ` 100 crore & < ` 500 crore 13 3,172 20 6,114 2.3 9.3
≥ ` 500 crore 48 1,33,889 27 55,310 96.4 84.0
Total 164 1,38,894 238 65,823 100.0 100.0
Source: BSE and NSE
Note: Includes rights, and public issues

33
 Annual Report 2022-23

iii. 
Industry-wise Resource Mobilisation:
Industry-wise highest resource mobilization
in 2022-23 was from ‘Insurance’ category
which accounted for 31.2 per cent of the
total mobilization, through the single IPO of
LIC, followed by ‘Miscellaneous’ (30.8 per
cent) and ‘Healthcare’ (6.9 per cent). It may
be noted that since the pandemic, resource
mobilisation of companies from healthcare
sector has increased significantly.

Table 3.3: Industry-wise Resource Mobilisation (Amount in ` crore)

2021-22 2022-23
Percentage Percentage
Industry Share Share
No. of No. of
Amount in Total Amount in Total
Issues Issues
Amount Amount
Raised Raised
Airlines 0 0 0.0 0 0 0.0
Automobiles 4 6,326 4.6 1 9 0.0
Banks/FIs 1 1,200 0.9 6 934 1.4
Cement/ Constructions 13 8,200 5.9 16 1,201 1.8
Chemical 7 6,461 4.7 12 4,086 6.2
Consumer Services 2 1,101 0.8 2 9 0.0
Electronic Equipment/
5 53 0.0 12 1,627 2.5
Products
Engineering 4 650 0.5 7 819 1.2
Entertainment 0 0 0.0 2 63 0.1
Finance 5 3,532 2.5 7 3,745 5.7
Food processing 9 4,106 3.0 11 1,447 2.2
Healthcare 20 10,590 7.6 14 4,552 6.9
Hotels 5 4,304 3.1 1 9 0.0
Info Tech 13 3,794 2.7 9 1,739 2.6
Miscellaneous 60 52,315 37.7 121 20,251 30.8
Roads & Highways 1 962 0.7 0 0 0.0
Telecom 2 21,276 15.3 1 26 0.0
Textile 7 4,359 3.1 9 408 0.6
Plastic 2 17 0.0 3 26 0.0
Power 0 0 0.0 1 4 0.0
Printing 1 12 0.0 0 0 0.0
Oil & Natural Gas 2 3,619 2.6 2 4,310 6.6
Insurance 1 6,019 4.3 1 20,557 31.2
Total 164 1,38,894 100.0 238 65,823 100.0
Source: BSE and NSE

34
 Chapter 3 Primary Markets

iv. 
Resource Mobilisation on Small and Chart 3.4: Size-wise Resource Mobilisation by
Medium Enterprises Platform: The SME Issuers
Small and Medium Enterprises (SME) 1,344

platform witnessed significant uptrend

both in terms of number of companies 682

listed as well as the amount raised in 234

72
2022-23 compared to 2021-22. During 20 31 44 30

2022-23, 125 companies were listed in < ` 5 Crore ≥ ` 5 Crore & < ` 10
Crore
≥ ` 10 Crore & < ` 25
Crore
≥ ` 25 Crore

the SME platform mobilising `2,333 crore No of Issues Amount (in ` crore)

compared to `958 crore raised through 70

Source: BSE and NSE
issues in 2021-22 (Chart 3.3).
B. 
Resource Mobilisation through Qualifi
Chart 3.3: Resource Mobilisation through SME ed Institutional Placement: QIP is an
IPOs alternative mechanism for the listed
2500 2333 companies to raise funds from qualified
2000 1844
institutional investors in the domestic
1500
958
market. During 2022-23, `8,212 crore
1000
495 were raised through QIPs (including
500

0
110 46 26 70 125 216
Institutional Placement Programme - IPP)
No. of issues Amount (in ` crore) as against `31,441 crore raised during
2018-19 2019-20 2020-21 2021-22 2022-23
2021-22. (Table 3.4).
Source: BSE and NSE
Table 3.4: Resource Mobilisation through
During 2022-23, out of 125 issues listed on Qualified Institutional Placement
the SME platform, 20 issues were of issue
(Amount in ` crore)
size less than `5 crore, 31 issues were of
issue size of `5 crore or more but less than Total
`10 crore, 44 issues were of issue size of Year Number of
Amount
Issues
`10 crore or more but less than `25 crore
and 30 issues were of issue size of `25 2021-22 29 31,441
crore or more (Chart 3.4). 2022-23 11 8,212
Source: BSE and NSE
During 2022-23 a total of 58 companies
(of which 25 companies at NSE and 33 Out of a total of 11 QIPs in 2022-23, five QIPs
companies at BSE) migrated from SME were of size less than `100 crore, three QIPs
platform to Main Board compared to 68 were of size `100 crore or more but less than
companies (of which 33 companies at NSE `500 crore and three QIPs were of issue size
and 35 companies at BSE) in the previous of `500 crore or more (78.1 per cent of total
year. resource mobilization through QIPs) (Table 3.5).

35
 Annual Report 2022-23

Table 3.5: Size-wise Resource Mobilisation through Qualified Institutional Placements

(Amount in ` crore)
Percentage Share in
2021-22 2022-23 Total Amount Raised
Issue Size during the Year
No. of No. of
Amount Amount 2021-22 2022-23
Issues Issues
< ` 100 crore 2 159 5 325 0.5 4.0
≥ ` 100 crore & < ` 500 crore 8 2,643 3 1,475 8.4 18.0
≥ ` 500 crore 19 28,639 3 6,412 91.1 78.1
Total 29 31,441 11 8,212 100.0 100.0
Source: BSE and NSE

C. 
Resource Mobilisation through securities are issued to a selected group
Preferential Allotments: Preferential of investors. During 2022-23, ` 83,832
allotments is another mode of resource crore were raised through preferential
mobilization used by the listed issue against ` 60,697 crore raised
companies wherein shares or convertible during the previous year (Table 3.6).

Table 3.6: Resource Mobilisation through Preferential Allotments

(Amount in ` crore)
Only NSE Only BSE Only MSEI Common Total
Year No. of No. of No. of No. of No. of
Amount Amount Amount Amount Amount
Issues Issues Issues Issues Issues
2021-22 30 268 160 2,732 2 3 157 57,694 349 60,697
2022-23 35 375 211 2,735 7 25 200 80,697 454 83,832
Source: BSE, MSEI and NSE

D. 
Applications for Public Issuance days in 2021-22. 26 applications
(Equity) on the Main Board of remained pending with SEBI in 2022-23
Exchanges: During 2022-23, SEBI as compared to 49 at the end of 2021-
received 91 applications for public 22 (Table 3.7). The increase in average
issuances as compared to 149 in 2021- time, with a lower base of documents
22. 114 offer documents were processed processed, was due to complicated
in 2022-23 as compared to 112 in 2021- issues where the concerns of other
22. The median time for processing of regulatory / statutory bodies needed to
applications was 28 working days in be addressed.
2022-23 as compared to 27 working

Table 3.7: Time taken for Regulatory Approval of Applications for Public Issues
Total Applications Median Time for Processing of
Year Processed Pending
received Applications
2021-22 149 112 49 27 (28)
2022-23 91 114 26 28 (34)
Note: Median time taken at SEBI for processing of applications (excluding time for which the application is pending with
intermediary or with the other regulator) in working days. The figures in bracket represent average working days taken at
SEBI for processing of applications (excluding time for which the application is pending with intermediary or with the other
regulator).

36
 Chapter 3 Primary Markets

3.2 DEBT MARKETS AND HYBRIDS
Development of corporate debt markets remains
critical for stimulating India’s investment driven
growth by imparting additional avenues for
corporates and other entities to raise long
term capital, which has implications on the
overall real economic growth. Over the years,
Government and SEBI have been formulating
several measures to develop and strengthen
the corporate debt markets. Important policy
measures taken by SEBI towards development
of corporate debt markets during 2022-23 are
summarised below:
3.2.1 Policy Developments
A.  Green Debt Securities: In order to
facilitate Municipal Corporations in issuing
green debt securities, it was clarified that
an issuer under the SEBI (Issue and Listing
of Municipal Debt Securities) (ILMDS)
Regulations, 2015, may issue a green debt
security if it falls within the definition of
“green debt security”, as per SEBI (Issue
and Listing of Non-Convertible Securities)
(NCS) Regulations, 2021. Further, the
disclosure requirements pertaining to
issuance and listing of green debt securities
were updated to include details of the
perceived social and environmental risks
and proposed mitigation plan associated
with the project(s), environmental impact
reporting of the projects financed by the
green debt securities and disclosure of
major elements of Business Responsibility
and Sustainability Reporting (BRSR) etc.
This will help in improving transparency
and inculcating good governance practices
at the issuer level while protecting the
interests of the investors. In addition,
certain do’s and don’ts are prescribed
that an issuer of green debt security
must ensure. This will help to avoid the
occurrence of greenwashing.

Box 3.2: Sustainable Finance in Indian Capital Markets: Green Bonds and Beyond
Bolstering energy transition towards a low carbon economy is a new mandate for governments across
the globe. In the aftermath of repeated environmental and climate adversities and a subsequent rise
in the demand for sustainable avenues of investments from a section of new age investors, the focus
has shifted to sustainable finance. Green bonds, which blazed a trail in sustainable finance sphere,
are innovative debt instruments that can provide a fillip to the journey towards a green economy.
Through an amendment to NCS Regulations, 2021, the scope of definition of ‘green debt security’
was enhanced by including new modes of sustainable finance. It introduced the concept of blue
bonds (related to water management and marine sector), yellow bonds (related to solar energy)
and transition bonds as sub categories of Green Debt securities. This will help issuers of green debt
securities to raise funds for a broader category of projects/ asset class at a relatively lower cost
than traditional corporate bonds. This will also allow more investment opportunities for Investors
while contributing to sustainable growth. Also, inclusion of transition bonds as part of green debt
securities will allow issuers to raise funds for transitioning to a more sustainable form of operations
in line with India’s Intended Nationally Determined Contributions (INDCs).

B. Registration and Regulatory Framework reaching out to a wider set of investors,

for Online Bond Platform Providers:
NCS Regulations, 2021 were amended
to provide a regulatory framework for
Online Bond Platform Providers (OBPPs).
Such platforms possess huge potential in
especially retail and non-institutional
investors. Therefore, the framework is
aimed at bringing such platforms within
regulatory ambit, by requiring the OBPPs
to register as stock brokers in the debt

37
Annual Report 2022-23

segment of the stock exchanges. As the application for registration by OBPPs

entities operating/ desirous of operating as as stock brokers was extended to March
OBPPs were facing difficulties, timeline for 01, 2023 (Box 3.3).

Box 3.3: Online Bond Platform Providers: Widening the Regulatory

Ambit for Investor Protection

During the past few years (since Covid-19), there has been an increase in the number of Online
Bond Platforms (OBPs), offering debt securities to non-institutional investors. Also, there has been
a significant increase in the number of registered users who have transacted through these OBPs.
It was observed that majority of the investors transacting on the bond platforms are non-institutional
investors.

Year No. of users Percentage of Non- No. of investors Percentage of Non-institutional

registered on institutional users (unique)transacted investors (unique) transacted on
OBPs registered on OBPs on OBPs OBPs
2020-21 47,410 98.9 1,834 99.5
2021-22 3,41,539 98.9 23,719 99.8
2022-23 5,77,590 98.4 21,051 99.5
(till July 2022)

Most of such bond platforms are fintech companies or are backed by brokers/registered
intermediaries. Even some of OBPs operate in a manner similar to organized avenues for trading,
like stock exchanges, bringing together buyers and sellers for executing trades in debt securities.
While OBPs provide an avenue fora large group of investors, particularly non-institutional investors
to access the bond market, their operations were outside SEBI’s regulatory purview. Additionally, it
was observed that there was inadequate transparency and disclosures to the investors dealing with
such platforms, lack of Investor grievances redressal mechanism, absence of standards for Know
Your Client (KYC) norms and inadequate Investor protection framework. Furthermore, the role of
stock exchanges/ clearing corporations were also appeared to be bypassed in many instances.

With the bond market offering tremendous scope for development, particularly in the non-institutional
space, there was a need to place checks and balances in the form of transparency in operations
and disclosures to the investors dealing with such OBPs, measures for mitigation of payment and
settlement risk, availability of redress mechanism in case of complaints, etc. Accordingly, SEBI
(Issue and Listing of Non-Convertible Securities) Regulations, 2021 were amended to provide a
regulatory framework for Online Bond Platform Providers (OBPPs). The regulatory framework has
mandated the following:
i. Standardized Operating Framework for OBPPs which includes objective, fair and transparent
criteria for registration of users/investors/sellers, Standardized KYC requirements, Risk
profiling and issuance of alerts to investors and sellers,
ii. Minimum disclosure requirements and conformity with the Advertisement Code
iii. Robust investor grievance redressal mechanism
iv. Comprehensive risk management framework
v. Disclosure of conflict of interest
vi. Data integrity-preservation, access and usage of data
vii. Reporting and disclosure requirements
Given the potential such platforms possess in reaching out to a wider set of investors, especially,
non-institutional investors, the new framework aims to ensure efficient offering of services to them
on one hand and retention of the business opportunities for the bond platforms on the other.

38
 Chapter 3 Primary Markets

C. 
Reduction in Denomination: To give
impetus to the secondary market for
corporate bonds through increased
participation and enhancement of liquidity,
face value of each debt security or non-
convertible redeemable preference share
issued on private placement basis was
reduced from ` 10 lakh to ` one lakh.
D. Restriction on the number of International
Securities Identification Number: To
reduce fragmentation and deepen liquidity
in the corporate bond market, maximum
number of ISINs maturing in any financial
year for an issuer of debt securities (on
private placement basis) has been reduced
from 12 to 9. However, where the total
outstanding amount across the nine ISINs,
maturing in a given financial year, reaches
`15,000 crore, three additional ISINs would
be permitted to mature in the same financial
year. This will be applicable to ISINs utilised
to issue debt securities from April 1, 2023.

Box 3.4: Improving Transparency and Participation through EBP Platform:

Review of Regulatory Provisions
SEBI had received representations from market participants, on the Electronic Book Provider
platform (EBP), highlighting concerns on the issues of ‘fastest finger first’ (allotment based on
time priority in bidding for issuances with fixed parameters), certain bidders not getting allocations
despite having worked on the issuance pre-listing, high ratio of green shoe to base issue size, limits
on arrangers placing bids on behalf of clients, etc. Further, certain issuers have expressed the
need for introduction of ‘anchor investor’ as an option, in order to assess the demand and receive
assurance from certain prospective investors towards subscription.
In light of all the above, the provisions of Chapter VI of the NCS Operational Circular pertaining to the
EBP platform was revised in 2022-23 to incorporate multiple provisions for enhanced participation.
Some of the major measures taken include the following:
a. Introduction of the concept of Anchor Investor as an option to issuers, subject to a maximum
allotment of 30 per cent; which would assist issuer in assessing demand for its issuance;
b. In order to address the issue of ‘fastest finger first’, the bidding process for issues with fixed
parameters was modified to incorporate price based bidding and allocations based on ‘price
time priority’; which in turn will bring bidders on level playing field;
c. Threshold for applicability of EBP process, has been reduced to include all issuances of debt
securities and NCRPS of ` 50 crore or more; which will bring larger share of the market on the
stock exchange platform and thereby enhance transparency;
d. Green shoe cannot be more than five times the base issue size which restricts irrational
discretion in the hands of the issuer with respect to base issue size and facilitates better bidding
and price discovery by bidders;
e. The limit for investment by arrangers on behalf of clients has been increased to ` 100 crore or
5 per cent of the base issue size, whichever is lower, thereby facilitating arrangers in garnering
response of and assisting larger number of investors to participate in bidding;
f. Corresponding penalty provision has been introduced for arrangers for repetitive default by its
clients; which would ensure commitment of arrangers in bringing genuine investors.
The provisions of the circular came into effect from January 1, 2023.

39
 Annual Report 2022-23
E. 
Revision of Timelines for Listing of
Securities Issued on Private Placement
Basis: To standardize the process of
issuance and listing of securities on private
placement basis through EBP platform or
otherwise and to bring about efficacy in the
listing process to expedite the availability
of securities for trading by the investors,
timeline for listing was reduced from T+4
to T+3 days (wherein T refers to issue
closure date) from January 01, 2023.
Further, to bring about clarity in the process
of issuance and listing, a list of the steps
involved for pre-listing and post-listing,
and relevant timelines have been detailed.
Timelines have also been prescribed for
submission of application for in-principle
approval from stock exchanges.
F. Use of Issue Proceeds of NCS: The LODR
Regulations were amended whereby the
timeline and frequency for submission
of statement indicating the utilization of
issue proceeds of NCS and disclosure
of material deviation in the use of issue
proceeds were specified and aligned with
the timelines for submission of financial
results. This was aimed at enhancing ease
of doing business for the issuers.
G. Issuance and Listing of Perpetual Debt
Instruments: In order to give more clarity
on the applicability of NCS Regulations,
2021, SEBI has clarified that only securities
which have the following characteristics
shall necessarily be required to comply
with the provisions of the NCS Regulations,
2021:
i. The issuer is permitted by RBI to issue
such instruments,
ii. The instruments form part of non-equity
regulatory capital,
iii. The instruments are perpetual debt
instruments, perpetual non-cumulative
preference shares or instruments of similar
nature and
40
iv. The instruments contain a discretion with
the issuer/ RBI for events including but not
restricted to all or any of the events: like
conversion into equity , write off of interest/
principal, skipping/ delaying payment of
interest/principal, making an early recall
and changing any terms of issue of the
instrument.
H. 
Timelines for Public Issue of Debt
Securities and NCRPS: NCS Regulations,
2021 were amended, to provide that a
public issue of debt securities and NCRPS
shall be kept open for subscription for a
minimum period of three working days and
maximum period of ten working days. The
amendment was aimed at bringing about
uniformity in requirements for entities
proposing to make public issuance of debt
or equity.
I.  Disclosure/ Submission of Financial
Results: LODR Regulations were
amended for incorporating changes in
disclosure/ submission requirements
pertaining to financials for promoting ease
of doing business for the debt listed issuers
as given below:
i. The timeline for submission of financial
results quarterly financials by issuers of
debt securities were aligned with that for
equity listed entities;
ii. Listed entities which are governed by
separate statutes and which are not
constituted as ‘companies’ under the
provisions of the Companies Act, 2013
were provided relief in terms of timelines
for submission of audited financial results
iii. Listed entities shall disclose all ratios/
equivalent financial information mandated
under applicable laws, if any. It was
also clarified that line items disclosure is
applicable on both quarterly and annual
bases
iv. If the entity has submitted both standalone
and consolidated financial results to the

stock exchange(s), it may publish only the
consolidated financial results and the line
items in the newspaper.
J. Other Policy Measures
i. In order to provide a holistic picture of all the
borrowings and the status of encumbrance
on the assets of the listed entity, the format
of security cover certificate was revised and
the manner of its preparation, submission
and calculation of security cover ratios
were specified. Further, to ensure effective
monitoring of covenants of the listed debt
securities and recovery expense fund and
adequate disclosure by DTs, manner of
such monitoring and disclosure thereof
was specified.
ii. To enhance ease of doing business and
to provide adequate time to the first time
issuers of listed debt securities to undertake
the formalities, the stock exchanges were
advised to take an undertaking from the
issuers, that Articles of Association (AoA)
will be amended within a period of six
months from the date of the listing of debt
securities.
iii. It was clarified that the provisions of the
circular pertaining to SoA by entities who
have listed their NCDS/ NCRPS shall not
apply to a SoA which solely provides for an
arrangement between a debt listed entity
and its unlisted wholly owned subsidiary.
iv. To enable the issuers and other market
stakeholders to get access to all the
applicable circulars at one place as well as
Chart 3.5: Trends of Fund Mobilisation through Debt Issues (` crore)
800,000
600,000
400,000
200,000
0
2018-19 2019-20
Public Issues
Source: BSE and NSE
41
Chapter 3 Primary Markets
assist in effective regulation of the corporate
bond market, a Single Operational Circular
for post listing requirements under LODR
Regulations was issued.
v. In line with relaxations provided by
MCA, SEBI relaxed the requirement (till
December 31, 2022) which prescribes that
an entity with listed NCS shall send a hard
copy of statement containing the salient
features of all the documents, to those
holders of NCSs who have not registered
their email address(es).
vi. In view of the difficulty faced by large
corporates to comply with the requirement
of raising minimum 25 per cent of their
incremental borrowings in a financial
year through issuance of debt securities,
timeline of contiguous block specified of
two years from 2021-22 was extended to
three years.
3.2.2 Market Activity and Trends Observed
A. Corporate Bonds: During 2022-23,
`7,63,673 crore was mobilised through
1,558 debt issues which was 27.4
percent higher than the funds mobilised
during previous year (Table 3.8). Funds
mobilised through electronic book provider
(EBP) has also increased by 36.6 percent
in 2022-23 compared to 2021-22. The data
reveals the trend of increasing reliance of
corporates on debt markets for raising
funds, in the midst of rising interest rate
scenario.
2020-21 2021-22 2022-23
Private Placement
 Annual Report 2022-23

Table 3.8: Resource Mobilization through Public Issues and Private Placement

2021-22 2022-23
Period / Category
No. of Issues Amount (` crore) No. of Issues Amount (` crore)
Public Issues 28 11,589 34 9,212
Private Placement* 1,405 5,88,037 1,524 7,54,461
of which through EBP Issues 784 5,22,337 862 7,13,596
Total 1,433 5,99,626 1,558 7,63,673
Note: Data for debt public issues have been taken on the basis of final post issuance reports received.
*Listed issues; EBP - Electronic Book Provider issues included in the total
Source: BSE and NSE.

Of the `9,212 crore raised through 34 public was for issue size of below ` 500 crore. There
issues, all the issues were from private sector. were only two public issues of size above ` 500
Size-wise comparison shows that 78.3 percent crore in 2022-23 compared to seven issues in
of the funds mobilised through public issues 2021-22 (Table 3.9).

Table 3.9: Size-wise Resource Mobilization through Public Issues

Issue Size 2021-22 2022-23

No. of Amount Percentage No. of Amount Percentage
Issues (` crore) Share in Total Issues (` crore) Share in Total
Amount Amount
< ` 50 crore 1 50 0.4 0 0 0.0
≥ ` 50 crore & < 1 94 0.8 7 627 6.8
` 100 crore
≥ ` 100 crore & < 19 5,097 44.0 25 6,585 71.5
` 500 crore
≥ ` 500 crore 7 6,348 54.8 2 2,000 21.7
Total 28 11,589 100.0 34 9,212 100.0
Source: BSE and NSE

During 2022-23, all the 34 public issues were from financial sector. (Table 3.10).

Table 3.10: Industry-wise resource mobilization through Public Issues

(Amount in ` crore)
2021-22 2022-23
Sector No. of Percentage Share in No. of Percentage Share in
Amount Amount
Issues Total Amount Issues Total Amount
Finance 26 10,539 90.9 34 9,212 100.0
Other
2 1,050 9.1 0 0 0.0
sectors
Total 28 11,589 100.0 34 9,212 100.0
Source: CDSL and NSDL.

42

B. Commercial Papers Listed : The value
of Commercial Papers (CPs) listed on
exchanges has reduced by 32 percent to
Table 3.11: Commercial Papers Listed
Year No. of No. of issuers No. of
listed who have unique
issuers# listed its CPs# ISINs
2021-22 251 244 3,550
2022-23 222 212 3,401
Note: # at the end of respective period
Source: BSE and NSE
C. 
Funds Raised Through Issuance of
Municipal Bonds : In 2022-23, there
was only one issue of municipal bonds by
Indore Municipal Corporation amounting to
` 244 crore.
3.3 CORPORATE GOVERNANCE AND
CORPORATE RESTRUCTURING
Prompt disclosures, transparency, reducing
information asymmetry, investor protection and
maintaining self-discipline are the basic tenets
for good corporate governance. SEBI has
implemented well knitted regulatory norms to
ensure robust corporate governance and enable
corporate restructuring. The following sections
highlight the major policy measures taken by
SEBI in 2022-23 for enhancing transparency
and governance of listed entities and also show
key trends in corporate restructuring.
3.3.1 Policy Developments
A.  ESG Disclosures for Listed Entities:
In order to enhance the reliability of ESG
disclosures, the Business Responsibility
and Sustainability Report (BRSR) Core
shall be introduced, which contains a
limited set of Key Performance Indicators
(KPIs), for which listed entities shall need
43
Chapter 3 Primary Markets
`13,44,270 crore in 2022-23 as compared
to ` 19,76,279 crore in 2021-22 (Table
3.11).
Value of CPs listed Amount of outstanding
at exchanges CPs listed on Exchanges#
(` crore) (` crore)
19,76,279 3,43,642
13,44,271 3,38,420
to obtain reasonable assurance. A glide
path was prescribed for applicability of
BRSR Core, beginning with the top 150
listed entities (by market capitalization)
from 2023-24 which shall be gradually
extended to the top 1000 listed entities by
2026-27. A number of companies have
significant ESG footprints in their value
chain. In order to increase transparency,
ESG disclosures and assurance (BRSR
Core only) shall be introduced for the
value chain of listed entities, with certain
thresholds that shall be specified. The
requirements of disclosure and assurance
shall be applicable to the top 250 listed
entities (by market capitalization), on a
comply-or-explain basis from 2024-25 and
2025-26, respectively.
B. 
Disclosure of material events or
information by Listed Entities: It was
observed that there was ambiguity
in determining materiality of events /
information for the purpose of disclosure
by listed companies which in turn led
to information asymmetry and rumours
mongering in the market. To prevent the
same, amendments were made to LODR
regulations, which is detailed in Box 3.5:
 Annual Report 2022-23

Box 3.5: Disclosure of Material Events: Ensuring Consistency and Uniformity

Regulation 30 of LODR Regulations requires listed entities to disclose material events/ information
to the stock exchanges. The events specified under Para A of Part A of Schedule III of LODR
Regulations (Para A) are deemed to be material events. These events are necessarily required to
be disclosed by the listed entities. Events enumerated under Para B of Part A of Schedule III of
LODR Regulations (Para B) are required to be disclosed based on application of the guidelines for
materiality, for which the listed entities are required to frame Materiality Policy. The listed entities
had discretion in terms of defining materiality.
Timely dissemination of information helps in reducing information asymmetry, promotes transparency
and enables investors to take informed decision. Instances of inadequate, inaccurate, misleading
and delayed disclosures of material events / information by listed entities leads to information
asymmetry in the market. Listed entities had requested that, guidance in more definite terms was
required for facilitating a uniform approach in determining materiality of events or information.
Accordingly, in order to bring more transparency and to ensure timely disclosure of material events
or information by listed entities, the Board, inter-alia, decided to amend the LODR Regulations to
provide for the following:
i. Introduction of a quantitative threshold for determining ‘materiality’ of events / information.
ii. Stricter timeline for disclosure of material events / information for which decision has been
taken in the meeting of the Board of directors (within 30 minutes) and which are emanating
from within the listed entity (within 12 hours).
iii. Market rumours to be verified and confirmed, denied or clarified, , by top 100 listed entities by
market capitalization effective from October 1, 2023 and by top 250 listed entities with effect
from April 1, 2024.
iv. Addition of a few new material events and modification of certain material events.
This is expected to provide shareholders, investors and public at large, timely access to all material
information for taking investment decisions and engagement with the listed entity. Market analysts
will also have timely access to all material information for monitoring the performance and operations
of the listed entity. In short, information asymmetry is expected to be substantially addressed, for
better price discovery of securities.

C. Change in Determination of Open Offer 60 days volume weighted average market

Price in case of Disinvestment of PSU
Companies: It was observed that market
prices of the PSU companies undergoing
disinvestment process were influenced
by disclosures made as part of public
announcements related to disinvestment
process. In cases of disinvestment which
results in change in control, the consequent
rise in prices increased the liability of
acquirers who were in the process of
taking over such companies. In view of
the same, the requirement of calculating
price for determining open offer price was
dispensed in such cases of disinvestment.
D. 
Amendment to SEBI (Buy-back of
Securities) Regulations, 2018: In view
of the challenges and limitations observed
in buyback through stock exchange route,
it was decided to dispense the same
in a phased manner without disrupting
the market. Amendment to Buyback
Regulations were made to this effect which
are detailed in Box 3.6.

44
 Chapter 3 Primary Markets

Box 3.6: Rationalizing Buyback Mechanism for Efficient Price Discovery

Buy-back Regulations, facilitates listed entities to undertake buy-back through tender offer, or
from the open market through stock exchanges via book-building process . It was observed that
buyback through stock exchanges had certain drawbacks as a single investor would benefit over
others, if his entire order matches with the order placed by the company. Further, this corporate
action interferes with the efficient price discovery mechanism for the security.
In order to rationalize the methods available for companies to carry out buy-back and in the interest
of the investors, SEBI has decided to introduce a glide path (table below) with respect to reduction
in the maximum limit and the time for buyback offer through stock exchange mechanism and
subsequently dispense with this route from April 01, 2025.
Effective Date
Parameter
April 01, 2023 April 01, 2024 April 01, 2025
Maximum Limit (per cent) 10 5 0
Time Period for completion of 66 working days 22 working days Not Applicable
buy-back offer
Meanwhile, it was decided to undertake buyback through stock exchange mechanism on a
separate window of a stock exchanges till such time this route it is in force. At the same time,
with an aim to enhance ease of doing business, and to incentivise the tender route medium, the
requirement of filing Draft Letter of Offer (DLoF) with SEBI under Buyback through tender offer has
been dispensed with. Further, the timelines have also been shortened to enable early completion
of buyback process.
These changes are expected to encourage companies to opt for tender offer route, which is more
equitable vis-à-vis stock exchange route thereby, benefitting the shareholders, as the acceptance
of shares under buyback is proportionate. The amendments will also ensure quicker receipt of
buyback consideration due to the proposed reduction in timeline for completion of buyback.

E. Sale, Lease or Disposal of F. 

an Undertaking of a Listed Entity
outside the “Scheme of Arrangement”
Framework: It was observed that there
was regulatory arbitrage in terms of
requirement of approval from shareholders
when a listed entity either sells, leases
or disposes an undertaking outside the
scheme of arrangement framework vis-à-
vis when implemented through scheme of
arrangement framework. To harmonise the
frameworks and to empower shareholders,
it has been mandated to disclose the
objects of and commercial rationale for
and use of sale proceeds, along with the
approval of shareholders through “majority
of minority” (in addition to special resolution
as required under the Companies Act,
2013).
Disclosure of certain types of
agreements binding listed entities: It
was observed that promoters enter into
agreements without the knowledge and / or
consent of the listed entity. These bind the
listed entities and can have repercussions
on their management/ control and impose
restrictions. To address the same and to
provide information to shareholders, it
has been mandated that any agreement,
which, either directly or indirectly, impacts
the management or control or imposes
any restriction or creates any liability upon
the listed entity has to be disclosed to the
stock exchanges.
G. Other Policy Measures
i. In order to have a regulatory check by SEBI
and stock exchanges on compliance by

45
 Annual Report 2022-23
material subsidiaries of listed entities, it has
been mandated to disclose specific details
of material subsidiaries of a listed entity,
including date and place of incorporation,
and name and date of appointment of the
statutory auditors of such subsidiaries, in
the annual report of the listed entity.
ii. In order to prevent situations of
permanency in special rights granted to
certain shareholders, amendment has
been notified mandating periodic approval
of shareholders by way of a special
resolution once in every 5 years for any
special right granted to a shareholder of a
listed entity.
iii. To empower the shareholders, amendment
has been notified that any director
appointed to or serving on the board of
a listed entity from April 1, 2024 would
require periodic shareholder approval,
once in every 5 years from the date of
first appointment. Further, if a director
is continuing with a gap of more than 5
years, shareholders’ approval is required
for his / her continuation in the first general
meeting held after April 1, 2024.
Table 3.12: Trends in Open Offers
Objectives
Consolidation of
Change in control
Year holdings
No. of Amount No. of Amount
Offers (` crore) Offers (` crore)
2021-22 54 15,485 1 15,299
2022-23 80 35,508 5 1,870
B. 
Issuance of Observations on Offer
Documents: During 2022-23, 108
draft letter of offers for open offers were
processed by SEBI, of which 21 draft letter
of offers for open offers were filed during
2021-22. Out of 108 draft letters of offer
46
iv. To foster ease of doing business,
timeline for submission of first financial
results by newly-listed entities have been
streamlined. Further, a timespan of three
months has been specified for filling up
of vacancies of Directors, Compliance
Officer, Chief Executive Officer (CEO)
and Chief Financial Officer (CFO) in timely
manner.
3.3.2 Market Activity and Trends Observed
A. Open Offer: During 2022-23, 86 open
offers with open offer size aggregating
to `37,384 crore were closed compared
to 72 open offers with open offer size
aggregating to `33,075 crore which were
closed in 2021-22. Out of 86 open offers
closed during the year, 80 open offers with
offer size aggregating to `35,508 crore
were made with the objective of change in
control, five open offers of size aggregating
to `1,870 crore were made with the
objective of consolidation of holdings and
one open offer with offer size of `6 crore
was made with the objective of substantial
acquisition of shares (Table 3.12).
Total
Substantial
Acquisition No. of Amount
No. of Amount Offers (` crore)
Offers (` crore)
17 2,292 72 33,075
1 6 86 37,384
processed, observations were issued in
respect of 92 letters of offer during 2022-
23 and 16 draft letters of offer are pending
with SEBI for issuance of observation letter
as on March 31, 2023 (Table 3.13).
 Chapter 3 Primary Markets

Table 3.13: Status of Draft Letters of Offers for Table 3.14: Exemption applications under
Open Offers Regulation 11 of Takeover Regulations

Status 2021-22 2022-23 Status 2021-22 2022-23

Pending draft letters of offer 10 21
Application pending at the 16 5
at the beginning of the year
beginning of year
Draft letters of offer received 89 87
during the period* Applications received 19 17
Total 99 108 during the year
Observations issued by 76 92 Total applications 35 22
SEBI during the year
Applications disposed 30 20
Offer/s withdrawn 2 - during the year of which
Draft letters of offer in process 21 16
at the end of the year Exemption granted 25 6
*Under New Takeover Regulations Exemption not granted - -
Returned / withdrawn/ 5 14
Regulation 11 of the Takeover Regulations Not maintainable (without
deals with applications for seeking passing order)
exemption from open offer obligations.
Applications in process 5 2
During 2022-23, 17 applications were at the end of the year
filed with SEBI seeking exemption as
compared to 19 applications filed during
C. 
Buy-back is one of the ways in which
2021-22. Among the 22 applications
a company can return money to its
(five applications carried forwarded
shareholders. The total buyback offer
from previous year and 17 applications
during 2022-23 aggregated to `22,755
received during 2022-23) with SEBI, six
crore compared to `30,891 crore during
applications were granted exemption from
2021-22. It is also observed that the
open offer vis-à-vis 25 applications which
average utilization of the buyback offers
were granted exemption during 2021-22,
which were completed in 2022-23 was
14 applications were returned/ withdrawn/
98.7 per cent compared to 99.8 per cent in
not maintainable (disposed without
2021-22. Further, 62 buy-back offers were
passing an order) and two applications
received during 2022-23 (an increase of
are in process with SEBI as on March 31,
77 per cent over the number of buybacks
2023 (Table 3.14).
received in 2021-22), of which 24 were

47
 Annual Report 2022-23

through the open market purchase method
and 38 were through the tender offer. Out
of the 24 buyback offers through open
market route, received in 2022-23, 17 had
been closed and seven were ongoing as
on March 31, 2023. Further, out of the 38
offers for buyback through tender offer, 31
were closed and seven were pending as
on March 31, 2023 (Table: 3.15).

Table 3.15: Buy-back Cases

2021-22 2022-23
No. of Buy-back Actual Amount No. of Buy-back Actual Amount
Particulars cases size Utilized for cases size Utilized for Buy-
Buy- back of back of Securities
Securities (` crore)
(` crore)
Buy-back through open market
Cases Received
5 9,590 9,554 17 14,587 14,452
and Closed
Cases Received
4 497 NA 7 747 NA
but not Closed
Buy-back through Tender Offer
Cases Received
21 20,341 20,330 31 5,748 5,627
and Closed
Cases Received
5 462 NA 7 1,673 NA
but not Closed

D. Schemes of Arrangement: Listed entities 3.4 INTERMEDIARIES ASSOCIATED

undertaking a scheme of arrangement are
required to file the draft documents related
to scheme of arrangement with the stock
exchange(s) for obtaining observation letter
or no-objection letter, before filing such
scheme with any Court or Tribunal. SEBI
also receives the draft documents from
stock exchanges and issues observations.
During 2022-23, SEBI issued observations
for 58 draft schemes documents as against
69 draft schemes documents in 2021-22
(Table 3.16).
Intermediaries hold a place of prominence
in the securities market, as they functions as
connecting links which enable the seamless
functioning of the securities market. SEBI
keeps a check on the functioning of various
intermediaries associated with the market via
various regulations so as to ensure fair and
appropriate market conduct. The following
sections outline the major policy developments
and the market trends related to intermediaries
associated with primary market.

Table 3.16: Scheme of Arrangement 3.4.1 Policy Developments

A.  Review of Norms for Processing
Year Observations issued Investors’ Service Requests by RTAs.
2021-22 69 In light of various difficulties faced by the
investors and to make the processing of
2022-23 58
investor service requests more efficient

48

and investor friendly, various provisions of
SEBI’s circulars with respect to common
and simplified norms for processing
investor’s service requests by RTAs were
modified and/or relaxed as below:
i. Folios without PAN, KYC details and
Nomination to be frozen w.e.f. October 01,
2023 instead of April 01, 2023;
ii. Any payment including dividend, interest
or redemption payment in respect of frozen
folios to be made only through electronic
mode with effect from April 01, 2024;
iii. Option of in-person verification along with
certain documents provided for updation of
signature;
iv. Submission of email id by the investors
made optional;
v. Mandatory acknowledgement to be
provided by the RTA pursuant to
submission of documents by the investor.
B.  implification of Transmission of
S and indemnity bond as per the format
Securities : To enhance ease of dealing in
securities markets and with a view to make
the transmission process more efficient
and investor friendly, the procedure for
transmission of securities has been further
simplified vide amendments to various
LODR Regulations and circulars. The
salient features include:
i. Introduction of legal heirship certificate
which can be issued at Tehsildar level or
its equivalent certificate in order to provide
an additional avenue to the investor, which
is less time consuming and easier than
obtaining the other documents in intestate
succession, for example, succession
certificate or court decree;
ii. Increase in the threshold limit for simplified
documentation to `5 lakh from `2 lakh
for securities held in physical mode per
listed issuer; to `15 lakh from `5 lakh for
securities held in dematerialised mode thus
encouraging more physical shareholders
to dematerialize their holdings;
49
Chapter 3 Primary Markets
iii. For ease of reference, a ready reckoner
listing out the documents required for
transmission of securities held in single
name with or without nomination has been
provided.
C.  implification of Issuance of Duplicate
S
Securities Certificates : With a view to
make issuance of duplicate securities
more efficient and investor friendly,
the procedure and documentation
requirements for issuance of duplicate
securities has been further simplified. The
salient features include:
i. limited set of documents to be submitted
for issuance of duplicate securities;
ii. no requirement of submission of surety;
iii. Also, if the value of securities as on date
of submission of application for issuance
of duplicate securities does not exceed
`5 lakh then submission of affidavit
prescribed shall suffice.
D. Standard Operating Procedures (SOP)
for Dispute Resolution : While Regulation
40 of SEBI LODR, Regulations, 2015
contained provisions for dispute resolution
under the arbitration mechanism, there
was no standard operating procedure for
the same. An SOP has been issued which,
inter-alia, contains specific guidelines with
respect to applicability of the arbitration
mechanism, maintenance of panel of
arbitrators and the code of conduct for
arbitrators, limitation period for filing
an arbitration application, number of
arbitrators etc.
E. 
Enhanced Guidelines for Debenture
Trustees and Listed Issuer Companies
on Security Creation and Initial due
Diligence: On the basis of feedback
received from market participants on the
aspects of due diligence and security
 Annual Report 2022-23

creation, the requirements relating to already prescribed in 2017, following has

encumbrances, creation of security and
related due diligence by debenture trustees
has been revised. The circular, inter alia,
clarifies the following:
i. Manner of change in security/ creation
of additional security/ conversion of
unsecured to secured in case of already
listed non-convertible debt securities and
the due diligence by debenture trustee for
the same.
ii. Creation of encumbrance on the securities
for securing the non-convertible debt
securities shall be through the depository
system only.
iii. Manner of due diligence certificate in case
of shelf prospectus/ memorandum.
iv. Guidelines for empanelment of external
agencies by debenture trustee(s).
F. 
Cyber Security and Cyber Resilience
Framework for Qualified Registrars to
an Issue and Share Transfer Agents :
In order to strengthen and improve cyber
security and cyber resilience framework
for QRTAs in addition to the framework
been additionally mandated for QRTAs:
i. Conducting vulnerability assessment and
penetration tests (VAPT) at least once in
a financial year and compliance of closure
of findings identified during VAPT to be
submitted to SEBI;
ii. Conducting comprehensive cyber audit at
least twice in a financial year.
iii. All cyber-attacks, threats, cyber-incidents
and breaches experienced by QRTAs to be
reported to SEBI within 6 hours of noticing
/ detecting such incidents or being brought
to notice about such incidents. Further, the
incident to be reported to Indian Computer
Emergency Response team (CERT-In) in
accordance with the guidelines / directions
issued by CERT-In from time to time.
3.4.2 Market Activity and Trends Observed
A.  Registered Intermediaries Associated
with the Primary Market : During 2022-
23, new registrations were granted to
nine Merchant Bankers, two Registrar to
Issue and Share Transfer Agent and two
Banker to an Issue (Table 3.17).

Table 3.17: Status of Registration of Intermediaries and Median Time for Approval

Application Median
Application Registration Rejected/ time for
Pending as
Type of Opening Received Granted Returned/ processing
on March
Intermediary Balance during during Withdrawn applications
31, 2023
2022-23 2022-23 during (working
2022-23 days)
Merchant Banker 4 13 9 2 41 6
Registrar to Issue
and Share Transfer 2 1 2 0 39 1
Agent
Bankers to an Issue 2 3 2 1 31 2

As on March 31, 2023, there were 218 and 26 Debenture Trustee registered with
Merchant Bankers, 75 Registrar to Issue and SEBI (Table 3.18).
Share Transfer Agent, 55 Bankers to an Issue

50
 Chapter 3 Primary Markets

Table 3.18: Registered Intermediaries Associated with the Primary Market

No. of Registered Intermediaries
Type of Intermediary Registered as Registration Registration
Registered as on
on March 31, granted during surrendered
March 31, 2023
2022 2022-23 during 2022-23
Merchant Banker 218* 9** 8 218
Registrar to Issue and
78 2 5 75
Share Transfer Agent
Bankers to an Issue 64* 2 11# 55
Debenture Trustee 26 0 0 26
*Revised from 219 to 218 and revised from 65 to 64
**One Re-registration has been granted subsequent to change in control.
# Registration of 11 banks, which were merged over the years, have been considered as surrendered.

51
 Annual Report 2022-23
Chapter 4:
Secondary Markets
During 2022-23, domestic stock markets were
weighed down by recurring headwinds in the form
of lingering impact of Ukraine-Russia conflict,
possibility of looming global recession, elevated
inflation, monetary tightening by central banks,
FPI outflows, currency volatility and global
banking crises. However, markets weathered
the dampens and exhibited resilience on the
back of strong macroeconomic fundamentals,
regulatory support, supply-side interventions,
robust corporate earnings and strong
domestic institutional and individual investors
participation. The present chapter outlines the
policies and programmes undertaken by SEBI
for streamlining and developing of secondary
market (equity-cash, debt and derivatives
segment) and the associated intermediaries.
The market activity and trends observed across
the various segments are also covered in detail
in the chapter.
4.1. CASH MARKETS: EQUITY
4.1.1. Policy Developments
A.  Net Settlement of Cash segment and
F&O segment: With a view to provide better
alignment of cash and derivatives segment,
mitigation of price risk and bringing in
netting efficiencies for market participants,
the mechanism of net settlement of cash
segment and F&O segment upon expiry of
stock derivatives has been introduced. The
obligations arising out of cash segment
settlement and physical settlement of F&O
segment, upon expiry of stock derivatives,
would be settled on net basis instead of
52
settling such obligations separately. This
policy measure would help in reduction
of systemic risk, better alignment of cash
segment and F&O segment, netting
efficiencies for participants, mitigation of
price risk in certain cases and reduction of
margin requirements.
B. 
Social Stock Exchange Segment: The
Social Stock Exchange (SSE) segment on
the exchanges provides social enterprises
Non-profit organizations (NPOs) and
for-profit enterprises engaged in eligible
activities, a unique opportunity to register
and raise funds on a recognized exchange
platform. NSE and BSE have been given
approval to for setting up SSE as a
segment. Four NPOs on NSE and seven
NPOs on BSE have been registered on the
SSE segment during 2022-23.
C. 
Comprehensive Framework on Offer
for Sale of shares through stock
exchange mechanism: Offer for Sale
(OFS) framework of shares through stock
exchange mechanism was reviewed
comprehensively with the objective of
bringing in more flexibility and efficiency.
The major changes include relaxation in
the eligibility criteria regarding minimum
shareholding for the non-promoter
shareholders for offering shares through
OFS mechanism, modification in cooling
off period between two successive OFS
based on the liquidity of the shares (i.e. +2
weeks for most liquid, +4 weeks for liquid
 Chapter 4 Secondary Markets

and +12 weeks for illiquid shares), offering
of unsubscribed portion of the non-retail
category to retail investors, etc. OFS
mechanism has also been made available
to unit holders or sellers of listed REITs /
InvITs to offer their holdings through stock
exchange mechanism.
D. 
Inclusion of Equity Exchange Traded
Funds for Offering MTF: Taking into
account the emergence of Exchange
Traded Funds (ETFs) as an investment
product with various advantages such as
transparency, diversification, lower cost,
etc., it has been decided to allow units
of equity ETFs categorized as Group-I
security, as an eligible security for Margin
Trading Facility (MTF) as well as an eligible
collateral under margin trading facility. This
domestic institutional investment. The
market saw an upward trend despite
unfavourable factors such as elevated
inflation, RBI’s rapid pace of interest rate
hikes, and the depreciation of Indian
Rupee over US dollar, FPI outflows and
the impact of global liquidity tightening.
However, in the last quarter (Jan-Mar
2023), market sentiment turned weak
fuelled by rising projections for recession,
and spill over from banking turmoil in the
US and Europe, despite the stimulus from
a capital expenditure-oriented Budget
(Chart 4.1).
Chart 4.1: Movement of Stock Market Benchmark
Indices
115
110

will further enhance the liquidity in equity 105

100

ETFs. 95
90
85

E. 
Financial Information Providers in the 80
75

Account Aggregator Framework: SEBI 70

2 2 2 2 2 2 2 2 2 3 3 3
r2 r2 y2 n2
2 g2 p2 t2 v2 c2 n2 b2 r2
has enabled financial information providers Ma Ap Ma Ju Ju
l2
Au Se Oc No De Ja Fe Ma

in the securities markets i.e. Depositories Nifty 50 (local currency) MSCI-EM Nifty 50 (USD)

and Mutual Fund Asset Management Source: Refinitiv, NSE, BSE

Companies through their Registrar and Note: Nifty 50 and MSCI-EM indices have been indexed
to 100 as on March 31, 2022
Transfer Agents to provide the financial
information to an Account Aggregator. Chart 4.2: Movement of India VIX
The provision would enable credit lending
30.0
institutions and banks to access the 25.0
securities market data related to financial 20.0

assets held by credit seekers and lead to 15.0

better credit/ lending decisions. 10.0

5.0
2 2 2 2 2 2 2 2 2 3 3 3
r2 r2 y2 n2 l2
2 g2 p2 t2 v2 c2 n2 b2 r2
Ma Ap Ma Ju Ju Au Se Oc No De Ja Fe Ma
4.1.2 Market Activity and Trends Observed
A. Performance of Indices Source: NSE
The trajectory of Indian equity market was
distinctively different across two phases At the end of March 31, 2023, Sensex and Nifty
during 2022-23. During Apr-Dec 2022, closed at 58,992 and 17,360, recording change
Indian equity market was among the best of 0.7 per cent and -0.6 per cent, respectively
performing markets in the world, touching over March 31, 2022. Sensex and Nifty touched
record highs, well supported by sustained their respective all-time highs of 63,284 and
growth momentum, pent up domestic 18,813, on December 01, 2022 and the lowest
demand, falling oil prices and consistent level of 51,360 and 15,294, respectively, on June

53
 Annual Report 2022-23

17, 2022, during the year. The volatility index of event data showed the resilience of markets
India, India VIX was significantly lower by 37.1 as vulnerability in a single group did not pose
per cent at the end of 2022-23 as compared any systemic risk to the Indian securities market
to March 31, 2022 (Chart 4.2). Compared to ecosystem. The representation of the said
other emerging and developed markets, Indian conglomerate in Indian benchmark indices
markets were resilient as reflected by the is relatively minor, given the limited free float
annualised volatility of their respective indices market capitalization of the group. As on March
(Chart 4.3) 31, 2023, this group had zero per cent weightage
in Sensex, compared to 1.3 per cent weightage
Chart 4.3: Annualized Volatility of Major Stock in Nifty 50.
Markets in 2022-23
30% 30% The performances of broad indices have been
30%

21%
muted during 2022-23. The broader market
20%
20%
15% 15% 16%
18%
18% 19% 19% 19% 20%
index, Nifty 500 declined by 2.3 per cent, Nifty
11% Smallcap declined notably by 13.8 per cent
10%
while Nifty Midcap 100 rose marginally by
0%
) l )
1.2 per cent. Amongst the selected sectoral
or
e UK India ina pa
n
re
a ce JIA man
y an frica razi on
g
AQ
an
Si
ng
ap Ch Ja
S
Ko Fr
US
(D
Ge
r Ta
iw
S o uth
A B
H on
gK
( NA
SD indices, the highest gain was observed in
US
Nifty PSU (36.3 per cent), followed by FMCG
Source: Refinitiv (26.5 per cent) and BSE Capital Goods (25.0
per cent). Negative return was shown by Nifty
It is pertinent to mention that no significant Media (-28.6 per cent), followed by Nifty IT
movement was observed in VIX in the wake (-21.0 per cent) and BSE Teck (-20.1 per cent)
of fraud allegations of a major business (Chart 4.4)
conglomerate on January 24, 2023. The post

Chart 4.4: Annual Variation in Major Indices in 2022-23

Nifty 50 -0.6%
Sensex 0.7%
Nifty Midcap 100 1.2%
Nifty 500 -2.3%
Nifty Smallcap 100 -13.8%
Nifty PSU 36.3%
Nifty FMCG 26.5%
BSE CG 25.0%
BSE Auto 17.5%
Nifty Bank 11.6%
BSE Finance 5.7%
BSE Oil&Gas -7.2%
BSE Power -10.8%
BSE CD -11.0%
Nifty Pharma -11.5%
Nifty Metal -14.4%
Nifty Reality -16.4%
BSE TECK -20.1%
Nifty IT -21.0%
Nifty Media -28.6%

N
 ote: BSE CG: BSE Capital Goods, BSE CD: BSE Consumer Durables
Source: NSE and BSE
54
 Chapter 4 Secondary Markets

B. 
Turnover and Market Capitalisation in
Cash Segment
The market capitalisation of both BSE and
NSE declined by 2 per cent in 2022-23,
while, free float market capitalisation as a
percentage of total market capitalisation,
of each exchange, rose to 47 per cent in
2022-23, as compared to 46 per cent in
2021-22.
During 2022-23, trading activity in cash
segment declined significantly at BSE
and NSE, as compared to previous year.
The number of trades declined by more
than 15 per cent at both the exchanges,
while quantity of shares traded fell by
17.5 per cent at NSE and 16.5 per cent
at BSE, during the year. Consequently,
the average daily turnover (ADT) in 2022-
23 declined by 20.0 per cent to `53,434
crore at NSE and 23.4 per cent to `4,132
crore at BSE as compared to the previous
year. During 2022-23, NSE accounted
for 92.8 per cent share in aggregate
turnover of `143.3 lakh crore (across all
the exchanges) in cash segment.

Table 4.1: Exchange-wise Trading Statistics for Cash Segment

Stock Exchange 2021-22 2022-23 Variation (per cent)
Turnover (` crore)
NSE 1,65,66,257 1,33,05,073 -19.7
BSE 13,38,225 10,28,865 -23.1
MSEI 43 44 3.5
Total 1,79,04,525 1,43,33,983 -19.9
Total Market Capitalisation (` crore)
NSE 2,61,81,064 2,56,32,704 -2.1
BSE 2,64,06,501 2,58,19,896 -2.2
MSEI* 2,41,77,249 2,51,57,438 4.1
Note: *For MSEI market capitalisation is provided for all listed as well as permitted companies.
Source: BSE, NSE and MSEI.

Geographical distribution of the turnover (based
on broker terminal location) shows that more
than 68 per cent of NSE’s turnover and around
40 per cent of BSE’s turnover in cash segment
was concentrated in Mumbai (including Thane)
in 2022-23. Share of Ahmedabad has been pro-
gressively rising over the years, to 11.2 per cent
at NSE and 23.2 per cent at BSE. Other cities
having share higher than one per cent are Kol-
kata, Delhi and Hyderabad at NSE, and Kolkata
and Delhi at BSE (Table 4.2).

55
 Annual Report 2022-23

Table 4.2: Turnover of Top-10 Cities in the Cash Segment (Per cent)
BSE NSE
City 2021-22 2022-23 City 2021-22 2022-23
Mumbai 36.4 39.7 Mumbai / Thane 67.6 68.0
Ahmedabad 21.3 23.2 Ahmedabad 9.1 11.2
Kolkata 2.3 1.9 Kolkata 5.0 4.2
New Delhi 2.2 1.5 Delhi 5.4 3.7
Rajkot 0.9 0.9 Hyderabad 2.7 2.5
Nalgonda 0.0 0.8 Rajkot 0.8 1.0
Noida 0.3 0.6 Chennai 0.7 0.9
Vanasthalipuram 0.0 0.5 Bangalore 1.2 0.8
Vadodara 0.4 0.3 Pune 0.3 0.4
Jaipur 0.3 0.3 Cochin 0.5 0.4
Others 36.0 30.3 Others 6.7 6.9
Total 100 100 Total 100 100
Note: City-wise turnover is calculated on gross basis.
Source: BSE and NSE.

C. Stock Market Indicators per cent decline in market capitalisation of

Market capitalisation-to-Gross domestic
product (GDP) ratio is indicative of size
of capital market vis-à-vis that of the
economy. At end of 2022-23, market
capitalisation to GDP ratio for BSE slipped
to 94.8 per cent from 112.5 per cent at the
end of 2021-22, on account of a 16.1 per
cent growth in nominal GDP along with two
the exchanges.
While turnover to GDP ratio in cash
segment fell to 52.6 per cent in 2022-23,
for equity derivatives segment, turnover
to GDP ratio in 2022-23 nearly doubled
to 14,158 per cent from 7,504 per cent
(Table 4.3).

Table 4.3: Select Ratios Relating to the Stock Market (Per cent)
Market Capitalisation to GDP Ratio Total Turnover to GDP Ratio
Year Cash Segment Equity Derivatives
BSE NSE
(All-India) Segment (BSE + NSE)
2021-22 112.51 111.55 76.28 7,504
2022-23 94.78 94.10 52.62 14,158
Notes: First revised estimate of GDP at current prices for 2021-22 and provisional estimate for 2022-23 released on May
31, 2023 by MoSPI, have been considered for computation;
Source: BSE, NSE and Central Statistical Office.

At the end of 2022-23, PE Ratios (Trailing)
for benchmark indices – Nifty 50 and Sensex
moderated to 20.4 and 22.4 respectively, from
22.9 and 25.8 recorded at end of 2021-22.
As compared to global benchmark indices,
Forward PE of MSCI India (19.2) was trading
at 63 per cent premium to MSCI Emerging
Market Index (11.8) at the end of March-23. The
valuation of MSCI India remained high vis-à-
vis its global peers like China, Brazil and other
developed economies (Chart 4.5).

56
 Chapter 4 Secondary Markets

Chart 4.5: Forward Price to Earnings Ratio

25
19.7 19.2 19.1 18.6
20 17.3 16.2
12.8 13.7 12.6 11.8
15 11.4
10.7 10.4
10 6.6
5
0
MSCI India MSCI China MSCI Brazil MSCI Korea MSCI US MSCI EM MSCI World

Forward PE Ratio Long term average (5 year) Forward PE Ratio Mar-23

Source: Refinitiv, NSE

D. Trading Frequency Limited (ICCL) and NSE Clearing Limited

As on March 31, 2023, the number of listed
companies at NSE and BSE stood at 2,191
and 5,433, respectively. During 2022-23,
the number of stocks trading more than
100 days during the year declined to 81.4
per cent at NSE and 63.2 per cent at BSE,
During 2022-23, at pan-India level, 20.2
from 85.2 per cent and 63.5 per cent,
respectively, in previous year. Further,
the share of scrips trading for less than
20 days doubled to 8.1 per cent at NSE
indicating moderation in trading activity
during the year.
E. Settlement
The total quantity of shares delivered and
the value of shares delivered (aggregated
for all exchanges) decreased by 11.1 per
cent and 9.2 per cent, respectively in 2022-
23 over the previous year. The delivery
volumes at Indian Clearing Corporation
(NCL) decreased by 24.2 per cent and 7.5
per cent, respectively, in 2022-23. In terms
of value of shares delivered, share of NCL
rose to 90.5 per cent in 2022-23 from 89.4
per cent in 2021-22.
per cent of the total trades resulted in
delivery (compared to 19.1 per cent in the
previous year). The quantity delivered as
a percentage of quantity traded increased
to 19.4 per cent at NCL, while it decreased
to 24.1 per cent at ICCL during 2022-
23 (compared to 17.5 per cent and 28.8
per cent, respectively in previous year).
Delivered value as percentage of value
traded at pan-India level increased to 23.8
per cent during 2022-23, from 22.2 per
cent in 2021-22 (Table 4.4).

Table 4.4: Delivery Statistics (Per cent)

Quantity Delivered (as a percentage of Value Delivered (as a percentage of
Clearing Quantity Traded) Value Traded)
Corporation
2021-22 2022-23 2021-22 2022-23
NCL 17.5 19.4 21.3 24.2
ICCL 28.8 24.1 33.8 19.4
Total 19.1 20.2 22.2 23.8

Source: ICCL and NCL

57
 Annual Report 2022-23

Box 4.1: Building Safe and Efficient Markets for Investors:

Implementation of T+1 Settlement

India, one of the earliest adopters of T+1 settlement system in the global securities market, well
ahead of major developed and emerging markets, completed its transition to T+1 settlement cycle
in equity market in 2022-23. In this regard, a roadmap for phased implementation of T+1 settlement
was issued by MIIs vide joint press release dated November 08, 2021, to mitigate the concerns
around uniformity of implementation across stock exchanges.

Accordingly, stocks in equity segment across stock exchanges were ranked based on market
capitalization for the month of October 2021 and based on the ranking arrived, the bottom 100
stocks were made available for introduction on T+1 settlement, from trade date February 25, 2022.
Thereafter, from March 2022 onwards, on the last Friday (trade day) of every month, the next bottom
500 stocks from the list of stocks ranked were made available for on T+1 settlement. With effect
from January 27, 2023, all stocks in equity segment across stock exchanges have moved to T+1
settlement.

In order to address concerns around post trade activities like allocation of trades by FPIs (client-
wise or scheme-wise), booking of forex by FPIs and confirmation of such trades by custodians, the
timeline for trade allocation and confirmation was extended by CCs, respectively by one hour on
T-day and 12 hours on T+1 day. The revised settlement timelines are as below:

Process Under T+2 settlement Under T+1 settlement

Trade Confirmation by custodians By 01:00 P.M. on T+1 day By 07:30 A.M. on T+1 day
Pay-in of funds/ securities to CCs By 11:00 A.M. on T+2 day By 11:00 A.M. on T+1 day
Pay-out of funds/ securities by CCs By 01:30 P.M. on T+2 day By 01:30 P.M. on T+1 day

The switch to T+1 settlement cycle shall benefit investors by increasing market liquidity as the
securities/funds of trades carried out on T day will be available on the next working day itself. An
early settlement of funds/securities under a T+1 settlement cycle may also enable mutual funds to
facilitate faster availability of redemption proceeds to investors. Other benefits associated with a
T+1 cycle include increased trading turnover and reduced settlement risk thereby leading to overall
development of the securities market.

F. Dematerialisation NSDL increased by 11.2 per cent (Y-o-Y)

Since 2020, there has been a significant rise
in the number of demat accounts opened at
NSDL and CDSL. As on March 31, 2023,
the number of demat accounts registered
across both depositories was `11.4 crore.
Number of investor accounts opened at
CDSL and NSDL during 2022-23 registered
growth of 31.8 per cent and 17.9 per cent,
respectively, though the same has been
lower as compared to growth rates of 2021-
22. The number of listed companies signed
up for dematerialization with CDSL and
and 9.4 per cent (Y-o-Y), respectively, at the
end of March 2023.
The value of securities in the demat form at
CDSL and NSDL increased marginally by
6.8 per cent and 0.1 per cent respectively,
at the end of March 2023. At the end of
2022-23, NSDL had 88.4 per cent share in
terms of market value of demat securities,
while CDSL had a share of 11.6 per cent.
(Table 4.5).

58
 Chapter 4 Secondary Markets

Table 4.5: Depository Statistics

NSDL CDSL
Particulars
31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23
No. of Investor Accounts (` lakh) 267 315 630 830
No. of Companies Signed up (Listed and 37,478 40,987 18,268 20,323
Unlisted), of which
No. of Companies that are Listed 5,846 5,843 5,886 6,043
Quantity of Securities in Demat Form (` crore) 2,77,353 3,22,433 56,757 61,285
Value of Securities in Demat Form (` crore) 3,01,87,556 3,02,18,890 37,17,278 39,71,127
Market Capitalisation of Listed Companies 2,66,74,665 2,61,81,095 2,63,55,532 2,58,19,813
Joined in Demat (` crore)
Custody Value of Shares of Listed Companies 2,29,38,892 2,22,61,191 32,28,356 34,05,158
(` crore)
Ratio of Dematerialised Equity Shares to Total 86.0 85.0 12.2 13.2
Outstanding Shares Listed (per cent)
Source: NSDL and CDSL

During 2022-23, CDSL saw a significant
decline in terms of quantity (by 28.4 per cent)
and value of shares settled (by 26.2 per cent)
in demat form. While NSDL recorded a decline
of 22.8 per cent in terms of quantity of shares
settled, value of shares settled rose by 12.7
per cent. The percentage share of CDSL in the
number and value of shares settled in demat
form decreased to 57.8 per cent and 24.7 per
cent respectively in 2022-23 from 59.6 per cent
and 33.4 per cent in 2021-22. As on March 31,
2023, the total value of debentures held with
NSDL and CDSL in the demat form increased
by 9.0 per cent to `43.3 lakh crore from `39.7
lakh crore as on March 31, 2022. The demat
value of debentures at NSDL increased by
8.9 per cent, whereas that at CDSL increased
by 14.6 per cent. On the other hand, the total
value of commercial papers held with NSDL
and CDSL in the demat form decreased by 5.0
per cent to ` 3.9 lakh crore as on March 31,
2023, from `4.1 lakh crore as on March 31,
2022. The demat value of commercial papers
at NSDL decreased by 5.4 per cent and at
CDSL the same increased by 151.2 per cent
(Table 4.6).

Table 4.6: Depository Statistics: Debentures/ Bonds and Commercial Papers

Particulars Debentures / Bonds Commercial Papers
NSDL CDSL NSDL CDSL
31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23
No. of Issuers as on 3,441 3,846 1040 1168 282 253 155 138
No. of Active 17,938 21,170 9,465 10,307 1,535 1,529 830 973
Instruments as on
Demat Value (` crore) 38,70,919 42,14,464 97,897 1,12,195 4,10,361 3,88,346 1,043 2,620
as on
Source: NSDL and CDSL

59
 Annual Report 2022-23

4.1.3 Risk Management Measures
A. Suspension of Scrips
During 2022-23, 100 scrips at BSE, 11
scrips at NSE and 53 scrips at MSEI were
suspended on account of surveillance
measures, non-payment of fees and non-
compliance of various regulations and
procedures. Suspended scrips constituted
1.8 per cent, 0.5 per cent and 18.5 per
cent of the total listed companies at BSE,
NSE and MSEI during 2022-23. At BSE
and NSE, the majority of the suspensions
were due to procedural reasons. At BSE,
20 companies and at MSEI, 46 companies
were suspended due to non-payment of
annual fees. For non-compliance with
the LODR Regulations, three companies
were suspended at BSE and one at NSE
(Table 4.7).

Table 4.7: Details on Suspended Scrips

BSE NSE MSE
Reason for Suspension
2021-22 2022-23 2021-22 2022-23 2021-22 2022-23
Non Payment of Annual Fees 51 20 - - 44 46
Surveillance Measure 4 15 - - 1 -
Non-compliance of LODR
Regulations (Corporate Governance 6 3 2 1 1 NA
Related) [Regulation 17(1), 18(1), 27(2)]
Any Other (Reg. 31, 33, 34 and Reg. 76
of SEBI (Depositories and Participant) 52 42 6 6 17 6
Regulation 2018
Procedural 60 20 21* 4* 2 1
Total 173 100 29 11 64 53
Suspensions Revoked during the Year 109 91 16 5 6 2
Note: *Companies suspended pursuant to NCLT order
Source: BSE and NSE

Delisting: During 2022-23, 101 scrips were
delisted from BSE, 16 from NSE and eight from
MSEI, constituting 2.0 per cent, 0.7 per cent and
2.8 per cent of the listed companies at respective
exchanges. At BSE, 8 companies were delisted
due to voluntary delisting, while 75 were delisted
due to compulsory delisting. At NSE, number
of companies under voluntary and compulsory
delisting stood at 6 and 4, respectively during
the year 2022-23 (Table 4.8). During 2022-
23, 3 companies were suspended on account
of liquidation and have been delisted from the
exchanges, pursuant to provisions of Rule 21(2)
(b) of the Securities Contracts (Regulation)
Rules 1957.

60
 Chapter 4 Secondary Markets

Table 4.8: Details on Delisted Scrips

BSE NSE MSEI
Reason for Delisting
2021-22 2022-23 2021-22 2022-23 2021-22 2022-23
Voluntary Delisting 16 8 10 6 7 6
Compulsory Delisting 10 75 10 4 0 2
Delisting pursuant to Liquidation 0 2 8 1 0 0
Any Other (procedural delisting) 15 16 10 5 0 0
Total 41 101 38 16 7 8
Source: BSE, NSE

B. Surveillance Measures: During 2022- to previous year, number of scrips moved

23, at BSE 1,858 scrips (34.2 per cent of
the listed companies at BSE) were moved
under additional surveillance measures
(ASM), whereas, 1,930 scrips were moved
out of ASM. At NSE, 794 scrips (36.2
per cent of the listed companies at NSE)
moved under ASM, while 833 scrips moved
out of ASM during 2022-23. As compared
under ASM at BSE and NSE fell by 13.0
per cent and 26.3 per cent, respectively.
As regards number of scrips moved under
Graded Surveillance Measure (GSM),
both BSE and NSE saw a decline of 13.8
per cent and 28.2 per cent, respectively
(Table 4.9).

Table 4.9: Surveillance Measures

BSE NSE
Surveillance Measures
2021-22 2022-23 2021-22 2022-23
Scrips Moved to ASM 2,136 1,858 1,077 794
Scrips Moved out of ASM 2,134 1,930 1,041 833
Scrips Moved to GSM 457 394 39 28
Scrips Moved out of GSM 508 419 77 33
Scrips Moved to Promoter “Encumbrance” 26 29 42 58
Scrips Moved out of Promoter “Encumbrance” 29 35 16 63
Scrips Moved to ASM Insolvency Resolution Proceedings
42 62 34 74
(IBC Inclusions)
Scrips Moved out of ASM Insolvency Resolution Proceedings
42 65 26 54
(IBC exclusions)
Total 5,374 4,792 2,352 1,937
Source: BSE and NSE

4.1.4 Market Concentration rose. Share of others, which include

A. Share of Participants in Annual Cash
Market Turnover
 During 2022-23, share of proprietary
traders in annual cash market turnover
decreased marginally, while that of FPIs
individual domestic investors, Partnership
Finns/LLP, Trust/Society, AIFs, Depository
Receipts, PMS clients, Statutory Bodies,
VCFs, NBFC, etc. declined at both the
exchanges (Table 4.10).

61
 Annual Report 2022-23

Table 4.10: Participant-wise Share in Cash Market Turnover (per cent)

NSE BSE
Category
2021-22 2022-23 2021-22 2022-23
Proprietary Traders 27.5 27.2 33.9 33.1
Domestic Institutions* 2.3 2.6 2.4 3.1
FPIs 12.3 15.1 11.1 15.4
MFs 6.2 8.0 2.4 2.3
Corporates 3.8 4.2 4.6 4.5
Others** 47.8 43.0 45.6 41.6
Total 100 100 100 100
Notes: *Domestic institutions (excluding mutual funds) include banks, DFIs, insurance companies and the New Pension
Scheme. **Others include individual domestic investors, Partnership Finns/LLP, Trust/Society, AIFs, Depository Receipts,
PMS clients, Statutory Bodies, VCFs, NBFC, etc.
Source: BSE and NSE

The dominant mode of trading at exchanges B. Share of Top-100 Brokers/ Securities in

during 2022-23 was through co-location, though
traded value through co-location declined
marginally at BSE and NSE. Share of mobile
trading also declined marginally to 18.1 per
cent at BSE and 19.7 per cent at NSE, as
compared to previous year. On the other hand,
shares of algo trading and direct market access
increased at both the exchanges during 2022-23
(Table 4.11).
Annual Cash Market Turnover
The percentage share of top 100 brokers
in the annual cash market turnover in
2022-23 was 89.0 per cent at BSE and
89.1 per cent at NSE. Share of the top
100 securities in the annual cash market
turnover was 50.9 per cent at BSE,
and 61.5 per cent at NSE in 2022-23
(Table 4.12).

Table 4.11: Mode of Trading in the Cash Market Table 4.12: Share of Top-100 Brokers/Securities
(per cent) in Annual Cash Market Turnover (per cent)
Mode of BSE NSE
BSE NSE
Trading 2021-22 2022-23 2021-22 2022-23 Particulars
2021-22 2022-23 2021-22 2022-23
Co-location 39.3 36.9 34.8 34.1
Share of Top-100 Brokers 89.3 89.0 88.8 89.1
Mobile 18.6 18.1 20.2 19.7 in Annual Cash Market
Non-ALGO 27.2 30.3 18.8 18.5 Turnover
Internet Based 8.2 7.5 11.7 9.1 Share of Top-100 Scrips/ 50.6 50.9 62.7 61.5
Trading Securities in Annual Cash
Market Turnover
ALGO 3.7 4.3 12.4 14.7
Source: BSE and NSE
Direct Market 0.2 0.3 1.3 2.9
Access
The top 10 brokers in the cash segment of
Smart Order 1.2 1.7 0.9 1.0
Routing BSE, who represent 19.6 per cent of the
FOW-NOW 1.6 0.9 0.0 0.0
total clients, contributed 53.5 per cent of
its gross turnover in 2022-23. On the other
Source: BSE and NSE

62
 Chapter 4 Secondary Markets

hand, top 10 brokers in the cash segment market and improving transparency in the
of NSE, who represent 65.2 per cent of the corporate sector by requiring companies to
total clients, contributed 38.1 per cent to its disclose information about their financial health
gross turnover. (Table 4.13). and operations. It also contributes to economic
growth by reducing corporate dependence on
Table 4.13: Top 10 Brokers in the Cash Segment bank loans/equity financing. SEBI has taken
Exchange Percentage share Percentage share in various initiatives during 2022-23 to promote
in Gross / Notional the Total Clients (as
Turnover on) development of the corporate bond market and
2021-22 2022-23 31-Mar-22 31-Mar-23 to ensure ease of doing business.
BSE 51.3 53.5 20.3 19.6
4.2.1 Policy Developments
NSE 40.9 38.1 41.9 65.2
A.  Introduction of Futures contracts on
Source: NSE, BSE Corporate Bond Indices: In order to
enhance liquidity in the bond market and

During 2022-23, mutual funds were also to provide opportunity to the investors
dominant participants in the corporate
to hedge their positions, a framework has
bond market with 49.5 per cent share in
been prescribed to permit stock exchanges
traded value at NSE. Barring domestic
financial institutions, share of all other to introduce derivative contracts on indices
participants declined during 2022-23 as of corporate debt securities rated AA+ and
compared to previous year (Table 4.14). above. To start with, the stock exchanges
are permitted to launch futures contracts
Table 4.14: Participant-wise share in Corporate on corporate bond indices, subject to
Bond Trades at NSE certain conditions.
Category 2021-22 2022-23
Mutual Funds 31.6 49.5 B. 
Stock brokers permitted on RFQ
Indian Banks 19.1 11.3 platform: Despite the RFQ platform being
Insurance Companies 8.3 7.2 introduced in 2020 as a participant-based
Trading Members 7.5 7.1 model, it was observed that the trading
Corporates 8.7 6.4 through the platform was lean. In order
Primary Dealers 6.9 4.5 to facilitate wider market participation,
Others 10.5 9.1 stock brokers registered under the debt
FPIs 4.7 2.8 segment of the stock exchanges were
Domestic Financial 0.2 0.8 permitted to place/ seek bids on the
Institutions (other than MFs, RFQ platform on behalf of their clients, in
Insurance, Banks) addition to the existing option of placing
Foreign Banks 2.6 1.6 bids in proprietary capacity from January
Total 100 100 1, 2023.
Source: NSE
C. 
Operationalization of Limited Purpose
4.2 SECONDARY MARKET: DEBT Clearing Corporation: In order to
MARKETS AND HYBRIDS bring parity between provisions of
SECC Regulations and requirements of
A well-developed corporate bond market is Repurchase Transactions (Repo) (Reserve
important as it facilitates diversification of Bank) Directions, 2018 and Payment and
financing sources, lowering of the borrowing Settlement Systems Act, 2007 (PSS Act),
costs, supplying necessary liquidity into the SEBI amended the provisions of SECC

63
 Annual Report 2022-23
Regulations relating to composition of
Board relating to Nominee Director,
provisions relating to categorization
of Managing Director, appointment of
Chairperson, approval for appointment of
Managing Director and Dispute Resolution
Mechanism. These amendments would
enable the operationalization of Limited
Purpose Clearing Corporation, which in
turn will provide liquidity to corporate bond
market through repo transactions.
D. 
Reduction in Denomination: To give
impetus to the secondary market for
corporate bonds through increased
participation and enhancement of liquidity,
face value of each debt security or non-
convertible redeemable preference share
issued on private placement basis was
reduced from ` 10 lakh to ` one lakh
E. 
Security and Covenant Monitoring
system hosted by Depositories: In
order to ensure adequate monitoring, it
was prescribed that the depositories shall
ensure periodic monitoring regarding
compliance with the requirements of
various circulars pertaining to ‘Security
& Covenant Monitoring System’ issued
by SEBI from time to time and report the
instances of the non-compliance within the
specified timelines.
F. 
Mode of settlement for trades: SEBI
clarified that in addition to the existing
payment mechanisms, payment
mechanisms provided by banks/ payment
aggregators authorised by RBI, from time
to time, may be used for settlement of
trades executed on the RFQ platform.
G. 
Applicability of GST on fees remitted to
SEBI: It was specified by SEBI vide circular
64
dated July 18, 2022 that fees and other
charges payable to SEBI shall become
subject to GST at the rate of 18 per cent
with effect from July 18, 2022. Accordingly,
similar provision was incorporated under
NCS Operational Circular to provide
information on the same.
H. 
Applicability of PFMIs to AMC Repo
Clearing Limited: PFMIs published by
Committee on Payments and Settlement
Systems (CPSS) and International
Organization of Securities Commissions
(IOSCO) were made applicable to AMC
Repo Clearing Limited (ARCL), the Limited
Purpose Clearing Corporation.
I. 
Extension of timeline pertaining to
‘Security and Covenant Monitoring’
system: In view of representations from
market participants, timeline was extended
for entering the legacy data on details of
the existing outstanding NCS in ‘Security
and Covenant Monitoring’ system, and
for verification of the same by debenture
trustees.
4.2.2 Market Activity and Trends Observed
A.  Settled Trades: The value of corporate
bond trades settled through Clearing Cor-
porations increased by 3.5 per cent to
`13.6 lakh crore in 2022-23 from `13.1
lakh crore in 2021-22. The value of list-
ed corporate bond trades settled at BSE
during 2022-23 grew by 42.4 per cent to
`1.6 lakh crore from `1.1 lakh crore during
2021-22. However, during the same pe-
riod, value of listed corporate bond trades
settled at NSE decreased by 6.1 per cent
to `9.9 lakh crore from `10.5 lakh crore
(Table 4.15).
 Chapter 4 Secondary Markets

Table 4.15: Settlement of Corporate Bonds

(Amount in ` crore)
BSE/ICCL NSE/NSCCL Off Market Settled Trades
[Trades executed on OTC + RFQ + [Trades executed on OTC + RFQ +
anonymous platforms and settled anonymous platforms and settled
through ICCL] through NSCCL]
Period Listed Corporate Unlisted Listed Corporate Unlisted Listed Corporate Unlisted
Bonds Corporate Bonds Bonds Corporate Bonds Bonds Corporate Bonds
No. of No. of No. of No. of No. of No. of
Trades Amount Trades Amount Trades Amount Trades Amount Trades Amount Trades Amount
Settled Settled Settled Settled Settled Settled
2021-22 3,12,620 1,15,329 21,701 59,350 9,03,091 10,51,437 8,237 37,407 34,427 28,942 26,110 19,095
2022-23 3,20,120 1,64,227 32,616 79,031 7,77,693 9,87,742 14,166 61,835 69,546 24,953 91,790 39,322
Source: ICCL for Trades done at BSE, NSCCL for trades done on NSE, and NSDL and CDSL for off market trades

B. 
Request for Quote Platform (RFQ) is or through SEBI registered stock brokers
an electronic trade execution platform of the debt segment. During 2022-23,
for specified debt securities including total number of trades only in corporate
corporate bonds, commercial papers bonds through RFQ platform increased
(CP), certificate of deposits (CD), gov- by 16.0 per cent to 8,810 from 7,596
ernment securities (G-sec), state de- trades in the previous year. The volume
velopment loan (SDL) and treasury bills of trade also increased by 6.6 per cent to
(T-bills). The eligible participants on the `2.83 lakh crore from `2.66 lakh crore in
platform have an option to trade directly 2021-22 (Table 4.16 and Chart 4.6).

Table 4.16: Activity and Trends on Request for Quote Platform for Corporate Bonds
No. of
No. of No. of unique Total no. Total no. of Amount of
participants Number
Month participants participants of RFQs responses trades (in
registered of trades
participated participated initiated to the RFQs INR crore)
during the year
2021-22 139 7,692 194 15,124 6,980 7,596 2,65,652
2022-23 130 8,907 358 15,902 9,353 8,810 2,83,061
Source: NSE and BSE

Chart 4.6: Monthly Trends in Trades - Request for Quote Platform in 2022-23

35000 1200
30000 1000
25000
800
20000
600
15000
400
10000
5000 200
0 0
2 2 2 2 2 2 2 2 3 3 3
r2 y2 n2 l 22 g2 p2 t2 v2 c2 n2 b2 r2
Ap Ma Ju Ju Au Se Oc No De Ja Fe Ma

Number of trades (RHS) Amount of trades (in INR crore) (LHS)

Source: NSE and BSE

65
 Annual Report 2022-23

4.2.3 Risk Management Measures earlier adjusted only in cases where

Reporting of OTC trades in Non-Convertible
Securities: Chapter XVI on ‘Reporting of
Trades’ of the Operational Circular dated
August 10, 2021, inter alia, contains provisions
relating to reporting, clearing and settlement of
‘Over the Counter’ (OTC) trades by all person(s)
dealing in NCS. In order to tackle the issue
of incomplete information being reported by
traders to the stock exchanges, SEBI prescribed
a uniform format for reporting of the OTC trades,
in line with the format applicable for display of
trades information by stock exchanges on their
websites.
4.3 EQUITY DERIVATIVES MARKETS
The equity derivatives segment of NSE
witnessed substantial growth in trading whereas
at BSE, the same recorded muted volumes
during 2022-23. At the pan-India level, in 2022-
23, the total turnover in equity derivatives
segment increased to 2.2 times the turnover
in previous year. The ratio of turnover in equity
derivatives to that in cash segment increased
from 98.4 in 2021-22 to 269.1 in 2022-23.
4.3.1 Policy Developments
A. Adjustment in Derivative Contracts for
Dividend Announcements
 The prices of derivative contracts were
dividends declared were at or above 5
per cent of the market value of underlying
stock. It was represented by market
participants that the dividend threshold
for adjusting the price of derivatives was
quite large and consequently, dividend
announcements which were substantially
large but below the 5 per cent threshold
may result in misalignment of cash
and derivatives markets. Pursuant to
deliberations with the stakeholders,
the threshold for adjusting prices of
derivatives post dividend announcements
was lowered to 2 per cent of the market
value of underlying stock. This is expected
to bring in better alignment of cash and
derivatives market.
4.3.2 Market Activity and Trends Observed
NSE, which accounted for 99.1 per cent share
in turnover of the equity derivatives segment
in 2022-23, witnessed significant increase in
trading volumes in index derivatives segment.
The number of contracts traded at NSE increased
by 123.8 per cent to 4,177 crore in 2022-23 from
1,866 crore in the previous year. The notional
turnover at NSE increased by 125.6 per cent
from `16,952 lakh crore to `38,223 lakh crore
during the same period (Table 4.17).

Table 4.17: Trends in the Equity Derivatives Segment

No. of Contracts Turnover Open Interest at the end of the Year
Traded (crore) (` lakh crore)
Year No. of Contracts Value (` crore)
NSE BSE NSE BSE NSE BSE NSE BSE
2021-22 1,866 67 16,952 661 73,59,094 1,888 5,88,567 173
2022-23 4,177 37 38,223 343 1,34,18,486 0 11,05,826 0
Source: NSE and BSE

66

During 2022-23, the number of contracts traded
at BSE declined by 44.4 per cent to 37 crore
from 67 crore in the previous year, mainly on
account of fall in trading in index options. Equity
derivatives turnover at BSE went down by 48.1
per cent from ` 661 lakh crore to ` 343 lakh
crore. On account of the same, the percentage
share of turnover of BSE in the equity derivatives
segment fell to meagre 0.9 per cent of the
aggregate turnover in 2022-23 from 3.8 per
cent in 2021-22. Index Options are most traded
instrument in the Indian equity derivatives
segment. On the contrary, at NSE, both the
number of contracts traded and turnover in the
index options segment during 2022-23 were
more than twice of the previous year’s records.
The notional turnover of index options grew by
132.0 per cent during 2022-23, as compared to
previous year. In terms of number of contracts
Chart 4.7: Product-wise Share in Equity Derivatives Segment of NSE
2% 0%
0%
3%
1% 1%
95%
2021-22
2022-23
Source: NSE
Amongst index futures products at NSE,
the percentage share of Bank Nifty futures,
decreased to 46.1 per cent in 2022-23 from
47.8 per cent in the previous year, whereas
that of Nifty futures increased to 53.8 per cent
from 52.2 per cent during the same period. The
percentage share of Nifty options decreased to
67
Chapter 4 Secondary Markets
traded, index options' volume surged by 130.1
per cent during 2022-23.
4.3.3 Market Concentration and Risk Man-
agement Measures
A. Market Concentration
Product-wise: During 2022-23, the share
of index options in total turnover at NSE
increased to 97.7 per cent from 94.9 per
cent in the previous year. On the contrary,
the percentage share of stock futures and
stock options in total turnover at NSE
decreased to 0.5 per cent and 1.5 per
cent during 2022-23 from 1.2 per cent 3.3
per cent respectively in the previous year
(Chart 4.7). For BSE, almost 100 per cent
of the total turnover in equity derivatives
segment was contributed by index options
in 2021-22 same as in previous year.
Index Futures
Index Options
Single Stock Futures
Single Stock Options
98%
36.5 per cent during 2022-23 from 41.0 per cent
in the previous year, while that of Bank Nifty
options too decreased to 56.4 per cent from
59.0 per cent during this period. Nifty Financial
Services options (FINNIFTY) accounted for
7.1 per cent of total options trading in 2022-23
(Chart 4.8).
 Annual Report 2022-23

Chart 4.8: Instrument-wise Share in Index Futures and Options at NSE

Futures Options

0.1% 7.1%

53.8%
52.2% 0.0% 0.0%
41.0%
36.5% 59.0%

46.1%
47.8% 56.4%
2021-22 2021- 22
2022-23 2022-23 2022-23

BANKNIFTY NIFTY FINNIFTY BANKNIFTY NIFTY FINNIFTY

Source: NSE

Maturity-wise: NSE had introduced weekly
expiry options of Bank Nifty Index and Nifty
50 Index with effect from May 27, 2016, and
February 11, 2019, respectively. Since then,
weekly options have emerged as the most
traded instrument in the Indian equity derivatives
market at NSE. During 2022-23, the share of
weekly expiry options in total index options
turnover at NSE increased to 76.3 per cent from
74.6 per cent in the previous year. Further, the
share of near month options (one-month expiry)
in total index options turnover at NSE decreased
to 23.5 per cent from 24.9 per cent during the
same period.
Participant-wise: Participant-wise analysis
of the equity derivatives segment shows that
the percentage share of proprietary traders
increased to 38.0 per cent in 2022-23 from
34.8 per cent in 2021-22 at NSE, while it fell to
75.3 per cent from 83.5 per cent at BSE. The
percentage share of FPIs in the F&O segment of
NSE decreased to 16.6 per cent in 2022-23 from
18.8 per cent in 2021-22 and that of 'corporates'
category marginally fell to 6.3 per cent from 8.4
per cent during the same period. The 'Others'
category (comprising retail and high net worth
individuals (HNIs)), continues to represent a
significant market share in the equity derivatives
segment of NSE, with a total market share of
34.8 per cent in 2022-23, compared to 33.4 per
cent in 2021-22. Mutual funds constituted 4.1
per cent trading in equity derivatives segment at
NSE during 2022-23. At BSE, share of 'Others'
category increased to 21.1 per cent from 14.2
per cent during the same period (Chart 4.9).

Chart 4.9: Participant-wise Share in the Equity Derivatives Turnover

NSE BSE
Proprietary 0.1%
trades
4.1% Proprietary
FPIs 6.3% 4.5% 34.8% trades 21.1%
14.2%
Corporate 8.4% 33.4% FPIs
0.1%
2.3%
MFs 16.6% 3.6%
18.8% Corporate 0.0%
Domestic 83.5%
0.0%
Institutions 34.8% 75.3%
38.0% Others 2021-22
Others 2021-22
2022-23
2022-23
2022-23

N
 ote: Domestic Institutions are excluding MFs. Outer circle denotes 2022-23 and inner circle denotes
2021-22.
Source: BSE and NSE

68
 Chapter 4 Secondary Markets

In terms of member category-wise share, trading
members who were also self-clearing members
(TM_SCM) accounted for 36.5 per cent of the
total turnover in the equity derivatives segment
of NSE. Trading members who can clear trades
of self as well as other trading members (TM_
CM) accounted for 36.5 per cent, followed by
only trading members (TM) category (27.0 per
cent). At BSE, 99.8 per cent trades were done
solely by the TM category members.
The top 10 brokers in the equity derivatives
segment of BSE, who represented about 0.1 per
cent of the total clients, contributed 99.9 per cent
of the total notional turnover at BSE in 2022-23.
On the other hand, top 10 brokers in the equity
derivatives of NSE, who represented about 54.8
per cent of the total clients, contributed 60.0 per
cent to the notional turnover at NSE in 2022-
23. The top 10 brokers are selected based
on the criteria of highest percentage share in
the notional turnover in the equity derivatives
segment of the exchanges in 2022-23. Total
number of clients have been computed based
on the count of PANs that have traded at least
once during the period (Table 4.18).

Table 4.18: Top 10 Brokers in the Equity Derivatives Segment

Exchange Percentage Share in the Gross /
Percentage Share in the total Clients (as on)
Notional Turnover
2021-22 2022-23 31-Mar-22 31-Mar-23
BSE 99.8 99.9 0.30 0.1
NSE 58.3 60.0 52.0 54.8
Source: BSE and NSE

Mode of trading: Based on modes of trading 4.4. COMMODITY DERIVATIVES MARKET

at exchange platform, it is observed that, during
2022-23, 50.1 per cent trading in the equity
derivatives segment of NSE was through co-
location route, followed by mobile trading (12.8
per cent), non-algo trading (12.6 per cent),
direct market access (10.6 per cent), internet-
based trading (9.6 per cent) and algo (4.3 per
cent) (Chart 4.10).
Chart 4.10: Mode of Trading in the Equity
Derivatives Segment of NSE
The commodity derivatives market facilitates
price discovery and risk management for
commodities market, which ensures a means
for producers, consumers, and traders to
manage their commodity price risks and hedge
against price fluctuations. In India, the term
‘commodity derivatives’ is defined under section
2 of Securities Contracts (Regulation) Act, 1956
and is regulated by SEBI.

4.3% Over the years, the Indian commodity derivatives

9.6% 10.6%
Co-location
4.4%
12.3%
market has expanded with many new products
10.5%
Mobile
12.6%
and segments. Presently, the commodity
Non-ALGO
16.4%
derivatives are traded at four exchanges,
Internet Based Trading namely, Multi Commodity Exchange (MCX),
ALGO 12.8%
9.6%
National Commodity and Derivatives Exchange
46.9%

Direct Market Access 2021-22

50.1%
(NCDEX), BSE and NSE. These exchanges
2022-23
facilitate trading in a wide range of commodities
such as gold, silver, base metals, crude oil,
Source: NSE
natural gas and agricultural commodities.

69
 Annual Report 2022-23
4.4.1 Policy Developments
During the year, SEBI undertook several
measures in order to further strengthen
commodity derivatives market, including
allowing participation of FPIs in exchange
traded commodity derivatives (ETCDs) in India.
Further, SEBI approved 12 new commodity
derivatives contracts (nine commodity futures
and three commodity options). Details of policy
measures are given below:
A. 
Participation of SEBI registered Foreign
Portfolio Investors: With a view to
enhance liquidity and depth of commodity
derivatives market, SEBI allowed foreign
investors to participate in Indian ETCDs
through FPI route. To begin with, FPIs have
been allowed to participate in cash settled
non-agricultural commodity derivative
contracts and indices comprising such
non-agricultural commodities.
B. 
Permission to launch multiple contracts
on the same commodity: With a view
to have more liquidity in a contract, it
was required that stock exchanges were
allowed to launch only single contract
on a particular commodity. However,
stock exchanges represented that due
to the restriction, investor participation
was limited as single contract is not able
to meet requirements of both small and
medium players and large players in the
securities market. Accordingly, stock
exchanges have been allowed to launch
multiple contracts in the same commodity.
Different contracts in same commodity
would encourage broader participation of
investors and value chain participants in
commodity derivatives market.
4.4.2 Global Commodity Price Movements:
Amidst the continuing global risks and
uncertainties, global commodity prices remain
volatile during 2022-23. Though, the prices
started to ease as compared to 2021-22, they
70
were still higher than the levels before the conflict
between Ukraine and Russia as at end of 2022-
23. One of the primary reasons for the easing
of commodity prices is the global economic
slowdown, more particularly in China and the
fears of recession across the world. During
2022-23, the ‘All Commodity Price Index’ by IMF
declined by 29.9 per cent. During first half of the
year, the IMF Energy Index declined by 0.5 per
cent, primarily driven by a decrease in Crude Oil
Price Index by 13.6 per cent. During the year,
the prices of Base Metals and Precious Metals
indices witnessed a decline of 12.8 per cent and
5.4 per cent, respectively. Similarly, Agriculture
Price Index recorded a decrease of 9.4 per cent
over the previous year ending March 31, 2022
(Chart 4.11).
Chart 4.11: Movement of IMF Commodity Price
Indices
150% 133.4%
100%
Percentage change
69.5%
50% 17.5% 11.0%
27.6%
0%
-5.4% -9.4%
-50% -12.8%
-100%
-29.9%
-43.9%
All Commodity Energy Base Metals Precious Metals Agriculture
FY 22 FY 23
Source: IMF
4.4.3 Price Discovery in Indian Markets
A.  Movement of Commodity Futures
Indices
 During 2022-23, the MCX iCOMDEX
Composite index recorded annualized
volatility of 16.3 per cent as against 18.3
per cent during 2021-22. Among sectoral
indices, the MCX iCOMDEX index
recorded maximum annualised volatility of
41.2 per cent, followed by Metal (19.1 per
cent) and Bullion (17.7 per cent) index.
Domestic indices moved in tandem with
international indices for most part of the
year. During 2022-23, MCX iCOMDEX
Composite witnessed a decrease of 8.5
per cent (Y-o-Y) as against 12.8 per cent
 Chapter 4 Secondary Markets

fall in the S&P GSCI index. In the energy
segment, the decline observed in the
MCX iCOMDEX Energy (31.4 per cent)
was more than twice of the drop in S&P
GSCI Energy Index (13.8 per cent). In
the base metal segment, the percentage
fall in the MCX iCOMDEX Base Metals
Index (17.8 per cent) was lower than the
decline in its international counterpart
(23.4 per cent). During 2022-23, the MCX
iCOMDEX Bullion increased by 6.8 per
cent, however, S&P GSCI Precious Metals
Index registered a decrease of 2.9 per
cent, driven by the record rise in domestic
gold prices despite the global fall in gold
prices. (Table 4.19 and Chart 4.12).

Table 4.19: Domestic Commodity Indices during 2022-23

Change year-on-year
Particulars 2021-22 2022-23
(per cent)
A. Domestic Commodity Indices
MCX iCOMDEX Composite
Year-end 14,516 13,285 -8.5
Average* 11,955 13,490 12.8
MCX iCOMDEX Bullion
Year-end 15,144 16,176 6.8
Average* 14,493 14,679 1.3
MCX iCOMDEX Metal
Year-end 21,593 17,743 -17.8
Average* 16,761 18,058 7.7
MCX iCOMDEX Energy
Year-end 8,375 5,749 -31.4
Average* 5,821 8,448 45.1
B. Annualised Volatility of indices (in per cent)
MCX iCOMDEX Composite 18.3 16.3 -11.2
MCX iCOMDEX Bullion 14.2 13.7 -3.8
MCX iCOMDEX Metal 29.4 19.1 -35.0
MCX iCOMDEX Energy 35.7 41.2 15.6
Note: * Average of daily closing values
Source: MCX

71
 Annual Report 2022-23

Chart 4.12: Trends in Domestic and Global Commodity Indices during 2022-23
5%
15%
0%
10%
-5%
5% -10%
0% -15%
-5% -20%
-10% -25%
-15% -30%
-35%

5% 30%
20%
0%
10%
-5% 0%
-10%
-10%
-20%
-15% -30%
-40%
Apr 2022
May 2022

Jun 2022
Jul 2022
Aug 2022
Sep 2022

Oct 2022
Nov 2022
Dec 2022

Apr 2022
May 2022

Jun 2022
Jul 2022
Aug 2022
Sep 2022

Oct 2022
Nov 2022
Dec 2022
Jan 2023
Feb 2023
Mar 2023

Jan 2023
Feb 2023
Mar 2023
Source: MCX, S&P

A. Commodity Price Movements for select/ followed by Cotton J34 at BSE (31.5 per
major commodities traded cent), Kapas at MCX (28.8 per cent) and
 During 2022-23, prices of most of the Barley at NCDEX (28.3 per cent). On the
commodities futures contracts traded on other hand, Jeera at NCDEX recorded the
Indian exchanges witnessed downward highest increase of 65.4 per cent during
trend. This was in line with the trends the year, followed by Sesame seed at
observed in commodities traded on NCDEX (43.8 per cent). Among non-agri
major commodity exchanges across the commodities, the prices of Natural gas
world. Amongst the agri. commodities futures at MCX (57.9 per cent) declined
traded at the Indian bourses, the steepest the most while that of Gold contracts at
decline was registered in futures prices MCX increased the most by 14.3 per cent
of Coriander at NCDEX (40.3 per cent), (Chart 4.13)

72
 Chapter 4 Secondary Markets

Chart 4.13: Variation in Futures Closing Price (Year-on-Year) (in per cent)

Natural Gas -MCX -57.9

Coriander-NCDEX - 40.3
Cotton J34-BSE - 31.5
Kapas-MCX - 28.8
Barley-NCDEX - 28.3
Zinc-MCX - 25.6
Aluminium-MCX - 25.5
Turmeric-NCDEX - 21.9
Crude Oil-MCX - 20.2
Nickel-MCX - 17.0
Steel Long-NCDEX - 15.4
Castor Oil-NCDEX - 12.9
Cotton seed oil cake-NCDEX - 11.3
Guar seed-NCDEX - 9.9
Mentha Oil-MCX - 8.0
Copper-MCX - 5.1
Guargum-NCDEX - 3.5
Lead-MCX - 2.1
Bajra-NCDEX 6.3
Silver-MCX 7.0
Gur-NCDEX 8.7
Gold-MCX 14.3
Sesameseed-NCDEX 43.8
Jeera-NCDEX 65.4

Note: Variation is computed for closing prices of near-month contracts of select commodities traded during 2022-23.
Source: MCX, NCDEX, BSE, NSE

Comparison of closing futures prices of major
commodities traded in domestic as well as
international markets suggests unidirectional
trends for most of the commodities, except
cotton. Indian cotton prices displayed contrarian
trend vis-a-vis global market. The price of
cotton at MCX declined by 34 per cent during
the year, as against the rise in global prices by
45 per cent (Intercontinental Exchange, USA).
(Chart 4.14).

73
 Annual Report 2022-23

Chart 4.14: Divergence between Domestic and International Commodity Prices

- 58%
Natural Gas - 58%
-15% International
Zinc -27%
Aluminium -18% Domestic
-27%
Crude Oil -19%
-20%
-18%
Nickel -17%
-13%
Rubber -10%
Copper -6%
-4%
-2%
Lead -1%
Silver 4%
7%
Gold 10%
15%
Cotton -34%
45%

-60% -40% -20% 0% 20% 40%

Source: MCX, S&P

4.4.4 Market Activity and Trends Observed against 67 during 2021-22. The number
A.  Market Activity: During 2022-23, of commodities - permitted, available for
derivatives contracts on 51 commodities/ trading and traded - at each exchange
variants were available for trading as during 2022-23 is given at Table 4.20.

Table 4.20: Permitted and Traded Contracts at Domestic Exchanges (2022-23)

No. of Permitted No. of Commodities No. of Traded Commodities

Exchanges Commodities available for trading during 2022-23
Non-Agri Agri Non-Agri Agri Non-Agri Agri
MCX$ 12 4 12 4 12 4
NCDEX$$ 1 25 1 24 1 16
BSE 3 3 3 3 2 3
NSE 6 0 4 0 1 0
Note: $ at MCX, data includes 3 commodity indices (MCX iCOMDEX Bullion, MCX iCOMDEX Energy, MCX iCOMDEX
Metal) in addition to non-agri commodity count. $$ at NCDEX, data includes 1 commodity index (GUAREX) in addition to
agri commodity count.
Source: All Exchanges

i. 
Trends in Turnover: The pan-India
turnover in commodity derivatives segment
increased by 49.7 per cent in 2022-23 to
` 150.1 lakh crore, up from `100.3 lakh
crore in 2021-22. Among exchanges,
MCX, which holds 98.4 per cent share in
overall commodity derivatives turnover,
recorded an increase of 68.3 per cent. On
the other hand, turnover declined for other
exchanges, viz. BSE, NCDEX and NSE
by 98.9 per cent, 54.7 per cent and 10.1
per cent, respectively. NCDEX contributed
1.4 per cent to the total turnover, followed
by NSE (0.12 per cent) and BSE (0.06 per
cent). (Table 4.21)

74
 Chapter 4 Secondary Markets

Table 4.21: Turnover of Commodity Derivatives Market

Change year-on-year
Particulars 2021-22 2022-23
(per cent)
All-India Total Turnover (` crore) 1,00,27,758 1,50,13,608 49.7
MCX, of which 87,81,757 1,47,80,566 68.3
Futures 67,53,928 60,43,084 -10.5
Options 20,27,830 87,37,483 330.9
BSE, of which 7,69,075 8,365 -98.9
Futures 4,039 3,433 -15.0
Options 7,65,036 4,933 -99.4
NCDEX, of which 4,57,181 2,06,922 -54.7
Futures 4,56,693# 2,04,932 -55.1
Options 487 1,989 308.3
NSE, of which 19,745 17,755 -10.1
Futures 2,273 14 -99.4
Options 17,472 17,741 1.5
Note: #Revised Figures
Source: All Exchanges

ii. 
Turnover of futures and options
contracts: During 2022-23, the overall
turnover of options contracts increased
sharply by 211.7 per cent to `87.6 lakh
crore from `28.1 lakh crore in 2021-22.
On the other hand, the turnover of futures
contracts declined by 13.4 per cent to
`62.5 lakh crore from `72.1 lakh crore in
the previous year. The turnover in options
contracts increased mainly due to surge
in trading volume in energy and bullion
options at MCX by 363.1 per cent and
111.0 per cent, respectively. In 2022-23,
out of total commodity derivatives turnover,
futures segment contributed 41.6 per cent
as compared to 72 per cent in 2021-22,
while options segment accounted for 58.4
per cent of the total turnover, up from 28
per cent in 2021-22.
iii. Turnover of agri and non-agri contracts:
In 2022-23, the turnover of non-agri
segment increased by 56.4 per cent to
`147.8 lakh crore from `94.5 lakh crore
in 2021-22, while that of agri segment
decreased by 60.1 per cent to `2.3 lakh
crore from `5.7 lakh crore over the last
year. This resulted in decline in percentage
share in overall turnover of agri segment to
1.5 per cent from 5.7 per cent in the previous
financial year. On the other hand, share of
non-agri segment turnover increased from
94.3 per cent in 2021-22 to 98.5 per cent
in 2022-23. Within the non-agri segment,
the turnover of energy segment recorded
a significant rise of 149.6 per cent in 2022-
23 (Y-o-Y), whereas metal and bullion
segment decreased by 38.5 per cent and
8.5 per cent, respectively.
iv. Participant-wise Turnover: In the agri
segment, the share of proprietary traders
declined from 40.6 per cent in 2021-22 to
38.8 per cent in 2022-23. The category of
‘others’ accounted for the highest share
(60.1 per cent) in 2022-23, up from 57.9
per cent in the previous year. ’Others’
category mainly includes client categories
of Hindu Undivided Family (HUF),
individual proprietary firms, partnership
firms/limited liability partnership, public
and private companies or body corporates.
The share of Value chain participants
(VCPs)/hedgers was 1.1 per cent in 2022-

75
 Annual Report 2022-23

23. VCPs/hedgers, Farmer Producer segment, the share of proprietary traders

Organizations (FPOs) and farmers are the
categories of ‘hedgers and producers’ who
trade in exchange platform to hedge the
risks arising from their economic activities.
Category of domestic financial institutional
investors include Category-3 AIFs,
PMS and mutual funds. In the non-agri
increased from 35.5 per cent in 2021-22
to 48.4 per cent in 2022-23. The share of
VCPs/hedgers was 2.2 per cent, while that
of domestic financial institutional investors
and others was 0.1 per cent and 49.3 per
cent, respectively (Table 4.22).

Table 4.22: Participant-wise Share in Turnover of Commodity Derivatives Market

Domestic
FPOs/ VCPs/ Proprietary Financial Foreign
Segment Year Others
Farmers Hedgers traders Institutional Participants
Investors
2022-23 0.0 1.1 38.8 0.0 0.0 60.1
Agri
2021-22 0.0 1.5 40.6 0.0 0.0 57.9
2022-23 0.0 2.2 48.4 0.1 0.0 49.3
Non-Agri
2021-22 0.0 3.4 35.5 0.1 0.0 61.0
Source: All Exchanges

4.4.5 Details of New Products approved by
SEBI
Out of 91 commodity/variants notified by the
Government of India for trading on stock
exchange platforms, approval was granted
during 2022-23 to several fresh contracts across
exchanges which included approval to nine
futures contracts and three options in goods
contracts.The details of new contracts approved
by SEBI during 2022-23 and time taken for
regulatory approval are given in Table 4.23.

Table 4.23: New Commodity Derivatives Contracts Approved during 2022-23

No. of Median Time Taken
Applicant
Contract Type Contract Name Applications for Approval
Exchange
Approved (no. of working days)
Gold 1Kg NSE
Crude Oil NSE
Natural Gas NSE
Groundnut (in shell) NCDEX
Commodity Futures
Aluminium Mini MCX 9 15 (15.55)
Contracts
Lead Mini MCX
Zinc Mini MCX
Crude Oil Mini MCX
Natural Gas Mini MCX
Jeera NCDEX
Options in Goods Coriander NCDEX 3 26 (26)
Turmeric NCDEX
Note: For calculation of Median Time Taken (working days), processing time has been taken from latest date
of receipt of complete information from the exchanges. The figure in bracket represents average number of
working days taken for processing of applications from the latest date of receipt of complete information.
Source: All Exchanges
76
 Chapter 4 Secondary Markets

4.4.6 Commodities Physically Delivered in metal space, NCDEX utilised 74.5 per cent of
through the Platform the warehouse capacity, followed by MCX (49.2
During 2022–23, the total amount of commodities per cent), while BSE and NSE did not utilize
delivered physically has declined significantly, their warehouse facility. In case of bullion, at
mainly on account of fall in physical deliveries MCX, the vaults are on a shared basis and the
in agri segment. The total quantity delivered in insurance value of the stock decides the storage
agri segment has decreased by 53.7 per cent capacity of the vault. During 2022-23, capacity
in 2022-23 over previous year (Table 4.24). utilisation for MCX was 35.2 per cent, while the
The commodities delivered in base metal value for BSE and NSE combined together was
segment has increased moderately by 6.9 per negligible. (Table 4.25).
cent in 2022-23. In case of bullion, the total
amount of commodities delivered declined in Table 4.25: Warehouse Capacity Utilisation at
2022-23 as compared to 2021-22. Amongst Exchanges (As on March 31, 2023)
agri commodities traded at NCDEX, around No. of
93 per cent of physical delivery during 2022- Total No. of Capacity of Capacity
Warehouse
23 was concentrated in six commodities, viz. Particulars Registered Warehouses Utilised
Service
Warehouses (MT) (MT)
Castorseed, Cotton seed oil cake, Guar seed, Providers
Coriander, Jeera, and Guargum. The highest MCX
delivered quantity was in NCDEX Castorseed Agri 18 5 27,227 991
(68,085 MT), followed by NCDEX Cotton Seed Metal 14 3 29,260 14,386
Oil Cake (52,620 MT) and NCDEX Guarseed Bullion # 25 4 4,388 1,546
(45,410 MT). At MCX platform, the highest NCDEX
delivered quantity was in Aluminium (36,005 Agri 141 7 4,05,327 83,847
MT), followed by Copper (20,868 MT) and Metal 1 1 2,300 1,713
Cotton (17,408 MT). BSE
Agri 8 3 8,086 0
Table 4.24: Physically Delivered Quantity (Metric Bullion 2 2 323 0.0
Tonnes) Metal 1 1 2,500 0
Quantity Delivered NSE
Segment Bullion 4 1 470 0.0
2021-22 2022-23
Metal 1 1 520 0
Agri 5,23,156 2,42,331
Bullion 620 493 Source: All Exchanges

Metals 82,349 88,067

4.4.8 Risk management Measures
Source: All Exchanges
A.  Comprehensive Risk Management
Framework for Electronic Gold Receipts
4.4.7 Warehouse Capacity Utilization related Segment: With the objective to put in
to Exchange Traded Commodity Derivatives place a risk management framework for
The warehousing capacity indicates storage Electronic Gold Receipts (EGR) segment,
space available for various clearing members guidelines were issued by SEBI. The
and their respective constituents/ depositors guidelines specified eligible collateral,
who are willing to store goods and give delivery applicable margins, reporting and
on respective Clearing Corporation’s platform. verification framework of margins, penalty
Within the agri warehouse facility, the capacity and shortfall management, norms relating
utilisation was the highest for NCDEX (20.7 per to Settlement Guarantee Fund (SGF)
cent), followed by MCX (3.6 per cent). Further, etc. The risk management framework

77
 Annual Report 2022-23

also provides guidelines for CC to have turnover in commodities derivatives segment

adequate capital buffer in form of margins
and other collaterals, which are collected
from members or is in the form of SGF to
eliminate any kind of settlement risk and
thus guaranteeing the settlement of trades
which are executed on exchange platform.
4.4.9 Market Concentration
In the commodities market, the MCX is a
dominant exchange, with market share of 98.4
per cent in total turnover. This dominance of
MCX is partly attributed to rise in options trading
in MCX in the recent years. During 2022-23,
the options turnover at MCX increased by
whopping 330.9 per cent over previous year and
now contributes to 58.2 per cent of pan-India
(compared to 20.2 per cent in 2021-22). This
spurt in options trading at MCX was mainly in
energy and bullion segments. Overall, during
2022-23, the trading in energy segment was
concentrated to the tune of 69.4 per cent of the
total turnover across exchanges, followed by
bullion (22.7 per cent) and metal (6.3 per cent).
The share of agri segment has reduced to 1.5
per cent in 2022-23 from 5.7 per cent in 2021-
22. Compared to previous year, the turnover in
agri segment has fallen by 60.1 per cent year-
on-year. The concentration of trading in terms
of segment (agri-non-agri), instruments (futures
and options), products (agri. Bullion, energy and
metals) and exchanges is represented in the
Chart 4.15.

Chart 4.15: Distribution of Trading Activity in Commodity Derivatives

Segment - wise Share in commodity Derivatives Product Segment-wise share in Total Turnover
Turnover
0.7 80
100% 0.7 80
100% 69.4
90% 70 69.4
90% 70
80%
80% 60
70% 66.3 60
70% 66.3
60% 50 41.6
60% 50
50% 99.9 99.3 100.0 37.2 41.6
50% 99.9 99.3 100.0 40 37.2
40% 40
40%
30% 30 22.7
30% 30 22.7
20% 15.5
20% 33.7 20 15.5
10% 33.7 20
10% 10 5.7 6.3
0% 0.1 5.7 6.3
0% 0.1 10 1.5
MCX NCDEX NSE BSE 0 1.5
MCX NCDEX NSE BSE 0
2021-22 2022-23
2021-22 2022-23
Agri Non-Agri Agri Bullion Energy Metal
Agri Non-Agri Agri Bullion Energy Metal

Instrument-wise Share in Commodity Derivatives Exchange-wise share in Commodity Derivatives Turnover

Turnover
100
100 98.4
99.7
96.7

98.487.6
99.7

80
96.7

80 87.6
60
60
40
40
20 7.7
20 3.3 0.0 0.1 0.1 0.00.2 1.4 4.6 0.06 7.7 0.12 0.2
3.3 0.0 0.1 0.1 0.00.2 1.4 4.6 0.06 0.12 0.2
0
0 NCDEX MCX BSE NSE
NCDEX MCX BSE NSE NCDEX MCX BSE NSE
NCDEX Futures
MCX BSE
Options NSE 2022-23 2021-22
Futures Options 2022-23 2021-22
Source: All Exchanges

78
 Chapter 4 Secondary Markets

4.4.10 Contracts suspended/banned October 2010, respectively. Currently, these are

from trading
The suspension of commodity futures contracts
notified in December, 2021 was extended
in December, 2022 for one more year. The
details of contracts which remained suspended/
discontinued are provided in Table 4.26.
available for trading on four currency pairs viz.
US Dollars (USD-INR), Euro (EUR-INR), Great
Britain Pound (GBP-INR) and Japanese Yen
(JPY-INR). The cross-currency pairs such as
EUR-USD, GBP-USD and USD-JPY are also
permitted for trading.

Table 4.26: Discontinued/suspended

Commodities contracts during 2022-23
4.5.1 Policy Developments
The overall policy developments for various
Discontinued/
Contract Name Exchange products traded in secondary market are
Suspended
Commodity Futures Contracts detailed in Sections 4.1, 4.2, 4.3, 4.4 and the
forthcoming section on MIIs.
Rubber Discontinued MCX
Crude
Degummed Discontinued/ 4.5.2 Global Currency Movements and Per-
NSE formance of Indian Rupee
Soybean Oil Suspended
Futures $ The strengthening of the US Dollar on account
Wheat$ Suspended NCDEX of interest rate hikes and hawkish policy stance
Chana$ Suspended NCDEX of US Federal Reserve weakened other global
Rapeseed-
Suspended NCDEX
market currencies during 2022-23. During
Mustard Seed$ the fiscal, Indian Rupee depreciated by 8.2
Soybean$ Suspended NCDEX per cent to close at 82.2 against USD after
Refined Soy Oil$ Suspended NCDEX touching its historic low of 83.2 on October 20,
Hipro Soybean
Suspended NCDEX 2022. Among other currencies, Japanese Yen,
Meal$ Chinese Remnimbi , British Pound and Euro
Crude Palm Oil$ Suspended NCDEX depreciated (against USD) by 9.1 per cent, 6.5
Moong$ Suspended NCDEX per cent and 2.1 per cent, during the year. On
Futures on Commodity Indices the other hand, dollar index appreciated by 4.3
NCDEX Soydex$ Suspended NCDEX per cent (Chart 4.16).
Note: $ The trading in these derivative contracts was earlier
suspended during December, 2021 and the suspension
Chart 4.16: Trends in Global Currency Movements
was extended in December, 2022 for one more year. 20.0
9.2
10.0 4.3 1.6
Source: All Exchanges 0.0
-10.0 -2.1 -2.6 -4.3 -4.9 -4.9
-6.5 -6.7 -6.8 -7.6 -8.2 -8.3 -9.1
-20.0
4.5 CURRENCY DERIVATIVES -30.0 -21.8
-40.0 -30.6
ex es il ey
ico d sia ur
o
la
nd sia sia n UK an az rea di
a
ina pan rica k
ex In us E ai ne ay pi ai
w Br Ko In Ch Ja Af ur
M r R
Th do al ilip T T
S. th
Currency derivatives are standardized financial Do
lle In M
Ph So
u

contracts that are traded on exchanges. The

underlying instrument of these contracts are
currency pairs which are exchanged at a
future date, and at a stipulated rate. Currency
derivatives, which include futures and options
contracts, are used to manage foreign
exchange risks arising out of fluctuations in
currency rates. In India, currency futures and
options were launched in August 2008 and
Source: Refinitiv
4.5.3 Market Activity and Trends Observed
In line with the development of capital market
and with increase in need for hedging against
foreign exchange risks by corporates/exporters/
importers, trading activity in currency derivatives
segment has increased significantly over
the years. The aggregate turnover of all the

79
 Annual Report 2022-23

exchanges in the currency derivatives segment
increased by 60.9 per cent to `445.9 lakh crore
in 2022-23 from `277.2 lakh crore 2021-22.
Turnover at currency derivatives segment of
MSEI and NSE grew by 156.4 per cent and
79.9 per cent respectively, during 2022-23,
while that at BSE declined by 2.8 per cent over
the previous year. During 2022-23, market
share of NSE rose further to 85.4 per cent
from 76.4 per cent in 2021-22, while share of
BSE continued to decline from 23.3 per cent to
14.1 per cent in 2022-23. Open interest in the
currency derivatives market at the end of 2022-
23 stood at `1.78 lakh crore, up by 44.0 per cent
compared to 2021-22 (Table 4.27).

Table 4.27: Trends in the Currency Derivatives Segment

No. of Contracts Traded (`Lakh) Turnover (` crore)
Exchange
2021-22 2022-23 2021-22 2022-23
BSE 8,645 7,804 64,54,526 62,71,864
MSEI 120 284 90,270 2,31,435
NSE 27,919 46,975 2,11,75,555 3,80,86,873
Total 36,684 55,064 2,77,20,351 4,45,90,171

Source: BSE, NSE, MSEI

4.5.4 Market Concentration and Risk 22). The share of USD-INR options in total
Management Measures currency derivative turnover at NSE and
A. Market Concentration BSE were 73.4 per cent and 27.4 per cent,
 During 2022-23, the share of currency respectively, in 2022-23 (Table 4.28).
options in total currency derivatives
turnover at NSE increased further to 73.4 Table 4.28: Product-wise Market Share in
Currency Derivatives Segment (Per cent)
per cent (compared to 66.7 per cent in
the previous year), whereas that at BSE Currency Exchanges
Type
declined to 27.5 per cent from 53.7 per Pair 2021-22 2022-23
cent in the previous year (during this USD-INR 31.6 29.7
period turnover in the currency options EURO-INR 1.6 1.3
Futures
segment at BSE had halved). At MSEI, GBP-INR 2.8 1.9
almost all the trading was concentrated in Others 0.5 0.4
the currency futures products. USD-INR 63.4 66.6
EURO-INR 0.0 0.0
Options
The trading activity in currency derivatives GBP-INR 0.1 0.0
segment is concentrated mainly in USD- Others 0.0 0.0
INR currency pair. Among currency Source: BSE, NSE, MSEI
futures products, the share of USD-INR
in total currency derivative turnover at
NSE declined to 22.3 per cent in 2022-23 In the currency derivatives market, proprietary
(compared to 27.0 per cent in 2021-22), traders were the largest participants in NSE and
while that at BSE and MSEI increased BSE. Banks and Corporates were the major
to 71.9 per cent and 99.4 per cent participants at MSEI with market share of 49.6
respectively (compared to 46.1 per cent per cent and 34.4 per cent, respectively, in
and 96.3 per cent, respectively, in 2021- 2022-23 (Table 4.29).

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 Chapter 4 Secondary Markets

Table 4.29: Participant-wise Share in Currency Derivatives Segment (Per cent)

NSE BSE MSEI
Category/Year
2021-22 2022-23 2021-22 2022-23 2021-22 2022-23
Proprietary Trades 61.7 66.7 60.9 87.7 3.2 3.6
FPIs 10.5 9.5 2.4 2.9 4.1 12.4
Banks 0.8 0.5 0.0 0.0 43.7 49.6
Corporate 6.8 5.3 5.2 3.8 48.9 34.4
Others 20.4 18.0 31.4 5.6 0.1 0.0
Source: BSE, NSE, MSEI

4.6 INTEREST RATE DERIVATIVES BSE and NSE decreased by 45.4 per cent and
MARKETS 0.2 per cent, respectively, in 2022-23 (Table
4.30). During this period, market share of NSE
Exchange traded interest rate derivatives (IRDs) in overall IRD turnover was 52.8 per cent. Open
are the standardised contracts traded on a interest in the IRD market at the end of 2022-23
recognised stock exchange, and the value of the stood at `1,228 lakh crore, increasing by 32.4
contracts is derived from reference interest rates per cent compared to 2021-22.
or the market prices of interest-rate securities.
Currently, in India, interest rate future contracts Table 4.30: Trends in Interest Rate Derivatives
are available on Government of India securities, No. of Contracts
Turnover (` crore)
Treasury bills and MIBOR, whereas interest rate Exchange Traded (`Lakh)
option contracts are available on Government of 2021-22 2022-23 2021-22 2022-23
India securities only. Institutional investors like BSE 22 13 43,165 23,552
banks, corporate, insurance companies, among NSE 14 14 26,357 26,296
others, use IRDs to hedge the interest rate Total 36 26 69,522 49,848
risks in their underlying government securities Source: BSE and NSE
portfolio.
4.6.3 Market Concentration and Risk Man-
4.6.1 Policy Developments agement Measures
The overall policy developments for various During 2022-23, interest rate futures constituted
products traded in secondary market are 100 per cent share of the total turnover in IRDs
detailed in Section 4.1 and the forthcoming at both NSE and BSE, while there was zero
section on MIIs. turnover in interest rate options. Proprietary
traders and Corporates were the major
4.6.2 Market Activity and Trends Observed participants in IRDs. At NSE, 53.0 per cent
During 2022-23, the aggregate turnover in the of turnover in IRDs segment was contributed
IRDs segment across all exchanges declined by proprietary traders category, while at BSE,
further by 28.3 per cent to `49,848 crore, the share of proprietary traders increased from
following a decline of 51.7 per cent in the 29.1 per cent to 39.6 per cent during 2022-23
previous year. Turnover in IRDs segment of (Table 4.31).

81
 Annual Report 2022-23

Table 4.31: Participant-wise Share in Interest which had permanent recognition, namely,
Rate Derivatives BSE, NSE, CSE, MCX, NCDEX and ICEX.
Category/ NSE BSE SEBI had renewed recognition of MSEI
Year 2021-22 2022-23 2021-22 2022-23 on a yearly basis, which is currently valid
Proprietary up to September 15, 2023. Calcutta Stock
Trades 55.7 53.0 29.1 39.6 Exchange Ltd (CSE) had not applied
FPIs 0.9 0.9 0.0 0.0 for voluntary exit and compulsory exit
Banks 6.1 1.5 0.0 1.0 process is underway. However, the matter
Corporate 13.0 22.8 28.8 39.4 is sub judice before Hon’ble Kolkata
Insurance High Court. Pursuant to the exit policy
Companies 2.6 3.8 0.0 1.9 for de-recognized/non-operational stock
Others 21.8 18.1 42.2 18.1 exchanges notified by SEBI in 2012, 20
Source: BSE and NSE stock exchanges have exited so far. The
last exchange to exit was Magadh Stock
4.7 MARKET INFRASTRUCTURE Exchanges in 2019-20.
INSTITUTIONS
B. Clearing Corporations: Clearing
Stock exchanges, clearing corporations (CCs) Corporations (CCs) carry out the
and depositories are collectively referred to as functions of clearing, settlement, collateral
the Market Infrastructure Institutions (MIIs) and management and risk management.
constitute a key part of the securities market The CCs currently having approval from
infrastructure. In addition to the providing SEBI (in the non-commodity markets) are
critical functions/services such as trading NSE Clearing Limited (NCL) and Indian
and surveillance, clearing and settlement, Clearing Corporation Limited (ICCL). The
dematerialisation and custody of securities, four CCs currently having approval from
MIIs also act as frontline regulators. MIIs are SEBI in the commodity derivatives markets
systemically important institutions for the are Multi Commodity Exchange Clearing
economy and their robust functioning is central Corporation Limited (MCXCCL), National
for the smooth and efficient operation of the Commodity Clearing Limited (NCCL),
markets. Indian Clearing Corporation of India Limited
(ICCL) and NSE Clearing Limited (NCL).
4.7.1 MIIs' Functioning During 2022-23, the recognition granted
The functioning of stock exchanges and CCs is to Metropolitan Clearing Corporation of
governed by Securities Contracts (Regulation) India Limited (MCCIL) expired on October
(Stock Exchanges and Clearing Corporations) 02, 2022. SEBI has renewed recognition
Regulations, 2018 (“SECC Regulations”) of two CCs viz. MCXCCL and NCCL that
and that of the depositories by the SEBI is currently valid up to July 20, 2025 and
(Depositories and Participants) Regulations, September 09, 2025, respectively.
2018 (“D&P Regulations”), and various circulars
issued thereunder. C. Depositories: National Securities
A. Stock Exchanges: Stock exchanges are Depository Limited (NSDL) and Central
granted recognition for their operations in Depository Services Limited (CDSL) are
the securities market by SEBI under Section the two central securities depositories in
4 of the Securities Contracts (Regulation) India. The function of the depositories is
Act (SCRA), 1956. As on March 31, 2023, to hold securities (like shares, debentures,
there were six stock exchanges in India bonds, government securities, mutual fund

82
 Chapter 4 Secondary Markets

units, etc.) of investors in dematerialised 15 per cent shareholding in an MII, whereas

form. The depositories provide many
of their services through depository
participants (DPs) as their agents.
4.7.2 Ownership and Governance of MIIs
In India, SECC Regulations, D&P Regulations,
and various circulars issued thereunder,
prescribe the norms for ownership and
governance at stock exchanges, CCs and
depositories. These ownership and governance
norms prescribed by SEBI have evolved over
time, taking into consideration that the MIIs are
systematically important public utilities vested
with regulatory responsibilities under various
statutes.
As prescribed under the SECC Regulations
and D&P Regulations, eligible domestic and
foreign entities are permitted to hold up to
all other persons are permitted to hold up to
five per cent shareholding. The regulations
also stipulate eligibility criteria for acquiring
or holding shares of an MII, and require such
acquirer to seek approval from SEBI, either
prior to acquisition of shares or subsequent to
such acquisition, depending on the percentage
of shares acquired.
A. Stock Exchanges: As of March 31, 2023,
foreign shareholders collectively hold
about 41.2 per cent stake in NSE. In BSE
and MSEI, it was relatively lower at 13.4
per cent and 7.5 per cent, respectively.
Individuals had 59.3 per cent shareholding
in MSEI at the end of 2022-23, while it
constituted 57.5 per cent shareholding
at BSE and 12.7 per cent at NSE (Table
4.32).

Table 4.32: Ownership Pattern of Stock Exchanges (Per cent)

BSE NSE MSEI
Category
31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23
Foreign Shareholding (A) 18.1 13.4 44.6 41.2 7.5 7.5
- FDI 0.1 0.1 33.8 34.0 0.0 0.0
- FPI 12.8 7.6 10.8 7.2 0.0 0.0
- Others 5.2 5.6 0.0 0.0 7.5 7.5
Domestic Shareholding (B) 81.9 86.6 55.4 58.8 92.5 92.5
- Banks 0.6 0.3 4.6 4.6 13.5 13.5
- Insurance Companies 6.1 6.2 19.3 19.4 0.0 0.0
- Domestic Financial Institutions 1.0 0.7 0.0 0.0 1.5 1.5
- Individuals 50.9 57.5 10.4 12.7 59.4 59.3
- Corporates 20.3 19.4 15.1 16.0 15.1 15.2
- Others 2.9 2.5 6.1 6.2 3.1 3.1
Total (Foreign + Domestic) 100 100 100 100 100 100
Source: BSE, NSE and MSEI

83
 Annual Report 2022-23

At the end of March 2023, the shareholding
of top 10 shareholders at BSE, NSE and
MSEI stands at 18.2 per cent, 42.5 per
cent and 29.9 per cent, respectively.
B. Clearing Corporations: As of March 31,
2023, there are four CCs in India. The
NCL and ICCL are the wholly owned
subsidiaries of NSE and BSE, respectively.
Similarly, MCXCCL and NCCL are the
wholly owned subsidiaries of MCX and
NCDEX, respectively. Post the introduction
of interoperability (in equity segment), the
CCs are also catering to various segments
of non-associated exchanges through an
interoperability arrangement in compliance
with SEBI circular on interoperability
among the CCs.
C. Depositories: At NSDL, the ‘Banks’
continued to hold the largest share with 37.0
per cent of the total shareholding in NSDL
as on March 31, 2023. While, at CDSL,
‘Individuals’ were the top shareholders
with 40.6 per cent shareholding at the end
of March, 2023 (Table 4.33).

Table 4.33: Ownership Pattern of Depositories (Per cent)

CDSL NSDL
Category
31-Mar-22 31-Mar-23 31-Mar-22 31-Mar-23
Foreign Shareholding 17.0 17.3 28.5 26.4
- FDI 0.0 0.0 0.0 0.0
- FPI 9.8 7.5 0.0 0.0
- Others 7.2 9.8 28.5 26.4
Domestic Shareholding 83.0 82.7 71.5 73.6
- Banks 3.4 2.2 37.0 37.0
- Insurance Companies 7.4 8.5 3.0 3.0
-  Domestic Financial Institutions (Other than 8.2 7.8 6.8 6.8
banks and corporates) (including MFs, NBFCs,
AIFs)
- Individuals 36.5 40.6 0.0 1.4
- Corporates 22.8 2.3 24.7 25.3
- Others 4.7 21.3 0.0 0.1
Total (Foreign + Domestic) 100 100 100 100
Source: CDSL and NSDL

At the end of March 2023, the shareholding of
top 10 shareholders at CDSL and NSDL stands
at 44.4 per cent, and 88.2 per cent, respectively.
4.7.3 Policy Developments.
A. Orderly winding down of Clearing
Corporations: The SECC Regulations,
2018 were amended to ensure that CCs
have a framework for orderly winding down
of their critical operations and services. The
framework should provide for timely and
orderly settlement or close out or transfer of
positions, and/ or the transfer of the collaterals
or deposits or margins or any other assets of
the members to another recognised CC that
would take over the operations of the CC
which is winding down its critical operations
and services.
B. 
Strengthening Governance of MIIs:
SEBI had constituted a committee on
“Strengthening Governance of Market
Infrastructure Institutions” in April 2022,
under the chairmanship of Shri G.

84
 Chapter 4 Secondary Markets

Mahalingam, ex-Whole Time Member, for further strengthening of governance

SEBI, to review the existing governance norms at MIIs (Box 4.2).
framework and make recommendations

Box 4.2: Strengthening Governance of MIIs

Market Infrastructure Institutions (MIIs) are unique institutions providing vital infrastructure of
trading, settlement and record keeping. They are vested with regulatory responsibilities, while
pursuing commercial interests like other profit-oriented entities. Because of this conflicting nature
of MII’s role, the governance standards of MIIs need to be robust to increase market confidence
and deter malpractices. In light of the governance lapses observed in some of the MIIs, rapidly
changing market dynamics and increasing reliance of MIIs on technology, a Committee headed by
Shri G. Mahalingam, former Whole Time Member, SEBI was set up to make recommendations for
further strengthening the governance norms relating to MIIs. Based on the recommendations of the
Committee and public comments on the same, SEBI Board approved various amendments to the
SECC Regulations, 2018 and D&P Regulations, 2018 for strengthening governance norms relating
to MIIs. The major amendments, inter-alia, includes the following:
i. The functions of MIIs have been categorized into three verticals viz. Critical Operations;
Regulatory, Compliance, Risk Management and Investor Grievances; and other functions. The
functions under the first two verticals separately are to be given higher priority by MIIs over other
functions.
ii. The existing process of appointment of Public Interest Directors (PIDs), Non-Independent Directors
(NIDs) and Managing Director (MD) has been rationalized and skill-set on areas viz., capital
markets, finance and accountancy, legal and regulatory and technology has been mandated for
PIDs while maintaining an overall balance of expertise required in the Governing Board. Further,
amendments also enable SEBI to suo-moto appoint PIDs on the Governing Board of the MIIs.
iii. In order to enhance transparency, MIIs shall disclose the agenda and minutes of meetings of their
Governing Board related to regulatory, compliance, risk management and investor grievances
areas on their website.
iv. An external agency shall independently assess the performance of MIIs and their statutory
committees.
v. The definition of Key Managerial Personnel (KMPs) as well as their compensation policy related
to variable pay has been revised to improve overall accountability.
vi. The existing Code of conduct and Code of ethics for the directors and KMPs of the MIIs were
rationalized into a single code of conduct. A code of conduct for stock exchanges and CCs
(similar to the existing code of conduct for Depositories) and for the governing board of the MIIs
were also introduced.
vii. Detailed framework for data sharing by MIIs was prescribed. Further, the scope of regulatory
actions under SECC Regulations and D&P Regulations was enhanced to take actions for
contravention of any regulations.

C. ARCL Tri-Party Repo Product on NSE’s Tri-Party Repo Market (TRM) platform.
TRM Platform: SEBI and RBI have allowed ARCL is a LPCC and is recognized by
NSE to offer trading in AMC Repo Clearing SEBI under SECC Regulations 2018.
Ltd. (ARCL) Tri-Party Repo Product on its For this product, ARCL will act as a Tri-

85
 Annual Report 2022-23
Party Agent and will provide settlement
services including settlement guarantee,
risk management, collateral management
etc.
D. 
Norms for Scheme of Arrangement
for unlisted MIIs: In terms of SEBI
(LODR) Regulations, 2015, listed entities
(including listed Market Infrastructure
Institutions (MIIs)) desirous of undertaking
scheme of arrangement or involved in a
scheme of arrangement are required to file
the draft scheme with stock exchange(s)
for obtaining Observation Letter or No-
objection Letter, before filing such scheme
with any Court or Tribunal. However, in
case of unlisted MIIs there is no specific
provision under extant law. With a view
to harmonize and bring uniformity in the
norms related to scheme of arrangement
for unlisted MIIs in line with provisions
currently applicable to listed MIIs a
framework similar to the scheme of
arrangement mechanism for listed MIIs
was issued.
E. 
Cyber/System Security and Business
Continuity for MIIs
i. 
Standard Operating Procedure (SOP)
for handling of Stock Exchange
Outage: The SOP was prepared with a
view to ensure that any outage at stock
exchange(s) is handled in a harmonized
and consistent manner. The SOP, inter-
alia, included definition and reporting
requirements for stock exchange outage,
continuity of trading on unaffected
segments / exchanges and resumption
of trading on affected exchange after
recovering from outage. Objective
scenarios along with timelines for extension
of trading hours have been defined in
case exchange outage is not resolved.
The measures introduced remove the
uncertainty regarding extension of trading
hours arising out of exchange outage.
86
ii. 
Annual System and Network audit
of MIIs: In order to keep pace with the
technological advancements in the
securities market, SEBI has enhanced the
existing framework for annual System and
Network audit for all MIIs. Further, for the
MIIs whose systems have been identified
as “protected system” by NCIIPC, such
System and Network audit has been
stipulated on a half yearly basis.
iii. 
Modification in Cyber Security and
Cyber resilience framework for MIIs:
In order to enhance the cyber resilience
posture of the MIIs, SEBI has revised
the existing Cyber Security and Cyber
resilience framework for the MIIs. The
revised guidelines, inter-alia, include
identification of critical assets based on
their sensitivity, requirement of conducting
Vulnerability Assessment and Penetration
Testing (VAPT) of the MIIs on annual basis
/ half yearly (for the MIIs, whose systems
have been identified as “protected system”
by NCIIPC), and mandatory cyber audit.
iv. 
Ensuring Business Continuity on
account of technology issue/ cyber-
attack: A Working Group for Improvement
in Systems and Emergency Response
(WISER) comprising CTO, Chief
Information Security Officer and the
Compliance Officer of MIIs, among others,
was formed to strengthen capabilities
to effectively manage any issues in
technology/ cyber space that can threaten
business continuity for the MIIs.
v. 
Comprehensive Standard Operating
Procedure (CSOP) for handling delay in
settlement activities: Timely completion
of daily settlement activities on rolling basis
ensures smooth functioning of operations
of the MIIs and also contributes to ease
of doing business for market participants.
However, the rolling settlement includes

several intermediate activities involving
data exchange among systems of multiple
MIIs and that with market participants.
A joint CSOP has been formulated in
this regard to iron out any operational /
technical issues while carrying out daily
settlement activities.
vi. 
SEBI-MII Technology Symposium 2023:
SEBI organized a two-day Technology
Symposium involving members of SEBI-
Technical Advisory Committee, SEBI
High Powered Steering Committee on
Cyber Security, Standing Committee of
Technology (SCOT) of MIIs and other
relevant industry experts at NISM. The
symposium was organized with the
objectives of discussing technological
and cybersecurity challenges being
faced by the market, knowledge sharing,
discussing recent cybersecurity incidents
and cybersecurity best practices
4.8 INTERMEDIARIES ASSOCIATED
4.8.1 Policy Developments
A. Introduction of Investor Risk Reduction
Access platform: It was decided that a joint
platform to provide Investor Risk Reduction
Access (IRRA) service shall be developed
by the exchanges to provide the investors
an opportunity to square off/close the open
positions and/or cancel pending orders
in case of disruption of trading services
provided by the TM. The IRRA service,
which shall support multiple segments
across multiple exchanges, is expected
to be operationalized from October 01,
2023. Two sets of stakeholders would be
benefitted from this initiative, viz. the end
clients with open positions will have an
opportunity to close their position thereby
minimise their risk of losses and the TMs
whose trading services are disrupted as
IRRA will be able to provide an alternative
to their clients to reduce the risk.
87
Chapter 4 Secondary Markets
B. Block Mechanism in demat account of
clients undertaking sale transactions:
Considering the benefits of block
mechanism and based on the discussions
held with different stakeholders, SEBI
has made the facility of block mechanism
mandatory for all Early Pay-In (EPI)
transactions. It was also clarified that the
block mechanism shall not be applicable
to clients having arrangements with
custodians registered with SEBI for
clearing and settlement of trades. The
end clients, who give EPI of securities for
sale transactions, would be benefitted as
their securities would not move out of their
demat account.
C. Execution of ‘Demat Debit and Pledge
Instruction’: SEBI widened the scope
of Demat Debit and Pledge Instruction’
(DDPI) to include mutual fund transactions
being executed on stock exchange order
entry platforms and tendering shares
in open offers through stock exchange
platforms. Accordingly, DDPI has been
prescribed to be used for the following
specific purposes:
i. Transfer of securities held in the beneficial
owner accounts of the client towards stock
exchange related deliveries/settlement
obligations arising out of trades executed
by clients on the Stock Exchange through
the same stock broker;
ii. 
Pledging/ re-pledging of securities in
favour of trading member (TM)/ clearing
member (CM) for the purpose of meeting
margin requirements of the clients in
connection with the trades executed by
the clients on the stock exchange; mutual
fund transactions being executed on stock
exchange order entry platforms; and
tendering shares in open offers through
stock exchange platforms.
This policy is going to benefit the end
clients, as the risk of misuse of PoA will be
mitigated and on-boarding process will be
simplified further.
 Annual Report 2022-23
D. 
Enhanced obligations and
responsibilities on Qualified Stock
Brokers: In order to further strengthen the
compliance and monitoring requirements
relating to stock brokers and to ensure
efficient functioning of securities market,
SEBI amended the SEBI (Stock Broker)
Regulations, 1992 for designating certain
stock brokers, having regard to their size
and scale of operations, likely impact on
investors and securities market, as well
as governance and service standards,
as Qualified Stock Brokers (QSBs), on
the basis of certain parameters and
appropriate weightages thereon. Stock
broker designated as a QSB would be
required to meet enhanced obligations
and discharge responsibilities to ensure
appropriate governance structure,
appropriate risk management policy and
processes, scalable infrastructure and
appropriate technical capacity, framework
for orderly winding down, robust cyber
security framework, and investor services
including online compliant redressal
mechanism. QSBs are to be subjected
to enhanced monitoring and surveillance
including additional submissions to be
made to MIIs/SEBI, as and when sought.
Exchanges, vide joint press release during
March 2023 identified and designated 15
stock brokers as QSBs. This policy will
help investors as concentration risk would
be mitigated due to enhanced supervision
and monitoring of QSBs. QSB framework
will be effective from July 2023.
E. 
Handling of clients’ securities by
Trading Members/Clearing Members:
In order to further streamline the process
of handling of unpaid securities by stock
broker and in view of the fact that there was
no client-wise demarcation of securities
lying in Client Unpaid Securities Account
(CUSA), which led to intermingling of
shares of different clients, SEBI has
88
prescribed certain guidelines which inter
alia states the following:
i. Unpaid securities (i.e., the securities that
have not been paid for in full by the clients)
shall be transferred to respective client’s
demat account followed by creation of
an auto-pledge (i.e., without any specific
instruction from the client) with the reason
“unpaid”, in favour of a separate account
titled – “client unpaid securities pledgee
account”, which shall be opened by stock
brokers.
ii. 
If the client fulfils its funds obligation within
five trading days after the pay-out, stock
brokers shall release the pledge so that the
securities are available to the client as free
balance. If the client does not fulfil its funds
obligation, stock brokers shall dispose of
such unpaid securities in the market within
five trading days after the pay-out under
intimation (email / SMS) to the client.
iii. 
All the existing “client unpaid securities
accounts” shall be wound up on or before
April 15, 2023. The securities lying in
such accounts shall either be disposed
of in the market or be transferred to
the client’s demat account by the stock
brokers accordingly, failing which such
accounts shall be frozen for debit and
credit. Investors will be benefited as the
risk of misuse of their securities will reduce
significantly.
F. 
Settlement of Running Account of
Client’s Funds lying with Trading
Member: To mitigate the risk of misuse
of client’s funds, SEBI directed the TMs
to settle running accounts of funds of the
client, after considering the end of the
day obligation of funds as on the date of
settlement across all exchanges on first
Friday of the quarter (i.e., Apr-Jun, Jul-
Sep, Oct-Dec, Jan-Mar) for all the clients.
For clients, who have opted for monthly
settlement, running account are required

to be settled on first Friday of every month.
If first Friday is a trading holiday, then such
settlement shall happen on the previous
trading day. This policy would benefit all
the investors by reducing the risk of misuse
of their funds maintained by stock brokers.
G. 
Validation of Instructions for Pay-
In of Securities : In order to mitigate
the risk of misuse of clients’ securities,
particularly those given towards delivery/
settlement obligations, SEBI prescribed
that Depositories, prior to executing actual
transfer of the securities for pay-in from client
demat account to TM Pool account, shall
validate the transfer instruction received
through any of the available channels for
the purpose of pay-in, i.e. either initiated
by clients themselves or by the Power of
Attorney (POA) / Demat Debit and Pledge
Instruction (DDPI) holder against the
client-wise net delivery obligation received
from CCs. This policy would benefit all the
investors by minimising the risk of misuse
of their securities.
H. Performance/Return Claimed by
Unregulated Platforms: To prevent
any act and instances of mis-selling by
unregulated entities SEBI prescribed
that stock brokers who provide services
relating to algorithmic trading shall not:
i. directly or indirectly make any reference
to the past or expected future return/
performance of the algorithm; and/or
ii. 
directly or indirectly associate with any
platform providing any reference to the
past or expected future return/performance
of the algorithm
 This policy is intended to protect the
investors from falling prey to any kind of
mis-selling done by unregulated entities.
I. Naming / Tagging of demat accounts
maintained by Stock Brokers: As a
step towards mitigating misuse of client
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Chapter 4 Secondary Markets
securities, in consultation with stock
exchanges and depositories, SEBI
prescribed that all demat accounts
maintained by stock brokers should be
appropriately tagged. These directions
shall not be applicable for the demat
accounts which are used exclusively for
banking activities by stock brokers which
are also banks. This policy would minimise
the risk of misuse of the investors’
securities.
J.  Maintenance of a website by stock
brokers and depository participants:
SEBI has directed Stock Brokers
(SB) / Depository Participants (DP) to
maintain a designated website, which
shall mandatorily display the following
information, in addition to all such
information, which have been mandated
by SEBI/stock exchanges/depositories
from time to time:
i.  Basic details of the SB/DP such as
registration number, registered address of
Head Office and branches, if any.
ii. Names and contact details such as email
ids etc. of all key managerial personnel
(KMPs) including compliance officer.
iii. 
Step-by-step procedures for opening an
account, filing a complaint on a designated
email id, and finding out the status of the
complaint, etc.
iv. Details of Authorized Persons.
 The investors in general would be
benefited as a designated website brings
in transparency and helps the investors to
keep themselves well informed about the
various activities of the SB/DP.
K. 
Procedure for seeking prior approval
for change in control: To streamline
the process of providing approval to the
proposed change in control of stock broker/
clearing member, depository participant,
investment adviser, research analyst or
research entity, registrar to an issue and
 Annual Report 2022-23

share transfer agent and KYC (Know
Your Client) Registration Agencies (KRA),
guidelines on procedure for seeking prior
approval for change in control was issued
during November 2022.
4.8.2 Registration Details
As per Section 12(1) of the SEBI Act, 1992, it is
specified that no stock broker shall buy or sell or
deal in securities except in certain cases. SEBI
grants certificate of registration to the brokers
under SEBI (Stock Brokers) Regulations, 1992.
A. Stock Brokers: During 2022-23, the
number of registered stock brokers
declined across all the segments (barring
a few exceptions like debt segment of all
exchanges and all derivatives segments of
NSE) (Table 4.34).

Table 4.34: Registered Stock Brokers

Registered Registered Net
Addition Cancellation/
Stock Brokers Stock Brokers Addition
Segment Exchange during 2022- Surrender of
as on March 31, as on March 31, during
23 Memberships
2022 2023 the Year
BSE 1,302 16 48 1,270 -32
Cash
NSE 1,227 33 34 1,226 -1
Segment
MSEI 311 5 13 303 -8
BSE 906 8 28 886 -20
Equity
NSE 1,146 38 35 1,149 3
Derivatives
MSEI 296 0 12 284 -12
BSE 566 10 21 555 -11
Currency
NSE 757 26 25 758 1
Derivatives
MSEI 507 3 22 488 -19
BSE 267 12 5 274 7
Debt NSE 247 7 2 252 5
MSEI 14 0 0 14 0
MCX 26 72 546 -46
NCDEX 339 4 34 309 -30
Commodity
ICEX 126 0 23 103 -23
Derivatives
BSE 291 9 13 287 -4
NSE 284 13 5 292 8

Source: All Exchanges

During 2022-23, the majority of the stock
brokers were registered as corporate entities.
In the cash segment, about 86 to 92 per cent
of the total brokers across exchanges were
corporate brokers. In derivative segments,
corporate brokers accounted for 78 per cent
to 95 per cent across exchanges, while in debt
segments about 97 to 100 percent brokers were
corporates (Table 4.35).

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 Chapter 4 Secondary Markets

Table 4.35: Classification of Stock Brokers in 2022-23

Name Total No. Number Percentage Share
Segment of Stock of stock Proprietor Partner Proprietor
Exchange brokers Corporate LLP Partnership Corporate LLP
ship ship ship
BSE 1,270 127 31 1,091 21 10.0 2.4 85.9 1.7
Cash
NSE 1,226 52 43 1,105 26 4.2 3.5 90.1 2.1
Segment
MSEI 303 15 7 278 3 5.0 2.3 91.8 1.0
BSE 886 40 15 818 13 4.5 1.7 92.3 1.5
Equity
NSE 1,149 44 42 1,032 31 3.8 3.7 89.8 2.7
Derivatives
MSEI 284 14 7 262 1 4.9 2.5 92.3 0.4
BSE 555 8 8 525 14 1.4 1.4 94.6 2.5
Currency
NSE 758 11 14 717 16 1.5 1.9 94.6 2.1
Derivatives
MSEI 488 26 16 443 3 5.3 3.3 90.8 0.6
BSE 274 5 0 268 1 1.8 0.0 97.8 0.4
Debt NSE 252 4 3 245 0 1.6 1.2 97.2 0.0
MSEI 14 0 0 14 0 0.0 0.0 100.0 0.0
MCX 546 19 27 491 9 3.5 5.0 89.9 1.7
NCDEX 309 10 19 279 1 3.2 6.1 90.3 0.3
Commodity
ICEX 103 13 9 80 1 12.6 8.7 77.7 1.0
Derivatives
BSE 287 3 6 270 8 1.1 2.1 94.1 2.8
NSE 292 5 7 271 9 1.7 2.4 92.8 3.1
Source: All Exchanges

B. Clearing Members: During 2022-23, the segment, the number of registered clearing
number of registered clearing members members increased in ICCL and NCL during
decreased in the cash segment of all the the year (Table 4.36)
clearing corporations. In equity derivatives
Table 4.36: Registered Clearing Members
Registered
Registered Net
Clearing Addition Cancellation /
Clearing Clearing Addition
Segment Members as during Surrender of
Corporations Members as on during the
on March 31, 2022-23 Memberships
March 31, 2023 Year
2022
ICCL 1,343 15 31 1,327 -16
Cash Segment NCL 1193 27 37 1183 -10
MCCIL 304 0 2 302 -2
ICCL 160 21 8 173 13
Equity
NCL 574 52 13 613 39
Derivatives
MCCIL 44 0 1 43 -1
ICCL 105 15 4 116 11
Currency
NCL 233 20 2 251 18
Derivatives
MCCIL 52 0 1 51 -1
ICCL 45 6 3 48 3
Debt NCL 112 5 4 113 1
MCCIL 5 0 0 5 0
MCXCCL 194 26 20 200 6
NCCL 140 4 14 130 -10
Commodities
NCL 52 3 1 54 2
Derivatives
ICCL 39 2 2 39 0
MCCIL 18 0 0 18 0
Source: All Exchanges
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 Annual Report 2022-23

During 2022-23, the majority of clearing members
(CMs) were registered as corporates. In the
cash segment across exchanges about 85 to 91
per cent of the total CMs were corporates, while
in the equity derivatives, currency derivatives
and commodity derivatives segment around 90
to 100 per cent of the total CMs were corporate
entities. In the debt segment all the CMs were
corporate entities (Table 4.37).

Table 4.37: Classification of Clearing Members at end of 2022-23

Name of Total No. Number Percentage Share
Segment Clearing of clearing Proprietor Partner Proprietor Partner
Corporation members Corporate LLP Corporate LLP
ship ship ship ship
ICCL 1,327 148 31 1,128 20 11.2 2.3 85.0 1.5
Cash
NCL 1,183 49 48 1,062 24 4.1 4.1 89.8 2.0
Segment
MCCIL 302 15 11 276 0 5.0 3.6 91.4 0.0
ICCL 173 1 1 171 0 0.6 0.6 98.8 0.0
Equity
NCL 613 10 11 579 13 1.6 1.8 94.5 2.1
Derivatives
MCCIL 43 0 0 43 0 0.0 0.0 100.0 0.0
ICCL 116 1 0 112 3 0.9 0.0 96.6 2.6
Currency
NCL 251 1 1 243 6 0.4 0.4 96.8 2.4
Derivatives
MCCIL 51 2 0 49 0 3.9 0.0 96.1 0.0
ICCL 48 0 0 48 0 0.0 0.0 100.0 0.0
Debt NCL 113 0 0 113 0 0.0 0.0 100.0 0.0
MCCIL 5 0 0 5 0 0.0 0.0 100.0 0.0
MCXCCL 200 5 4 185 6 2.5 2.0 92.5 3.0
NCCL 130 6 6 117 1 4.6 4.6 90.0 0.7
Commodities
NCL 54 1 1 52 0 1.9 1.9 96.3 0.0
Derivatives
ICCL 39 0 0 39 0 0.0 0.0 100.0 0.0
MCCIL 18 0 1 17 0 0.0 5.6 94.4 0.0
Source: Clearing Corporations

At the end of March 31, 2023, at ICCL, 93.4 per cent such members accounted for 98.2 per cent and 93.4
of the total registered CMs in cash segment were per cent respectively (Table 4.38).
self-clearing members, while at NCL and MCCIL,

Table 4.38: Segment-wise Clearing Members/ Self Clearing Members at end of 2022-23
ICCL NCL MCCIL MCXCCL NCCL
Name of Segment
CM SCM CM SCM CM SCM CM SCM CM SCM
Cash 88 1,239 21 1,162 20 282 0 0 0 0
Equity Derivatives 78 95 212 401 19 24 0 0 0 0
Currency Derivatives 52 64 154 97 43 8 0 0 0 0
Debt 25 23 56 57 5 0 0 0 0 0
Commodity Derivatives 20 19 26 28 9 9 17 183 10 120

Source: Clearing Corporations

C. Depository Participants: During 2022- CDSL. As of March 31, 2023, number of

23, there was net addition of 6 depository registered DPs at NSDL was 283 and at
participants (DPs) at NSDL and 4 DPs at CDSL was 588 (Table 4.39).

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 Chapter 4 Secondary Markets

Table 4.39: Registered Depository Participants

Registered
Registered Cancellation/ Net
Addition Depository
Depository Surrender of Addition
Depository during 2022- Participants as
Participants as on Memberships during the
23 on March 31,
March 31, 2022 during 2022-23 year
2023
NSDL 277 10 4 283 6
CDSL 584 26 22 588 4
Source: CDSL and NSDL

D. Other Registered Intermediaries: Status 242 Research Analysts registered during

of registration of other intermediaries 2022-23 (Table 4.40)
shows that 116 Investment Advisors and

Table 4.40: Registered Intermediaries

Registered New Registered

Cancellation/
Intermediaries Registration Intermediaries
Type of Intermediary Surrender /
as on March 31, during 2022- as on March 31,
during 2022-23
2022 23 2023
KYC (Know Your Client) 5 1 0 6
Registration Agency (KRA)
Approved Intermediaries (Stock
2 - - 2
Lending Schemes)
Proxy Advisors 4 1 1 4
Investment Advisers 1,330 116 134 1,312
Research Analysts 825 242 212 855

4.8.3 Process of Registration of Various applications for stockbrokers and depository

Intermediaries participants was 18 working days and 15
During 2022-23, median time for processing the working days, respectively (Table 4.41).

Table 4.41: Median Time Taken for Approval of Registrations for Intermediaries

Application Pending Median Time

Type of Balance Application Applications rejected/ as on for processing
Intermediary c/f received Granted returned/ March Applications (in
withdrawn 31, 2023 working days)
Stock Brokers 6 70 71 5 0 18
Depository 8 33 36 3 2 15
Participants

93
 Annual Report 2022-23

Chapter 5:
Fund Management Activities

Rising financial awareness, robust regulatory the confidence of investors backed by a

framework and financial technology has
propelled the evolution of Indian asset
management industry over the years as a
popular mode for wealth creation for individual
and institutional investors. Sustained rise
in systematic investing, growth in passive
investing space and Environmental, Social
and Governance (ESG) investing are spurring
the further growth of mutual fund ecosystem.
Over the years, Alternative Investment Funds
(AIFs) are also burgeoning with growth of
Indian economy and rapid expansion of wealthy
investor class. REITs and InvITs are other
innovative mechanisms to finance the real
estate and infrastructure which in turn can have
multiplier impact on India’s economic growth.
5.1 MUTUAL FUNDS
The mutual fund industry has grown by leaps
and bounds over the last decade reflecting
nurturing regulatory framework. Asset under
Management (AUM) of mutual fund (MF)
industry in India has grown from ` 7.0 lakh crore
in March 2013 to ` 39.4 lakh crore as of end of
March 2023, registering a CAGR of 19 per cent
for the decade. For crore of investors, mutual
funds have become the preferred mode of
investment which in turn leads to financialization
of saving and accretions to capital formation.
Through various developmental and regulatory
measures, SEBI has been relentless in taking
the growth and development of the MF industry
to the next level. The various policy measures
taken during 2022-23 are detailed below:
5.1.1 Policy Developments
A. Introduction of Execution Only Platforms
for Direct Plans: A regulatory framework
for Execution Only Platforms (EOPs) for
direct plans of mutual fund schemes was
introduced in 2022-23 (Box 5.1).

Box 5.1 : Investor Convenience and Protection through Execution

Only Platforms for Direct Plans
Since their introduction, in 2012, direct plans have seen enormous growth within mutual fund
ecosystem. As on March 31, 2023, average AUM routed through direct plans of mutual fund
schemes stands at `17.9 lakh crore, which is 45 per cent of the total AUM. With the increasing
focus on financial literacy, digitization, online banking, usage of smartphones, and awareness
about mutual funds, more and more investors would be in a better position to leverage technology
and invest directly in mutual fund schemes.
Presently, there are various channels available to investors for investment in direct plans of mutual
fund schemes. They also use platforms of investment advisors / stock brokers to only execute
transactions in direct plans of mutual fund schemes. However, not all investors who are executing
transactions in direct plans through these platforms are availing of any advisory/broking services.

94
 Chapter 5 Fund Management Activities

The usage of investor advisor/stock broker/portfolio manager registration code by their technology
platforms/digital platforms for visibility of the transactions brings convenience for investors by
providing an overall view of their investments. However, for the investors who are not their clients in
terms of respective Regulations, the risk associated with such transactions cannot be overlooked
as the non-clients do not have any recourse or protection available under any regulatory framework.
Hence, to further promote the penetration of mutual funds and to ensure that ease of investment
comes with adequate investor protection and grievance redressal mechanism, a framework for
working of platforms providing execution only services for mutual fund direct schemes i.e., Execution
Only Platforms (EOPs) was proposed as the stepping stone towards strengthening the investors
with the power of technology along with the ability to invest directly in mutual fund schemes.
The EOP framework is intended to provide convenience to investors in making investments;
appropriate investor protection mechanisms; and ease of doing business for the EOPs, by
mandating only appropriate regulatory compliances as is required for the EOP activity.
Under the approved framework, two types of EOPs: Category 1 and Category 2 shall be granted
registration. Both are mandatorily required to be body corporates. Category 1 EOPs shall be
agents of AMC registered with AMFI where AMCs may pay flat transaction fee. While Category 2
shall be agents of investors with an option to register as stock brokers under SEBI (Stock Brokers)
Regulations, 1992 or may obtain membership under a new segment of stock exchanges viz.,
EOPs. They would be paid by both investors and AMCs.
Having multiple avenues available for investment in direct plans is expected to further galvanise
SEBI’s effort of penetration of mutual funds. Further, investment in technology and infrastructure by
the proposed EOPs may lead to better user experience for investors investing in direct plans. The
transactions routed through EOPs will benefit both the investors and AMC, where investor would
get convenience and a user-friendly interface for investment in direct plans of mutual fund schemes
and AMCs will receive investments in their schemes.

B. 
Investments through ESG Schemes:
In order to encourage ESG investing, a new
ESG category is being introduced under
which AMCs can launch schemes on ESG
related factors. Further, to address the risk
of green washing, minimum investments
by ESG schemes are being specified in
securities wherein assurance on Core
Business Responsibility and Sustainability
Reporting (BRSR Core) is made available.
In addition, third party assurance and
certification by the board of AMCs on
compliance with ESG scheme objective
along with enhanced disclosures on voting
decisions would be required.

95
 Annual Report 2022-23

Box 5.2 : Development of Passive Funds : An Enabling Regulatory framework

Considering the emergence of passive funds i.e., Exchange Traded Funds (ETFs) and index funds,
as an investment product for retail investors globally and various advantages of passive investing
like transparency, diversification, lower cost vis-à-vis active funds etc., detailed guidelines were
issued. The major initiatives included the following:
i. Providing greater flexibility to debt ETFs and index funds to replicate the underlying debt
indices with certain relaxations in terms of duration, rating and selection of issuers etc.
ii. In order to reduce volatility and difference of returns of ETFs/ index funds w.r.t. their
benchmarks, maintenance of tracking error and tracking difference below a specified
threshold has been mandated for equity and debt passive funds respectively. Further,
disclosure of tracking error and tracking difference have been mandated for both equity
and debt passive funds.
iii. In order to make the market making process less capital intensive, it has been decided that
net settlement between cash leg of transactions in units of ETF by the market maker and
consequent transaction in underlying basket by the ETF shall be implemented.
iv. In order to ensure liquidity on exchange platform, threshold of ` 25 crore has been
prescribed, below which all transaction by investors (except the market maker) has to be
executed on exchange platform.
v. Liquidity window has been provided to investors to directly approach the AMC for redemption
of units of ETFs without any exit load.
vi. In order to enhance transparency on net asset value (NAV) of ETFs, the requirement of
indicative NAV (iNAV) to be disclosed on exchange platform on continuous basis was
prescribed subject to certain conditions.
vii. Equity-linked saving scheme (ELSS) in passive fund category (in the form of index funds)
has been introduced.
viii. The mandatory deduction towards investor education and awareness from the scheme has
been reduced from the existing two bps to one bps.

C. 
Introduction of Credit Risk based
Single Issuer Limit: In order to avoid
inconsistency in investment by mutual
funds in debt instruments of an issuer,
irrespective of the scheme being actively or
passively managed, a similar credit rating
based single issuer limit was introduced for
actively managed mutual fund schemes.
The prudential limit for schemes other than
credit risk funds specified that a mutual
fund scheme shall not invest more than 10/
8/ 6 per cent of its net asset value (NAV)
in debt and money market securities rated
AAA/AA/A and below, respectively, issued
by a single issuer. The above investment
limits may be extended by up to two per
cent of the NAV of the scheme with prior
approval of the Board of Trustees and
Board of Directors of the AMC, subject to
compliance with the overall 12 per cent limit
specified in Mutual Funds Regulations.
D. 
Bringing Clarity on the Roles and
Responsibilities of Trustees and Board
of AMCs: SEBI is bringing clarity in the roles
and responsibilities of trustees and Board
of AMCs of mutual funds with the focus on
unit holder protection. This is being done by
specifying core responsibilities of trustees
which shall require independent evaluation

96
 Chapter 5 Fund Management Activities

and due diligence by the trustees. The
Board of AMC will be made responsible
for protecting the interests of unitholders
and stakeholders. In this regard, the Board
of AMC will be entrusted to constitute a
Unitholder Protection Committee with a
focus on unitholders’ protection.
Sponsored AMCs” to continue the mutual
fund business, subject to the said AMCs
fulfilling certain criteria. This would give
the original sponsor flexibility to voluntarily
disassociate itself from the mutual funds
without needing to induct a new and
eligible sponsor.

E.  odification of Eligibility Criteria for

M F. 
Sponsors of Mutual Funds: The existing
regulatory framework for sponsors of
mutual funds has been reviewed. As per
the modified criteria, the current profitability
requirement in the main eligibility route
for sponsor has been revised and an
alternative route has been introduced to
enable a diverse set of entities to become
sponsors of mutual funds with sound
financial condition to capitalize the AMC.
Such entities would also include private
equity funds, who otherwise may not have
been eligible to be sponsors, with requisite
safeguards in place. AMCs have to
deploy the minimum prescribed net worth
in liquid assets as specified. Sponsor
would be responsible for maintenance of
minimum net worth on a continuous basis.
It has also been decided to allow for “Self
Nomination for Mutual Fund Unit
Holders: In order to bring uniformity
in practices across all constituents in
securities market, it was prescribed that
investors subscribing to mutual fund units
on or after October 01, 2022, shall have
the choice of providing nomination in the
format specified by SEBI or opt out of
nomination through a signed declaration
form. AMCs have been given time till
September 30, 2023 for nomination / opting
out of nomination of all the investments of
unit holder(s), failing which the folios shall
be frozen for debits.
G. 
Timelines for Transfer of Dividend
and Redemption Proceeds: Timeline
for payment of dividend and transfer of
redemption or repurchase proceeds to the
unitholders has been reduced (Box 5.3).

Box 5.3: Reduction in Timelines for Redemption Pay-out and Dividend Payment
As per the SEBI (Mutual Funds) Regulations, 1996, every mutual fund and AMC shall despatch
to the unitholders, the dividend payments within fifteen days from the record date and despatch
the redemption or repurchase proceeds within ten working days from the date of redemption or
repurchase. These timelines were prescribed in 1996 and numerous regulatory and technological
developments have taken place since then viz. improved system of AMCs and RTAs, T+2 settlement
etc. Further, transfer of such proceeds had to be mandatorily to the investor’s registered bank
account. Development of fund transfer facilities like IMPS, NEFT, RTGS, etc. have also greatly
reduced the time required for such fund transfers.
Based on the above factors and historical data on redemption pay-out and dividend payment, SEBI
decided to reduce the redemption pay-out days from fifteen to three in all cases of redemption ,
except for redemption in overseas mutual funds wherein time limit of T+5 days is specified. Further,
considering the pace of change in payment settlement technology and bulk of the mutual fund
dividend payments are now electronic, maximum timeperiod for payment of dividend was reduced
from the current period of 15 days to seven working days.

97
 Annual Report 2022-23
H. Management and Advisory Services by
AMCs to FPIs: In order to facilitate ease
of doing business, AMCs were permitted
to provide management and advisory
services to Foreign Portfolio Investors
(FPIs) operating from International
Financial Services Centres (IFSC) and
regulated by IFSC Authority, if such
FPI falls under the categories specified
vide SEBI circular dated December 16,
2019. In case, the FPIs do not fall under
the categories specified in the aforesaid
circular, they will be allowed to invest
in mutual fund schemes other than the
schemes in the category of “thematic”.
Also, for investment in equity and equity
derivative securities listed on recognized
stock exchanges in India, such FPIs are
not allowed to take contra-position for
a period of six months from the date of
purchase or sale of such securities.
5.1.2 Risk Management Measures
A. Amendment to SEBI (PIT) Regulations,
2015: SEBI (Prohibition of Insider Trading)
Regulations, 2015 (PIT) Regulations, were
amended to bring “trading in units of mutual
funds” under the ambit of these regulations.
The amendment provided definitions of
Unpublished Price Sensitive Information,
generally available information and other
related terms for mutual funds. A separate
code of conduct was instituted in line with
the existing PIT Regulations, 2015 for
designated persons in respect of mutual
funds. Further, reporting and monitoring
requirements were specified with respect
to transactions in mutual fund units by
designated persons.
B. 
Two-Factor Authentication for
Transactions in Units: In order to
prevent third party payments, mitigate
risks and to promote secure environment
98
for mutual fund investors the following
was mandated. In case of subscription
and redemption of units, two-factor
authentication (for online transactions) and
signature method (for offline transactions)
was mandated for authentication. It
was clarified that in case of mandates/
systematic transactions, the requirement
of two-factor authentication shall be
applicable only at the time of registration of
mandate/systematic transactions. Further,
AMCs were also mandated to ensure that
payment for mutual fund transactions are
accepted through only such modes, where
independent traceability of end investor
can be ensured and payment is credited
directly to the registered and verified bank
account of the investor.
C. 
Risk Value of Commodities for Risk-
O-Meter: In order to evaluate the risk
value of commodities, in which mutual
funds are permitted to invest, mutual fund
schemes which invest in commodities
were mandated to assign a risk score
corresponding to the annualized volatility
of the price of the said commodity. The
annualized volatility shall be computed
quarterly, based on past 15 years’ prices
of benchmark index of the said commodity
and risk score for the commodities shall be
as per the annualized volatility.
5.1.3 Market Activity and Trends
A. Mutual Funds Registered with SEBI
As on March 31, 2023, 46 MFs were
registered with SEBI. In 2022-23, two
funds surrendered their registration with
SEBI (Table 5.1). There were two funds
where there were no active schemes but
the license was not surrendered and one
new mutual fund was registered although
there were no active schemes in the fund
in this financial year.
 Chapter 5 Fund Management Activities

Table 5.1: Mutual Funds Registered with SEBI No. of Schemes

S.
Sector 2021-22 2022-23 Scheme Category Launched
No.
2021-22 2022-23
Public Sector 6 6
III Hybrid Schemes 6 12
Private Sector 41 40 IV Solution Oriented
- 6
Schemes
Total 47 46
V Other Schemes 94 158
Note: Data is as on March 31 of respective financial year. B Closed-ended Schemes 36 86
I Income/Debt Oriented
36 85
B. Schemes Launched Schemes
The year 2022-23 witnessed an almost II Growth/Equity Oriented
- 1
two-fold increase in new schemes as 361 Schemes
new schemes were launched compared III Other Schemes - -
to 183 in the previous year (Table 5.2). Of C Interval Schemes - -
the total, 275 were open-ended schemes Grand Total (A+B+C) 183 361
and 86 close-ended schemes. Passive Fund of Funds Scheme
16 24
schemes, included in ‘Others Schemes’ (Domestic)
consisting of ETFs, Index funds and Fund
of Funds (FoFs) investing in overseas C. Resource Mobilisation by Mutual Funds
funds, witnessed highest number of new During 2022-23, both gross fund
scheme additions (158) during 2022-23. mobilisation and redemption witnessed
upward trend compared to the previous
Table 5.2: Mutual Fund Schemes Launched
year (Chart 5.1). Gross resource
mobilisation during the year 2022-23 stood
No. of Schemes
S. at ` 105.1 lakh crore, almost 12.8 per cent
Scheme Category Launched
No. higher than ` 93.2 lakh crore mobilised
2021-22 2022-23
A Open-ended Schemes 147 275 in previous year. Redemptions also kept
I Income/Debt Oriented pace with fund mobilisation and showed an
11 39 increase of 15.0 per cent in 2022-23. Net
Schemes
II Growth/Equity Oriented inflows witnessed a sharp decline of 69.1
36 60
Schemes per cent (amounting to ` 76,225 crore).

Chart 5.1: Mobilisation of Resources by Mutual Funds (` crore)

Assets at the end of the period

Gross Funds Mobilised

Net Flows

Redemptions

- 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

2022-23 2021-22 2020-21 2019-20 2018-19

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 Annual Report 2022-23

In terms of sector-wise share in gross resource
mobilisation, share of private sector mutual
funds decreased from 77.3 per cent in 2021-22
to 73.8 per cent in 2022-23 (Table 5.3). In terms
of net fund inflow, public sector mutual funds
dominated their private peers with almost 80 per
cent share in total inflow of funds. Private sector
mutual funds saw their net fund inflow decrease
by 89.2 per cent (` 15,983 crore) in 2022-23 as
compared to 2021-22 (` 1,48,287 crore).

Table 5.3: Sector-wise Resource Mobilisation (` crore)

Private Sector MFs Public Sector MFs
Year Grand Total
Open Close Interval Total Open Close Interval Total
Mobilisation of Funds
2021-22 71,99,331 2,389 557 72,02,278 21,11,850 3,376 0 21,15,227 93,17,505
2022-23 77,45,376 7,544 1,996 77,54,916 27,43,629 8,812 0 27,52,442 1,05,07,357
Redemption/Repurchase
2021-22 69,77,853 75,967 171 70,53,991 20,01,959 14,825 0 20,16,784 90,70,775
2022-23 77,02,011 35,333 1,589 77,38,933 26,83,332 8,867 0 26,92,199 1,04,31,132
Net Inflow/Outflow of Funds
2021-22 2,21,478 -73,578 386 1,48,287 1,09,891 -11,449 0 98,443 2,46,730
2022-23 43,365 -27,789 407 15,983 60,297 -55 0 60,242 76,225
Note: Net assets of ` 66,590.39 crore pertaining to Fund of Funds schemes for March 2023 is not included.

At the end of 2022-23, AUM of mutual funds
witnessed a growth of 4.9 per cent compared
to previous year and stood at ` 39.4 lakh crore.
Open-ended schemes accounted for more than
99 per cent share in total AUM, while less than
1 per cent was contributed by closed-ended
schemes. The expansion in AUM was due to
increase in the asset base of passive schemes
and equity oriented schemes by ` 1.8 lakh
crore and ` 1.5 lakh crore respectively when
compared to the previous year.
Amongst the open-ended schemes, growth/
equity oriented schemes witnessed a net inflow
of ` 1.5 lakh crore during the year, driven by
inflows into sectoral/thematic funds, small cap
funds, mid cap funds, large & mid cap funds etc.
With the rise in passive investing, the net inflows
through ETFs/ index funds rose significantly
during 2022-23. The number of index funds
registered increased to 177 in 2022-23 from
93 a year before and net inflows increased
to ` 95,671 crore in 2022-23 compared to
` 44,770 crore in 2021-22. In case of other ETFs,
a declining investment trend was observed as
compared to the previous year.
Open-ended income/ debt oriented schemes
witnessed net outflows of ` 1.8 lakh crore during
2022-23 which was an outcome of rising interest
rate scenario (Table 5.4). Among the open ended
debt oriented mutual fund schemes, liquid funds
witnessed the highest net outflow of ` 36,603
crore, followed by low duration funds (` 31,105
crore) and floater funds (` 30,736 crore). The
net inflow was positive for long duration funds
(` 6,119 crore), followed by gilt funds (` 5,472
crore), dynamic bond funds (` 2,912 crore),
and gilt funds with 10-year constant duration
(` 2,423 crore).
Amongst the hybrid scheme funds, multi-asset
allocation schemes witnessed highest net
inflows (` 6,070 crore) followed by balanced
hybrid fund/aggressive hybrid funds (` 5,725
crore) whereas arbitrage schemes witnessed
highest outflow amounting to ` 35,171 crore
during 2022-23.

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 Chapter 5 Fund Management Activities

Table 5.4: Scheme-wise Resource Mobilisation and Assets under Management

Funds Net Inflow
Repurchase/ Net Assets
mobilized (+ve)/
No. of No. of Redemption Under
for the Outflow (-ve)
Sr. Scheme schemes Folios for the period Management
period for the period
No. Category (` crore) (` crore)
(` crore) (` crore)
As on March 31,
(As on March 31, 2023) (Apr-Mar 2023)
2023
A Open ended
1,278 14,52,03,038 1,04,89,005 1,03,85,343 1,03,662 39,07,838
Schemes
I Income/Debt
Oriented 315 71,59,720 96,72,023 98,55,626 -1,83,603 11,81,982
Schemes
II Growth/Equity 390 9,82,91,799 3,62,003 2,15,250 1,46,753 15,17,082
Oriented
Schemes
III Hybrid Schemes 138 1,21,45,563 1,58,175 1,76,988 -18,813 4,78,917
IV Solution Oriented 36 56,86,952 3,713 1,877 1,836 32,334
Schemes
V Other Schemes 399 2,19,19,004 2,93,091 1,35,603 1,57,489 6,97,522
B Close Ended 165 5,24,716 16,356 44,200 -27,844 33,194
Schemes
I Income/Debt 136 1,67,669 16,356 42,222 -25,866 26,994
Oriented
Schemes
II Growth/Equity 29 3,57,047 0 1,978 -1,978 6,200
Oriented
Schemes
III Other Schemes 0 0 0 0 0 0
C Interval Schemes 12 2,846 1,996 1,589 407 999
I Income/Debt 12 2,846 1,996 1,589 407 999
Oriented
Schemes
II Growth/Equity 0 0 0 0 0 0
Oriented
Schemes
III Other Schemes 0 0 0 0 0 0
Grand Total (A+B+C) 1,455 14,57,30,600 1,05,07,357 1,04,31,132 76,225 39,42,031
Fund of Funds Scheme 76 18,62,743 27,340 12,378 14,962 66,590
(Domestic)
Notes:
1. Number of schemes includes series / serial plans
2. Segregated portfolios created in a scheme are not to be treated as a separate scheme.
3. Number of folios does not include folios of segregated portfolios.
4. AUM of segregated portfolios is included
5. Inter scheme investments are excluded from the above data

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 Annual Report 2022-23

D. Deployment of Funds
i. Scheme-wise Sectoral Deployment: As
on March 31, 2023, 44.3 per cent of the
total assets under debt schemes were
deployed in financial services, while 41.3
per cent were deployed in Bank Deposits,
Repo, Treps, T-Bills, G Sec and SDLs
(Chart 5.2).
As on March 31, 2023, 63.7 per cent of the total
assets under equity schemes was deployed in
five major sectors. Financial services accounted
for the highest investment share at 31.2 per
cent, followed by consumer discretionary (10.6
per cent), information technology (9.8 per cent),
healthcare (6.1 per cent) and Industrials (6.0
per cent) (Chart 5.3).

Chart 5.2: Deployment of Funds (Debt) (Per cent Chart 5.3 : Deployment of Funds (Equity) (Per
of Investment) as on March 31, 2023 cent of Investment) as on March 31, 2023

Consumer Utilities 1.6%

Discretionary 1.6% Others 6.4%

Energy 1.8%
MF Units Financial
3.0% Rest of Services
Sectors 31.2%
36.3%
Financial
Services
44.3%
Bank
Consumer
Deposits, Repo,
Discretionary
Treps, T-Bills, 10.6%
G Sec, SDLs 41.3%
Industrials
6.0%
Information
Healthcare Technology
6.1% 9.8%

ii. Asset Class-wise Deployment of Funds: iii. 

Mutual Fund Scheme-wise Annual
In 2022-23, mutual funds’ investment Returns: The number of mutual fund
in equity instruments stood at 56.7 per schemes giving a negative annual return
cent, increasing from 53.7 per cent in the increased from 60 in 2021-22 to 342 in
previous year. On the other hand, share 2022-23. At the same time, schemes giving
of debt assets declined from 43.1 per cent returns more than 5 per cent fell from 898
in 2021-22 to 42.7 per cent in 2022-23 in 2021-22 to 595 in 2022-23 (Table 5.6).
(Table 5.5).
Table 5.6: Mutual Fund Scheme-wise Annual
Table 5.5: Asset Class-wise deployment of funds Returns
(` crore) Annual Return Number of schemes
(per cent) 2021-22 2022-23
Year <= -10 20 56
Equity Debt Others Total
Ended from -10 to <= -5 12 93
2021-22 20,21,271 16,19,571 1,21,091 37,61,933 from -5 to <=0 28 193
2022-23 22,44,807 16,92,854 23,432 39,61,093 from 0 to <=5 604 591
from 5 to <=10 214 449
Note: AUM of mutual funds is based on the data given by
> 10 684 146
AMCs, while data for asset class-wise deployment of funds Note: Annual Returns for Direct Plan Growth Option of
is based on the data given by RTAs. Schemes (including FOF) is considered

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 Chapter 5 Fund Management Activities

E. Trends in Transactions on Stock
Exchanges
In 2022-23, aggregate net investments by
mutual funds in secondary markets reduced by
more than half from ` 2.8 lakh crore in 2021-
22 to ` 1.2 lakh crore (Table 5.7). During 2022-
23, in equity segment, mutual funds reported
net purchase of ` 1.8 lakh crore, while in the
debt segment, net sale of ` 57,889 crore were
reported.

Table 5.7: Trends in Transactions on Stock Exchanges by Mutual Funds (` crore)

Equity Debt Total

Year Net Net Net

Gross Gross Gross Gross Gross Gross
Purchase/ Purchase/ Purchase/
Purchase Sales Purchase Sales Purchase Sales
Sales Sales Sales
2021-22 12,55,852 10,75,950 1,79,902 16,31,109 15,32,903 98,206 28,86,961 26,08,853 2,78,108
2022-23 12,48,991 10,66,937 1,82,055 15,82,997 16,40,886 -57,889 28,31,988 27,07,823 1,24,166

Chart 5.4: Trends in Transactions on Stock Exchanges by Mutual Funds (` crore)

600,000

500,000

400,000

300,000

200,000

100,000

-100,000 2018-19 2019-20 2020-21 2021-22 2022-23

-200,000

Equity Net Purchase /Sales Debt Net Purchase /Sales

Total Net Purchase /Sales

F. 
Unit Holding Pattern: During 2022-
23, an incremental 1.6 crore folios were
added to the mutual fund segment taking
the aggregate number of investor folios to
14.6 crore. Individual investors continued
to hold dominant position in terms of
share in total number of investor accounts
and assets held. Individual investors
accounted for 97.1 per cent of the total
folios while they commanded a share of 55
per cent in the total assets during 2022-23.
(Table 5.8) This was further accelerated
by the continuous growth of systematic
investment plan (SIP) accounts. During

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 Annual Report 2022-23

2022-23, 251.4 lakh new SIPs were
registered, taking the total number of SIPs
outstanding to 6.4 crore with a total AUM
of ` 6.8 lakh crore as on March 31, 2023.
Corporates and institutions accounted
for only 1.1 per cent of the total number
of folios but they held 40.8 per cent of the
total net assets. In terms of sector-wise
unit holding pattern, at the end of March
31, 2023, private sector mutual funds held
84.3 per cent of total folios and 79.5 per
cent of the total net assets, making them
the dominant players in industry.

Table 5.8: Unit Holding Pattern of Mutual Funds (As on March 31, 2023)
Percentage Percentage
AUM
Category Year No. of Folios to Total to Total
(in crore)
Folios Net assets
2021-22 12,57,54,565 97.1 19,78,217 52.7
Individuals$
2022-23 14,14,85,672 97.1 21,67,772 55.0
2021-22 23,44,636 1.8 1,38,535 3.7
NRIs/OCBs
2022-23 27,06,467 1.9 1,62,225 4.1
2021-22 199 0.0 4,483 0.1
FPIs
2022-23 194 0.0 4,754 0.1
2021-22 14,05,252 1.1 16,35,448 43.5
Corporates/Institutions/others
2022-23 15,38,267 1.1 16,07,280 40.8
Total (2022-23) 14,57,30,600 100.0 39,42,031 100.0
Note: $ Individuals include both retail and HNI.

G. Number of Defaults and Restructurings notably fell from 55 to one in 2022-23

in Debt Securities (Table 5.9). The percentage of default and
 The instances of defaults declined to five restructured amount to total debt schemes’
in 2022-23 from 28 in 2021-22, while AUM declined to 0.42 per cent in 2022-23
the number of instances of restructuring from 0.5 per cent in the previous year.

Table 5.9: Number of Defaults and Restructurings in Debt Securities

Per cent of
Default and Total (cumulative) Outstanding
default and
restructured amount recovered default and
No. of No. of restructured
amount as on after default of restructured
Year instances instances of amount to total
date of default/ the security/ after amount as on
of defaults restructuring debt schemes
restructuring (` restructuring as on March 31
AUM as on
crore) March 31 (` crore) (` crore)
March 31
2021-22 28 55 3,735 562 3,817 0.50
2022-23 5 1 1,852 247 833 0.42

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 Chapter 5 Fund Management Activities

H. Quantum of Unclaimed Amount funds of niche/ sophisticated and institutional

 The unclaimed redemption amount of
mutual funds decreased by 1.7 per cent
to ` 979 crore at the end of 2022-23 from
` 995 crore at the end of 2021-22 (Table
5.10). But, the unclaimed dividend amount
went up by 8.0 per cent to ` 1,659 crore in
2022-23 from ` 1,539 crore in the previous
year.
Table 5.10: Quantum of Unclaimed Amount
with Mutual Funds (Amount in ` crore)
Unclaimed Unclaimed
Year
redemption dividend
2021-22 995.4 1,538.8
2022-23 978.9 1,659.0
Note: As on March 31 of respective year-end
5.2 ALTERNATIVE INVESTMENT FUNDS
Alternative Investment Funds (AIFs) are privately
pooled investment vehicles for channelizing
investors to various assets. Over the years, SEBI
has developed a robust alternative investment
ecosystem in the country which has witnessed
remarkable rise in number of funds registered,
commitment raised and new investment made.
Major policies implemented for AIF industry
during 2022-23 are given below:
5.2.1 Policy Developments
A. Participation by AIFs in Credit Default
Swaps: To provide greater investment
flexibility to managers of AIFs and to
facilitate deepening of the domestic
corporate bond market, AIFs have been
permitted to participate in Credit Default
Swaps (CDS) not only as protection buyers
but also as protection sellers, subject to
conditions for risk mitigation. Following
types of transactions in CDS by AIFs were
approved:

Category I AIFs Hedging: Purchase CDS on underlying investment in debt securities

Category II AIFs Hedging: Purchase CDS on underlying investment in debt securities
Sell CDS: Unencumbered Government bonds / Treasury bills equal to the amount
of CDS exposure to be earmarked against the CDS.
Category III AIFs Purchase CDS: For hedging or otherwise, within permissible leverage
Sell CDS: Within permissible leverage. selling of CDS will not tantamount to
undertaking leverage, so long as unencumbered G-Secs/ T-Bills equal to the
amount of CDS exposure are kept earmarked against the CDS

B. 
Transaction in Corporate Bonds
through RFQ Platform: To increase
the liquidity on Request for Quote (RFQ)
platform of stock exchanges and to
enhance the transparency and disclosure
pertaining to trading in secondary market
in corporate bonds, it has been inter-alia
stipulated that AIFs shall undertake at
least 10 per cent of their total secondary
market trades in corporate bonds by value
in a month by placing/seeking quotes on
the RFQ platform.
C. Timeline for Declaration of First Close
of Schemes: To ensure that the inactive
schemes are closed down in a timely manner
and investors get updated disclosures in
Private Placement Memorandum (PPM), it
has been prescribed that the ‘First Close’
of a scheme shall be declared not later
than 12 months from the date of SEBI
communication for taking the PPM of the
scheme on record and that the corpus of
the scheme at the time of declaring its ‘First
Close’ shall not be less than the minimum

105
 Annual Report 2022-23
corpus prescribed in AIF Regulations for
the respective category/sub-category of
the AIF.
D. Calculation of Tenure of Close-Ended
Schemes: To ensure that tenure of a
scheme is calculated from a definite point
of time so that investors have a clear
timeframe on investment horizon of the
scheme of AIF, it has been specified that
the tenure of close- ended schemes of AIFs
shall be calculated from date of declaration
of first close instead of calculating the
tenure from the date of declaration of final
close.
E. Ring-fencing of Assets and Liabilities
of Schemes: SEBI has specified that the
manager and the trustee/trustee company/
the Board of Directors/ designated partners
of the AIF (based on the legal structure of
the AIF) shall ensure that the assets and
liabilities, bank accounts and securities
accounts of each scheme of an AIF are
segregated and ring-fenced from other
schemes of the AIF.
F. 
Review of Regulatory Provisions
with regard to Change in Control: To
streamline the process of processing
applications for change in control of
manager/sponsor and change in manager/
sponsor of AIFs and to bring parity with
other SEBI Regulations, AIF Regulations
have been amended to specify that change
in manager/sponsor shall require prior
approval of SEBI by paying fee equivalent
to the registration fee as applicable to the
respective category / sub-category of the
AIF.
G. 
Change in Control involving Scheme
of Arrangement: To streamline the
processing of applications for change in
control of the sponsor and/or manager of
106
the AIF involving scheme of arrangement
which needs sanction of National
Company Law Tribunal (NCLT) in terms
of the provisions of the Companies Act,
2013, certain guidelines including granting
in-principle approval by SEBI prior to filing
the application with the NCLT have been
specified.
H. 
Foreign Investment in AIFs: To
ensure that the money coming through
the AIF structure is in compliance with
applicable laws and from a jurisdiction with
information sharing protocols in place, it
has been mandated that foreign investor of
an AIF is a resident of the country whose
securities market regulator is a signatory
to the IOSCO’s Multilateral Memorandum
of Understanding or a signatory to the
bilateral Memorandum of Understanding
with SEBI.
I. 
Guidelines for Overseas Investment:
Information required to be submitted
by AIFs/Venture Capital Funds (VCFs)
for processing application for allocation
of overseas investment limit has been
streamlined. To provide flexibility in making
overseas investment, the requirement
of overseas investee company to have
Indian connection has been done away
with. Further, it has been specified that if
an AIF/VCF liquidates investment made in
an overseas investee company previously,
the sale proceeds received from such
liquidation, to the extent of investment
made in the said overseas investee
company, shall be available to all AIFs/
VCFs (including the selling AIF/VCF) for
reinvestment.
J. 
Guidelines for Large Value Fund
for Accredited Investors: Guidelines
with respect to filing of the placement
memorandum by Large Value Fund (LVFs)
 Chapter 5 Fund Management Activities

for accredited investors and modalities for
extension of tenure beyond two years by
LVFs have been specified.
5.2.2 Market Activity and Trends Observed in
AIFs
A. Category-wise Registration: The total
number of registered AIFs at the end of
March 31, 2023 increased to 1,088 from
885 at the end of March 31, 2022 (Table
5.11). The number of registered AIFs,
increased by 24 per cent each for Category
I, Category II, and 20 per cent for Category
III AIFs, respectively, at the end of 2022-23
as compared to previous year.

Table 5.11: Number of Registered AIFs (Category-wise)

No. of AIFs Registered as on
Category of AIFs
March 31, 2022 March 31, 2023
Category I - Total 204 253
Infrastructure Fund 18 19
Social Venture Fund 14 14
Venture Capital Fund 157 204
SME Fund 15 15
Special Situation Funds 0 1
Category II 508 628
Category III 173 207
Grand Total 885 1,088

B. Category-wise Investment: At the end
of 2022-23, the amount of commitment
raised by all categories of AIFs increased
by 30 per cent to ` 8,33,774 crore from
` 6,41,359 crore at the end of 2021-22
(Table 5.12). The amount of fund raised
and investment made increased by 16.5
per cent and 19 per cent, respectively
at the end of 2022-23. The cumulative
investment made by Category-I, II and III
AIFs increased by 0.9 per cent, 21.8 per
cent and 16.8 per cent, respectively, at the
end of 2022-23.

Table 5.12: Category-wise Investment by AIFs (Amount in ` crore)

As on March 31, 2022 As on March 31, 2023
Commitments Funds Investments Commitments Funds Investments
raised Raised made raised Raised Made
Category I Total 53,374 29,000 23,798 58,929 28,284 24,012
Infrastructure Fund 11,852 7,911 6,821 15,581 5,466 4,743
Social Venture Fund 2,896 2,101 578 1,473 565 331
Venture Capital Fund 37,445 18,789 16,234 41,726 22,191 18,886
SME Fund 1,181 199 165 149 62 52
Category II 5,19,189 2,23,457 1,99,452 6,93,945 2,66,296 2,42,915
Category III 68,796 61,406 60,809 80,900 71,030 71,055
Grand Total 6,41,359 3,13,863 2,84,059 8,33,774 3,65,610 3,37,982

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 Annual Report 2022-23

C. Instrument-wise Deployment of Funds: by 28 per cent (` 94,568 crore) in debt/

As on March 31, 2023, AIFs invested 41.5 securitized debt instruments and 19.6
per cent (` 1,40,108 crore) of the total per cent (` 66,351 crore) in listed equity
funds in unlisted equity shares/equity (excluding listed/ to be listed on SME
linked instruments/LLP interest followed exchange (Table 5.13).

Table 5.13: Instrument-wise Deployment of Funds by AIFs (` crore)

Percent- Funds In- Percent-
Funds Invested
age Share vested as on age Share
Type of Instruments as on March 31,
of Funds March 31, of Funds
2022
Invested 2023 Invested
Unlisted Equity Shares/ Equity Linked 1,17,580 41.4 1,40,108 41.4
Instruments/ LLP Interest
Listed Equity (excluding Listed/ to be Listed 46,756 16.5 66,351 19.6
on SME Exchange)
Debt/ Securitised Debt Instruments 82,631 29.1 94,568 27.9
Units of other AIFs 5,243 1.9 8,122 2.4
Liquid Funds 9,830 3.5 12,709 3.7
Listed/ to be Listed Securities on SME 53 0.02 128 0.04
Exchange
Others 21,966 7.7 15,996 4.7
Total 2,84,059 100.0 3,37,982 100.0

D. 
Sector-wise Deployment of Funds by
AIFs: At end of March 31, 2023, AIFs had
deployed major portion of funds in Real
estate (20.1 per cent), followed by IT/
ITeS (6.3 per cent), Financial services (6.1
per cent), NBFCs (5.3 per cent), Banks
(4.0 per cent), and Pharmaceuticals (3.7
per cent) (Chart 5.5). The top six sectors
accounted for around 46 per cent of total
deployment of funds by AIFs as at the end
of March 2023.

Chart 5.5: Sector-wise Deployment of Funds by AIFs %

Real Estate, 20.1

Others, 45.4 IT/ITes, 6.3

Financial
Services, 6.1

NBFCs, 5.3
Insurance, 2.7 Banks, 4.0
Pharmaceuticals, 3.7
Health Care
Providers and Services, 3.1 FMCG, 3.2

Notes:
1. Banking and Financial Services exclude NBFCs;
2. Data w.r.t sector-wise deployment of funds is reported by AIFs which do not take leverage.

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 Chapter 5 Fund Management Activities

5.3 PORTFOLIO MANAGERS 5.3.1 Policy Developments

A.  Performance Benchmarking and
Portfolio managers cater the needs of high net Reporting of Performance by Portfolio
worth individuals who seek customized and well Managers: In order to help investors in
diversified investment portfolios. An account assessing the performance of a portfolio
of the various policy and risk management manager, the applicable requirements
measures undertaken during 2022-23 for related to performance reporting and
the development of portfolio management benchmarking by portfolio managers has
framework and a glimpse of the market activity been reviewed (Box 5.4).
are given in the following sub-sections.

Box 5.4: Performance of Portfolio Management Services: A New Approach for

Benchmarking and Reporting
An investment approach is the documented investment philosophy to be adopted by the portfolio
managers while managing the client funds in order to achieve client’s investment objectives. In
order to help investors in assessing the performance of a portfolio manager, an additional layer of
broadly defined investment themes called ‘Strategies’ (such as ‘equity’, ‘debt’, ‘hybrid’ and ‘multi
asset’) has been incorporated.
A portfolio manager has to tag each Investment Approach (IA) to a Strategy. Once tagged, it can
be changed only after offering an option to subscribers to exit without any exit load. Association
of Portfolio Managers in India (APMI) is required to precribe three benchmarks for each Strategy.
While tagging an IA to a particular Strategy, the portfolio manager shall select one benchmark from
those prescribed for that Strategy to enable the investor to evaluate relative performance of the
portfolio managers. Tagging can be changed only after offering an option to subscribers to the IA
to exit without any exit load.
APMI is also required to prescribe standardized valuation norms for portfolio managers, in
accordance, to which valuation of the portfolio debt and money market securities by portfolio
managers shall be carried out. Valuation agencies would also be empaneled by APMI for providing
security level prices to portfolio managers.
Also, while communicating performance, portfolio manager is required to report the Extended
Internal Rate of Return (‘XIRR’) to investors for each IA along with Time-weighted Rate of Return
(‘TWRR’) and trailing return of selected benchmark.

B. 
Prudential Norms for Related Party
Transactions of Portfolio Managers:
With a view to enhance transparency,
investor protection and reduce conflict
of interest, limits on investment in
securities of associates/ related parties of
portfolio managers have been specified.
Portfolio managers are mandated to
seek prior consent of the client regarding
investments in the securities of associates/
related parties. Requirements relating
to disclosure of details of investment by
portfolio manager and minimum credit
rating of securities for investments by
portfolio managers were also specified.
C. Master Circular for Portfolio Managers:
In order to enable the stakeholders to
have an access to all the applicable
requirements at one place, all circulars
issued till November 30, 2022 were
rescinded and replaced with the Master
Circular for portfolio managers dated
March 20, 2023.

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 Annual Report 2022-23

5.3.2 Risk Management Measures mandated to have robust cyber security

A.  Cyber Security and Cyber Resilience
Framework for Portfolio Managers: As
part of the operational risk management,
cyber security and cyber resilience
framework has been introduced for all
portfolio managers with asset under
management of ` 3000 crore or more,
under discretionary and non-discretionary
portfolio management service taken
together. The portfolio managers are
and cyber resilience systems in order to
provide essential facilities and services and
perform critical functions in the securities
market.
5.3.3 Market Activity and Trends Observed
During 2022-23, the total number of registered
portfolio managers increased by 9.0 per cent
from 367 in 2021-22 to 401 in 2022-23 (Table
5.14).

Table 5.14: Registered Portfolio Managers

No. of Registered New Cancellation/ Registered
Type of Intermediary Intermediaries as on Registrations Surrender during Intermediaries as on
March 31, 2022 during 2022-23 2022-23 March 31, 2023
Portfolio Managers 367 53 19 401

The total number of clients with portfolio
managers increased by 4.3 per cent from
1,39,949 in 2021-22 to 1,45,918 in 2022-23.
Number of clients registered under discretionary
category increased by 6.0 percent, while under
non-discretionary category, number of clients
witnessed a decline of 25.8 per cent during the
same period (Table 5.15).
The total AUM of the portfolio management
industry increased by 15.2 per cent from ` 24.2
lakh crore at end of 2021-22 to ` 27.9 lakh
crore at the end of 2022-23. AUM under non-
discretionary category and discretionary (EPFO/
PFs) category increased by 31.1 per cent and
16.3 per cent respectively by at end of 2022-
23. Pursuant to notification dated November 9,
2021 to facilitate co-investment, filing of data
relating to co-investment started from 2022-23.

Table 5.15: Assets Managed by Portfolio Managers

No. of Clients AUM (` crore)
Year Discretionary
Ended Discretionary Non- Co- Discretionary Non- Co-
Advisory Total (Non EPFO/ Advisory Total
Discretionary Investment (EPFO/ PFs) Discretionary Investment
PFs)
2021-22 1,30,525 7,512 1,912 0 1,39,949 17,69,845 2,65,250 1,75,943 2,08,231 0 24,19,269
2022-23 1,38,371 5,572 1,923 53 1,45,919 20,58,973 2,76,085 2,30,677 2,20,021 328 27,86,084
Note: The data has been compiled on the basis of information submitted by portfolio managers to SEBI.

110
 Chapter 5 Fund Management Activities

Chart 5.6: Trends in AUM and Clients in PMS

180,000 ` 3,000,000
160,000
` 2,500,000
140,000
120,000 ` 2,000,000
100,000
` 1,500,000
80,000
60,000 ` 1,000,000
40,000
` 500,000
20,000
- `-
2018-19 2019-20 2020-21 2021-22 2022-23
No. of Clients AUM (in ` Cr) (RHS)

During 2022-23, gross inflow of ` 3,70,364
crore was recorded under discretionary portfolio
management category, while, gross inflow of
` 1,07,338 crore was witnessed under non-
discretionary portfolio management category
(Table 5.16). Net inflow during 2022-23, for
discretionary and non-discretionary category
stood at ` 2,90,954 crore and ` 53,193 crore,
respectively.

Table 5.16: Total Fund Inflows/ Outflows under Portfolio Management Services
(Amount in ` crore)
Discretionary Non-Discretionary
Year
Inflow Outflow Net Inflow Outflow Net
2021-22 2,55,587 1,34,932 1,20,654 64,167 33,566 30,601
2022-23 3,70,364 79,410 2,90,954 1,07,338 54,145 53,193
Note: The data has been compiled on the basis of information submitted by portfolio managers to SEBI

5.4 COLLECTIVE INVESTMENT SCHEMES 5.5 REAL ESTATE INVESTMENT TRUSTS

Registration and regulation of the working
of CIS:
As on March 31, 2023, there was only one
registered collective investment management
company (CIMC), M/s GIFT Collective
Investment Management Company Ltd., which
was registered during 2008-09. However, no
CIS has been launched by this CIMC till date.
AND INFRASTRUCTURE INVESTMENT
TRUSTS
Sound infrastructure is a sine qua non for
economic development. For an emerging
economy like India, real estate and infrastructure
investments can accelerate the pace of economic
growth. Owing to the paucity of resources, public
sector can’t fully cater the infrastructure needs
of the economy. Considering the capital intensity

111
 Annual Report 2022-23
and slower yields, private sector investments
in these sectors are limited. Real Estate
Investment Trusts (REITs) and Infrastructure
Investment Trusts (InvITs) are innovative
pooled investment vehicles which allow
monetisation of infrastructure and real-estate
asset while simultaneously providing investors
the opportunity to invest in these assets without
actually owning them. Given the importance of
private investment in infrastructure development
and the imperative role that REITs and InvITs
can play, SEBI has been continuously engaged
in strengthening the regulatory framework as
well as in easing the process for these two
products. The following are the important policy
measures taken for REITs and InvITs during
2022-23.
5.5.1 Policy Developments
A. Reduction of Timelines for Listing: In
order to streamline the process of public
issue of REITs and InvITs, the time taken
for allotment and listing after the closure
of the issue, was reduced from 12 to
six working days. Similarly, for privately
placed InvITs, the time taken was reduced
from 30 to six working days. This will help
enhance liquidity in the market and bring
about parity with equity instruments.
B. 
Amendments to Guidelines for
Institutional Placement of Units: The
mandatory listing period for institutional
placement of units by listed REITs/InvITs
was reduced from 12 to six months.
Further, sponsors were allowed to be
allotted units on institutional placement, for
unsubscribed portion subject to fulfilment
of certain conditions.
C. Issue and Listing of Commercial Paper:
To improve the robustness of REITs and
InvITs by allowing them greater flexibility
in capital structuring, REITs and InvITs
were allowed to issue and list Commercial
Paper (CPs), subject to their complying
112
with RBI guidelines in issuance and
listing norms prescribed through SEBI
(NCS) Regulations, 2021. The issuance
of CPs shall be within the overall debt
limit permitted under REITs and InvIT
Regulations, 2014.
D. UPI Mechanism: In order to provide an
additional option for individual investors
to apply in public issues of units of REITs
and InvITs, a facility to block funds
through Unified Payment Interface (UPI)
mechanism for application value up to
` five lakh has been provided.
E. Amendment to REITs Regulations and
InvITs Regulations: In order to align
REITs and InvITs Regulations Companies
Act, 2013, following amendments were
notified:
i. Eligibility criteria for the appointment
of independent directors and role and
responsibilities of senior management
personnel.
ii. Provisions related to tenure of auditor of
REITs/InvITs.
iii. Mandatory limited review of consolidated
accounts by the auditors of REITs/InvITs.
iv. Inclusion of overnight funds under cash
and cash equivalents for the purpose of
computation of leverage.
v. Vigil mechanism and whistle blower policy
for investment manager.
vi. Mandatory transfer of unclaimed / unpaid
distributions of REITs/InvITs to SEBI
Investor Protection and Education Fund.
F. 
Introduction of Governance Norms:
Governance norms that were applicable to
REITs and InvITs on a comply or explain
basis under SEBI (LODR) Regulations,
2015 were made applicable to REITs and
InvITs on a mandatory basis under REITs
Regulations 2014 and InvITs Regulations
2014. The mandatory compliance with
Corporate Governance norms will be
 Chapter 5 Fund Management Activities

beneficial for stakeholders of REITs and allowed to conduct meetings of unit holders
InvITs. through video conferencing or other
audio-visual means and the procedure to
G.  Amendments to Guidelines for conduct the same was specified. This will
Preferential Issue and Institutional enable maximum participation of the unit
Placement: To provide more clarity on holders in the decision-making process,
regulatory norms in preferential issue and irrespective of their geographical location.
institutional placement of units by listed
REITs and InvITs, following amendments 5.5.2 Market Activity and Trends Observed
were specified: As on March 31, 2023, there were 20
i. Reduction in timeline for listing of units InvITs registered with SEBI, out of which 15
from seven to two working days from the were listed. Similarly, as on March 31, 2023,
date of allotment. there were five REITs registered with SEBI, out
ii. Alignment of norms related to pricing of which three were listed. The funds raised by
of frequently traded units, in case of InvITs during 2022-23, decreased by 70 per cent
preferential issue, with SEBI (ICDR) to ` 6,360 crore compared to previous year and
Regulations, 2018. no funds were raised by REITs during 2022-23
iii. Reduction in the time period of restriction (Table 5.17).
on allotment of units in case of preferential
issue to any person (including sponsors) Table 5.17: REITs and InvITs
who has sold or transferred any units of REITs InvITs
the issuer from six months to 90 trading Particulars 2021- 2022- 2021- 2022-
days. 22 23 22 23
Number of
H. 
Reduction in Minimum Unitholding Registered Trusts
Requirement: The minimum holding 4 5 17 20
at the End of the
requirement of units by sponsor(s) and Period
sponsor group(s) of REITs was reduced Number of Entities
from 25 per cent to 15 per cent of total Listed on Stock 3 3 10 15
outstanding units on post-initial offer basis Exchanges
in line with the requirements specified Funds Raised
for sponsor(s) in the InvITs Regulations, During the Year 950 0 21,195 6,360
2014. (Amount in ` Crore)
Note: Funds raised include through initial offer,
I. 
Discontinuation of Framework for preferential issue, institutional placement and rights
Unlisted InvITs: The separate regulatory issue and funds raised by unlisted InvITs.
framework for unlisted InvITs was
discontinued under InvITs Regulations, Table 5.18: Net Asset Value of REITs and
2014. The unlisted InvITs regime had InvITs (Amount in ` crore )
promoted regulatory arbitrage, since it REITs InvITs
allowed issuing entities to choose a less
2021-22 2022-23 2021-22 2022-23
stringent regulatory regime compared to
that for listed InvITs. 78,555 70,614 1,36,650 1,76,957
Note; Net Asset Value as on March 31 of Year End
J. Meetings of Unitholders through Audio-
Visual Means: REITs and InvITs were

113
 Annual Report 2022-23
5.6 RISK MANAGEMENT MEASURES
Regulations for REITs and InvITs specify various
provisions regarding risk management. These
pertain to unitholding requirements and norms
for listing and issuances. The units issued by
REITs and InvITs are required to be issued in
dematerialized form and in case of public issue,
the application can be made only through ASBA.
REITs and InvITs are required to maintain at
least 25 per cent public unit holding. In addition,
REITs and InvITs are required to have the
specified minimum number of unitholders to
avoid any concentration of unitholding. Units of
114
REITs and InvITs are required to be listed and
the issuers are required to adhere to the listing
agreements. Privately placed InvITs which can
invest in under construction projects have a
minimum investment threshold of ` one crore.
Further, units of a privately placed InvIT can be
offered only to institutional investors and body
corporates. For further issuance of units through
institutional placement or preferential allotment,
REITs and InvITs are required to follow the
process which is similar to equity issuances.
Regular disclosures regarding related party
transactions, unitholders’ meeting, unit holding
pattern etc. are mandated for REITs and InvITs.
 Chapter 6 Foreign Portfolio Investors And Foreign Venture Capital Investors
Chapter 6:
Foreign Portfolio Investors and Foreign
Venture Capital Investors
Foreign portfolio investors (FPIs) and foreign
venture capital investors (FVCIs) are crucial
for emerging markets as sources of non-
debt creating capital flows and in promoting
innovative new age knowledge and technology
start-up ecosystem. In spite of India’s innate
strength in macroeconomic fundamentals, the
uncertain geopolitical situation, tightening of
monetary policies by central banks and changes
in country weightages in indices by global index
providers drove the flows to and from India during
2022-23. Government and SEBI have
undertaken major policies directed at improving
the ease of access and investment climate for
FPIs over the years. This chapter delves into
the measures taken by SEBI to facilitate foreign
investment into India and also the market
activities and trends observed during 2022-23.
6.1 FOREIGN PORTFOLIO INVESTORS
6.1.1 Policy Developments
A. Streamlining the On-boarding process
of FPIs: In order to ease the on-boarding
process of FPIs and to reduce the time
taken for granting registration and opening
of demat, trading and bank accounts
of FPIs, following measures have been
taken:
i. Grant of FPI registration on the basis of
scanned copies of application forms and
supporting documents and activation
of trading post-verification of physical
documents;
115
ii. Acceptance of use of digital signatures by
FPIs, in accordance with the provisions
of the Information Technology Act, 2000,
for execution of registration related
documents;
iii. Certification of copies of original
documents by authorized bank officials
using SWIFT mechanism. This will reduce
physical movement of documents and the
time taken for registration;
iv. Verification of PAN through the Common
Application Form (CAF) module available
on the websites of the depositories.
v. Submission of unique investor group ID by
FPI applicants in lieu of complete details of
group constituents.
B. Facilitation of FPI Registration through
Depositories: In order to facilitate
registration of FPIs through NSDL and
CDSL, SEBI (FPI) Regulations, 2019 were
amended to enable SEBI to generate the
FPI registration number. Further, CAF
was amended by Government of India to
enable both depositories to host the CAF
for FPI registration.
C. Removal of Limitations to the Multiple
Investment Managers Structures: SEBI
registered FPIs operating under the Multiple
Investment Managers (MIM) structures
have been accorded the flexibility to
engage internal investment managers, in
addition to external investment managers.
 Annual Report 2022-23

D. 
Compliance requirement by FPIs: For sell off was in 2008-09, during the global
prompt compliance and to ensure better financial crisis (Chart 6.1). During 2022-
enforcement, FPIs have been obligated 23, FPI pull-out was driven by the series
to inform their Designated Depository of rate hikes by the Federal Reserve and
Participants (DDPs), the details of all FPIs other central banks in the wake of mounting
forming part of the same investor group inflationary pressures. Continuation
and any changes thereof as well as any of Russia – Ukraine crisis had further
material change in previously submitted deteriorated geopolitical environment and
information, as soon as possible but not had led to foreign investors’ flight to safety.
later than seven working days. The opening up of China post lockdown
and change in weightages of other
6.1.2 Market Activity and Trends Observed emerging markets in the global benchmark
A. Fund Inflow/ Outflow: The year 2022- indices also impacted the portfolio flows
23 witnessed FPI outflows to the tune of to India. In spite of the outflows, the
` 40,936 crore compared to the previous domestic markets, however, were not
fiscal when the outflow was ` 1.2 lakh much impacted as a result of the effective
crore. This was also the third highest sell- counterbalance provided by domestic
off by FPIs during a financial year. While investors, both individual and institutional,
FPI outflow of pandemic driven 2021-22 led by mutual funds.
has been historic high, the second highest

Chart 6.1: Trend in Net Investments by FPIs (` crore)

300,000
250,000
200,000
150,000
100,000
50,000
0
-50,000
-100,000
-150,000
2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

Source: NSDL

B. Instrument-wise FPI Investments: FPI investment in debt through voluntary

During 2022-23, FPIs pulled out ` 37,632 retention route (VRR) fell by more than
crore from Indian equity market, compared half to ` 5,814 crore in 2022-23 as against
to outflow of ` 1.4 lakh crore during 2021- ` 12,642 crore in the previous year. FPIs
22. FPIs were also net sellers to the tune were net sellers of hybrid instruments to
of ` 8,937 crore in debt segment in 2022- the tune of ` 181 crore in 2022-23 while
23 as compared to being net buyers of they were net buyers of ` 3,498 crore in
` 1,628 crore during last fiscal. However, last fiscal. (Table 6.1)

116
 Chapter 6 Foreign Portfolio Investors And Foreign Venture Capital Investors

Table 6.1: Net Investment of FPIs (` crore)

Year Equity Debt Debt-VRR Hybrid Total
2021-22 -1,40,010 1,628 12,642 3,498 -1,22,242
2022-23 -37,632 -8,937 5,814 -181 -40,936
Source: NSDL

During 2022-23, FPIs were net sellers for highest monthly net FPI outflow of ` 51,422
seven months to the tune of ` 1.48 lakh crore, crore followed by May 2022 (` 36,518 crore)
of which equity segment witnessed an outflow and January 2023 (` 26,544 crore) (Chart 6.2).
of ` 1.49 lakh crore. June 2022 witnessed the

Chart 6.2: Trends in Instrument-wise Net Investment by FPIs during 2022-23 (` crore)

80,000
60,000
40,000
20,000
0
-20,000
-40,000
-60,000
2

22

22

22

22

23

3
22

23
2

2
-2

-2
r-2

-2
l-2

g-

p-

v-

c-

b-
n-

n-
ay

ar
ct

No

De
Ap

Au

Se

Fe
Ju

Ju

Ja
M

M
O

Equity Debt Hybrid

Note: Debt includes Debt through Voluntary Retention Route (Debt-VRR);

Source: NSDL

C. 
Assets Under Custody (AUC) of
Custodians : As on March 31, 2023, the
AUC of FPIs reduced by 4.4 per cent to
` 48.7 lakh crore from ` 50.9 lakh crore at
the end of March 31, 2022. Equity assets
constituted 91.5 per cent of total assets
held by FPIs in India as on March 31, 2023.
FPI’s AUC in equity and debt instruments
declined by 4.9 per cent and 3.8 per cent
respectively during 2022-23 as compared
to last year. (Table 6.2)

Table 6.2: Assets of FPIs in India (Amount in ` lakh crore)

Assets of FPIs in India Per cent Percentage Share
Product
Change in AUC
March 31, 2022 March 31, 2023 March 31, 2022 March 31, 2023
Y-o-Y
Equity 46.9 44.6 -4.9 92.0 91.5
Debt 2.5 2.4 -3.8 5.0 4.9
Debt-VRR 1.2 1.4 17.3 2.3 2.9
Hybrid 0.3 0.3 3.6 0.7 0.6
Total 50.9 48.7 -4.4 100.0 100.0
Source: NSDL

117
 Annual Report 2022-23

D.  ector-wise
S and Country-wise
Distribution of FPI’s AUC: As on March
31, 2023, of the total ` 44.6 lakh crore
equity assets held by FPIs, ` 15.0 lakh crore
were held in Financial Services sector,
followed by Information Technology (` 4.9
lakh crore) and Oil, Gas & Consumable
Fuels (` 4.5 lakh crore). These top three
sectors accounted for more than half of the
FPI’s AUC of equity segment for the period
2022-23 (Table 6.3)

Table 6.3: Sector-wise Distribution of FPI Equity Assets

Sr. Percentage Share in Total Equity Assets
Sectors
No. As on March 31, 2023
1 Financial Services 33.5
2 Information Technology 11.0
3 Oil, Gas & Consumable Fuels 10.1
4 Fast Moving Consumer Goods 7.5
5 Automobile and Auto Components 5.7
6 Healthcare 4.9
7 Power 3.3
8 Consumer Durables 3.3
9 Capital Goods 3.1
10 Metals & Mining 2.9
11 Telecommunication 2.5
12 Consumer Services 2.3
13 Chemicals 2.1
14 Construction Materials 1.8
15 Construction 1.8
16 Others 4.0
Total 100.0
Source: NSDL

As on March 31, 2023, a total of 11,081 FPIs
were registered in India from various jurisdictions
of which highest registration was from USA
(3,464), followed by Luxembourg (1,348) and
Canada (820). As on March 31, 2023, 39.4 per
cent of the total assets of the FPIs in India were
from USA, followed by Singapore (9.4 per cent),
Luxembourg (7.5 per cent) and Mauritius (6.7
per cent). The AUC of FPIs from Singapore and
USA increased by 5.3 per cent and 3.1 per cent
respectively during 2022-23 as compared to last
year (Table 6.4).

118
 Chapter 6 Foreign Portfolio Investors And Foreign Venture Capital Investors

Table 6.4: Country-wise Number of FPIs and AUC of FPIs (Amount in ` crore)
Number of FPIs AUC of FPIs
Percentage Percentage Share Share
March March
Country Change March 31, March 31, Change (%) as on (%) as on
31, 31,
year on 2022 2023 year on Mar 31, Mar 31,
2022 2023
year year 2022 2023
USA 3,433 3,464 0.9 18,60,462 19,19,053 3.1 36.5 39.4
Mauritius 578 583 0.9 5,52,591 3,24,551 -41.3 10.8 6.7
Singapore 511 557 9.0 4,33,322 4,56,204 5.3 8.5 9.4
Luxembourg 1,275 1,348 5.7 3,90,677 3,63,663 -6.9 7.7 7.5
UK 590 627 6.3 2,66,622 2,55,319 -4.2 5.2 5.2
Ireland 661 732 10.7 2,42,710 2,38,336 -1.8 4.8 4.9
Canada 743 820 10.4 1,63,666 1,54,845 -5.4 3.2 3.2
Norway 23 23 0.0 1,30,423 1,47,185 12.9 2.6 3.0
Japan 434 438 0.9 1,20,212 1,12,360 -6.5 2.4 2.3
Others 2,242 2,489 5.5 8,21,253 8,99,276 -3.7 16.1 18.5
Total 10,608 11,081 4.5 50,94,715 48,70,792 -4.4 100.0 100.0
Source: NSDL

E. FPI Limits in Corporate Bonds and their
Utilisation: In 2022-23, overall upper limit
for the investment by the FPIs in corporate
bonds was increased to ` 6,67,871 crore
from ` 6,07,039 crore in 2021-22. However,
the overall debt utilisation as percentage
of total investment limits in the corporate
bonds category went down to 15.520 per
cent as on March 31, 2023 from 20.0 per
cent as on March 31, 2022 (Table 6.5).

Table 6.5: Foreign Investment Limits in Corporate Bonds

Unutilized Auc-
Upper Total Invest-
Investment tioned Limits Per cent Limit Available
Limit ment
Year* (` crore) available with of Limits for Investment
(` crore) (` crore)
FPIs Utilized (` crore)
A B C (B+C)
2021-22 6,07,039 1,21,018 0 1,21,018 20.0 4,86,021
2022-23 6,67,871 1,03,666 0 1,03,666 15.5 5,64,205
Note: * Data is as on March 31 of the respective financial year
Source: NSDL

F. Offshore Derivatives Instruments (ODIs) The value of investments in ODIs on

Issued by FPIs: ODIs or Participatory
Notes (PNs) are issued by a registered FPI
to overseas investors who wish to invest
in Indian stock market without registering
themselves with SEBI. Investments in ODIs
provide the foreign investors an exposure
to Indian securities and derivatives market.
equity and debt (including derivatives)
increased by 0.7 per cent to ` 88,600 crore
as on March 31, 2023 when compared to
` 87,979 crore as on March 31, 2022.
(Table 6.6).

119
 Annual Report 2022-23

Table 6.6: Value of ODIs/ PNs (` crore)

Notional Notional Notional value of
At the end of Notional Notional value
value of value of AUC of ODIs as a per-
respective Fi- value of of ODIs on Hy-
ODIs on ODIs on FPIs centage of
nancial Year ODIs* brid Securities
Equity Debt AUC of FPIs
2021-22 87,979 78,233 9,593 153 50,94,715 1.73
2022-23 88,600 77,921 10,573 106 48,70,792 1.82
Note: * in Equity, Debt, Hybrid Securities and Derivatives
Source: NSDL

6.2 
FOREIGN VENTURE CAPITAL sector was 7.1 per cent and in services sector
INVESTORS was 2.9 per cent as on March 31, 2023. The
unclassified ‘Others' category accounted for
In order to encourage and facilitate prompt foreign 87.7 per cent of the total FVCI assets as on
venture capital investment into innovative start- March 31, 2023 (Table 6.7).
ups and new age technology and knowledge
based ventures, SEBI has put in place foreign Table 6.7: Cumulative Net Investments by FVCIs
venture capital investor (FVCI) mechanism. This (` crore)
has gone a long way in augmenting domestic Sectors 2021-22 2022-23
pool of resources available for venture capital.
Information Technology 3,261 3,448
FVCIs can invest directly in the venture capital
Telecommunication 166 166
undertakings or invest through VCFs (Category
Pharmaceuticals 824 656
I AIFs). As on March 31, 2023, there are 269
registered FVCIs in India. Media/Entertainment 594 219
Services sector 1,505 1,416
The cumulative net investment of FVCIs Industrial products 42 12
increased by 5.0 per cent during 2022-23. Of the Others 39,570 42,369
total, FVCI investment in information technology Total 45,962 48,286

120

Chapter 7:
Credit Rating Agencies
Credit rating agencies (CRAs) occupy systemically
important position in securities markets in their
role as gatekeepers of corporate information.
They facilitate investment decisions by assessing
risk, its location and distribution in the financial
system. In short, CRAs help to allocate capital
efficiently across sectors by appropriate pricing
of risk, assisting firms in accessing capital at low
cost and helping investors in achieving risk-return
balance. During 2022-23, SEBI’s initiatives were
focused towards strengthening and standardizing
the rating policies, reducing conflict of interest,
ensuring business continuity and transparency
in the credit rating ecosystem. The major policy
measures taken during 2022-23 and the market
trends are detailed in this Chapter.
7.1 POLICY DEVELOPMENTS
7.1.1 Standardization of Rating Scales: To
help investors make more informed decisions
regarding securities in the debt investment
space, CRAs were advised to use the following:
A. Standardized symbols and definitions for
the new ratings/ reviews for issuer rating/
corporate credit rating;
B. Rating scales for ‘structured finance’
instruments for capital protection oriented
schemes;
C. Standard descriptors for an issuer/ security
placed on “Rating Watch” and “Rating
Outlook”.
7.1.2 Credit Ratings Supported by Credit
Enhancement : In order to bring transparency
and to enable investors to understand the
121
Chapter 7 Credit Rating Agencies
extent of credit enhancement (CE) provided by
third-party/ parent/ group company or backed
by specified support considerations, such as
guaranteed bond, covered bond, standby letter
of credit backed securities, letter of comfort etc.,
the following measures were prescribed:
A. CRAs were mandated to disclose
unsupported ratings without factoring
in the explicit CE or specified support
considerations, and Supported rating after
factoring in the explicit CE or specified
support considerations.
B. While assigning such credit ratings, CRAs
shall conduct independent due diligence
on the nature of specified support
consideration and form a definitive internal
view, and, wherever warranted, obtain
an independent external legal opinion
for ascertaining the strength of the credit
enhancement.
C. For such credit ratings, CRAs shall verify
the documentation related to the specified
support considerations to ensure inter alia
the following:
i. The support is unconditional, irrevocable,
and legally enforceable till all the obligations
of the rated security has been paid to the
investors.
ii.  CRAs shall undertake independent
examination of financial strength of the
support provider to ascertain the ability to
honour the obligations guaranteed by the
support provider.
iii. The support provider has a lower
probability of default on a continuous
 Annual Report 2022-23
basis, compared with the rated issuer, till
the time such ratings are outstanding.
7.1.3 Enhanced Disclosures by CRAs and
Norms on Rating Withdrawal: In order to allow
investors and other stakeholders to properly
use disclosures in a fair assessment of CRAs,
the following changes were prescribed:
A.  Methodology for computation of sharp
rating action was standardized and CRAs
were asked to disclose sharp rating
action if the rating change between two
consecutive rating actions is more than or
equal to three notches downward.
B. CRAs were mandated to have detailed
policy on Issuers Not Cooperating
(INC), including non-submission of
material events, risk of non-availability of
information, etc. CRAs to follow uniform
practice of three consecutive months of
non-submission of No Default Statement
(NDS), or inability to validate timely debt
servicing, as a ground for considering
migrating ratings to INC. CRAs were
also mandated to formulate and disclose
policy on ‘minimum / indicative information
requirement’.
C. While withdrawing any rating, CRA in its
press release shall also assign a credit
rating to such security, except where there
are no outstanding obligations under the
security rated by the CRA, or the company
whose security is rated is wound up or
merged or amalgamated with another
company.
D. Rating withdrawal norms for perpetual
debt securities that are listed, or proposed
to be listed, was revised.
E.  Disclosure of Average Rating Transition
Rates for Long-Term Credit Ratings –
Additional disclosures prescribed in view of
increasing number of INC ratings. Similarly,
additional disclosures of cumulative default
rates (CDRs) prescribed.
F. All disclosures by CRAs on their websites
to be provided in excel / machine readable
122
format with maintenance of an archive of
disclosures for at least 10 years.
7.1.4 Firewall between Credit Rating
Agencies and their Affiliates: To strengthen
the firewall between SEBI-registered CRAs and
their non-rating entities, CRAs were directed
to formulate a policy on separation or firewall
practices with the non-rating entities and
document the same in their operation manuals/
governing document, to be ratified by their Board
of Directors. Credit rating scales (i.e., symbols
and definitions) prescribed by SEBI shall not be
used by any non-rating entities of the CRA. The
websites of SEBI-registered CRAs and their
non-rating entities shall also be separate.
7.1.5 Suspension, Cancellation or Surren-
der of Certificate of Registration : In order
to enable interoperability among CRAs, a
framework has been issued for orderly migration
of credit ratings of listed or proposed to be listed
regulated products to another SEBI registered
CRA, pursuant to cancellation, suspension, or
surrender of certificate of registration of a CRA.
7.1.6 Amendment in the Definition of
Change in Control: The definition of ‘change
in control’ was amended under SEBI (CRA)
Regulations, 1999, to align with the definition of
‘change in control’ across different regulations
made by the Board and thereby ensure
consistency and uniformity in the definition.
7.1.7 Other Measures:
A. CRAs were advised:
i. to use standardized framework for
industry classification published by the
stock exchange for rating exercises, peer
benchmarking, and research activities
including research for economy, industries,
etc.
ii. to align their rating scales with the
scales prescribed under the guidelines
of respective financial sector regulator
 Chapter 7 Credit Rating Agencies

or authority in terms of Regulation 9(f) of
CRA Regulations.
B. An Operational Circular for CRAs has been
issued to enable the industry and other
users to have access to all the applicable
circulars/directions in one place.
7.2 ENFORCEMENT OF CRA
REGULATIONS
Vide SEBI Order dated October 6, 2022, SEBI
cancelled the certificate of registration granted to
Brickwork Ratings Private Limited, and directed
the CRA to wind down its operations within a
period of six months from the date of the Order.
Hon’ble Securities Appellate Tribunal, vide
interim order dated October 14, 2022, stayed
the aforesaid SEBI Order, while prohibiting
the CRA from taking any new assignment or
contract or launch any new scheme during the
pendency of the CRA’s appeal. The matter is
currently sub-judice.
7.3 
MARKET ACTIVITY AND TRENDS
OBSERVED
As on March 31, 2023, seven CRAs were
registered with SEBI, out of which, two (CARE
Ratings and ICRA Limited) were listed. During
2022-23, a total of 765 fresh ratings were
assigned cumulatively by all the CRAs, of which,
CRISIL assigned 339 fresh ratings (44 per
cent), followed by India Ratings (19 per cent)
and ICRA Limited (14 per cent) (Chart 7.1).

Chart 7.1: Proportion of Fresh Ratings Issued by CRAs during 2022-23

2%
1%
Acuite Ratings
8%
19% Brickwork Ratings
12%
CARE Ratings
CRISIL Ratings
14%
ICRA Limited
India Ratings
44%
Infomerics

Source: All CRAs

In terms of rating transition, total number of to non-investment grade declined to 11 per

downgrades rose by 30 per cent to 149 during cent from 21 per cent during the same period
2022-23 as compared to 115 during 2021-22. (Chart 7.2).
The proportion of downgrades from investment

123
 Annual Report 2022-23

Chart 7.2: Rating Downgrades

India Infome FY23

Acuite BWR CARE CRISIL ICRA Ratings rics
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22

0 10 20 30 40 50

Downgrades from Investment to Non-Investment Grade

Downgrades within Investment/Non-Investment Grade

Source: All CRAs.

Further, 196 ratings were upgraded (including five upgrades from non­-investment to investment grade)
in 2022-23, up from 174 rating upgrades (including one upgrade from non-­investment to investment
grade) in 2021-22 (Chart 7.3).

Chart 7.3: Rating Upgrades

FY23
Rating Infom
erics

FY22
FY23
India

FY22
FY23
ICRA

FY22
CRISI

FY23
Acuite BWR CARE L

FY22
FY23
FY22
FY23
FY22
FY23
FY22

0 10 20 30 40 50 60 70 80

Upgrades from Non-Investment to Investment Grade Upgrades within Investment/Non-Investment Grade

Source: All CRAs.

124
 Chapter 7 Credit Rating Agencies

The number of defaults significantly reduced to six in 2022-23 compared to 36 defaults in 2021-22
(Table 7.1).

Table 7.1: Defaults Reported by CRAs

Defaults from Non- Defaults from Investment

CRAs Year Total Defaults
Investment Grade Grade
Acuite Ratings 2021-22 0 0 0
2022-23 0 0 0
Brickwork Ratings 2021-22 14 8 6
2022-23 1 0 1
CARE Ratings 2021-22 10 9 1
2022-23 3 3 0
CRISIL Ratings 2021-22 6 6 0
2022-23 0 0 0
ICRA 2021-22 1 1 0
2022-23 0 0 0
India Ratings 2021-22 5 4 1
2022-23 0 0 0
Infomerics 2021-22 0 0 0
2022-23 2 2 0
Total 2021-22 36 28 8
2022-23 6 5 1

Source: All CRAs.

As on March 31, 2023, total number of investment grade ratings (rating greater than or
outstanding ratings across all CRAs stood at equal to BBB), almost same as on March 31,
2,251, of which 85.3 per cent pertains to above 2022 (85.7 per cent) (Chart 7.4).

Chart 7.4: Outstanding Ratings Distribution

900
800
700
600
500
400
300
200
100
0
AAA AA A BBB BB B C D
End of March 2022 526 862 352 184 81 34 12 195
End of March 2023 560 838 330 191 71 44 23 194

Source: All CRAs.

125
 Annual Report 2022-23
Chapter 8:
Protection of the Investor Interests
Amongst the objectives enshrined in the
preamble of SEBI Act of 1992, protection of
interests of investors is paramount to SEBI.
Accordingly, ever since its inception, SEBI’s
major thrust was on investor protection and
expanding the reach to the investors. With
the unprecedented increase in the number of
investors during last few years, reaching 11.4
crore on March 31, 2023, the need to focus on
investor protection becomes more imperative.
SEBI conducts various investor education and
awareness programmes which benefit the inve-
stors across the country. In addition to these,
SEBI undertakes various investor centric policy
measures and focus on timely and satisfactory
redressal of grievances of the investors.
This chapter intends to throw light on SEBI’s
initiatives aimed at investor protection. The
first part of the chapter deals with the investor
education initiatives of SEBI. In the second
part, a brief outline of the investor centric policy
measures undertaken during 2022-23 is given.
The third part explains the various measures
adopted by SEBI for redressal of investor
grievances and the final part provides details
of inflows into and the utilization of Investor
Protection and Education Fund (IPEF) of SEBI
and the investor protection funds of the Market
Infrastructure Institutions (MIIs).
8.1. INVESTOR EDUCATION
“An investment in knowledge always pays the
best interest”- These words from the book ‘The
126
Way to Wealth’ by Benjamin Franklin reiterates
the importance of education. Section 11(2) (f) of
the SEBI Act, 1992, inter-alia, mandates SEBI
to promote investors’ education in the securities
market. Accordingly, SEBI actively pursues
investor education and promotes financial
literacy.
8.1.1 Investor Education Programmes:
SEBI employs various modes like regional
seminars (jointly with MIIs, SEBI recognized
Investor Associations (IAs) and Securities
Market Trainers (SMARTs) for conducting
awareness programmes in equity segment
and Commodities Derivatives Trainers (CoTs)
for conducting awareness programmes in
commodities derivatives segment. SEBI’s
investor education and awareness programmes
focus on creating awareness among investors/
general public about the basic concepts related
to securities market, the risks involved, rights
and obligations of investors, do’s and don’ts of
investing, grievance redressal mechanism etc.
These awareness programmes are conducted
in various regional languages besides Hindi
and English and are free of charge for the
participants. Apart from the programmes, SEBI
also uses other modes like mass media, mobile
app, etc. for spreading awareness messages.
A glimpse of the various investor awareness
programmes conducted by SEBI during 2022-
23 is given in Table 8.1.

Table 8.1: Investor Awareness Programmes Conducted during 2022-23
Particulars
Investor Awareness Programmes by Investor Associations
Total Programmes Conducted by IAs
Total Participants of IA Programmes
Awareness Programmes by Securities Market Trainers
Total Programmes Conducted by SMARTs
Total Participants of SMARTs Programmes
Commodities Awareness Programmes by Commodities Derivatives Trainers
Total Programmes conducted by CoTs
Total Participants of CoTs Programmes
Details in this regard are elaborated below:
A. 
Investor Awareness Programmes by
Investor Associations: SEBI recognises
IAs which works in the field of consumer
and investor education and grievance
redressal. They conduct investor education
workshops for investors on behalf of SEBI,
particularly in tier II and tier III cities / towns.
IAs act as a link between SEBI and the
investors and give policy inputs to SEBI
in matters related to investor protection.
They also provide guidance to investors
with respect to investing in securities
market and help them in taking up their
grievances with the intermediaries. As
on March 31, 2023, there are 24 SEBI
recognised IAs. During 2022-23, these IAs
had conducted 283 investor awareness
programmes, funded through SEBI IPEF,
covering over 18,500 participants across
the country. Since 2010, such IAs have
conducted 2,262 awareness programmes
covering over 1.16 lakh participants.
B. 
Securities Market Trainers Progra-
mmes: SEBI launched the SMARTs
programme in 2020-21 for enhancing
SEBI’s investor education and awareness
activities, thereby complementing the
investor education efforts of MIIs and
IAs. Individuals / organizations having
prescribed qualifications / experience
127
Chapter 8 Protection of the Investor Interests
2021-22 2022-23
380 283
22,979 18,544
1,797 883
1,81,834 47,412
110 73
6,449 3,794
in the field related to law, commerce,
management, economics and financial
markets, are eligible to be empanelled as
SMARTs. As on March 31, 2023, SEBI
has empanelled a total of 190 SMARTs
(180 individuals and 10 organisations).
Out of the individual SMARTs, 47 were
empanelled during 2022-23 and 133
were granted renewal of empanelment
for a further period of one year. The
empanelled SMARTs are spread across
22 states and union territories covering
102 districts. During 2022-23, these
SMARTs have conducted 883 investor
awareness programmes covering over
47,000 participants across the country.
Since inception in 2020, SMARTs have
conducted 2,967 such investor awareness
programmes covering over 2.44 lakh
participants.
Additionally, other developments during
2022-23 with respect to SMARTs are as
follows:
i. 
Training of Trainers of SMARTs and
Investor Associations: With a view
to update and enhance the knowledge
level of empanelled trainers of SMARTs
and IAs, two-days residential training
programmes have been organized at
four different locations in India. Further,
a training program for newly empanelled
 Annual Report 2022-23
SMARTs was conducted and 189 trainers
have attended the training programmes
spread across 20 states. During the
training sessions, the empanelled trainers
were explained about due-diligence,
KYC, investing in securities market, how
to take precautions against misconduct
and frauds in securities market and digital
investing, depository services, investor
grievances redressal mechanisms, etc.
These sessions were undertaken by
market experts and officials from stock
exchanges and SEBI.
ii. 
Amendments to SMARTs Operational
Guidelines: With a view to streamline the
empanelment process of new SMARTs,
improve the billing process and to make
SMARTs programmes more effective with
less administrative work, the SMARTs
operational guidelines and terms and
conditions have been amended w.e.f.
January 18, 2023.
C. Commodities Awareness Programmes:
SEBI recognises institutions with prior
experience for conducting free financial
and investor awareness programmes on
the commodity derivatives segment as
CoTs. These programmes are conducted
specifically among farmers, traders,
agricultural producers, processors, etc.
Since their launch in 2017, CoTs have
conducted 318 investor awareness
programmes covering almost 16,000
participants. As on March 31, 2023, there
are 20 SEBI recognised CoTs (three have
not renewed their recognition) across
17 districts in 12 States and UTs. During
2022-23, these CoTs had conducted 73
investor awareness programmes, funded
through SEBI IPEF, covering over 3,700
participants. Some of the commodities
in which these commodities awareness
programmes were conducted are cotton,
wheat, maize, turmeric, cumin etc.
128
8.1.2 D
 igital Channels for Investors
The major digital channels through which SEBI
focusses its investor education are:
A. 
SEBI Investor Website: A dedicated
website http://investor.sebi.gov.in is
maintained for the benefit of investors.
The website provides relevant educational
and awareness material and other useful
resources such as financial education
booklets, securities market booklet,
information on various topics related to the
securities market, FAQs, etc. The website
also contains details of the schedules of
various investor and financial programmes
which are updated on a regular basis.
During 2022-23, the SEBI investor website
had a total of 3,51,609 visitors with an
average of 29,301 visitors per month.
SEBI Investor Website contains, inter alia,
the following:
i. Theme-wise Awareness Materials: In
order to bring uniformity in conducting
investor awareness programmes across
the country, SEBI has developed
standardized PPTs on various themes/
topics pertaining to the securities market
which act as a step-by-step guide to know
about how to invest in securities market.
Currently, 14 such PPTs are available
on the SEBI Investor Website. The PPTs
are updated at periodical intervals and
are communicated to the trainers to make
them aware about the changes taking
place in the securities market.
ii. 
The Securities Market Booklet: In
collaboration with MIIs, a securities market
booklet was developed which explains the
basic aspects of investing in securities
market in a very simple and lucid language
and covers topics such as KYC procedures,
precautions to be taken by investors while
investing, etc. The booklet is available in
Hindi, English and 11 regional languages.

iii. 
Financial Education Booklet: Financial
education booklet,which contains infor-
mation related to basic concepts about
banking, securities market, insurance,
pension and various government schemes
in the financial sector, has been developed
for the Resource Persons (RPs)
Programme. The booklet is also revised
periodically to incorporate the recent
market developments and initiatives. The
booklet is available in English and Hindi
and regional languages.
iv. Short Videos: Short videos on awareness
messages by SEBI and links of awareness
videos of MIIs are posted on the SEBI’s
Investor Website.
v. Financial Calculators: Various financial
calculators are made available on SEBI’s
investor website which are free to use,
simple and accurate. Financial calculators
are useful tools for determining one’s
present financial health and accordingly,
helps in making plans for the future. In
addition to the basic calculators which were
already available, SEBI has further added
14 financial calculators which include
Standard Compound Interest Calculator,
Flexible Compound Interest Calculator,
Increasing Investment Contributions
Calculator etc.
vi. Other: SEBI Investor Website also
displays the Investor Charter of SEBI and
intermediaries as well as FAQs related to
primary market, secondary market, mutual
fund etc.
B. AskSEBI: SEBI has a dedicated e-mail
address asksebi@sebi.gov.in through
which assistance/guidance is provided
to investors by replying to their queries.
In 2022-23, a total of 4,815 queries were
received, out of which 4,604 queries were
replied through this e-mail id, four through
letters, one through personal meeting with
the investor and 206 through phone-calls.
The maximum number of queries were
129
Chapter 8 Protection of the Investor Interests
with respect to investor complaints and
other queries received pertained to KYC,
SEBI Settlement Scheme in the matter of
illiquid stock options, Collective Investment
Schemes (CIS), Pearls Agrotech Corpo-
ration Limited (PACL) refunds etc
C. SAARTHI Mobile App: SEBI’s mobile app
on investor education was launched on
January 19, 2022. This app is developed
in Hindi and English language and is
available on iOS and android platforms.
The app contains educational content
like basic concepts related to securities
market, KYC mechanism, mutual funds,
investor grievance redressal mechanism,
introduction to derivatives, etc. The primary
objective of the app has been to extend
the reach of SEBI’s financial education
and investor awareness initiatives to the
mobile phones of investors. The app is
also updated on a regular basis. The app
has 1,50,000 downloads with a 4.39 star
rating.
8.1.3 Visit to SEBI Programmes: Under
‘Visit to SEBI Programmes’, students from
various schools, colleges and professional
institutes visit different offices of SEBI to learn
about securities market. These sessions cover
various topics like basic concepts of securities
market, new developments in securities
market, etc. Additionally, SEBI officers also
visit different educational institutions to conduct
awareness programmes. During 2022-23,
SEBI had conducted a total of 413 Visit to
SEBI programmes by covering over 18,000
participants. Since 2010, a total of 3,954 Visit
to/ by SEBI programmes have been conducted
covering over 1.77 lakh participants.
8.1.4 Impact Assessment of the Awareness
Programmes: In order to assess the impact of the
investor education workshops being conducted
by SEBI recognized IAs, SEBI in association
with National Institute of Securities Markets
 Annual Report 2022-23
(NISM), conducted an impact assessment study
of IAs. All the SEBI recognized IAs, workshop
participants and trainers were covered in the
survey. The recommendations as suggested in
the report are under implementation.
8.1.5 New Initiatives for Investor Education
during the year
A. Celebration of Azadi ka Amrit Mahotsav:
SEBI celebrated glorious 75 years of
India’s independence and participated
in the Azadi ka Amrit Mahotsav (AKAM)
celebrations. Under the AKAM umbrella, an
iconic event was organised by MoF-DEA
in collaboration with SEBI on June 8, 2022
at Vigyan Bhawan, New Delhi. The said
event was presided over by Smt. Nirmala
Sitharaman, Hon’ble Union Minister of
Finance. Shri V. Anantha Nageswaran,
Chief Economic Adviser; Shri Ajay Seth,
Secretary DEA; Shri S.K. Mohanty,
WTM, SEBI; and Shri Ashwani Bhatia,
WTM, SEBI graced the event with their
presence. Representatives from different
ministries/departments of GoI, SEBI,
securities market and other stakeholders
also attended the event. During the event,
two panel discussions were organised
under the symposium - Jaagruk Niveshak:
Samridh Bharat ki Neev on the topics
namely, ‘Emergence of women investors
in the securities market' and 'Growth
of Indian retail investors: Challenges in
becoming an informed investor.’
B. Participation in Book Fairs and Trade
Fairs: SEBI, along with MIIs and other
organisations like AMFI, participated in the
International Kolkata Book Fair (IKBF) –
2023, Kolkata, from January 31- February
12, 2023 to promote investor awareness
and investor education. The 13 day long
event was inaugurated by Shri G.P. Garg,
Executive Director, SEBI, in the presence
of other senior officials from SEBI and
MIIs. Various activities such as skit on
130
financial markets, talk show, quiz contests,
panel discussion by market experts and
academicians etc. were organized. The
book fair received an overwhelming
response from all the participants and more
than 19,000 persons visited the SEBI stall.
SEBI also participated in various district
book fairs (in association with MIIs) and
other government initiatives during 2022-
23 including Hornbill Festival and Bihar
Diwas celebrations to promote investor
awareness and investor education. More
than 11,000 persons visited the SEBI stalls
in book fairs.
SEBI also participated in the 41st edition of
India International Trade Fair (IITF) – 2022,
New Delhi, from November 14-27, 2022,
jointly with MIIs and other organisations like
AMFI, Commodity Participants Association
of India (CPAI) and ANMI. The theme of
the event was “Nivesh Ka Amritkal”. As a
part of the fair, a pavilion “Bharat Ka Share
Bazar” was set up displaying banners,
showing development of Indian securities
market and role of SEBI. The SEBI pavilion
was inaugurated by Shri Ashwani Bhatia,
WTM, SEBI in presence of dignitaries and
other officials from MIIs. During the event,
several senior officials delivered keynote
addresses at the pavilion and interacted
with the participants. Various investor
awareness activities were organised
during the course of the event such as:
i.  Investor awareness programmes were
conducted by eminent speakers/dignitaries
educating the participants about the
securities market.
ii. A walk-in quiz was also conducted on a
continuous basis for the audience at the
SEBI pavilion. This quiz was very well
received by the visitors and certificates
were also distributed amongst the
participants.
iii. 
November 17, 2022, was observed as
“Tech Day” to impart the message of

use of technology in financial sector and
its importance. Similarly, November 21,
2022, was observed as “Women Centric
Day” to impart the message of financial
independence among women.
iv. Skit programmes and muppet shows were
organised throughout the week which
received huge attention from the crowd.
8.1.6 Financial Education Activities
Conducted by Resource Persons: SEBI
has been undertaking financial education
programmes since June 2010, as a precursor and
enabler for its investor education programmes.
As a part of such initiative, entities/individuals
who are interested in working in the field of
financial education have been empanelled as
“Resource Persons (RPs)”. The empanelled
RPs supplement SEBI’s initiatives in the area of
financial education and investor protection. The
RPs conduct Financial Education Programmes
(FEPs) for the prescribed target group, who lack
basic financial knowledge. The target groups
of RPs program include self-help groups,
homemakers, lower and middle income groups,
executives and retired people.
The programmes cover basic financial market
concepts related to banking, securities market,
insurance, pension and government schemes,
do’s and don’ts and precautionary measures
while investing in securities market, etc. These
workshops are free of cost for the participants. To
increase the efficiency and timely communication
with RPs, SEBI has developed the RP portal to
digitalise the whole process of program approval,
131
Chapter 8 Protection of the Investor Interests
documents submission, program monitoring,
claim request processing, etc.
As on March 31, 2023, there are 621 SEBI
empanelled RPs across 310 districts in 28 states
and union territories. During 2022-23, these RPs
have conducted over 15,000 financial education
programmes covering over 5 lakh participants.
Since the inception of the program in 2010, RPs
have conducted 1,30,882 financial education
workshops/ webinars covering over 64 lakh
participants.
8.1.7 Regional Seminars in Association with
MIIs and AMFI : SEBI, in association with MIIs,
conducts regional seminars across the cities and
towns of the country. These are conducted free
of charge for the existing / new investors and
general public, educating them about the basic
concepts of investing in securities markets.
These seminars act as a platform for investors
to personally interact with SEBI officers and
also to raise their concerns, which in turn acts
as inputs/ leads to policy decisions.
During 2022-23, a total of 649 regional seminars
were conducted across the country covering over
50,000 participants. Since 2010, a total of 3,304
such regional seminars have been conducted
covering nearly 3 lakh participants. During 2022-
23, SEBI, in association with the Association of
Mutual Funds in India (AMFI), had conducted 10
regional seminars across the country covering
5,034 participants. The details of the RP
programmes and regional seminars conducted
by SEBI during 2022-23 are given in Table 8.2.
 Annual Report 2022-23

Table 8.2: Resource Person Programmes and Regional Seminars

Particulars 2021-22 2022-23

Financial Education Programmes by RPs
Total RP Programmes Conducted 8,861 15,314
Total Participants of RP Programmes 3,03,589 5,08,814
Regional Seminars in Association with MIIs
Total Regional Seminars Conducted 642 649
Total Participants of Regional Seminars 53,463 50,123
Regional Seminars in Association with AMFI
Total Regional Seminars Conducted 22 10
Total Participants of Regional Seminars 24,555 5,034

8.1.8 Other Investor Awareness Initiatives of SEBI to the participants highlighting

A.  Celebration of Global and National
Events
i. World Investor Week-2022
World Investor Week (WIW)-2022, an
International Organization of Securities
Commissions’ (IOSCO) initiative, was
celebrated in India from October 10-
16, 2022 with SEBI as the national co-
ordinator. Other participants of the event
include MIIs, IAs, CoTs, SMARTs and other
organizations such as AMFI, Association
of National Exchanges of Members of
India (ANMI), etc.
As a part of the celebrations of WIW-2022,
a message was given by the Chairperson
the importance of investor education.
Other activities conducted as a part of
WIW celebrations include display of
bilingual banners at the offices of SEBI
and MIIs, media campaigns for investor
awareness, ringing the bell ceremonies
at stock exchanges, etc. A micro site
was developed wherein the details about
various investor awareness activities
planned out during WIW-2022 were
posted so that the investors can get easy
access to all the information at one place.
Key messages cautioning investors and
making them aware about the securities
market were displayed on the microsite
(Table 8.3).

Table 8.3: Key Messages published during World Investor Week 2022

Date Key Message

October 10, 2022 A smart investor weathers negative financial shocks with an adequate emergency fund.
October 11, 2022 A smart investor understands that risk exists in all investments.
October 12, 2022 A smart investor focuses on the impact of inflation on purchasing power and uses real
rates of return to assess investment performance.
October 13, 2022 A smart investor conducts research before investing to protect against financial scams.
October 14, 2022 A smart investor verifies that an investment professional is licensed.
October 15, 2022 A smart investor never discloses personal information on an unexpected call or other
communication.
October 16, 2022 A smart investor ensures the use of strong passwords and good data security practices
such as two-factor authentication on accounts containing financial data.

132

Investor awareness programmes, quizzes,
crossword competitions etc. were conducted
as a part of the WIW celebrations. Various
unique initiatives were also undertaken like
special investor awareness programmes for
transgender persons, women, armed forces,
etc. During WIW – 2022, nearly 180 lakh people
were reached through investor awareness
programmes, road shows, radio and TV shows.
Overall, nearly 23 crore people were reached
out during WIW-2022.
Chart 8.1: Reach of World Investor Week – 2022
Online resources (Page Views) 0.3
Facebook (views), 2.8
Twitter (views), 0.3
Emails sent, 7.7
Instagram (views), 3.2
SMS Sent, 0.1
Newspaper, 6.1
Source: Respective MIIs, Trade Bodies and Associations
ii. 
Celebration of Global Money Week
– 2023: Global Money Week (GMW)
is a week-long, financial education/
awareness-raising campaign initiated by
Organisation for Economic Co-operation
and Development-International Network
on Financial Education (OECD-INFE) to
raise awareness and encourage wide
range of stakeholders, particularly children
and young people to learn about money
matters, livelihoods and entrepreneurship.
As a part of GMW - 2023 celebrations,
OECD/INFE and the Bank of Italy had
organized an online global launch event
on March 20, 2023 in which Shri Ashwani
Bhatia, WTM, SEBI, addressed the public,
non-profit and private institutions who
were involved in designing and providing
financial education in their countries across
the world. The theme of the address was
Chapter 8 Protection of the Investor Interests
“G20 and GMW – Supporting the financial
inclusion and financial literacy of young
people”.
SEBI was the national co-ordinator for
celebration of GMW-2023 in India. The
11th edition of GMW-2023 was celebrated
from March 20-26, 2023. The celebrations
witnessed the participation of financial
market regulators), organizations like
National Centre for Financial Education
(NCFE) and RPs. The theme for the
GMW-2023 celebrations was “Plan your
(in crore) money, Plant your future” and the slogan
was “Learn. Save. Earn.” The basic
objective of GMW-23 in India was to take
efforts for creating financial awareness
among the young people from an early
age and help them acquire the knowledge,
You tube (viewed), 0.3
skills, attitude and behaviors necessary
LinkedIn (views), 0.2
to make sound financial decisions and
ultimately achieve financial well-being.
Various financial education webinars, and
other activities were conducted across the
country. Awareness programmes were
also conducted for students and youth
across the country by SEBI empanelled
RPs. During the celebrations of GMW-
2023, over 12.34 lakh people were reached
through awareness programmes, media
campaigns, etc.
Chart 8.2: Reach of Global Money Week-2023
YouTube, 114,633 Facebook, Instagram, LinkedIn
and Twitter, 13,283
Awareness
Programmes, 6,500
Website, 1,100,000
Source: NCFE and SEBI
133
 Annual Report 2022-23
iii. National Financial Literacy Week-2023:
SEBI participated in the celebration of
National Financial Literacy Week-2023
which was celebrated across India to
boost financial literacy and financial
education in the country. The said week
was celebrated during Feb 13–17, 2023.
A series of financial education webinars
were conducted for different target
audiences like students, youth, etc. During
the aforesaid week, Shri Ashwani Bhatia,
WTM, SEBI addressed the participants
on the topic – “Good financial behavior to
mitigate investment risk” on February 15,
2023.
B. 
Co-ordination with International
Organizations: SEBI actively participates
in various policy initiatives and conferences
/ symposiums organized by international
organizations like IOSCO, OECD etc. SEBI
is a full-time member of OECD-INFE which
promotes and facilitates international co-
operation between policy makers and
other stakeholders for financial education
initiatives for investors worldwide. In such
meetings, SEBI shares its experiences in
the areas of financial education, investor
education, etc. and also draws experiences
from other regulators. Moreover, SEBI
provides suggestions/ inputs on a regular
basis for various reports and surveys
conducted by IOSCO and OECD.
C. Co-ordination with Institutes/Domestic
Committees: SEBI actively synchronizes
with various investor-centric institutions
and domestic committees along with
other financial sector regulators, Ministry
of Corporate Affairs (MCA) etc., some of
which are as below:
i. National Centre for Financial Education:
SEBI along with other financial sector
regulators viz. RBI, IRDAI and PFRDA
is the co-promoter of NCFE. SEBI has
subscribed to share capital of NCFE to the
134
extent of ` 30 crore amounting to 30 per
cent of the paid-up capital of ` 100 crore.
The board of NCFE consists of members
representing the respective financial
sector regulators and SEBI is represented
by an officer of the rank of Chief General
Manager. SEBI actively associates with
NCFE by conducting various programmes
through NCFE such as 1,359 Financial
Education Programmes for Adults (FEPA),
69 Financial Awareness and Consumer
Trainings (FACT), 56 Financial Education
Training Programmes (FETP) and 34
Money Smart School Programmes
(MSSP).
ii. 
Investor Education and Protection
Fund Authority of Ministry of Corporate
Affairs: Investor Education and Protection
Fund (IEPF) Authority of MCA was
established to administer activities related
to Investor Education and Protection Fund.
ED, SEBI is the ex-officio member of the
IEPF Authority. SEBI also participates in
the meetings conducted by IEPF Authority
and provides inputs regarding various
initiatives being taken for streamlining and
simplifying the claim settlement process
and investor education initiatives.
D. 
Specialized Awareness Programmes:
SEBI also conducts awareness
programmes on Indian securities market
for the officials of various government
departments/ bodies. During 2022-23, two
programmes each were conducted for the
officer trainees of Indian Audit and Accounts
Service, newly inducted inspectors, deputy
superintendent in CBI on deputation and
police officials of Meghalaya. Awareness
programmes were also conducted for
government officers and defense staff,
sub-inspectors (probationers) batch of
CBI, police officials of Chhattisgarh,
officers of Indian Audit and Accounts
Department under C&AG, officers of Bihar

institute of Public Administration and Rural
Development (BIPARD), police officials of
Assam as well as Mizoram and officials of
Forest Department of Ranchi. A webinar
was also conducted for officers of Central
Academy for Police Training, Bhopal.
E. 
Campaign on Arbitration Mechanism
at Stock Exchanges: A campaign was
conducted to spread awareness on
availability of arbitration mechanism at
stock exchanges for disputes against
Registrar and Transfer Agents (RTAs)/
listed companies. Electronic messages
were sent to investors including clients,
account holders of trading members
and depository participants. A total of 8
lakh SMS and emails were sent to the
holders of physical shares pertaining to
listed companies, where the mobile/ email
details were available with the RTA.
8.2. INVESTOR CENTRIC POLICY
MEASURES
The objective of investor protection is inherent in
most of the policy measures taken up by SEBI.
The major investor centric policy measures
adopted during 2022-23 include:
8.2.1 Operationalisation of Online Dispute
Resolution Mechanism: The present MII
administered dispute resolution process has
certain drawbacks. It only covers certain
segments (stock brokers and commodity brokers,
depository participants, listed companies and
registrars and share transfer agents) of the
securities markets. Also, it is largely a physical
and multi-layered process: IGRC, arbitration
(sole or panel depending on the amount) and
appellate arbitration (Panel) process, making it
relatively costly and time consuming. In order
to bridge the gaps, SEBI approved the proposal
to harness Online Dispute Resolution (ODR)
mechanism by:
135
Chapter 8 Protection of the Investor Interests
A. Extending the MII administered conciliation
and arbitration to registered intermediaries
/ regulated entities and their investors /
clients,
B. Conducting proceedings in a hybrid mode,
C. Expanding the capacity of the MII
administered conciliation and arbitration
mechanism with the aid of ODR institutions,
and
D. Streamlining the dispute resolution
process and adoption of other measures
to strengthen enforcement of awards.
8.2.2 Provisions included in the Amend-
ment to LODR Regulations: The following
major amendments were notified in Listing
Obligations and Disclosure Requirements
(LODR) Regulations in order to improve the
framework of investor protection:
A. A provision was included which relates
to the handling of unclaimed amounts
pertaining to listed NCS issued by entities
which do not fall within the definition of
‘company’ under the Companies Act,
2013. Prior to the amendment, there were
no specific provisions pertaining to the
handling of unclaimed amounts lying with
issuers which were not companies. The
amendment is aimed at assisting investors
of debt securities issued by such entities,
to claim their outstanding amount.
B. 
Listed entities with Non-convertible
Securities (NCS)/ Non-convertible
Redeemable Preference shares (NCRPS)
which intend to come out with schemes
of arrangement are mandated to submit
an application seeking no objection from
stock exchanges, prior to filing application
with National Companies Law Tribunal
(NCLT). The application will be sent by the
stock exchanges to SEBI for observations.
Further, SEBI prescribed the operational
aspects with reference to application by
listed entities which have listed their NCS/
 Annual Report 2022-23
NCRPS and intend to undertake or are
involved in schemes of arrangement.
8.2.3 Appointment of Nominee Director in
the Board of the Issuer of Debt Securities:
As per the amendment to the NCS Regulations,
2021, it is made mandatory for the issuer of
debt securities, to incorporate suitable provision
in its Articles of Association, which confer upon
its board of directors, the obligation to appoint
any person nominated by the SEBI registered
Debenture Trustee, as a nominee director.
8.2.4 Internal Escalation Matrix by Stock
Brokers & Depository Participants: SEBI
has been receiving complaints w.r.t improper
service and lack of reachability of the stock
brokers and depository participants. Hence,
advisory has been issued to stock exchanges
and depositories to mandate disclosure of
internal escalation matrix by stock brokers and
depository participants on their websites and
business offices.
8.2.5 Option to Check Brokerage while
Placing Order: Based on the complaints
received with respect to excess brokerage,
SEBI through MIIs issued circulars advising
trading members to display brokerage, statutory
and regulatory levies on the order placement
window/screen before confirming the order to
enable investor to make an informed decision.
8.2.6 Protection of Investors in Passive
Funds
A. 
Liquidity Window for Investors:
Investors in general cannot approach
AMCs to subscribe or redeem units of
ETFs. They only have the option to trade
units of ETFs on exchange even if it is
at a loss as compared to NAV. In order
to address this issue, concept of liquidity
window has been provided. When the
window opens, investors can directly
approach the AMC for redemption of
136
units of ETFs without any exit load.
B. 
Norms for Measuring Tracking Error:
SEBI has spelt out norms for tracking
measurement to bring in standardisation.
So, tracking error for passive funds (other
than debt ETFs/index funds) based on
past one-year rolling data shall not exceed
two per cent. Also, all ETFs/index funds
(including debt funds) have to disclose the
tracking error based on past one year rolling
data, on a daily basis, on the website of
respective AMCs and AMFI. So far, AMCs
were using one or three-year rolling data
and either daily rolled or monthly rolled
for calculating tracking error and hence a
uniform comparison was difficult. While no
limit has been fixed for tracking difference
for equity ETFs/index funds, for debt
funds the annualised tracking difference
averaged over one-year period shall not
exceed 1.25 per cent.
C. Reduced Cost: In order to make ETFs/
index funds more cost effective, the
mandatory deduction towards investor
education and awareness from the scheme
has been reduced from the existing 2 bps
to 1 bps.
8.2.7 MF Central Utility: Following the directive
from SEBI, depositories and RTAs have set up
a mutual utility platform - MF Central- for issuing
Consolidated Account Statement (CAS) to
mutual fund investors. MF Central also allows
investors to view their portfolio across all the
Mutual Funds on a single platform.
In addition to the above, other policy initiatives
aimed at investor protection undertaken during
2022-23 are covered in the respective chapters.
8.3 REDRESSAL OF INVESTORS’
GRIEVANCES
SEBI has been taking various regulatory
measures to expedite the redressal of investor
 Chapter 8 Protection of the Investor Interests

grievances. The grievances lodged by investors A. 

Investor Grievances Received and
are taken up with the respective listed company Redressed: The number of complaints
or intermediary and continuously monitored. received on cumulative basis has reached
Grievances pertaining to stock brokers and to 32,80,632 as on March 31, 2023. A brief
depository participants are taken up with status of investor grievances received and
concerned stock exchange and depository redressed is given in Table 8.4.
for redressal and monitored by SEBI through
periodic reports obtained from them. Grievances Table 8.4: Status of Investor Grievances Received
pertaining to other intermediaries are taken up and Redressed
with them directly for redressal and continuously Grievances Grievances Pending
Financial Received Redressed Actionable
monitored by SEBI. The company/intermediary Year
Year-wise Year-wise Grievances*
is required to respond in prescribed format in
the form of Action Taken Report (ATR). Upon 2021-22 42,694 48,883 2,364
the receipt of ATR, the status of grievances 2022-23 34,752 ^
39,062 $
2,030
is updated. If the response of the company/ *excludes Regulatory Action (RA) complaints
^includes 314 complaints transferred in the current year
intermediary is insufficient / inadequate, follow- to R.A. tab from grievances received in the current year
up action is initiated. SEBI takes appropriate and pending actionable in the previous FY as SEBI had
enforcement actions (adjudication, 11B initiated enforcement action.
directions, prosecution, etc) as provided under
$
includes 4290 complaints which were resolved in the
current year, pending in R.A. tab in previous year.
the law, where progress in redressal of investor
grievances is not satisfactory.
Details regarding the pending complaints (as on
8.3.1 SEBI Complaints Redressal System : March 31, 2023) are given in Chart 8.3.
SEBI Complaints Redressal System (SCORES)
has helped the investors in getting real time Chart 8.3: Status of Pending Complaints
information regarding the status of their 110
grievances. Investors may lodge a complaint on
SCORES within one year from the date of cause
of complaint, where the investor has approached
the listed company or registered intermediary
or MII for redressal of the complaint and the
entity rejected the complaint or in cases of non-
receipt of communication from the entity/non-
1,920
satisfaction with the reply or redressal action
taken by the entity. In case an investor fails to
lodge a complaint within the stipulated time, he
may directly take up the complaint with the entity Complaints pending for less than 3 months
concerned or may approach appropriate Court of Complaints pending for more than 3 months
law. To enable all the investors/intermediaries,
MIIs and listed companies to have access to With the exception of 2020-21, the number
all the requirements at one place, SEBI has of pending actionable grievances has been
issued master circular in November 2022 which steadily declining over the years (as shown in
encompasses various circulars earlier issued Chart 8.4) due to expeditious disposal by SEBI.
on SCORES.

137
 Annual Report 2022-23

Chart 8.4: Pending Actionable Grievances on SCORES at the end of Financial Year
60,000

50,000 49,113

37,880
40,000
28,653
30,000
23,725

20,000
11,410
9,147
10,000 5,736 5,452 4,476 4,054 5,171
3,094 3,540 2,364 2,030
0
-09

-10

-11

-12

-13

-14

-15

-16

-17

-18

-19

-20

-21

-22

-23
08

09

10

11

12

13

14

15

16

17

18

19

20

21

22
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
SCORES enables the investor to directly lodge complaints received during 2022-23, 30,628
the complaints online and such complaints are complaints (or 88.1 per cent) were e-complaints,
considered as ‘e-complaints’. Also, any physical while remaining 4,124 ones (or 11.9 per cent)
complaint (P-complaint) along with mandatory were P-complaints. The various categories
details received against any registered entity is of complaints and region-wise distribution of
also uploaded on SCORES and thereby gets complaints received and redressed are given in
converted into an e-complaint which is handled Table 8.5 and Table 8.6 respectively.
online in SCORES platform. Out of 34,752

Table 8.5: Type/Category of Complaints

Sr. No. Category 2021-22 2022-23

1 Stock Broker 11,261 8,674
2 Refund/Allotment/ Dividend/Transfer/ Bonus/Rights/ Redemption/
6,789 5,754
Interest
3 Registrars to an Issue and Share Transfer Agents 3,877 4,620
4 Mutual Funds 3,866 3,042
5 Depository Participants 3,794 2,750
6 PG Portal Received 1,219 1,445
7 Stock Exchanges 1,675 1,427
8 Investment Adviser 900 843
9 Collective Investment Scheme 1,034 736
10 Corporate Governance/Listing Conditions 807 642
11 Non-Demat/Remat 551 545
12 Prelisting/Offer Document (Shares) 1,343 543
13 Price/Market Manipulation 497 452
14 PACL Committee 655 451
15 Depository 681 421
16 Others 623 312
17 Delisting of securities 516 265
18 Accounting Manipulation by Listed Companies/ Financial Statement
371 237
Fraud
19 Research Analyst 103 226

138
 Chapter 8 Protection of the Investor Interests

Sr. No. Category 2021-22 2022-23

20 Fake and Forged 250 216
21 Takeover/Restructuring 120 181
22 Bankers to an Issue 474 145
23 Recovery and Refund Department 115 128
24 Insider Trading 119 101
25 Portfolio Managers 136 99
26 Buy back of securities 75 81
27 Merchant Bankers 308 76
28 Debenture Trustee 126 69
29 KYC Registration Agency (KRA) 98 63
30 Special Enforcement Cell 51 40
31 Alternative Investment Fund 33 38
32 Commodity Exchanges 57 36
33 Venture Capital Funds 33 26
34 Credit Rating Agencies 13 14
35 Minimum Public Shareholding 10 13
36 Prelisting /Offer Document (Debentures & Bonds) 22 13
37 Enforcement Matters 30 12
38 Spreading Rumours / Buy Sell Tips 7 7
39 Infrastructure Investment Trust 32 5
40 Custodian of Securities 9 2
41 Real Estate Investment Trust 3 1
42 Sub-broker 0 1
43 Foreign Institutional Investors 1 0
44 Miscellaneous Surveillance Issues 2 0

45 Price/Volume Manipulation in Commodity Futures and Options 8 0

46 Underwriters 0 0
Total 42,694 34,752

Table 8.6: Region-wise Distribution of Complaints Received and Resolved

Received during Disposed during

Region
2022-23 2022-23
Head Office Region (Maharashtra, Diu & Daman) 17,096 17,150
Northern Region (Delhi, Punjab, Himachal Pradesh, Jammu &
6,074 7,736
Kashmir, Uttar Pradesh and Uttarakhand)
Southern Region (Andhra Pradesh, Telangana, Tamil Nadu,
4,069 5,304
Karnataka and Kerala)
Eastern Region (West Bengal, Assam, Odisha, Jharkhand and
2,505 2,513
Bihar)
Western Regional Office(Gujarat, Rajasthan, Madhya Pradesh,
5,008 6,359
Chattisgarh and Goa)
Total 34,752 39,062

139
 Annual Report 2022-23

8.3.2 Analysis of Investors’ Feedback: A days of closure of a complaint. During 2022-

review module was implemented in SCORES 23, SEBI received 1,628 complaints for review;
in 2016-17 wherein an investor can make a 1,812 review complaints were resolved while
one-time request for review of a complaint 447 review complaints were pending as on 31
closed by the dealing officer of SEBI within 15 March, 2023 (Table 8.7).

Table 8.7: Status of Review Complaints

Financial Review Complaints Received Review Complaints Redressed Pending Review
Year Year-wise Cumulative Year-wise* Cumulative Complaints
2021-22 2,126 12,507 2,396 11,836 671
2022-23 1,628 14,135 1,812 13,648 447
*includes complaints received in previous year.

8.3.3 SEBI Toll-free Helpline: SEBI had
launched toll free helpline service numbers 1800
22 7575/ 1800 266 7575 in 2011 to facilitate
replies to various queries of the general public
on matters relating to securities market. The
helpline service is available every day from 9:00
a.m. to 6:00 p.m. (except on declared public
holidays in Maharashtra) to investors from all
over India. The helpline service is available in
English, Hindi and 6 other regional languages
(Chart 8.5).
issue have been resolved to its satisfaction
and the fees due to intermediaries associated
( including ASBA banks )with the issue process
have been paid. During 2022-23, SEBI issued
140 NOCs to the applicant companies. In order
to enable listed companies to have access for
all the applicable requirements prior to seeking
NOC for release of one percent of the issue
amount, SEBI has issued master circular in
November 2022 which encompasses various
circulars issued earlier on this subject.

Chart 8.5: No. of Calls attended at Toll-free 8.3.5 Complaints/Arbitration Cases with
Helpline Stock Exchanges: About 9,419 complaints
were resolved during 2022-23, compared to
5,00,000 4,84,462
11,574 during the previous year. As on March
4,00,000 3,61,512
31, 2023, there were 590 complaints pending
3,00,000 2,59,447
2,32,215
2,03,464 with the stock exchanges as against 608 pending
2,00,000
complaints as on March 31, 2022. During 2022-
1,00,000
23, the highest number of complaints received
0
2018-19 2019-20 2020-21 2021-22 2022-23 were service related (31.4 percent). Almost 15.9
per cent of the total complaints resolved during
8.3.4 Issuance of No Objection Certificates: 2022-23 pertained to non- receipt of payment
As per SEBI (ICDR) Regulations 2009, or securities by the clients (compared to 26.1
companies raising capital through public issue per cent in 2021-22) (Table 8.8). During 2022-
of securities are required to deposit one percent 23, 341 cases were received by the exchanges
of the issue amount with the designated stock for the arbitration of complaints against trading
exchange. SEBI shall issue the NOC after members as compared to 464 in the previous
satisfying itself that the complaints received year. During 2022-23, 354 cases were resolved
by SEBI against the company arising from the as against 737 in 2021-22.

140
 Chapter 8 Protection of the Investor Interests

Table 8.8: Complaints/ Arbitration Cases with Stock Exchanges related to Trading Members

2021-22* 2022-23
Details Received Resolved Pending at Received Resolved Pending at
during the during the the end of during the during the the end of the
year year the year year year year
A. Complaints against Trading Members
1. Non-receipt of
2,828 3,450 220 1,499 1,592 127
Payment/Securities
2. Unauthorized Trades 1,854 1,889 110 1,481 1,478 113
3. Brokerage and
630 629 27 606 590 43
Charges
4. Service related 4,140 4,114 161 2,949 2,935 175
5. Others 1,392 1,492 90 2,866 2,824 132
Total 10,844 11,574 608 9,401 9,419 590
B. Arbitration Cases related to Trading Members
Total Cases 464 737 176 341 354 163
*- Revised figures
Source: BSE, NSE, MSEI, MCX and NCDEX

Table 8.9: Complaints/Arbitration cases with Stock Exchanges related to Listed Companies

2021-22* 2022-23
Subject Matter
Received Resolved Pending Received Resolved Pending
A. Complaints against Listed Companies
1. Public/Further Offerings 1,028 979 81 501 574 8
2. Corporate Actions 2,951 2,925 323 3,276 3,357 296
3. Transfer of Securities 1,555 1,526 187 1,845 1,920 94
4. Miscellaneous 3,533 3,596 679 3,261 3,538 318
Total 9,067 9,026 1,270 8,883 9,389 716
B. Arbitration Cases 0 0 0 0 0 0
* Revised figures Source: BSE, NSE and MSEI

8.4 
INVESTOR PROTECTION AND EDU-
CATION FUND
SEBI Investor Protection and Education Fund
(IPEF) was created by an executive order dated
July 23, 2007 under Section 11 of the SEBI Act,
1992 with an initial corpus of `10 crore from
SEBI General Fund. Subsequently, SEBI (IPEF)
Regulations, 2009 were notified on May 19,
2009 for administration of the SEBI IPEF. The
purpose of the SEBI IPEF, in terms of the above
mentioned regulations and also as defined
under section 11(2) (f) of SEBI Act of 1992,
is protection of the interests of investors and
promotion of investor education and awareness.
SEBI had constituted SEBI IPEF Advisory
Committee as per the regulations for
recommending investor education and
protection activities and utilization of the funds
in the IPEF for the said purposes. During 2022-
23, three meetings of the aforesaid committee
were conducted for decisions regarding the

141
 Annual Report 2022-23

investor awareness activities. Besides SEBI
IPEF, Investor Protection Funds are maintained
by the stock exchanges as well as depositories.
A brief account of the inflow and utilization of
Investor Protection Funds of SEBI and MIIs is
given below:
8.4.1 Inflow into Investor Protection Funds
of SEBI and MIIs
A. Inflow into SEBI IPEF: The details with
respect to the inflow into SEBI IPEF is
given in Table 8.10.

Table 8.10: Inflow into SEBI IPEF (` crore)

Particulars 31-Mar-2022* 31-Mar-2023*
A. Opening Balance 111.14 169.79
B. Additions to the Fund (a+b) 60.87 75.03
a. Income from Investments 14.92 8.73
b. Other Receipts 45.95 66.30
Utilisation of Fund (See expenses details below)
C. Expenses incurred from IPEF Fund 6.81 11.93
D. IPEF Expenses refunded to SEBI Fund 0.0 4.58
E. IPEF Expenses payable to SEBI Fund 4.58 11.93
Net Balance (A+B-C-D+E) 169.79 240.23
*During the year the amount received in the matter of NSE co-location which was shown under IPEF has been
transferred to Deposit pursuant to SAT order. Accordingly, the previous year’s figures have been regrouped to
conform to current year’s presentation.

B. Inflow into Investor Protection Funds of As at end of

MIIs: The regulatory directives mandate Particulars March 31, March 31,
every exchange to establish an Investor 2022 2023
Protection Fund (IPF) with multiple B. Additions to the Fund
objectives of compensating investors in (a+b) 470 225
the event of defaulters’ members’ assets a. Income from Investments 146 144
not being sufficient to meet the claims of b. Other Receipts 324 81
investors, promoting investor education, C. Utilisation/Expenses
awareness and research. Depositories incurred from IPEF Fund 598 240
also maintain IPF as per the regulatory Net Balance (A+B+C) 2,333 2,319
mandates. The details regarding the inflow Investor Protection Fund of Depositories
of funds into IPFs of MIIs are given in A. Opening Balance 64 88
Table 8.11. B. Additions to the Fund
(a+b) 30 32
Table 8.11: Inflow into Investor Protection Funds a. Income from Investments 4 6
of MIIs b. Other Receipts 26 25
As at end of C. Utilisation/Expenses
Particulars incurred from IPEF Fund 6 12
March 31, March 31,
2022 2023 Net Balance (A+B+C) 88 108
Investor Protection Fund of Exchanges Data for 2021-22 is audited and 2022-23 is provisional
and unaudited for all exchanges and depositories.
A. Opening Balance 2,462 2,333
Source: Exchanges and Depositories

142
 Chapter 8 Protection of the Investor Interests

8.4.2 Utilization of Investor Protection Funds Protection Fund of exchanges are given in
of SEBI and MIIs Chart 8.6.

A. Utilization of the IPEF: The details of the Chart 8.6: Utilization of Investor Protection Funds
utilization of money from IPEF of SEBI is of Stock Exchanges
provided in Table 8.12.
600 539

Amount utilized (in ₹ crore)

500
Table 8.12: Utilization of SEBI Investor Protec- 400

tion and Education Fund 300

174
200
(` crore) 100 30 39 29 26
0
IPEF Expenses 2021-22 2022-23 Investor Awareness and Payment to Clients of Other Expenses
Education Defaulters

Financial Literacy 3.9 8.37 As on March 31, 2022 As on March 31, 2023

Seminar/Workshop by 1.24 1.92

SMARTs Source: Exchanges.
Note: Data for 2021-22 is audited and that for 2022-23 is
Seminar/Workshop by IA's 0.45 0.65 provisional and unaudited for all the exchanges
Investor Education 1.02 0.39
Seminar/Workshop by 0.13 0.22 Depositories utilize IPF mainly for promotion
CoTs of investor awareness and for conducting,
Capital Grants 0.05 0.00 supporting seminars, conferences, lectures,
Committee Meeting 0.01 0.01 workshops, programmes aimed at enhancing
Others 0.01 0.38 securities market literacy and awareness. The
6.81 11.93 details regarding the utilization of Investor
Total
Protection Fund of depositories are given in
Chart 8.7.
B. Utilization of Investor Protection Funds
of MIIs: Exchanges utilize income earned
on the corpus of IPF, towards promotion Chart 8.7: Utilization of Investor Protection
of investor education and awareness Funds of Depositories
programmes through seminars, lectures, 600 539
Amount utilized (in ₹ crore)

500
workshops, publications, training 400
300
programmes etc. Investor claims arising 200
174

out of a default of a broker/member of the 100 30 39 29 26

0
exchange are also eligible for compensation Investor Awareness and
Education
Payment to Clients of
Defaulters
Other Expenses

from IPF. Capital expenditure is permissible As on March 31, 2022 As on March 31, 2023

only with respect to setting up of Investor

Service Centre. In addition to these, the
income earned on IPF corpus can be
utilized in other manner as prescribed/
permitted by SEBI from time to time. The
details regarding the utilization of Investor
Source: NSDL and CDSL
Data for 2021-22 is audited and that for 2022-23 is
unaudited for both the depositories

143
 Annual Report 2022-23
Chapter 9:
Technology
SEBI recognizes that technology is a critical
enabler in creating a robust, transparent, and
efficient securities market in India. As the
market continues to grow and evolve, it is
increasingly relying on technology to enhance
market infrastructure, reduce transaction costs,
and improve investor access. In today's digital
age, embracing cutting-edge technologies
such as artificial intelligence, machine learning,
blockchain, and cloud computing has become
essential for informed and intelligent decision
making/regulation. This chapter presents an
overview of SEBI's technology initiatives, covering
different technological domains, undertaken in
the Indian securities market ecosystem.
9.1 
CYBER SECURITY AND SYSTEM
RESILIENCE
9.1.1 Cyber Security Posture of Securities
Market
A. Table Top Exercise for SEBI Regulated
Entities: SEBI conducted its first quarterly
cybersecurity Table Top Exercise (TTX)
in co-ordination with Indian Computer
Emergency Response Team (CERT-
In) under the guidance of High Powered
Steering Committee on Cyber Security
(HPSC-CS) during 2022-23. This exercise
aimed at analyzing the cyber incident
response and recovery plans at SEBI
Regulated Entities (REs). It comprised
of four scenarios/injects – i) Indicators of
Compromise of Denial of Service (DoS)
and Distributed Denial of Service (DDoS)
attacks, ii) Assessment of vulnerability
144
and patch management approaches, iii)
Assessment of log monitoring, handling
alerts and advisories and threat hunting;
iv) Ransomware attack on non-critical
systems. The learnings from the exercise
will aid in strengthening the cybersecurity
posture in securities market by enriching
and standardizing internal policies of the
REs and develop cyber incident response
and recovery plan. While such exercises
will be conducted regularly going forward,
a Chief Information Security Officer (CISO)
forum has also been initiated for providing
a platform for regular interaction and
knowledge sharing.
B. 
Framework for Adoption of Cloud
Services by SEBI REs: In order to
promote the adoption of cloud computing
and to mitigate the risks and challenges
associated with it, a revised framework for
adoption of cloud services by SEBI REs
has been issued. The framework will assist
the REs in leveraging the benefits of cloud
computing as well as developing a new
approach to deal with various issues related
to cloud services such as safeguarding
sensitive information, country risk, disaster
recovery, concentration risk, etc. The
cloud framework is principle-based that
covers the principles of governance, risk
and compliance; selection of cloud service
providers; data ownership and data
localisation; due diligence by REs; security
controls; contractual and regulatory
obligations, among others.

C. 
Vulnerability Assessment and
Penetration Testing by SEBI REs:
Vulnerability Assessment and Penetration
Testing (VAPT) is a proactive approach
to cyber security which helps in the
identification and closure of vulnerabilities
in information systems. VAPT exercise
improves the cybersecurity posture and
reduces the likelihood of successful cyber-
attacks. To analyze the cybersecurity
posture of the key REs, VAPT report was
sought from REs viz., MIIs, QRTAs, KRAs,
top ten brokers and top three AMCs. Since
the VAPT submissions were insufficient
in terms of scope, coverage, findings etc.,
REs were advised to perform VAPT by
a CERT-In empaneled auditor and by a
comprehensive scope prescribed by SEBI.
The stock exchanges, NSE and BSE were
directed to conduct VAPT on top 30 and
10 brokers respectively. As at the end of
the year, all entities have completed their
VAPT and closure has been submitted by
seven entities while in case of brokers,
reassessment of the closure has been
initiated by the exchanges. Following
this, the special purpose cyber audit
including VAPT of the select entities will
be conducted to evaluate their cyber
resilience and preparedness.
D. 
Cyber Security and Cyber Resilience
Measures for Market Intermediaries:
During 2022-23, the existing Cyber
Security and Cyber Resilience frameworks
have been modified for the intermediaries
viz. QRTAs, KRAs, stock brokers and
depository participants. The important
features, inter alia, include identification of
critical assets, requirement of conducting
VAPT, and comprehensive cyber audit.
All cyber-attacks, threats, cyber-incidents
and breaches experienced by QRTAs and
KRAs are required to be reported to SEBI,
while that of stock brokers and depository
participants to Exchanges/Depositories
145
Chapter 9 Technology
within 6 hours from notice/detection. The
incidents are also required to be reported
to CERT-In/NCIIPC. Besides, quarterly
reports containing information on cyber-
attacks, threats, and breaches experienced
by intermediaries and measures taken
to mitigate such vulnerabilities are also
to be submitted to SEBI/Exchanges/
Depositories within 15 days from the end
of every quarter.
E. Review of cyber audit requirements of
AMCs: A review of cyber audit regulatory
requirements of AMCs was undertaken
during 2022-23 to keep pace with the
technological advancements and further
strengthen the cyber security framework.
This included the standardization of the
format of audit report and observation
reporting, timebound resolution of the
open observations in the cyber security
audit report and revised auditor selection
norms.
F. 
Advisory for SEBI REs regarding
Cyber Security Best Practices: Due to
interconnectedness and interdependency
of REs, the cyber risk of any given entity
is no longer limited to the entity’s owned/
controlled systems, networks and assets.
Hence an efficient and effective response
to and recovery from a cyber-incident
at REs is essential to limit any related
financial stability risks. In this regard, an
advisory has been issued to REs as per
recommendations provided by Financial
Computer Security Incident Response
Team (CSIRT-Fin) in its report.
G. 
Cybersecurity Incidents Reporting
Portal: In order to enhance the
cybersecurity ecosystem for the market
entities, the Cyber Incidents Reporting
Portal (CIRP) was set up for reporting
cyber incidents by MIIs. During 2022-23,
the portal’s functionality has been extended
 Annual Report 2022-23

to stock brokers, mutual funds, portfolio cybersecurity challenges being faced by

managers and RTAs to facilitate reporting the market, knowledge sharing, discussing
and tracking of cyber incidents at one recent cybersecurity incidents \ and
place. This portal can only be accessed by cybersecurity best practices.
the CISO of REs and it facilitates sharing
of cyber incidents anonymously among the I. 
Cyber Swachhta Kendra: Cyber
CISOs. Swachhta Kendra (CSK) identifies and
reports botnet and vulnerable services
H. SEBI-MII Technology Symposium 2023: running on any of the peripheral devices
SEBI organized a two-day Technology of SEBI. This helps in enhancing secure
Symposium involving members of SEBI posture of SEBI infrastructure. SEBI has
Technical Advisory Committee, SEBI on-boarded selected REs, along with
High Powered Steering Committee on itself on the CSK (Botnet Cleaning and
Cyber Security, Standing Committee of Malware Analysis Centre) operated by
Technology (SCOT) of MIIs and other CERT-In. The number of events reported
relevant industry experts at NISM. The in on-boarded entities under CSK since
symposium was organized with the September 2022 is shown in Chart 9.1.
objectives of discussing technological and

Chart 9.1: Reported Events under Cyber Swachhta Kendra

900
800
700
600
500
400
300
200
100
0
02
2
02
2 22 22 22 22 22 23 23 23 23 23 23 23
, 2 5, 2 20 20 20 20 20 20 20 20 20 20 20 20
0 1, 5, 0, 5, 3 1, 1 5, 3 1, 1 5, 2 8, 1 5, 3 1, 1 5,
p3 Oc
t 1
Oc
t 3 v 1 v 3 c 1 c n n b b r r ril
Se No No De De Ja Ja Fe Fe Ma Ma Ap

9.1.2 Cybersecurity Measures at SEBI A. 

Upgradation of Various Technologies
During 2022-23, new technologies brought used in SOC including Security
under various projects were integrated with Information and Event Management:
Security Operations Centre (SOC) to protect the Various technologies used in SOC set
systems from cyber-attacks. In addition, steps up have been upgraded during the
were taken to improve cyber-security readiness year including the core technology,
of SEBI's systems by ensuring adherence to SIEM (Security Information and Event
the advisories received from CERT-In, NCIIPC management). SIEM was upgraded
and other subscribed sources, and issuance of to enhance the attack detection rates,
cyber-security advisories to SEBI employees integration capabilities with various new
and MIIs. Following were the major activities technologies refreshed during the year.
undertaken: New use cases have been put in place as

146

per the MITRE ATT&CK (The Adversarial
Tactics, Techniques, and Common
Knowledge) framework.
B. 
Threat Hunting: Threat hunting exercises
have been carried out in SEBI network
to proactively hunt for the presence of
any vulnerability exploits, precursors, or
indicators of attacks. These exercises
aim to identify any threat actor activity
within SEBI environment, by the cyber
threat actors known for targeting the
Indian Government, regulatory bodies, or
financial sector.
C. 
Enhancement of Processes, Creation
of new SOPs for SOC Operations: In
order to bring more effectiveness in SOC
operations, processes have been refined in
line with CIS (Center for Internet Security)
controls. To standardize the process of
handling SOC operations and responding
to incidents, various SOPs have been put
in place. Also, different Incident Response
(IR) playbooks have been enhanced to
deal with major types of incidents, such
as ransomware, phishing attacks, data
exfiltration, etc.
D. 
IT Policies and Gap Analysis: SEBI
developed/updated its internal IT and
Information Security Management System
(ISMS) policy documents and created IT
Policy manual which covers more than 45
policies and SOPs. During the year, SEBI
assessed its systems for compliance with
the IT Policy Manual and identified gaps in
these systems. SEBI is in the process of
addressing these gaps in order to achieve
operational improvement.
E. 
G20 Initiatives: SEBI participated in G20
Cyber Security exercise and drill conducted
by CERT-In. The exercise focused on
various issues such as cybersecurity
policies and SOPs, responses for dealing
147
Chapter 9 Technology
with common cybersecurity attacks, etc.
9.2 TECHNOLOGY IN SECURITIES
MARKETS ECOSYSTEM
9.2.1 Offsite Inspection of Mutual Funds:
Offsite inspection of mutual funds plays a pivotal
role in assessing regulatory compliance by
mutual funds. The project is currently deployed
in SEBI’s Data Warehouse and Business
Intelligence System (DWBIS). During the year,
32 new alerts were implemented. Broadly,
these alerts cover compliance for the following
regulatory requirements:
A. Exposure to REIT, InvIT, AT1 and T2
bonds.
B. Assessing whether asset allocation in MF
scheme is as per its category/sub category.
C. Adherence to timelines for rebalancing of
portfolios of MF schemes.

Further, data from valuation agencies was also
integrated in the system through API during the
year.
9.2.2 Surveillance Technology: SEBI
undertakes surveillance of securities markets
based on its in-house Surveillance System,
which is capable of generating alerts for
various market manipulations. Based on the
same, various preventive and enforcement
actions have been taken in the past. SEBI
keeps updating its extant alert systems to keep
abreast with the latest market manipulation
techniques including front running, insider
trading, unfair trade practices involving social
media / news channels, etc. Various tools have
been deployed to collect and analyze structured
and unstructured data while conducting
examinations and investigations in respect of
suspicious market manipulation cases. Digital
forensic tools have been deployed to acquire
and examine the digital data, collected during
search and seizure operations conducted by
SEBI. With the adoption of better data analytics
and digital forensic tools, SEBI has been able
 Annual Report 2022-23
to unearth complex modus operandi and collect
digital evidences as demonstrated in the interim
orders passed during 2022-23. The learnings
on the basis of cases of manipulation identified
are being augmented with technology to further
strengthen the surveillance capabilities.
9.3 TECHNOLOGY IN SEBI
9.3.1 Data Warehouse and Business
Intelligence System (DWBIS) and Data Lake:
During the year, automated workflows to load
various surveillance and investigation data
received from MIIs were upgraded and migrated
to the newly implemented Data Lake. This
data is used as input for generation of various
reports and alerts for market surveillance.
Further, existing alert generation systems were
also migrated to Data Lake during the year.
SEBI also initiated the process of upgrading its
Enterprise Data Warehouse (EDW) with latest
technology. The upgraded EDW solution is
expected to store three PB of data and will be
integrated with other components of DWBIS
and Data Lake.
9.3.2 Visual Yonder and Geotagging
Management Solution: Geotagging is the
process of adding geographical information
usually in the form of latitude and longitude
coordinates to various media such as photos,
videos etc. The project envisages to implement
geotagging technology based mobile application
solution, which enables SEBI to take necessary
photo/video at the location with details such as
location, date and timestamp for conducting site
visits/survey/training programs. The Geotagging
Solution is expected to be operationalized in
2023-24.
9.3.3 Document Verification facility on
SEBI website: Keeping in view the objectives
of transparency and accountability through the
use of technology, a system for the recipients,
to verify the genuineness of communications
sent by SEBI was envisaged with the help of
148
a Document Identification Number. A document
identification number is useful to help prevent
market frauds pertaining to the forging of SEBI
letters. The functionality is in the process of
implementation and would be made available to
general public in 2023-24 on SEBI website.
9.3.4 Revamping IT Network and
Connectivity: SEBI is revamping its core IT
network infrastructure and links backbone
across its Head office, Regional offices and
Local offices. The proposed solution is scalable,
taking into account the growth of manpower and
IT resources in the organization. The emerging
MAN-WAN topology is being incorporated to
ensure wider accessibility of IT infrastructure
resources in SEBI. The networking components
will be centrally visible and configurable with
the use of advanced technologies like Software
Defined Network, Network Access Control and
Patch management.
9.3.5 Revamp of Electronic Document
Management System: During the year, SEBI
revamped its electronic Document Management
System (DMS), consisting of content repository,
integration services, scanning solutions and
facility management services. Key benefits
derived from the DMS-2 system, inter alia,
include conversion of physical files into electronic
form for uploading and tracking; integration with
CMS, SCORES and other services for easy
reference of documents; Optical Character
Recognition (OCR) functionality to enable
search across documents; support for bilingual
(English and Hindi) forms and central storage
for current and archived files.
9.3.6 Internal Productivity Enhancement
A.  Case Management System: Some
significant enhancements were carried
out in Case Management System during
the year including the implementation of
Payment gateways for settlement scheme
for clients and brokers; GST changes for
settlement application fee; Workflows

for quasi-judicial authorities; System
enhancements and MIS generation for
Departments; alerts for monitoring and
compliances of different processes such
as Adjudication, 11B, Recovery, etc.;
and integration of recovery orders to the
system.
B. 
Automation of recruitment result
generation and merit list preparation:
To streamline the critical process of
recruitment, an in-house python based
tool was developed to generate the merit
list and list of selected candidates. This
automation has reduced the time taken
to prepare results from 1-3 days to only
10-20 minutes. This also generates HRD
summary report enlisting vacancies filled/
unfilled under different categories and
streams of the recruitment cycle.
C. 
SAP Enterprise Resource Planning
(ERP) Enhancements: Some of
the primary process automation and
enhancements carried out in SAP ERP
system were - automation of employee
profile generation, digitalization of HR and
vigilance processes, creation of system for
establishment processes, incorporation
of taxation related changes in Employee
Provident Fund module, centralization
of processing and disbursement of
vendor and staff payments, automation in
generation of all financial statements from
SAP, implementation of GST changes and
system mechanism to track timely payment
to vendors and mechanism to upload and
post bulk invoice entries.
9.3.7 Revamp of Email System: During
2022-23, implementation and rollout of new
E-mail and Archival systems was carried out.
Technologies implemented include e-mail
solution with integrated calendar, contacts, tasks
facility; and e-mail archival solution and inbox
149
Chapter 9 Technology
scanning solution. The new system provides
an on premise enterprise secure email solution
with collaboration facility along with enhanced
storage capacity.
9.3.8 Ease of Doing Business
A.  SEBI Intermediary Portal: The SEBI
Intermediary Portal (SI Portal) acts as
a principal interface between SEBI and
its registered intermediaries. During
2022-23, following enhancements were
made/initiated in the SI Portal as part of
enhancing the ease of doing business for
intermediaries, better data management
and strengthening the institutional memory
of the organisation:
a. Changes in registration Form-A for
investment advisors (IAs) pursuant to
changes in regulations.
b. Implementation of changes for transferring
all registration and post-registration
activities pertaining to IAs to BASL.
c. Implementation of end-to-end system for
online submission of Annual System Audit
Report for mutual funds.
d. Development of AIF Quarterly report
new format pursuant to change in AIF
regulations.
e. Development of alerts based on the data
received from AIF Quarterly Reports.
f. Inclusion of GST component in various
regulatory fees such as Application Fees,
Registration Fees, Renewal Fees, Annual
Fees, Turnover Fees, etc. paid by the
intermediaries.
g. Submission of application for approval of
appointment of Directors on the Board of
Trustee companies and AMCs.
h. Uploading of scheme related documents
over SEBI website (Scheme Information
Document (SID), Key Information
Memorandum (KIM) and Statement of
Additional Information (SAI) at half yearly
interval by AMCs.
 Annual Report 2022-23
9.4 FINTECH AND REGTECH INITIATIVES
9.4.1 Innovation Sandbox: SEBI’s Innovation
Sandbox facilitates access to an environment
(testing facilities and test data) provided by
enabling organizations like stock exchanges,
depositories and QRTAs, wherein innovators
(sandbox applicants) would be testing their
innovations in isolation from the live market and
would be used for offline testing of the proposed
solution of the applicant. During 2022-23, one
applicant (ArthaChitra) successfully completed
the testing phase. The applicant used BOW
API from BSE to develop and test an analytical
platform that allows users to develop their own
metrics along with in-built analytical features.
During the year, three more applicants were
selected for developing and testing their
solutions.
9.4.2 Manthan: SEBI in association with MIIs,
KFintech, CAMS, and Link Intime, had launched
a six-week Ideathon titled ‘Manthan’, to promote
innovation in the securities market. The event
was aimed at facilitating creation of pool of ideas
and innovative solutions revolving around the
securities market. The themes for the Ideathon
included investor education; securities market
development; market regulation and integration
of securities market with other financial
services. The event received an overwhelming
response with 900+ registrations and 133 idea
submissions. During the event, a series of 12
interactive knowledge sharing sessions were
conducted which were delivered by various
industry leaders and experts. A jury of 13
prominent individuals representing the market,
academia and SEBI selected 11 best ideas as
the winners. The 1st prize was won by the idea
“uniBroker”, which aimed to unify the trading API
interfaces of all the major Indian brokers to form
one standard library, thus acting as a broker of
brokers of sorts. All the winners were felicitated
in an award ceremony held on September 8,
2022 at SEBI Bhavan.
150
9.4.3 Working Groups on use of FinTech
in Indian Securities Market: During 2022-
23, the Working Groups constituted under
SEBI’s Committee of Financial and Regulatory
Technologies (CFRT) on the use of FinTech in
Indian securities market submitted their reports/
studies. While the group headed by Prof. Pulak
Ghosh prepared the guidelines for the usage
of AI/ML applications in the Indian securities
market, the group under CFRT member,
Shri Sharad Sharma explored use cases of
Blockchain/ DLT technologies in the Indian
securities market.
9.5 OTHER DEVELOPMENTS
9.5.1 SEBI Information Technology
Department (ITD) Internship Programme:
SEBI-ITD internship program continued in 2022-
23, wherein focus was on different IT projects
including data analytics, regulatory business
processes, e-reporting and SAP.
9.5.2 Inspection of MIIs: Considering the
adoption of technologies in various core activities
of MIIs, its adoption in their inspections is only
natural. ITD has been building and evolving
systems for automated offsite inspections of MIIs.
During 2022-23, 12 inspections were conducted
by operational departments in collaboration with
information technology department.
9.5.3 Procurement Process – Compliance:
In compliance with circulars of the Central
Vigilance Commission, SEBI has implemented
Integrity Pact (IP) for procurements. Following
personnel are working as Independent External
Monitors (IEMs) to oversee the implementation
of IP:
a.  Smt. Rajni Sekhri Sibal, IAS, Ex-Secretary
Government of India
b.  Shri Ajai Kumar, Ex-CMD, Corporation
Bank
During the year, five review meetings were held
with IEMs.
 Chapter 10
Chapter 10:
Regulatory Action, Supervision and
Enforcement
The robust surveillance system coupled with
an effective and transparent enforcement
mechanism put in place by SEBI promotes
orderly functioning of the securities market in
India. SEBI conducts regular inspections of the
Market Infrastructure Institutions (MIIs), market
intermediaries and the entities associated with
the securities market to oversee their activities
and to ensure compliances with various
regulations/ directions issued by the regulator.
Enforcement actions are initiated by SEBI,
as deemed appropriate, in the instances of
violation(s) of the laws regulating the securities
market. During 2022-23, SEBI conducted on-
site as well as off-site inspections of MIIs and
mutual funds. Additionally, to reduce regulatory
burden on intermediaries, SEBI carried out
comprehensive as well as theme based
inspections of the intermediaries, jointly with
stock exchanges and depositories. Further,
MIIs being the first level regulators oversee
the conduct of the entities coming under their
purview. The year saw a 25 per cent increase
in the number of inspections of stock brokers
by exchanges. SEBI also conducts search
and seizure operations to unearth market
misconducts and during the year, such search
and seizure operations related to 47 entities
at 40 locations covering 17 cities across the
country were carried out.
The transparent enforcement mechanism at
SEBI seeks to encourage better compliance
culture, penalize violations of rules and
151
Regulatory Action, Supervision and Enforcement
regulations and aim to deter misconducts in
the securities market. During the year, 345
orders were passed under 11/11(4)/11B/11D
proceedings. Further, 10,981 entities settled
the cases in the alleged dealings in the illiquid
stock options at BSE. This chapter provides
an account of the regulatory, supervisory and
enforcement actions of SEBI during 2022‑23.
10.1 MANNER OF OVERSEEING MARKETS
10.1.1 Surveillance
Effective surveillance of the securities market is
a pre-requisite for maintaining market integrity
to enhance investor confidence. The stock
exchanges are on the frontline as far as real
time surveillance of the market segments that
they operate in, are concerned. Complementing
the surveillance infrastructure of the stock
exchanges, SEBI has robust in-house systems
to monitor activities across all market segments
to check market misconduct like unfair trade
practices, market manipulation, front running,
insider trading, etc.
To further augment its surveillance functions,
SEBI has constituted Advisory Committee
for Leveraging Regulatory and Technology
Solutions (ALeRTS), which is tasked to guide
SEBI in its various technological initiatives.
The Committee held two meetings wherein
eight agenda items were discussed, of which
five were implemented during 2022-23 and the
remaining three are under consideration.
 Annual Report 2022-23
A. Major Surveillance Measures during
2022-23: Equity Segment
i. Surveillance Measures for Scrips with
Low Non-promoter Holding
 In view of concerns pertaining to
efficacy of fair price discovery, SEBI has
strengthened the monitoring framework
in consultation with stock exchanges, by
imposing stricter price bands for the scrips
having less than 25 per cent non-promoter
holding. The stock exchanges are advised
to do periodic review of price bands of
such scrips and reduce the price bands
if it satisfies the objective criteria laid
down in the price band review framework/
Additional Surveillance Measures (ASM)
framework.
ii. Extending Short-term ASM Framework
 In consultation with stock exchanges,
short-term ASM framework was extended
to securities on which derivative products
are available and their corresponding
Futures and Options contracts.
iii. Framework for Restricting Trading by
Designated Persons
PIT Regulations, 2015 restricts trading by
designated persons during trading window
closure period. In order to rationalize the
compliance requirement, improve ease of
doing business and prevent inadvertent
non-compliances of provisions of PIT
Regulations, 2015 by designated persons,
on the advice of SEBI, the MIIs developed a
system to restrict the trading of designated
persons by freezing the PAN at security
level during trading window closure period.
The framework was implemented in a
phased manner on account of certain
operational challenges. To begin with,
the system was made applicable to
declaration of financial results of the listed
company that is or was part of benchmark
indices i.e. NIFTY 50 and SENSEX. The
152
implementation of this system-driven
framework eliminated the inadvertent non-
compliances by designated persons.
For the quarter ended March 31, 2023,
PAN-ISIN level freeze in 56,338 demat
accounts of concerned designated persons
was carried out during the trading window
closure period.
iv. Framework for Dealing with Unsolicited
Messages and Videos on Social Media
Platforms
Plentiful unsolicited messages and videos
are being circulated/ uploaded on social
media platforms, containing incorrect
information with inflated/ unrealistic price
targets to dupe gullible investors. SEBI,
in consultation with the stock exchanges,
prescribed detailed actions to be taken by
the stock exchanges for dealing with such
unsolicited messages/ videos. In order
to further strengthen the framework, a
mechanism to initiate scrip level action was
developed and circulars were issued by
the stock exchanges, wherein, the scrips
shortlisted under the revised framework
attracted the following actions:
a. Trade for trade with price band of 5 per
cent or lower as applicable.
b. Trading permitted once a week.
c.  Additional Surveillance Deposit (100 per
cent of trade value) to be deposited by the
buyers.
d.  Display of the name of the scrip in the
‘Attention Investors/Investors Beware
page’ on the stock exchange website.
v. 
Monitoring of Structured Digital
Database Compliance
 PIT Regulations, 2015 mandates
maintenance of a Structured Digital
Database (SDD) by the board of directors
or head(s) of the organization, of every
person required to handle Unpublished
Price Sensitive Information (UPSI). SDD
 Chapter 10
is envisaged to capture details, such
as, nature of UPSI, details of persons
sharing / receiving UPSI with time stamp
and audit trail. Appropriate steps were
taken by stock exchanges to ensure
effective implementation of SDD by listed
companies.
vi. Surveillance Framework for Companies
under Insolvency and Bankruptcy Code
 SEBI had prescribed certain surveillance
actions for scrips undergoing Insolvency
and Bankruptcy Code (IBC) proceedings
under insolvency resolution process. In
order to enhance the surveillance w.r.t.
scrips under IBC, SEBI extended the
framework in the scrips having derivative
products.
In addition to above, the surveillance for
IBC framework was revised to make it
more effective by prescribing inter alia, the
following:
a. 
100 per cent margin to be levied on
securities shortlisted under IBC, from T+2
day (T being the day of shortlisting), on
which derivative products are available.
Further, no fresh derivative contracts to be
issued on such securities.
Post-attainment of non-promoter holding
b. 
of ≥ 25 per cent, the securities under
the IBC framework shall be moved out of
corresponding surveillance action, after
153
Regulatory Action, Supervision and Enforcement
completion of three subsequent calendar
months instead of three years.
vii. 
Publishing Messages Related to
Surveillance Action(s) on Scrips
The stock exchanges have a functionality
in their trading systems, wherein, an alert
message is provided while placing an order
on a scrip on which surveillance action(s)
are applicable. However, this functionality
was not present at the end of Trading
Members.

Accordingly, the stock exchanges
prescribed a timeline of six months to the
Trading Members to develop a functionality
on their front end trading platforms, by
which, any person while placing an order
in a scrip on which surveillance action(s)
are applicable, gets an alert message so
that the person placing the order is made
aware of such surveillance action(s) on the
scrip, before placing the order.
Additionally, in March 2023, the aforesaid
feature was made mandatory for Trading
Members with retail investors. In this
regard, as on March 31, 2023, 15 Trading
Members covering approximately 61 per
cent of retail investors at NSE and 74
per cent of retail investwors at BSE, have
activated this functionality.
 Annual Report 2022-23

Box 10.1: Search and Seizure Operations : Unearthing market misconduct

through social media
In continuation to its efforts to unearth market misconduct, SEBI, during 2022-23, conducted Search
& Seizure Operations involving 47 entities at 40 locations covering 17 cities across the country.
Based on the evidence obtained during Search & Seizure operations, it was observed that certain
entities were allegedly involved in fraudulent activities, inter alia, generating ill-gotten gains through
various modus operandi, including the following:
• Indulging in front running wherein it was observed that multiple entities were involved in
orchestrating a scheme whereby orders of big clients were front run by perpetrators using
conduit’s trading accounts.
• Indulging in Price/ Volume manipulation of scrips by uploading false and misleading videos on
social media channels including YouTube for luring investors and offloading shares at inflated
prices.
• Indulging in market manipulation, wherein certain entities have devised fraudulent scheme by
which the information relating to stock recommendations given by stock market experts on
TV Channels were shared by such experts with a group of entities in advance. The recipients
took positions in the scrip before the recommendations were aired on TV and squared off their
positions just after the stock recommendations were aired on TV, thereby earning ill-gotten
profits, which was shared between the traders and the stock market experts.
Pursuant to investigation by SEBI, the orders passed also mentioned about the Search & Seizure
operations and the evidences obtained from the seized digital devices.
Considering the nascent stage of Search & Seizure operations at SEBI and to keep up the
standards of operations on par with other enforcement agencies conducting Search & Seizure,
training was imparted by other enforcement agencies to SEBI officers.
The aforementioned actions by SEBI shall go a long way in educating investors to remain cautious
of such fraudulent schemes being run by certain entities.

B. 
Major Surveillance Measures during
ii. 
2022-23: Commodity Derivatives
Segment
Review of Position Limits in Cotton
i. 
Contracts
The existing position limits were revised
temporarily in cotton contracts based on
feedback from the commodity derivative
exchange, as price rise was observed in
cotton contracts during the season coupled
with low arrivals in the market, lower
production estimates released by Cotton
Association of India and overall decline in
open interest as well as stock deposited in
the warehouses.
Review of Concentration Margin
Framework on Agricultural
Commodities
In 2019, SEBI had modified the
methodology of calculating concentration
margins at client level for agricultural
commodities, especially, narrow
commodities. Thereafter, in 2020, initial
margins were revised and lean period
margins were introduced. SEBI, received
feedback from the industry that levy of all
these margins has resulted in increase in
the total applicable margins on agricultural
commodities which might be unfavorable
for the growth of commodity derivatives

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 Chapter 10
market and may discourage participants
from trading on the stock exchange
platform.
In order to address the concerns of the
market participants, methodology of
calculating concentration margins at
client level for agricultural commodities
was revised during 2022-23, wherein,
concentration margins are being levied
proportionately with varying levels of client
open interest.
iii. 
Systems/ Controls with MIIs regarding
Sikkim Based Traders
There were a few media reports in respect
of increase in commodity trading by Sikkim
based traders. It was alleged that the
exemptions of PAN, income tax and stamp
duty have turned Sikkim into a tax haven
for commodity speculators. The media
reports also indicated that the traders from
other states might be using Sikkim-based
residents as a proxy to carry out trades
so as to avoid filing tax returns, leading to
Sikkim behaving like an ‘offshore financial
centre’.
In this regard, the MIIs were advised
to specifically verify the KYC details of
investors, collection of stamp duty and
veracity of their claims on residency in
Sikkim.
MIIs completed the KYC reconfirmation
exercise of existing Sikkim based investors
in November 2022. The non-compliant
trading accounts have been closed and
non-compliant demat accounts have been
suspended, until such accounts become
compliant. As on March 31, 2023, total
1,465 non-compliant demat accounts
were suspended and 974 non-compliant
accounts were closed.
155
Regulatory Action, Supervision and Enforcement
C. Surveillance Index
To augment the adequacy and effectiveness
of surveillance systems of MIIs, two indices
Surveillance Adequacy Index and Index for
Surveillance Effectiveness were developed
by SEBI in consultation with the MIIs. The
index score arrived on the basis of specified
parameters is intended to provide guidance
to the respective Boards of the MIIs to act
as a performance benchmark to assess
effectiveness of the surveillance function
of the MIIs and to initiate measures for
strengthening of the same.
Such assessment also provides guidance
to the Board and Senior Management of
the MIIs for fixing the key responsibility
areas of the surveillance department and
officials comprising the department. The
output of the assessment of indices will
be supplementary to the Surveillance
Inspections of the MIIs carried out by SEBI.
The evaluation of self-assessment, as
submitted by the MIIs, viz., BSE, NSE,
NSDL and CDSL, was carried out and
various observations/ suggestions were
communicated to the concerned MIIs for
implementation.
10.1.2 Inspections
Inspection is one of the prime regulatory functions
of SEBI to oversee the conduct of securities
market in India. Inspections of MIIs and various
other entities are carried out regularly to ensure
compliance with applicable laws and regulations.
SEBI carries out the inspections independently
and jointly with the MIIs to ensure the integrity
and ethical conduct in the securities market and
in identifying potential risks prevailing in the
market. Appropriate regulatory actions based
on the findings of the inspections are taken in
furtherance.
 Annual Report 2022-23

A. Market Infrastructure Institutions an objective to improve the surveillance

 SEBI conducted inspection of various
MIIs during the financial year 2022-23,
with the objective to have an oversight on
their activities and improve their systems
and procedures. While, inspection of NSE,
MCX, MSEI, NCDEX, NSDL, CDSL, NCL,
MCXCCL, and NCCL were completed
within the financial year, inspection of
BSE and ICCL were at different stages
of completion. Additionally, SEBI also
undertook special purpose issue based
inspections and off-site supervision by way
of analysing reports, filings, etc., submitted
by the MIIs.
SEBI also conducts inspection of MIIs with
systems and procedures of the exchanges.
During 2022-23, SEBI has commenced on-
site inspection of the surveillance function
of CDSL and NSDL, while the same has
been initiated for BSE, NSE and MCX.
Inspections of BSE and NSE were also
done with respect to (a) processing
of investor claims received against
defaulter stock brokers, (b) complaint
handling processes of the exchanges
and (c) to examine the IGRC/Arbitration
Proceedings. A thematic inspection of
BSE and NSE, specifically with respect
to processing of investor claims received
against Karvy Stock Broking Ltd. was also
done during the year.

Box 10.2: Leveraging Technological Innovation and Data: Revamp of approach

for supervision of Market Infrastructure Institutions
In consonance with SEBI’s thrust on leveraging the present-day technological innovations and
data-driven decision-making, towards accomplishing the regulatory objective defined in its preamble,
during the last year, amongst other initiatives, SEBI embarked on the path to integrate technology
in the inspection process of Market Infrastructure Institutions (MIIs). The underlying objective of the
said initiative is to automate the inspection process and undertake offsite monitoring of some of the
areas of operations of MIIs, to transform the annual inspection exercise into a toolkit for ongoing
supervision. Towards this, a software utility is envisaged to be developed, to begin with by select
MIIs, which would aid both the regulator and the MII. To regulator, the same would facilitate in
(a) ongoing receipt of information from MIIs relating to their compliance as an entity vis-à-vis the
applicable regulatory requirements, (b) analysis of information, and (c) wherever possible provide
indications of possible non-compliance. For the MIIs, the same would serve as a tool for effective
compliance management.

For the above purpose, to begin with, the existing regulatory requirements applicable to stock
exchange(s) specified viz., SEBI regulations, circulars, etc., were classified into broad themes
which include governance, technology, MII operations, finance and monitoring of constituents by
stock exchange(s). Further, steps were initiated to translate the regulatory requirements applicable
to stock exchange(s) into data tables and compliance checks. As a result, towards the end of
the year several data tables and compliance checks across aforesaid themes were drafted and
consultations to incorporate the same into a utility are underway with the MIIs. Going forward, similar
exercise would also be undertaken for the depositories and clearing corporations. In addition to
automation, for some of compliance areas where automation may not be feasible owing to the data
being unstructured, the periodicity of review has been enhanced from annual to monthly / quarterly.

Adoption and implementation of the above initiative is expected to strengthen the supervision and
governance of MIIs which also serve the role of a public utility. This would also ensure that the
supervision process is data and technology driven and is independent of annual cycle of inspection.

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 Chapter 10 Regulatory Action, Supervision and Enforcement

B. Brokers and Depository Participants Details of the inspections of stock brokers

 During 2022-23, 87 stock brokers and (including commodity derivatives brokers)
28 depository participants (DPs) were and DPs carried out during the year are
inspected. The nature of these inspections given in Table 10.1.
were comprehensive with due emphasis
on compliance of specific provisions of Table 10.1: Inspection of Stock Brokers and
SEBI regulations/ circulars issued by Depository Participants
SEBI. During the inspections, themes Particulars 2021-22 2022-23
such as handling of funds and securities
Stock Brokers 92 87
of clients, settlement of accounts of clients
Depository Participants 51 28
on timely basis, segregation of clients and
proprietary funds/ securities, pledging of In addition to the joint inspections,
securities by the broker, investor redressal the stock exchanges also carried out
mechanism, KYC norms, etc., were taken inspections as per the policy adopted by
up for verification and supervision. them in consultation with SEBI (Table
10.2). Additionally, stock brokers are
The inspections of stock brokers and required to carry out internal audit on
DPs were carried out at a group level, a half-yearly basis by independent
i.e., activities of entities having equity auditors. Stock exchanges levy penalties
segment, commodity derivative segment for delay in filing the internal audit reports
and depository participant were inspected by stock brokers.
simultaneously. These inspections were
conducted jointly with respective stock Table 10.2: Inspections of Stock Brokers by
exchanges and depositories, ensuring that Stock Exchanges
all aspects of the functioning of the entity
Particulars BSE NSE MSE MCX NCDEX
are looked into by exchanges/ depositories
and SEBI concurrently. This initiative of 2021-22 385 546 21 247 122
joint inspections has minimized multiple 2022-23 833 431 9 291 89
inspections of the same entity by SEBI,
stock exchanges and depositories during C. 
Entities Associated with Fund
the year, thereby reducing the regulatory Management Activities
burden on intermediaries.  SEBI followed a risk-based inspection
policy for inspection of mutual funds. The
Pursuant to the joint inspection of an entity, inspections were undertaken on the basis
actions on all observed violations pertaining of various risk parameters, such as liquidity
to stock broker/ DP are initiated by one risk, credit risk, financial risk, market risk,
single institution i.e. either SEBI/ exchange technological risk, operation risk, etc., and
for stock brokers and SEBI/ depository for impact parameters, such as AUM of the
DPs, resulting in one single consolidated mutual fund, retail AUM, etc. During 2022-
action against the entity for an inspection. 23, inspection of 24 Mutual Funds and its
This has further eased the regulatory respective RTA operations were initiated.
burden on intermediaries. The distribution
of cases between SEBI/ exchanges/ SEBI also undertook thematic inspections
depositories are done periodically by a of the mutual funds for specific area
joint committee comprising representatives of concern separately. Seven such
from SEBI, exchanges and depositories. inspections were carried out during the

157
 Annual Report 2022-23
year. In addition, SEBI also undertakes
off-site surveillance-cum-inspection of
mutual funds whereby data is received
from AMCs and RTAs of the AMCs on a
regular basis along with Compliance Test
Reports (CTR) and Half Yearly Trustee
Reports (HYTR). Compliance of various
quantitative requirements are monitored
through algorithm based alerts run on the
said data and various actions are initiated
against the AMCs. As on March 31, 2023,
there are 81 alerts deployed to identify
potential cases of non-compliance of SEBI
(Mutual Fund) Regulations, 1996, circulars
and directives issued thereunder.
Inspection of books of accounts, records
and other documents pertaining to AIFs,
VCFs, REITs, InvITs, PMS and FVCIs
(through custodians) were also carried out
to verify whether the books of accounts,
records and other documents are being
maintained in the specified manner
including compliance with respect to AML/
CFT and KYC norms (Table 10.3).
Table 10.3: Inspections of Entities Associated
with Fund Management Activities
Particulars 2021-22 2022-23
Mutual Fund and its respective RTA 23 24
Portfolio Manager 12 17
Alternative Investment Fund 13 17
Venture Capital Fund 1 0
Foreign Venture Capital Investor 21* 9*
(through custodian)
Real Estate Investment Trust 0 2
Infrastructure Investment Trust 1 3
Note: * Included with Inspection of Custodians
D. 
Other Entities associated with
Securities Market
 During 2022-23, SEBI conducted
inspections of other entities associated
with securities market to examine into
their functioning, the compliance aspects
and to check probable irregularities (Table
10.4). Inspection of KRA was conducted
158
to ensure compliance levels in terms of
their systems, procedures, operations,
safeguards, maintenance of books of
accounts, records/KYC documents,
grievance handling mechanism, comp-
liance with regulations, amendments
thereto and various circulars issued
from time to time. Inspection of books of
accounts, records and other documents
pertaining to Investment Advisor and
Research Analyst was carried out to verify
whether the books of accounts, records and
other documents are being maintained in
the specified manner including compliance
with respect to AML/ CFT and KYC norms.
The nature of the inspections of RTA was
comprehensive with focus on compliance
of SEBI regulations/ circulars. The RTA
inspections covered aspects such as
procedures followed for various investor
service requests (transfer, transmission,
issuance of duplicate securities, change
in name, address, etc.), timelines within
which such requests were processed,
signature mismatch cases, etc. Inspection
of merchant bankers engaged in public
issue of equity as well as debt issues were
conducted during the year.
Table 10.4: Inspections of other entities
associated with Securities Market
Particulars 2021-22 2022-23
Merchant Banker 8* 42**
Registrars to an issue and share 11# 13#
Transfer Agent
Investment Adviser 14 10
Research Analyst 11 12
KYC Registration Agency 0 3
Credit Rating Agency 7 4
Debenture Trustee 4 4
Note: * Includes 6 and 2 inspections of Merchant Bankers
engaged in public issue of equity and debt securities,
respectively.
**Includes 37 and 5 inspections of Merchant Bankers
engaged in public issue of equity and debt securities,
respectively.
#Includes offsite inspection of 2 QRTAs (2021-22) &
Includes onsite inspection of 2 QRTAs (2022-23). (QRTA
is an RTA servicing more than 2 crore folios, physical and
demat folios combined together, for listed companies)
 Chapter 10 Regulatory Action, Supervision and Enforcement

E. Inspection of Investment Advisers by Department, other operational departments

BSE Administration and Supervision
Ltd.
 Based on the proposal received from
BSE, in response to SEBI circular dated
August 06, 2020, BSE Administration
and Supervision Ltd. (BASL), a wholly
owned subsidiary of BSE was granted
recognition to act as an Investment
Adviser Administration and Supervisory
Body for a period of three years from
June 01, 2021 in terms of Regulation
14 of SEBI (Investment Advisers)
Regulations, 2013 (IA Regulations,
2013). As per the provisions of Regulation
14(2) of SEBI IA Regulations, 2013, the
administration and supervision of IAs
have been delegated to BASL. In 2022-
23, BASL carried out inspections of 13
IAs, as delegated by SEBI.
10.1.3 Investigation
SEBI conducts investigation, if it has reasonable
ground to believe that any person has violated
provisions of SEBI Act, 1992 and regulations
framed thereunder like PFUTP Regulations,
2003, PIT Regulations, 2015, etc. Investigation
is initiated based on reference received from
sources such as SEBI’s Integrated Surveillance
within SEBI, exchange reports, government
agencies, media reports, complaints, etc. The
steps involved during investigation process
include analysis of market data (order and trade
log, transaction statements, etc.), exchange
report, data from the depository, KYC documents
obtained from brokers, depository participants,
etc., bank records like account statements and
KYC details, information about the company
including financial results and shareholding
pattern, major corporate developments including
events around them, call data records obtained
from telecom service providers, information
obtained from other market intermediaries and
alleged entities, etc. The purpose of investigation
is to gather evidence and to identify persons
behind manipulation, frauds, irregularities and
violations of securities laws so that appropriate
and suitable regulatory action(s) can be taken,
wherever required.
A. 
Trends and Nature of Investigation
Cases
During 2022-23, 144 cases pertaining to
various violations of securities laws were
taken up for investigation and 152 cases
were completed (Table 10.5).

Table 10.5: Nature of Investigation Cases

No. of Investigations Taken Up No. of Investigations Completed
Type of FUTP
2021-22 2022-23 2021-22 2022-23
Insider Trading 17 85 48 75
Market manipulation and price rigging 38 54 82 67
Takeovers 0 0 5 0
‘Issue’ related manipulation 0 0 1 0
Miscellaneous* 4 5 33 10
Total 59 144 169 152
Note: *Miscellaneous includes alleged violations of/related to - i) non-payment of dividend, ii) diversion of investors' money,
iii) Issuance of NCDs iv) Delisting offer, v) Dabba trading, Preferential allotment process, routing of funds, etc. Since several
investigation cases involve multiple allegations of violations, water-tight classification under specific category becomes
difficult. Therefore, cases have been classified on the basis of main charge/ violations.

159
 Annual Report 2022-23

B. 
Investigations relating to Fraudulent allegations of misstatement in financial
and Unfair Trade Practices statements of listed companies. The misstated
 SEBI, based on alerts generated by its financial statements may have direct or indirect
in-house surveillance system, complaints effect on the prices of securities of such listed
from investors, inputs provided by the ex- companies resulting in violations of SEBI
amination reports of the stock exchanges, Act, 1992, SCRA 1956, PFUTP Regulations,
etc., unearths evidence of fraudulent activ- 2003 and LODR Regulations, 2015. Based on
ities, which is actionable under the PFUTP the findings of the investigation, appropriate
Regulations, 2003. PFUTP Regulations, enforcement actions are initiated.
the framework to prevent the occurrence
of fraudulent and unfair trade practices During 2022-23, CFID had taken up 35 cases
are amended from time to time and the and completed 31 cases pertaining to financial
last amendment was done on January 25, statement fraud. In total, 36 and 32 cases, were
2022. Details of FUTP cases taken up and taken up and completed respectively during the
completed during the year are given in year (Table 10.7).
Table 10.6.
Table 10.7: Nature of Investigation Cases Taken-
Table 10.6: Fraudulent and Unfair Trade Practices up and Completed
Cases
No. of Cases No. of Cases No. Investiga- No. of Investiga-
Type of Taken-up Completed Type of FUTP tions Taken Up tions Completed
FUTP 2021-22 2022-23 2021-22 2022-23
2021-22 2022-23 2021-22 2022-23
Price and 31 29 72 52 Financial State- 12 35 9 31
Volume ments Fraud
Manipulation Miscellaneous* 0 1 1 1
cases
Total 12 36 10 32
Front 7 24 8 14
Running Note: *Miscellaneous includes alleged violations of/by - i)
Others# 0 1 2 1 Listing Conditions ii) Statutory Auditors ii) Disclosure re-
quirements.
Total 38 54 82 67
Note: #Others include cases related to order book
manipulation, mis-selling, misleading corporate 10.1.5 Enforcement Activities
announcements, investments in bonds, etc. Effective enforcement not only leads to a better
compliance culture but also underscores the
In addition to the above, during 2022- point that market misconduct and abuse will
23, six cases were taken up by ISD not go unpunished. It further ensures integrity,
for investigation, of which three cases transparency and fairness in the market. A
pertained to market manipulation and credible enforcement strategy underpins the
price rigging and three cases pertained importance of consistent, timely and transparent
to front running. Investigation in one regulatory outcomes, which are proportionate,
case pertaining to front running was dissuasive and effective. Under the SEBI Act,
completed during the year. Three cases 1992, SCRA, 1956 and the Depositories Act,
taken up for investigation in 2021-22 1996, SEBI broadly pursues two streams of
were also completed during 2022-23. enforcement actions, that is, administrative/
civil or criminal. Administrative/civil action
10.1.4 Corporation Finance Investigation includes issuing directions such as remedial
The Corporation Finance Investigation orders, cease and desist orders, suspension
Department (CFID) at SEBI, investigates or cancellation of certificates of registration

160
 Chapter 10 Regulatory Action, Supervision and Enforcement

and imposition of monetary penalties under i. 

respective statutes. Proceedings of a criminal
nature involve initiating prosecution proceedings
against violators by filing criminal complaints
before the competent court.
Enforcement mechanisms are invoked by
SEBI wherever it notices violation(s) pertaining
to laws regulating the securities market.
These include (a) Proceedings under Section
11/11(4)/11B/11D of SEBI Act, 1992, (b) Enquiry
Proceedings, (c) Adjudication Proceedings and
(d) Prosecution Proceedings.
A. Enforcement Actions Taken
 Enforcement actions are initiated as
approved by the competent authority
wherever violations of laws and obligations
relating to the securities market are
observed. Actions are determined based
on the principles of objectivity, consistency,
materiality and quality of evidence available
after a thorough analysis and appreciation
of facts. Table 10.8 presents a snapshot of
the various types of enforcement actions
taken by SEBI during the year 2021‑22
and 2022-23.
Table 10.8: Type of Enforcement Actions Taken
No. of Entities
Enforcement Action Taken
2021-22 2022-23
Prohibitive Directions Issued
under Section 11 of the SEBI 812 688
Act, 1992
Prosecutions Filed 211 127
Conviction by Courts 18
Action taken under SEBI (Intermediaries)
Regulations, 2008
(i) Cancellation 24
(ii) Suspension 6 24
(iii) Warnings Issued 8 4
Total 1,079 907
Proceedings under Section 11/11(4)/
11B/11D of SEBI Act, 1992
 Under these proceedings, SEBI issues
directions or prohibitive orders in the
interest of investors or the securities market,
either pending investigation/ enquiry or on
completion of such investigation/ enquiry.
Under Section 11(4) and 11B of the SEBI
Act, 1992, SEBI issues various directions
viz., suspending trading of any security in
a recognized stock exchange; restraining
persons from accessing the securities
market; impounding and retaining the
proceeds or securities, prohibiting any
person associated with the securities
market to buy, sell or deal in securities;
disgorging wrongful gain made or loss
averted by any contravention; directing
any intermediary or any person associated
with the securities market not to dispose
of or alienate an asset forming part of any
transaction which is under investigation
etc. Further, since March 2019, the Board
has been given additional power for levying
penalties under these proceedings. Under
Section 11D of the SEBI Act, 1992, SEBI
is empowered to pass an order requiring
such person to cease and desist from
committing or causing such violation.
During 2022-23, SEBI initiated enforcement
action in 67 cases under sections 11, 11(4),
11B and 11D, while it has disposed of 333
cases, out of which 130 cases pertained to
not obtaining SCORES authentication and
6 non-redressal of investor’s complaints.
In addition to the 333 cases, 12 cases
remanded by SC/HC/SAT were also
58 disposed of during the year. At the end of
March 31, 2023, 160 cases were pending.
(Table 10.9).

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 Annual Report 2022-23

Table 10.9: Age-wise Analysis of Enforcement if the DM is of prima facie view that it is
Actions u/s 11, 11(4), 11B & 11D of the SEBI Act, a fit case for cancellation of certificate of
1992 Proceedings
registration.
Particulars No. of cases
2021-22 2022-23
a. 
Enquiry proceedings by Designated
Cases pending at the beginning Authority
476 426
of the period
During 2022-23, enquiry was initiated in 25
Cases added during the period 176 67
cases under Intermediaries Regulations,
Cases disposed of during the
226 333 2008 and reports were submitted in 55
year
cases. Enquiry was pending in 16 cases at
Cases pending at the end of the
period
426 160 the end of the year (Table 10.10).
Break–up of pending cases at the end of the period
Table 10.10: Age-wise Analysis of Enquiry
Cases older than 2 years 192 43
Proceedings by Designated Authority
Cases older than 1 but less than
81 59 Particulars 2021-22 2022-23
2 years
Cases less than 1 year 153 58 Cases pending at the 31 46
beginning of the period
Total 426 160
Cases added during the period 37 25
ii. Enquiry Proceedings Enquiry Reports submitted 22 55
during the year
SEBI suspends or cancels the certificate
of registration of an intermediary after Cases pending at the end of 46 16
the period
following the due process envisaged under
Break-up of pending cases at the end of the period
the Intermediaries Regulations, 2008 on
Cases older than 2 years 9 2
the recommendation of the Designated
Authority (DA) appointed for that purpose. Cases older than 1 but less 11 2
than 2 years
Cases less than 1 year 26 12

Under the Intermediaries Regulations,
Total 46 16
2008, the enquiry proceedings are
conducted in two stages. The first stage
is before the DA who is appointed to b. 
Enquiry Proceedings before the
prepare a report recommending one of the Designated Member
measures stipulated in the regulations such  Upon submission of enquiry reports,
as suspension/ cancellation of certificate the recommendations made by the DA
of registration, issue of censure, etc. The are placed before the DM for passing
second stage is before the Designated of final orders under Regulation 27 of
Member (DM) who, after considering the the Intermediaries Regulations, 2008.
recommendations made by the DA passes During 2022-23, 90 cases were disposed
appropriate orders. Both the DA and the of; in addition to the 90 cases, seven
DM are required to issue show cause cases remanded by Hon’ble SAT were
notice and provide opportunity of personal also disposed of. At the end of 2022-23,
hearing to the noticees. However, pursuant 149 enquiry proceedings were pending
to SEBI (Intermediaries) (Amendment) (Table 10.11).
Regulations, 2021, opportunity of personal
hearing before the DM is to be given only

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 Chapter 10 Regulatory Action, Supervision and Enforcement

Table 10.11: Age-wise Analysis of Enquiry Particulars 2021-22 2022-23

Proceedings by Designated Member Break up of pending cases at the
Particulars 2021-22 2022-23 end of the period
Cases pending at the Cases older than 2 years 115 23
217 194
beginning of the period Cases older than 1 but less
102 1,840
Cases added during the than 2 years
23 45 Cases less than 1 year 6,707 87
period
Cases disposed of during the Total 6,924 1,950
46 90
year
Cases pending at the end of iv. Prosecution Proceedings
194 149
the period SEBI initiates proceedings by filing a
Break–up of pending cases at the criminal complaint in the instance of
end of the period contravention of provision(s) of SEBI Act,
Cases older than 2 years 183 136 1992, Securities Contracts (Regulation)
Cases older than 1 year but Act, 1956, Depositories Act, 1996, and/or
7 9
less than 2 years
any rules or regulations made thereunder.
Cases less than 1 year 4 4 Prosecution proceedings are initiated in
Total 194 149 case of non-payment of penalty imposed
by the adjudication officer or the Board; or if
Iii. Adjudication Proceedings the person fails to comply with the directions
Under chapter VIA of the SEBI Act, or order issued under the aforementioned
1992, SEBI may appoint an Adjudicating Acts. The complaints filed by the SEBI for
Officer (AO) for conducting an enquiry violation of the securities laws are tried by
and imposing monetary penalties for the SEBI Special Courts/ Sessions Court.
contravention of any provision of the SEBI Offences under the aforesaid securities
Act, 1992 or any rules or regulations made laws are compoundable by the court.
thereunder. During 2022-23, SEBI initiated
adjudication proceedings in 6,850 cases, 
During 2022-23, SEBI initiated 64
while it disposed of 11,824 cases (which prosecution cases, while the Courts
includes the cases with respect to trading disposed of 47 cases. At the end of March
of illiquid stock options at BSE). At the 31, 2023, there were 1,166 prosecution
end of March 31, 2023, 1,950 cases were cases pending before various Courts
pending for action (Table 10.12). (Table 10.13).
Table 10.12: Age-wise Analysis of Enforcement Table: 10.13: Age-wise Analysis of Enforcement
Actions - Adjudication Proceedings Actions - Prosecution Proceedings
Particulars 2021-22 2022-23 Particulars 2021-22 2022-23
Cases pending at the Cases pending at the
488 6,924 1,160 1149
beginning of the period beginning of the period
Cases added during the period 6,982 6,850 Cases added during the year 86 64
Cases disposed of during the Cases disposed of during the
546 11,824 97 47
year period
Cases pending at the end of Cases pending at the end of
6,924 1,950 1,149 1,166
the period the period

163
 Annual Report 2022-23

Particulars 2021-22 2022-23 A. 

Break up of pending cases at the
end of the period
Cases older than 2 years 1,043
Cases older than 1 year but
20
less than 2 years
Cases less than 1 year 86
10.2 REGULATORY ACTIONS
Statutory Warning/ Enquiry (under
Intermediaries Regulations)
Upon submission of enquiry reports, the
1,026 recommendations made by the DA are
placed before the DM for passing of final
76
orders. During 2022-23, enquiry was
64 completed and recommendations were
given in 55 cases for further necessary
action (Table 10.15).

10.2.1 Orders under Section 11/11(4)/11B/ Table 10.15: Enquiry Reports Submitted against
11D Proceedings Intermediaries/Institutions
During 2022-23, orders passed in 345 cases Particulars 2021-22 2022-23
(333 cases plus 12 cases remanded by SC/
Broker/Commodity Derivatives 12 25
HC/SAT) related to 1,151 entities under Section Broker
11/11(4)/11B/11D proceedings. Details of Depository Participants 0 0
the nature of violations pertaining to these
Brokers & Depository Partici- 0 1
entities are provided in Table 10.14. Further, pants
a total penalty amounting to `201.47 crore
Registrars to Issue and Share 2 2
was imposed against various securities market Transfer Agents
violations during the year. Credit Rating Agencies 1 0
Alternative Investment Fund 0 1
Table 10.14: Nature of Violation in Section
11/11(4)/11B/11D Proceedings Investment Advisors 7 23
Research Analyst 0 2
Nature of Violation No. of
Entities Portfolio Managers 0 1
2022-23 Total 22 55
PFUTP Regulations 317
Investment Advisor Regulations 231 B. Debarment/ Disgorgement
LODR Regulations 58  During 2022-23, direction of debarment
Prevention of Insider Trading 35 was issued against 575 entities, both
Deemed Public issues 33 debarment and disgorgement direction
SAST Regulations 17 were issued against 111 entities and only
CIS Regulations, 1999 17 disgorgement direction was issued against
VCF Regulation 11 14 entities.
Others 432*
Total 1,151
C. Interim and Final Orders
 During 2022-23, 12 interim orders were
Note: There may be more than one violation against an
entity; for the purpose of this table, the most relevant nature
passed; and 54 final orders were passed
of violation is considered while computing the numbers. where interim orders were passed in 2022-
*include entities who have availed settlement, proceedings 23 or before. (Table 10.16).
disposed against entities without any further direction, etc.

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 Chapter 10 Regulatory Action, Supervision and Enforcement

Table 10.16: Interim Orders and Final Orders supervision undertaken during the year,
based on Nature of Violations various actions were initiated, which inter
Nature of Interim Orders Final Orders passed alia include administrative warnings,
violation 2021-22 2022-23 2021-22# 2022-23* deficiency letters and advisory letters.
PFUTP Regu- Details of such actions against the MIIs and
4 12 19 13
lations
/ or their associated entities are provided in
PIT Regula-
5 0 1 1 Table 10.17.
tions
LODR Regula-
3 0 2 9
tions Table 10.17: Action Taken against MIIs and/or
IA Regulations 6 0 32 23 their Associated Entities
PMS Regula- Particulars 2022-23
0 0 0 2
tions
Administrative warnings/ warning letters 15
Stock Broker issued
0 0 0 2
Regulations
SAST Regula- Deficiency letters issued 16
1 0 1 1
tions
Advisory letters issued 48
CIS Regula-
0 0 5 1
tions, 1999
Others 1 0 4 2 ii. 
Entities Associated with Fund
Total 20 12 64 54 Management Activities
 During 2022-23, warning letters were
Note: There may be more than one violation in a given case, for
the purpose of this table the most relevant nature of violation is issued to 35 entities associated with
considered while computing the number of cases. mutual funds and deficiency letters were
#Final Orders in 2021-22 where interim orders are passed in or issued to three Mutual Funds/AMCs on
before 2021-22
*Final Orders in 2022-23 where interim orders are passed in or
account of non-compliance with SEBI
before 2022-23 Regulations/guidelines observed in CTR,
HYTR, inspection reports, etc. Regulatory
10.2.2 Other Regulatory Actions actions taken against various other
SEBI issues administrative warnings, deficiency entities associated with fund management
letters and advice letters against intermediaries/ activities are provided in Table 10.18.
institutions, pursuant to inspections and
investigations. The details of such actions during Table 10.18: Actions Taken against Entities
2022-23 are covered in the following section: Associated with Fund Management Activities
Admin- Defi- Advi-
A. 
Regulatory Action pursuant to Intermediaries / Funds istrative ciency sory
Investigation / Corporation Finance Warning Letter Letter
Investigation Mutual Funds and its
35 3 1
 During the year 2022-23, administrative respective RTA*
warnings were issued against 100 Portfolio Manager 18 7 1
entities pursuant to investigation and 18
Alternative Investment
entities pursuant to corporate finance Fund
20 3 0
investigations.
Real Estate Investment
0 1 0
Trust (REIT)
B. 
Regulatory Action pursuant to
Infrastructure Invest-
Inspection/Supervision 2 2 3
ment Trust (InvIT)
i. Market Infrastructure Institutions
 Pursuant to the inspections and offsite Note: *Mutual Funds/ AMCs/ Individuals associated with
the AMCs

165
 Annual Report 2022-23

iii. 
Other Entities associated with No. of Entities
Particulars
Securities Market 2021-22 2022-23
 During the year, 24 administrative Stock Broker Regulations/ 19 64
warnings were issued to merchant banks, Circulars
including two engaged in public issue of Non-compliance with SEBI 27 70
orders
debt securities. The regulatory actions
Insider Trading 20 65
taken/initiated against various types of the
CIS Regulations, 1999 4 0
entities are provided in Table 10.19.
Non-compliance with 14 88
summons
Table 10.19: Regulatory Actions against Other Others 127 235
Entities No Penalty /Settlement
Admin- Defi- Advi- No Penalty/Not applicable 750 1,042
Other Entities istrative ciency sory
Settlement 52 29
Warning Letter Letter
Total 2,369 3,731
Merchant Banker* 24 2 4
Registrars to an issue The penalties, with respect to various
2 0 0
and share Transfer Agent adjudication proceedings, imposed during 2022-
Research Analyst 2 0 1 23 are given below:
Credit Rating Agency 6 6 6 • For Violations Pertaining to Fraudulent
Debenture Trustees 4 3 9 and Unfair Trade Practices: SEBI
Debt Listed Company 2 0 1 completed adjudication proceedings
Note: *Includes 22 administrative warnings against MBs against 1,656 entities for engaging in
engaged in public issue of equity; 2 administrative warn-
FUTP. Penalties worth `342.79 crore was
ings, 2 deficiency letters and 4 advisory letters against
levied for such violations.
MBs engaged in public issue of debt securities.
• For Insider Trading Related Violations:
10.2.3 Adjudication Proceedings SEBI completed adjudication proceedings
During 2022-23, SEBI completed adjudication against 65 entities for engaging in insider
proceedings against 3,731 entities, through trading. Penalties worth `3.04 crore was
568 orders, excluding the ISO cases. Out of levied for such violations.
the 568 orders, 543 adjudication orders were • For Takeover Related Violations: SEBI
passed against 3,702 entities and 25 settlement completed adjudication proceedings
orders were passed against 29 entities. The against 51 entities for engaging in takeover
types of violations for which these entities were related violations. Penalties worth `37 lakh
penalized are given in Table 10.20. was levied for such violations.
• For Disclosure Violations: SEBI
Table 10.20: Snapshot of Adjudication Orders completed adjudication proceedings
Passed against 328 entities for violating disclosure
No. of Entities requirements specified in PIT Regulations,
Particulars
2021-22 2022-23 2015 and SAST Regulations, 2011.
Nature of Violation Penalties worth `8.45 crore was levied for
PFUTP 1,005 1,656 such violations.
Disclosure under SAST and 250 328 • For Remaining Violations: SEBI
PIT completed adjudication proceedings
Takeover 59 51 against 1,631 entities for other violations
Investor Grievances 0 3 pertaining listing requirements, broker
Listing/ LODR 42 100 regulations, non-redressal of investor

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 Chapter 10 Regulatory Action, Supervision and Enforcement

grievances, non-compliance with SEBI Intermediary/Institution 2021-22 2022-23

orders, non-compliance summons, etc. Stock Exchange 1 5
Penalties worth `94.63 crore were levied Clearing Corporation 0 2
for such violations. Alternative Investment
• No penalties were levied against 1,042 0 10
Fund
entities. Mutual Fund/AMC 0 2
Portfolio Manager 0 1
During 2022-23, SEBI passed 151 adjudication Foreign Portfolio Investor 4 0
orders against registered intermediaries, of Designated Depository
2 0
which maximum pertained to brokers (87), Participant
followed by Investment Advisors (12), and Research Analyst 0 4
remaining against various other intermediaries/ Total 102 151
institutions (Table 10.21). Note: * Includes one adjudication order passed with re-
spect to both stock broking operations and DP operations
Table 10.21: Adjudication Orders passed against
Intermediaries/Institutions 10.2.4 Recovery Proceedings
Intermediary/Institution 2021-22 2022-23 Section 28A of the SEBI Act, 1992 and the
Stock Broker/Commodity corresponding provisions of SCRA, 1956 and
80 88*
Derivatives Broker the Depositories Act, 1996 empower SEBI to
Depository Participant 7 10 recover money from persons who fail to pay
Sub-broker 1 1 the penalty imposed by an AO or fail to comply
Merchant Banker 3 4 with any directions of the Board for refund of
Investment Adviser 2 12 money or fail to comply with the direction of
Registrars to Issue and disgorgement order or fail to pay any fees due
2 11
Share Transfer Agent
to the Board. Details on recovery proceedings
Debenture Trustee 0 1 for 2022-23 is given in Table 10.22.

Table 10.22: Recovery Proceedings by SEBI

Penalty/
CIS and DPI Matters Disgorgement / Fee Total
Description
Matters
2021-22 2022-23 2021-22 2022-23 2021-22 2022-23
No. of Recovery Certificates / Notice
49 28 1,132 937 1,181 965
of Demand drawn by SEBI
No. of Certificates Cancelled 2 1 162 177 164 178
Amount covered under Certificates
15,326 5,604 430# 427# 15,756 6,031
(` crore)
Amount Recovered (` crore) 75 97 77 88* 152 185
No. of Certificates where recovery is
0 0 330 451 330 451
completed
No. of Certificates pending at the end
378 408 2,494 2,795 2,872 3,203
of Financial Year
Notes: #Amounts in Penalty/Disgorgement/Fee cases includes interest and costs till the date of issuance of Recovery
Certificate.
*Figures are subject to reconciliation with the banks.

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 Annual Report 2022-23

A. Outstanding Recovery Proceedings

A total of 5,444 Recovery Certificates were generated till March 31, 2023, out of which 3,203
Recovery Certificates are pending as on March 31, 2023 (Table 10.23).

Table 10.23: Category-wise Pending Recovery Certificates

Amount due as per Recovery
No. of Recovery Certificates
Category Certificate (` crore)
2021-22 2022-23 2021-22 2022-23
Collective Investment Schemes 103 117 70,415 75,643
Deemed Public Issues (DPI) 275 291 22,046 22,436
Disgorgement 76 60 3,040 3,070
Penalties 2,415 2,732 1,092 1,364
Fees 3 3 16 16
Total 2,872 3,203 96,609 1,02,529

Out of the total amount of `1,02,529 crore based on the policy prevalent in Income
to be recovered, `63,206 crore (which Tax Department. Segregation of such DTR
is 61.7 per cent of the total amount due) dues is purely an administrative act and
pertains to CIS/DPI matters of PACL Ltd. this will not preclude the Recovery Officers
and Sahara India Commercial Corporation from recovering the amount so segregated
Ltd., respectively. as DTR as and when there is a change in
any of the DTR parameters.
A total amount of `70,482.62 crore (which
is 68.7 per cent of the total amount due, As on March 31, 2023, out of the pending
i.e. `1,02,529 crore) is subject to parallel 3,203 Recovery Certificates, 692 Recovery
proceedings before various Courts and Certificates have been certified as DTR
Court appointed committees. In these and the total amount under these DTR
cases, SEBI’s recovery proceedings are certificates is `73,287 crore. (Table 10.24).
subject to directions/ approvals of respec-
tive Court/committee. Matters where In- Table 10.24: Break-up of Difficult to Recover
solvency and Bankruptcy Code (IBC) is Cases
invoked, SEBI’s recovery proceedings are Particulars 2021-22 2022-23
affected by the moratorium under the said Death (no assets left behind) 2 8
Code. In the matter of HBN Dairies and Al- Defaulter is alive but has no 49 83
lied Ltd., SEBI had challenged the NCLAT attachable assets
ruling that the IBC overrides the SEBI Parallel proceedings pend- 21 30
Act, 1992 and the same is pending before ing before State PID Courts,
NCLT and NCLAT
Hon’ble Supreme Court in Civil Appeal No.
Pending before Court ap- 41 56
5089/2019. pointed committees
Defunct Company 238 341
B. Difficult to Recover Dues Untraceable 94 120
Difficult to Recover (DTR) dues are the Under Liquidation 1 7
dues which could not be recovered even Stay/Moratorium by Courts 26 47
after exhausting all the modes of recovery Total no. of Certificates 472 692
and therefore for optimal utilisation of al- declared as DTR
located resources, the policy was made Total outstanding amount
67,228 73,287
by SEBI for including certain parameters (` crore)

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 Chapter 10 Regulatory Action, Supervision and Enforcement

C. Matters Sub-judice before Various Fora certificates are drawn. Majority of these
 There are 307 cases pending before matters are sub-judice before the Hon’ble
various Courts, Tribunals and other Securities Appellate Tribunal (SAT) (Table
fora related to matters where recovery 10.25).

Table 10.25: No. of Matters Pending before Various Fora

Total amount as per
No. of Recovery
No. of Cases Recovery Certificate
Court/Forum certificates
(` crore)
2021-22 2022-23 2021-22 2022-23 2021-22 2022-23
Supreme Court* 28 71 27 62 50,346 64,509
High Court# 57 70 74 61 12,173 18,783
Securities Appellate Tribunal 169 101 177 119 14,388 395
State PID Courts, NCLT/
NCLAT, Civil Courts, 53 65 34 22 13,212 4,440
Consumer Forum, etc.
Total 307 307 312 264 90,119 88,127
Note: *including the matter of PACL where Justice (Retd.) R. M. Lodha Committee has been appointed by Hon’ble Supreme
Court.
#including several matters where Justice S.P. Talukdar Committee has been appointed by Calcutta High Court.

D. Special Enforcement Cell passed by SEBI, an aggregate amount of

 The Special Enforcement Cell was
constituted by SEBI to specifically
implement the directions of the Supreme
Court dated August 31, 2012 with respect
to refund the amounts collected from
investors of Sahara India Real Estate
Corporation Ltd. (SIRECL) and Sahara
Housing Investment Corporation Ltd.
(SHICL) under the Red Herring prospectus
(RHP) issued by them. In accordance with
the directions contained in the judgment
of the Supreme Court, the actions of SEBI
are overseen by Justice (Retd.) B. N.
Agarwal appointed by the Supreme Court
in this matter. The progress relating to this
case is provided in the status reports filed
before the Supreme Court from time to
time. As on March 31, 2023, SEBI has filed
23 Status Reports.
i. 
Amount Received from SIRECL and
SHICL
 Pursuant to various orders passed by
the Supreme Court in this case and the
attachment Orders dated February 13, 2013
`15,646.68 crore has been recovered as
on March 31, 2023. This amount along
with the accrued interest after due refunds
to the eligible bondholders, was deposited
in nationalized banks in terms of the
judgment dated August 31, 2012 of the
Supreme Court. As on March 31, 2023,
the total amount deposited in nationalized
banks is around `25,163 crore.
ii. Status of Refunds made by SEBI
As on March 31, 2023, SEBI has received
19,650 applications involving 53,687 ac-
counts. Refunds have been made with
respect to 17,526 applications involving
48,326 accounts for an aggregate amount
of `138.07 crore including the interest
amount of `67.98 crore (Table 10.26). The
remaining applications were closed either
due to their records not being traceable in
the documents/data provided by SIRECL
and SHCIL or on account of no response
received from the bondholders on the que-
ries raised by SEBI.

169
 Annual Report 2022-23
Table 10.26: Status of Refunds made by SEBI
Particulars
Application received with Original Bond
Certificates/ Passbooks
Closed cases (Investor not responded/
No Record Found Cases – Received after
01/04/2016)
Cases already refunded
Note: There is no change in status of refunds from the year 2021-22, as SEBI (after processing of all the applications
received up to cut-off date i.e., July 2, 2018) is awaiting further directions from the Hon’ble Supreme Court.
*An application may fall in more than one category; hence, the number of cases are not mutually exclusive.
E. PACL Cell
 The Hon'ble Supreme Court vide order
dated February 02, 2016 in the matter of
C. A. No. 13301 of 2015 titled Subrata
Bhattacharya Vs. SEBI and other con-
nected matters directed SEBI to constitute
a Committee under the Chairmanship of
Justice (Retd.) R M Lodha for disposing
of the properties of PACL Ltd. so that the
sale proceeds can be distributed to the in-
vestors, who have invested funds in the
PACL Ltd. Accordingly, SEBI has consti-
tuted a committee under the chairmanship
of Justice (Retd.) R.M. Lodha (hereinafter
referred to as the "Committee"). In further-
ance to its mandate, the Committee has
taken the following steps:
i. Status of Refunds Made:
 The Committee initiated the process of
refund (first process) to the investors hav-
ing outstanding claims upto `2,500/- in
the year 2018. After verification of claims,
the Committee distributed `18.16 crore in
respect of 1,89,103 eligible claim applica-
tions.
Thereafter, the Committee invited claim
applications (second process) from all in-
vestors having outstanding claims with
PACL Ltd. through an online portal (http://
Account / Amount Claimed
No. of Cases*
Control Nos. by Bondholder (`)
19,650 53,687 823,116,907
2,748 5,361 68,801,303
Principal: 70,09,05,000
17,526 48,326
Interest: 67,98,86,131
sebipaclrefund.co.in/) in the year 2019.
The Committee received 1,50,29,573
claim applications with a total outstanding
claims amount (principal) of `28,733.75
crore.
The Committee, keeping in view the lim-
ited corpus available at its disposal, de-
cided to pay the claims of investors in a
staggered manner. The claim applications
are verified and in respect of eligible appli-
cations, the payments are credited directly
to the bank accounts of the investors, as
provided by them in their applications, by
way of electronic transfer. After effecting
the payment, investors are informed of the
same by way of SMS.
Investors whose claim applications were
found deficient during the verification pro-
cess have been provided multiple opportu-
nities to rectify the deficiencies.
As on March 31, 2023, the Committee has
effected refunds in respect of 18,43,010
eligible applications with outstanding claim
(principal) amount upto `15,000/-, aggre-
gating to a total disbursal of `831.78 crore.
The details of refunds made to the PACL
investors till March 31, 2023 are given in
Table 10.27.
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 Chapter 10 Regulatory Action, Supervision and Enforcement

Table 10.27: Refunds made to the PACL Investors till March 31, 2023
Amount
Type of Claim
Refund Process No. of Claim Applications Refunded
Applications
(` crore)
First Refund Process (From
Having claim amount 1,89,103 applications with claim
January 02, 2018 till March 18.16
upto `2,500/- amount of upto `2,500/-
03, 2018)
Second Refund Process
Having any outstanding 16,53,907 applications with
(From February 08, 2019 till 813.62
claim amount claim amount of upto `15,000/-
July 31, 2019)
Total 18,43,010 applications 831.78

Based on the funds available at its • Proposal II - Proposal for the sale of all the
disposal, the Committee has initiated properties in a cluster (all properties in a
refund exercise with respect to claim district to be considered as one unit).
applications with outstanding claim The said report is pending before the
amount (principal) of more than `15,000/- Hon’ble Court for consideration.
and upto `17,000/-.
10.2.5 Prosecution Proceedings
ii. Sale of Properties: During 2022-23, 64 prosecution cases were
 Hon'ble Supreme Court, by an order launched against 127 persons/ entities as
dated January 23, 2020, inter alia, had compared to 86 prosecutions launched against
requested the Committee to finalise and 211 persons/ entities in 2021-22. Details are
notify the terms and conditions for the given in Table 10.28 and Table 10.29.
sale of properties of PACL Ltd., including
Table 10.28: Prosecutions Launched
the terms and conditions stipulated by
Total till the end of
the Hon’ble Supreme Court. The Hon’ble During the Year
the Year
Court had further requested the Committee Year Against Against
to submit a report after the conclusion No. of No. of No. of No. of
cases Persons/ cases Persons/
of the above process. The Committee, Entities Entities
thereafter, took the requisite steps and at 2021-22 86 211 1,930 8,280
the end of the process, received only four 2022-23 64 127 1,994 8,407
offers. However, none of these offers met
the condition of submission of EMD of Table 10.29: Nature of Violations in Prosecutions
`150 crore, as stipulated by Hon’ble Court. Launched
The Committee, accordingly, filed its report No. of cases filed
Nature of Violation during
in the Hon'ble Court on March 05, 2020,
2021-22 2022-23
which is pending for consideration. Non-payment of Penalty Imposed by 59 49
Adjudication Officer/Whole Time Member
The Committee, thereafter, in a report dated Violation of CIS Regulations, 1999 1 6
September 24, 2021 has suggested two Non-compliance with Directions Issued 21 5
by the Board
proposals/ options for the sale of properties Violation of PFUTP Regulations, 2003 1 3
of PACL Ltd. for the consideration of the Indian Penal Code 0 1
Hon'ble Supreme Court, viz. Violations under Companies Act, 1956 3 0
• Proposal I - Proposal to sell 1000 properties Non-compliance with Summons Issued 1 0
of the highest book value; and by the Investigating Officer
Total 86 64

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 Annual Report 2022-23

Out of the total prosecution cases filed upto As on March 31, 2023, the Courts have disposed
March 31, 2023, the share of Head Office/West- of 832 prosecution cases filed by SEBI, out of
ern Region was 61.5 per cent and the corre- which 245 cases resulted in convictions and
313 cases were compounded (Table 10.32).
sponding pendency was 60.5 per cent. The
region-wise data on prosecution cases filed and Table 10.32: Number of Prosecution Cases
pending are given in Table 10.30. decided by the Courts up to March 31, 2023
Table 10.30: Region-wise Data on Prosecution Type of Decision by the Courts Total
Cases Launched and Pending
Convictions 245
No. of Cases
No. Cases Filed
Region Pending Compounded 313
2021-22 2022-23 2021-22 2022-23
Abated 48
Head Office/
Western 1,169 1,227 687 705 Dismissed/Discharged 150
Region
Northern Withdrawn 71
385 389 159 161
Region
Adjourned Sine Die 4
Southern
126 126 99 96
Region Acquitted 1
Eastern Re-
gion
250 252 204 204 Total 832
Total 1,930 1,994 1,149 1,166
10.2.6 Settlement and Compounding
SEBI initiates prosecutions for violation of pro- A. Settlement
visions of the SEBI Act, 1992, Companies Act,  During 2022-23, SEBI received 386
1956/2013, Depositories Act, 1996, SCRA, settlement applications under regular
1956, and the Indian Penal Code, 1860. A total settlement procedure. 185 applications
of 1,994 prosecution cases were launched up to were disposed of by passing appropriate
March 31, 2023, out of which 1,683 cases were settlement orders, while 285 applications
pertaining to violation of the provisions under were returned, rejected or withdrawn.
the SEBI Act, 1992 (Table 10.31). Settlement orders were passed for alleged
violations of various regulations, viz.,
Table 10.31: Nature of Prosecution Cases SAST Regulations, 2011; PIT Regulations,
Launched
2015; PFUTP Regulations, 2003; LODR
Number of Cases Regulations, 2015; FPI Regulations, 2019;
launched upto
Violation Alleged w.r.t. AIF Regulations, 2012; RTA Regulations,
March March
31, 2022 31, 2023 1993 and MF Regulations, 1996.
SEBI Act, 1992 1,621 1,683
SEBI Act, 1992 & SCRA, 1956 98 99 Of the 185 applications settled during the
SEBI Act, 1992, SCRA & year, an amount of `125.56 crore was
2 2
Companies Act 1956/2013 remitted to the Consolidated Fund of India
SEBI Act, 1992 & Companies
Act 1956/2013
74 74 (CFI) as settlement amount, including `3
SEBI Act, 1992 & Indian Penal lakh towards summary settlement amount
5 5
Code, 1860 (Table 10.33). In addition to this, `3.88
Companies Act, 1956 86 86 crore was agreed to be paid as disgorged
SCRA, 1956 7 7 amount that was credited to the IPEF and
Depositories Act, 1996 29 29 `44.27 lakh was paid as legal charges.
Indian Penal Code, 1860 8 9
Total 1,930 1,994

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 Chapter 10 Regulatory Action, Supervision and Enforcement

Table 10.33: Settlement Applications Filed with B. Compounding

SEBI  During the year, 20 applications were
Year 2021-22 2022-23 compounded and `223.4 lakh was
Pending at the beginning of received towards compounding charges.
150 221
the period As on March 31, 2023, there were 65
No. of settlement applications applications pending with Courts for
345 386
received compounding (Table 10.35).
No. of applications disposed of
107 185*
by passing orders1 Table 10.35: Compounding Applications Filed by
No. of applications rejected/ the Accused in Criminal Courts
167 285
withdrawn/returned
Year 2021-22 2022-23
Pending at the end of the
221 137 Pending at the beginning of the
period 24 9
period
Settlement Amount (` crore)2 59.19 125.56
No. of applications filed 2 77
Note:
No. of applications compounded 17 20
1. The number of applications may include disposed
applications filed during the previous financial years No. of applications rejected 0 1
2. Out of the total settlement amount of `1,25,55,66,982/; Pending at the end of the period 9 65
`1,25,52,66,982/- was received towards settlement
Compounding charges received
amount while `3,00,000/- was paid towards the 108.8 223.4
by SEBI (` lakh)
summary settlement amount.
*Includes 12 entities who availed SEBI Settlement
Scheme, 2022 and SEBI Settlement Scheme for Stock 10.3 LITIGATIONS
Brokers, 2022

10.3.1 Appeals in Securities Appellate

Additionally, `118.85 crore and `2.08 crore
Tribunal
received towards settlement terms, through
During 2022-23, the number of new appeals filed
consolidated settlement orders involving 10,981
before the Hon’ble SAT increased significantly
entities under the SEBI Settlement Scheme,
to 1,192 compared to 780 in the previous year.
2022 and 125 brokers under the SEBI Settle-
This year, the number of disposals by the
ment Scheme for Stock Brokers, 2022,
Hon’ble SAT also saw a significant increase, as
respectively, were also credited to the CFI
1,131 appeals were disposed of in comparison
(Table 10.34)
to 715 disposals in 2021-22. Out of the 1,131
Table 10.34: Settlement Schemes disposals, 606 appeals (53.6 per cent) were
Number dismissed, 178 appeals (15.7 per cent) were
Number of
Settlement
allowed and 201 appeals (17.8 per cent) were
of entities entities remanded for fresh consideration (Table
Amount
Scheme(s) eligible that
under the availed
received 10.36). During the year, the Hon’ble SAT gave
(` crore) judgments in certain important cases such as
Scheme the
Scheme NSE Co-Location group matter, New Delhi
SEBI Settlement Television Ltd. group and Satyam Computers.
13,702 10,981 118.85
Scheme, 2022
SEBI Settlement
Scheme for Stock 150 125 2.08
Brokers, 2022

173
 Annual Report 2022-23

Table 10.36: Status of Appeals before SAT with respect to Insider Trading Regulations, 44
Status of Appeals 2021-22 2022-23 per cent of the appeals were allowed.
Appeals pending at the begin-
632 697
ning of the year During the year, the Hon’ble SAT while deciding
Appeals filed during the year 780 1,192 a group of appeals in ISO Segment at BSE took
Appeals Dismissed 383 606* cognizance of the number of cases pending
Appeals Remanded 140 201 before the various Adjudicating Officers (AOs)
Appeals Allowed 138 178 of SEBI and noted that such cases are clogging
SEBI Orders upheld with the dockets of AOs. Considering the same,
40 128
modifications the Hon’ble SAT issued directions to devise
Appeals Withdrawn 14 18 a scheme to settle such cases. In compliance
Appeals Pending at the end of with the directions of the Hon’ble SAT, a
697 758
the year scheme, namely Settlement Scheme-2022,
Note: *Includes 172 appeals disposed in the Illiquid Stock was introduced and the same elicited positive
Options matters post initiation of Settlement Scheme, response from the noticees resulting into
2022 wherein the entities were granted the benefit of the
settlement scheme.
settlement of proceedings by 10,981 entities.

Majority of the disposed-off appeals 10.3.2 Appeals in Supreme Court

(approximately 67 per cent) pertained to
the violation of the provisions of the PFUTP
Regulations, 2003, of which approximately 60
per cent of the appeals were dismissed, 13
per cent were allowed and 16 per cent were
remanded. With respect to Takeover regulations,
only 10 per cent of appeals were allowed and
As on March 31, 2023, there were 440 cases
pending before the Supreme Court, compared
to 372 pending in the previous year (Table
10.37). Of the 73 cases disposed of during the
year, 54 cases were disposed of in favour of
SEBI, while 19 were disposed of against SEBI.

Table 10.37: Status of Litigation before Supreme Court

2021-22 2022-23
Particulars
Filed Disposed Pending Filed Disposed Pending
Cases filed by SEBI 53 28 173 69 27 215
Cases filed by Parties 65 22 199 72 46 225
Total 118 50 372 141 73 440
Note: Figures are excluding recovery litigations.

10.3.3  itigations in High Courts and

L 1,142 cases in the previous year (Table 10.38).
Other Forums Of the 248 cases disposed of during the year,
As on March 31, 2023, there were 1,132 cases 242 cases were disposed of in favour of SEBI,
pending before the High Courts, compared to while six were disposed of against SEBI.

Table 10.38: Status of Litigation before High Courts

Particulars 2021-22 2022-23
Filed Disposed Pending Filed Disposed Pending
Cases filed by SEBI 5 6 68 21 6 83
Cases filed by Parties 203 261 1,074 217 242 1,049
Total 208 267 1,142 238 248 1,132
Note: Figures are excluding recovery litigations.

174
 Chapter 10 Regulatory Action, Supervision and Enforcement

As on March 31, 2023, there were 443 cases previous year (Table 10.39). 92 cases were
pending before Other Forums (apart from disposed of in favour of SEBI, while five cases
Supreme Court, High Court, SAT and SEBI were disposed of against SEBI.
Special Court) compared to 338 cases in the

Table 10.39: Status of Litigation before Other Forums

Particulars 2021-22 2022-23
Filed Disposed Pending Filed Disposed Pending
Cases filed by SEBI 0 1 7 11 3 15
Cases filed by Parties 68 40 331 191 94 428
Total 68 41 338* 202 97 443
Note: Figures are excluding recovery litigations.
*12 cases pertaining to Recovery related litigation are segregated and reflected in the respective parts.

During 2022-23, 1,835 cases were filed and 1,596 cases were disposed of across various judicial
forums. 3,937 cases were pending at different stages before various judicial forums, as on March 31,
2023 (Table 10.40).
Table 10.40: Fora-wise Status of Cases
Pending as Pending as
Filed During Disposed dur-
Forum on March 31, on March 31,
2022-23 ing 2022-23
2022 2023*
Supreme Court 372 141 73 440
High Court 1,142 238 248 1,132
Securities Appellate Tribunal 697 1,190 1,131 756
SEBI Special Court 1,149 64 47 1,166
Civil Courts 100 22 24 98
Criminal Court (Other than criminal
0 1 1 0
complaints filed by SEBI)
Consumer Forum 165 158 54 269
NCLT 47 16 12 51
NCLAT 8 2 4 6
Labour Commissioner /Labour Court 6 1 0 7
Commissioner of GST & CX / Sales
2 0 0 2
Tax Appellate Tribunal
Commissioner of Income Tax 6 0 0 6
Permanent Lok Adalat 4 0 2 2
The Debt Recovery Tribunal 0 1 0 1
Bar Council of India 0 1 0 1
Total 3,698** 1,835 1,596 3,937
Note: *Excluding recovery litigations.
**12 cases pertaining to Recovery related litigation are segregated and reflected in the respective parts.

175
 Annual Report 2022-23
10.3.4 Important Court Pronouncements
A. Supreme Court of India
i.  Order dated October 13, 2022 in the
matter of SEBI vs. National Stock
Exchange Members Association (CA
No. 435/2007, CA 5076 of 2007 and CA
No. 3003 of 2011)
The appeal was filed by SEBI challenging
the order dated November 07, 2005
passed by Division Bench of Hon’ble Delhi
High Court, vide which the Hon’ble High
Court had declared paragraph (vi) of Part
A of the Circular dated March 28, 2002 to
be inconsistent with Section 12(1) of the
SEBI, Act 1992. The Circular dated March
28, 2002 provides that every stock broker
who has a certificate of registration has
to pay the fees in terms of Regulation 10
read with Schedule III of the SEBI (Stock
Brokers) Regulations, 1992, for every
certificate of registration that such stock
broker holds. The Hon’ble High Court
directed that single registration is sufficient
even if he has membership and functions
from several stock exchanges and directed
SEBI to refund the fees collected for any
subsequent registration.
On appeal filed by SEBI against the
aforesaid Order, Hon’ble Supreme Court,
vide judgment dated October 13, 2022
set aside the order of Hon’ble Delhi High
Court while holding that a stock broker
has to obtain a certificate of registration
from SEBI for each of the stock exchange
where such broker operates and has to
pay ad valorem fee prescribed in terms of
Regulation 10 read with Schedule III of the
SEBI (Stock Brokers) Regulations, 1992
for each such registration.
ii. 
Order dated August 30, 2022 in the
matter of SEBI vs. Rajkumar Nagpal &
Ors. (CA No. 5247/2022)
In a Suit filed by certain debenture
holders of Issuer company- RCFL, the
176
Single Judge, Bombay High Court vide
order dated October 28, 2021 held that
SEBI circular dated October 13, 2020,
in respect of entering Inter-Creditor
Agreement (ICA) and consequently
Resolution Plan, could not be permitted
to operate retrospectively and did not
govern the Debenture Trust Deeds (DTD)
since the same precede the SEBI Circular
in time. It was also held vide Clarificatory
Order dated November 15, 2021 that a
mere reference to the SEBI circular in
the supplementary trust deeds (signed
after issuance of SEBI circular) would not
override the express terms of any of the
debenture trust deeds.
SEBI assailed Ld. Single Judge orders
dated October 28, 2021 and November
15, 2021 by preferring appeal before a
Division Bench of the High Court, which
dismissed the said appeal of SEBI. SEBI
assailed Division Bench order dated March
21, 2022 by preferring Appeal before the
Hon`ble Supreme Court which vide order
dated August 30, 2022 partly allowed
the said appeal upholding the retroactive
application of the SEBI circular. Further,
the Hon’ble Court exercised the power
under Article 142 of Constitution of India
and observed that a dissenting debenture
holder should be provided an option to
accept the terms of the Resolution Plan.
Alternatively, the dissenting debenture
holders have a right to stand outside the
proposed Resolution Plan framed under
the lender’s ICA and pursue other legal
means to recover their entitled dues.
Further, it was held that a contractually
vested right may be taken away by the
operation of a statutory instrument and
since in the present case, the clauses 22
and 23 of DTD were in conflict with the
SEBI circular, which owes its existence
to statutory powers conferred by a
 Chapter 10
special legislation, the Circular will take
precedence over the DTD Clauses.
iii. 
Order dated July 11, 2022 in the matter
iv. 
of SEBI vs. Sunil K. Khaitan & Ors. (CA
No. 8249 of 2013) and SEBI vs. Madhuri
S Pitti (CA No. 1762 of 2014)
The appeal was preferred challenging order
dated June 19, 2013 passed by Hon’ble
SAT, involving question of law whether
Regulation 10 of the SAST Regulations,
1997 would be applicable to an acquirer
when the shareholding/ voting rights of
such acquirer exceeds the stipulated
threshold of 15 per cent in a company,
even though the collective shareholding/
voting rights of such acquirer along with
persons acting in concert is already more
than the stipulated threshold.
The Hon’ble Supreme Court held that:
• There would not be any violation of
Regulation 10 if the ‘acquirer’, which would
include the ‘person acting in concert’,
acquires new shares or voting rights when
he individually or along with the ‘person in
concert’ already holds more than 15 per
cent shares in the target company.
• The discretion granted to SEBI under
Regulations 44 and 45 of the SAST
Regulations, 1997 is necessary to meet
unusual and practical situations and to do
justice in a particular case and needs to be
exercised in consonance with legitimate
values of public law.
• In the absence of any period of limitation
prescribed by the enactment, every
authority is to exercise power within a
v. 
reasonable period depending upon factors
such as whether the violation was hidden
and camouflaged and thereby such
authority did not have any knowledge of
the violations concerned.
• SAT cannot substitute the penalty imposed
by the Board under Regulation 44 of
the SAST Regulations, 1997 with that of
177
Regulatory Action, Supervision and Enforcement
penalty under Section 15-H of SEBI Act,
1992.
Order dated September 14, 2022 in the
matter of Kavi Arora vs. SEBI (SLP No.
15149 of 2021)
The SLP was filed against the order dated
September 15, 2021 passed by Hon’ble
Bombay High Court, vide which the Writ
Petition seeking directions to SEBI to
forthwith furnish relied upon documents
in the WTM proceedings and a copy of
the opinion formed under Rule 3 of the
SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer)
Rules, 1995 (Rule 3), for constituting an
Adjudicating Authority to issue SCN to the
Petitioner was dismissed.

The Hon’ble Supreme Court while
dismissing the SLP held that at the stage of
appointment of Adjudicating Authority, the
Board only forms an opinion as to whether
there are prima-facie material available
justifying initiation of inquiry against the
noticee. The opinion of the Board under
Rule 3 has nothing to do with outcome of
the enquiry and the documents relied upon
for formation of opinion under Rule 3 are
not required to be disclosed to the noticee
unless relied upon in the inquiry. The
Hon’ble Supreme Court while referring
to the judgment in the case of Natwar
Singh, held that the documents which are
not relied upon need not be given to the
noticee.
Order dated September 14, 2022 in the
matter of DKG Buildcon Pvt. Ltd. vs. AO,
SEBI connected with RC Gupta & Co.
Pvt. Ltd. vs. SEBI (CA No. 5833/2009)
The captioned appeals were filed before
the Hon’ble Supreme Court against SAT
order dated January 07, 2009 vide which
SAT had upheld SEBI’s imposition of
penalty on the ground that the appellants
 Annual Report 2022-23
had not complied with the requirements
of the summons. The appellants inter-
alia contended that non-compliance of
summons was not a continuing wrong and
also that the AO could only have levied
a penalty of `1.5 lakh as per the section
15A(a) of the SEBI Act existing before
amendment of 2002 since the summons
dated April 1, 2003 and April 9, 2003
were issued in continuance of the earlier
summons.
While dismissing both the appeals, the
Supreme Court held that, the appellants
were bound to fully co-operate with the
Investigating Authority and promptly
produce all documents, records, and
information as were required for the
investigation from time-to-time. In failing
to do so, the appellants clearly obstructed
and hindered the investigation. The
penalty of rupee one crore imposed by AO
was upheld.
Order dated September 19, 2022 in the
vi. 
matter of SEBI vs Abhijit Rajan (CA No.
563 of 2020)
SEBI had vide order dated July 13, 2016,
in the matter of Gammon India Project
Ltd. (GIPL) directed for disgorgement of
amount of unlawful gains for trading and
averting loss based on the UPSI, which
was in violation of provisions of SEBI
Act, 1992 and PIT Regulations, 2015.
SAT vide Order dated July 13, 2016 set
aside the SEBI Order holding that the
respondent had no motive or intention to
make undeserved gains by encashing on
the UPSI that he possessed.
The Hon’ble Supreme Court vide judgment
dated September 19, 2022 affirmed that the
Respondent herein was an insider and the
said information was UPSI. It was further
observed that theory of proportionality
and rule of De Minimis cannot be applied
178
to cases of insider trading, however, the
Court can always test whether the act of
the insider in dealing with the securities,
was an attempt to take advantage of or
encash the benefit of the information in his
possession.
Order dated April 19, 2022 in the matter
vii. 
of Shivani Gupta & Ors. vs. SEBI (CA
No. 7590 of 2021) and Balram Garg vs.
SEBI (CA 7054 of 2021)
 The matter related to insider trading in
the scrip of PC Jeweller Ltd. where the
Appellants had traded in the scrip while in
possession of UPSI. SEBI vide its order
dated May 11, 2021 had inter-alia directed
for disgorgement of illegal gain as well as
imposed penalty of `20 lakh on each of the
appellants.
Hon’ble SAT vide its order dated April 19,
2022 upheld the SEBI Order. However,
the Hon’ble Supreme Court while allowing
the Appeal and setting aside SEBI and
SAT Orders, observed that SAT has
erred in upholding the SEBI Order as it
has failed to independently assess the
evidence and material on record and that
SAT concluded merely on preponderance
of probability. It was further held that
the onus was completely on SEBI that
Appellants were in possession of or having
access to UPSI. It was also held that in
the absence of any material available on
record to show frequent communication
between the parties, there could not have
been a presumption of communication of
UPSI and that trading pattern cannot be
the circumstantial evidence to prove the
communication of UPSI.
B. High Court
Order dated September 12, 2022 in the
i. 
matter of Manish Goel vs. SEBI & Ors.
before the Hon’ble Punjab & Haryana
High Court (CWP No. 17547 of 2022)
 Chapter 10

The Petitioner had challenged the
constitutional validity of the Regulation 2,
16(3), 27 and 31 of the SEBI (Research
Analysts) Regulations, 2014 on the ground
that the aforesaid regulations impose
unreasonable conditions / restrictions on
the public, including the petitioner and thus,
violate Article 19(1)(a), 19(1)(g) and 19(6)
of the Constitution of India. Similar issues
were also raised by the petitioner before
the SEBI by way of making representation,
which were responded with vide detailed
letter reply.
The Court while dismissing the petition
vide judgment dated September 12, 2022,
placed reliance on the aforesaid letter /
reply and held that the provisions of RA
Regulations, 2014 were framed with a
view to protect the interest of investors in
the securities market and hence were not
ultra vires the Constitution of India.
Earlier the petitioner had also approached
the Hon’ble Supreme Court (W. P (Civil)
No. 275 of 2022) wherein the Hon’ble Apex
Court, vide Order dated May 20, 2022
dismissed the petition as withdrawn since
the Petitioner had remedy of approaching
the concerned High Court
Order dated February 14, 2022 in the
ii. 
matter of Sandeep Kumar Poddar vs.
Union of India & Ors. (WPA:17301/2021)
Petition was filed challenging SCN issued
by the Adjudicating Authority in a matter
pertaining to ISO on various grounds such
as jurisdiction of SEBI to issue notice,
power of SEBI for proposing investors to
enter into settlement and whether AO being
authorized officer of SEBI, can adjudicate
its own dispute, among others.
The petition was dismissed by Hon’ble High
Court while observing that the petitioner
may participate in the proceedings and if
179
Regulatory Action, Supervision and Enforcement
aggrieved by any order passed by SEBI,
petitioner may file appropriate appeal
before SAT.
iii. 
Order dated September 12, 2022 in
the matter of Multibagger Securities v.
SEBI (CWP No. 18732 of 2022) before
the Hon’ble Punjab and Haryana High
Court
The petitioner challenged the constitutional
validity of Sections 11C(3), 11C(5), 11C(6)
and 11C(7) of SEBI Act, 1992, inter alia,
on the ground that the same impose
unreasonable conditions/ restrictions to
the public including the petitioner and
deprive the petitioners and public of their
fundamental rights and hence alleged the
said provisions to be violative of Articles
19(1)(a), 20(3) and 21 of the Constitution
of India.
The Hon’ble Punjab & Haryana High Court
vide its detailed judgment dismissed the
Petition and upheld the validity of the
impugned provisions of SEBI Act,1992
while observing that powers conferred
by such provision is necessary to be
exercised in public interest and to protect
investors. It was also observed that
SEBI has the statutory powers to ask for
information from the persons proceeded
against and it is obligatory for such
persons to cooperate with the investigation
by furnishing information in person or
producing documents in their possession.
Order dated November 30, 2022 in
iv. 
the matter of Securities & Timeshare
Welfare Owners Association vs. Union
of India & Anr. (PIL No. 12 of 2017)
before Bombay High Court

The PIL sought directions to the
Respondents (SEBI & Union of India) to
enforce Section 11AA of the SEBI Act,
1992 and the CIS Regulations, 1999
 Annual Report 2022-23
against all Time-share companies. Vide
order dated November 30, 2022, the PIL
was dismissed by the Bombay High Court
while imposing a cost of `25,000 on the
petitioner to be paid to SEBI. The Court
observed that:
• For SEBI to govern a particular activity or
an entity, such activity has to be in relation
to a security. Any scheme or arrangement
under the sun not involving a security
would not be the concern of the SEBI.
• Time-share as commonly understood is a
holiday membership plan scheme giving
benefit of a holiday stay in the hotels to
members after they have paid/invested an
amount under the scheme.
• All the schemes, which are not exempted
under Section 11-AA (3) cannot be said to
be CIS ipso facto.
• Whether Time-share activities can be
considered as a CIS is a question that would
depend upon the facts and circumstances
of each case and whether they satisfy
the said conditions or not will have to be
interpreted and analyzed according to the
facts and circumstances of each scheme
by SEBI.
• It would only be when SEBI receives
a complaint, examines the activities
complained of in relation to the SEBI
Act, 1992 and CIS regulations, 1999, it
can ascertain whether a scheme or an
arrangement between the investor and the
so called Timeshare company is a CIS or
not.
C. Securities Appellate Tribunal
i. 
Order dated January 23, 2023 in Appeal
No. 333 of 2019– NSE Vs. SEBI and
other connected appeals in the matter
of NSE Co-location facility provided by
NSE.
A batch of appeals were filed against SEBI’s
Order dated April 30, 2019, whereby NSE
was held to have violated the provisions
of Regulations 41(2) and 42(2) of the
180
Securities Contracts (Regulation) (Stock
Exchanges and Clearing Corporation)
Regulations, 2012 and Clause 4(i) of the
SEBI Circular dated March 30, 2012. Mr.
Ravi Narain and Ms. Chitra Ramakrishna
(former MD and CEO of NSE during
respective periods) were held to have
violated the provisions of Part A and Part
B of Schedule II of SECC Regulations r/w
Regulations 26(1) and 26(2) of the SECC
Regulations and Clause 3.8.1 of SEBI
Master Circular dated December 31, 2010.
SEBI had conducted an investigation on
receipt of certain complaints in respect of
co-location facilities provided by NSE. Upon
completion of investigation, proceedings
were initiated and vide Order dated April
30, 2019, SEBI found various deficiencies
and inadequacies in the systems of NSE
like absence of load balancer, early login
advantage, dissemination of information in
pre-defined sequence, routine connection
by trading members to secondary server
even when the primary source was
available, etc.
The Hon’ble SAT while dealing with the
contentions of the appellants inter alia
held that NSE had not complied with the
SEBI Circular dated March 30, 2012. The
Hon’ble SAT vide its Order dated January
23, 2023 set aside charge of violation of
Regulation 41(2) of the SECC Regulations,
on the ground that SECC Regulations
were notified in the year 2012, whereas
the TBT architecture was put in place in
the year 2010. Violation of Regulation
42(2) of the SECC Regulations was also
set aside, while observing that the same
pertained to maintenance of books of
accounts and records by the recognised
Clearing Corporation.

With regard to the role of Managing
Director and CEO, the Hon’ble SAT inter
 Chapter 10
alia held that they are responsible for day
to day affairs in running of the Exchange
and cannot pass on the responsibility of
ii. 
non-implementation of the load balancer
or non-monitoring of the secondary server.
The Hon’ble SAT further observed that
while functions may be delegated, duty
of care, due diligence, verification by the
top management cannot be abdicated.
While considering the same, the Hon’ble
SAT held that direction for disgorgement
from salary amounts to penal recovery
and in absence of any finding of wrongful
gain being made by Mr. Ravi Narain and
Ms. Chitra Ramakrishna, such direction
cannot be issued. As regard the direction
of prohibition from associating with a
listed company or Market Infrastructure
Institution or any other market intermediary
against Mr. Ravi Narain and Ms. Chitra
Ramakrishna for a period of five years, the
same was substituted with the period of
prohibition already undergone by them.

The Hon’ble SAT also observed that
there was lack of due diligence by NSE
on account of human failure to comply
with the circulars completely in letter and
spirit. Considering the same, the Hon’ble
SAT while upholding the other directions
against NSE, set aside the direction of
disgorgement and directed NSE to deposit a
sum of `100 crore to the Investor Protection
and Education Fund. Other directions i.e.,
prohibition from accessing the securities
market for a period of six months, to carry
out system audit at frequent intervals, after
thorough appraisal of the technological
changes introduced from time to time,
reconstitute standing committee on
technology at regular intervals to take
stock of technological issues, frame a clear
policy on administering whistle blower
complaints and to initiate an inquiry under
its Employee Regulations against certain
entities and submit a report to SEBI were
181
Regulatory Action, Supervision and Enforcement
not interfered with.
Order dated January 03, 2023 in Appeal
no. 431 of 2020–Dukes products (India)
Ltd. Vs. SEBI and in other connected 41
appeals in the matter of Kelvin Fincap
Ltd.
The appeals were filed challenging the
order dated August 31, 2022 passed by
the WTM and order dated June 30, 2022
passed by the AO in the matter of Kelvin
Fincap Ltd., which held that the appellants
along with 86 other noticees, who were
connected and part of the group, had
indulged in trades that manipulated the
price of the scrip by contributing to the
price rise and thus violated the provisions
of the PFUTP Regulations, 2003. For the
said manipulation, the WTM restrained 31
noticees including some of the appellants
from accessing the securities market for
periods ranging between three months
to one year while 69 noticees including
some of the appellants were cautioned
and directed to be careful in future.
Further, AO vide aforesaid order dated
June 30, 2022 imposed the penalties
ranging from `25,000/- to `5 lakh on the
noticees including the appellants. The
impugned orders have found that the
Appellants along with the other Noticees
were connected amongst themselves by
way of common addresses, e-mail id, etc.
and were part of a common scheme of
artificially inflating the price of the scrip of
the Company, which had absolutely dismal
financials. It was further found that the said
connection among appellants and other
noticees were corroborated by the conduct
of the appellants and other notices, viz.
peculiar ways of trading in the shares of
the Company.
The Hon’ble SAT vide its orders dated
January 03, 2023 has upheld the findings
in the Order of WTM, however, it quashed
 Annual Report 2022-23
the penalty imposed by the AO, upon
some of the appellants who were earlier
cautioned by the WTM. The Hon’ble SAT
held that peculiar trading behaviour in an
illiquid scrip in which all the orders were
placed above LTP by the appellants and
the time difference in the execution of the
trades ranged from mere 2 seconds to 5
hours indicated that the appellants have
traded among themselves consistently
with the sole purpose to increase the LTP.
The contribution of each appellant in such
trades howsoever miniscule in quantity,
the same cannot be ignored since the
modus operandi was that the appellants in
connivance with the buyers were trading
amongst themselves and thus the collective
volume has to be considered rather than
the miniscule trade quantities of individual
noticees. The Hon’ble SAT further upheld
the intelligible differentia criteria adopted
by SEBI in identification of 116 entities out
of larger group of 361 entities (identified
during investigation), who had indulged
in price manipulation, as the same has
reasonable nexus with the object sought
to be achieved. It further held that SEBI
exercised intelligible differentia based on
the material before it i.e. on the basis of
alleged manipulative trades in the scrip of
Kelvin Fincap Ltd. and issued show cause
notice to these 116 entities.
Order dated January 23, 2023 in Appeal
iii. 
No. 184 of 2019-OPG Securities Pvt.
Ltd. and 3 Ors. Vs. SEBI in the matter of
OPG Securities Pvt. Ltd.
The appeal was filed against the order
of the Whole Time Member dated April
30, 2019 whereby the Stock Broker
OPG Securities Pvt. Ltd. (OPG) and its
directors were prohibited from accessing
the securities market for a period of five
years with further directions to disgorge an
amount of `15.57 crore along with interest,
for violating the provisions of Regulation
182
4(1) of the PFUTP Regulations, 2003 and
Clauses A(1), (2) and (5) of the Code of
Conduct as specified in Schedule II of
Regulation 9 of Stock Brokers Regulations,
1992. The SCN charged the Appellant
of connecting to secondary servers for
TBT data to gain unfair advantage, which
resulted in unlawful gains.

The Appellant/ OPG Securities was
connecting to secondary/ fall-back server
without consent/ permission of NSE
repeatedly despite several reprimands/
warnings/ advices by the Exchange.
Impugned order held that OPG Securities
had made unlawful gains of `15.57 crore
which could not have been made but for the
illegal connections made to the Secondary
POP Server.
The Hon’ble SAT held that, OPG gained
undue advantage in accessing the
secondary servers of the NSE and flouted
the NSE guidelines. OPG disregarded the
norms laid down by NSE in its circular/
guidelines for moving to the secondary
server, which amount to an unfair trade
practice, which is violative of Regulation
4(1) of the PFUTP Regulations, 2003.
With respect to disgorgement, the Hon’ble
SAT noted that SEBI has relied upon the
figures in the ISB (Indian Business School)
Report while determining the disgorgement
amount which are based on first login.
According to the Hon’ble SAT , since the
impugned order held that early logging in
does not give any advantage and could
only be given a probabilistic advantage,
the quantum of disgorgement on the basis
of early login becomes erroneous.
Thus, the Hon’ble SAT upheld the violations
but remitted the case to SEBI to decide the
quantum of disgorgement afresh.
 Chapter 10
Order dated January 05, 2023 in Appeal
iv. 
No. 468 of 2022 – Menika Vs. SEBI in the
matter of trading in the scrip of Swan
Energy Ltd.
The appeal was filed against the order of
the AO dated April 27, 2022, wherein a
penalty of rupees five lakh was imposed
on the appellant under Section 15HA of
the SEBI Act for executing synchronized
and reversal trades in the scrip of Swan
Energy Ltd. The activities of the appellant
were found to be in violation of Section
12A(a), (b), (c) of the SEBI Act read with
Regulation 3 and 4 of PFUTP Regulations,
2003.
The Hon’ble SAT held that though the SCN
sent vide speed post acknowledgement
due to the residential address of the
appellant was returned with a remark “no
status”, the SCN served on the e mail-id of
the appellant is sufficient service as per the
proviso to Rule 7(b) of the SEBI (Procedure
for Holding Inquiry and Imposing Penalties)
Rules, 1995. On merits of the case, the
Hon’ble SAT held that the trades involved
were deliberate synchronized trades with
proper meeting of minds in which there
was no change in the beneficial ownership
and were non-genuine which resulted
in creation of misleading appearance
of trading in the scrip. Accordingly, the
vi. 
Hon’ble SAT dismissed the appeal.
Order dated March 28, 2023 in Appeal
v. 
No. 275 of 2023–Yogendra Singh Vs.
SEBI in the matter of unauthorised use
of name of Equity 99, a SEBI registered
intermediary.
The appeal was filed against the order
of SEBI dated January 02, 2023 wherein
it was held that the appellant, through
his proprietorship firm Equity 99, was
engaging in the activities of an investment
adviser without having a valid certificate
of registration and has violated Section
183
Regulatory Action, Supervision and Enforcement
12 (1) of SEBI Act, 1992 r/w Regulation
3(1) of the IA Regulations, 2013. Vide
the aforesaid order, the appellant along
with co-noticee, was inter-alia directed to
refund, jointly and severally, the amount
received from investors/clients, as fee
or consideration and were also debarred
from accessing the securities market for
a period of three years. Furthermore, the
noticees were restrained from selling their
assets, properties and holding of mutual
funds/shares/securities held by them in
demat/physical form except for the sole
purpose of making the refunds.
The Hon’ble SAT, while upholding the
findings of the order of SEBI in toto,
observed that the website of the appellant
clearly indicated that they were projecting
stock tips under various categories
and were offering various subscription
packages upon charging different amount
for different services. The Hon’ble SAT
held that such recommendations were in
the nature of investment advisory services
and the appellant has done it without taking
a registration certificate under the relevant
regulations. Accordingly, the Hon’ble SAT
dismissed the appeal.
Order dated May 13, 2022 in Appeal No.
191 of 2022­–Shubham Singhal Vs. SEBI
in the matter of trading in Illiquid Stock
Options on BSE.
The Appeal was filed against SEBI’s Order
dated February 09, 2022 wherein it was
held that the Appellant was one of the
various entities who had executed reversal
trades, by squaring off the transaction with
significant difference in sell value and buy
value, which were non-genuine in nature
and thus created false or misleading
appearance of trading to create artificial
volume in the Stock Options Segment of
BSE. Accordingly, the Appellant was held
 Annual Report 2022-23

to have violated provisions of Regulations Mangalaben A. Doshi

3(a), (b), (c), (d) and Regulation 4(1), 4(2)
(a) of the PFUTP Regulations, 2003.
The Hon’ble SAT, while dismissing the
matter observed that the case of the
Appellant is squarely covered by its earlier
decision dated September 14, 2020 in
the matter of Global Earth. However, the
Hon’ble SAT also took cognizance of the
number of similar cases pending before
the various AOs of SEBI and noted that
such cases are clogging the dockets of
AOs. Considering the same, the Hon’ble
SAT advised SEBI to devise a scheme in
terms of Section 15JB of SEBI Act, 1992
and SEBI (Settlement) Regulations, 2018
to settle such cases in an expeditious
manner.
The recommendations of the Hon’ble SAT
were considered by SEBI and a scheme,
namely Settlement Scheme, 2022, was
made operational from August 22, 2022 to
January 21, 2023.
D. SEBI Special Court, Mumbai
i. 
Order dated April 11, 2022 in SEBI
Special Case No. 310/2014 – SEBI vs.
Criminal Complaint was filed under
Section 24(2) of the SEBI Act, 1992
against Mangalaben A. Doshi (Accused),
for non-payment of penalty of `8,00,000/-
imposed on her vide Adjudication Order
dated December 31, 2012.
After trial, the SEBI Special Court found
that SEBI has proved beyond reasonable
doubt that the accused was well aware of
the adjudication order and despite of that,
she did not pay the penalty amount and
therefore committed an offence punishable
under Section 24(2) of the SEBI Act,
1992. Accordingly, the court sentenced
the accused to pay a fine of `25,00,000/-
out of which `20,00,000/- would be paid
to SEBI as compensation and in default
of payment of said fine, she was ordered
to undergo simple imprisonment for six
months.
10.4 AMENDMENTS TO REGULATIONS
The details of the amendments of regulations
have been given in respective chapter.
The details of the amendments of regulations
have been given in respective chapter.

Sl.
Date Title
No.
Principal Regulations – 0
Amendment Regulations – 46
1 March 14, 2023 SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2023
2 February 28, 2023 SEBI (Depositories and Participants) (Amendment) Regulations, 2023
3 February 28, 2023 Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
(Amendment) Regulations, 2023
4 February 28, 2023 SEBI (Investor Protection and Education Fund) (Amendment) Regulations, 2023
5 February 14, 2023 SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2023
6 February 14, 2023 SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2023
7 February 7, 2023 SEBI (Buy - Back of Securities) (Amendment) Regulations, 2023
8 February 7, 2023 SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023

184
 Chapter 10 Regulatory Action, Supervision and Enforcement

Sl.
Date Title
No.
9 February 2, 2023 SEBI (Issue and Listing of Non -Convertible Securities) (Amendment) Regula-
tions, 2023
10 January 17, 2023 SEBI (Settlement Proceedings) (Amendment) Regulations, 2023
11 January 17, 2023 SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regula-
tions, 2023
12 January 17, 2023 SEBI (Stock Brokers) (Amendment) Regulations, 2023
13 January 11, 2023 SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations,
2023
14 January 17, 2023 SEBI (Change in Control in Intermediaries) (Amendment) Regulations, 2023
15 January 9, 2023 SEBI (Alternative Investment Funds) (Amendment) Regulations, 2023
16 January 9, 2023 SEBI (Registrars to an Issue and Share Transfer Agents) (Amendment) Regula-
tions, 2023
17 December 30, 2022 SEBI (Employees’ Service) (Third Amendment) Regulations, 2022
18 December 9, 2022 SEBI (Procedure for Board Meetings) (Amendment) Regulations, 2022
19 December 5, 2022 SEBI (Listing Obligations and Disclosure Requirements) (Seventh Amendment)
Regulations, 2022
20 November 24, 2022 SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2022
21 November 21, 2022 SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regu-
lations, 2022
22 November 15, 2022 SEBI (Mutual Funds) (Third Amendment) Regulations, 2022
23 November 15, 2022 SEBI (Alternative Investment Funds) (Fourth Amendment) Regulations, 2022
24 November 15, 2022 Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
(Second Amendment) Regulations, 2022
25 November 14, 2022 SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Reg-
ulations, 2022
26 November 9, 2022 SEBI (Issue and Listing Of Non - Convertible Securities) (Second Amendment)
Regulations, 2022
27 November 9, 2022 SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2022
28 November 9, 2022 SEBI Infrastructure Investment Trusts) (Second Amendment) Regulations, 2022
29 November 9, 2022 SEBI (Payment of Fees) (Amendment) Regulations, 2022
30 November 9, 2022 SEBI (Substantial Acquisition of Shares And Takeovers) (Amendment) Regula-
tions, 2022
31 August 22, 2022 SEBI (Portfolio Managers) (Amendment) Regulations, 2022
32 August 11, 2022 Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
(Amendment) Regulations, 2022
33 August 3, 2022 SEBI (Mutual Funds) (Second Amendment) Regulations, 2022
34 August 1, 2022 SEBI (Intermediaries) (Amendment) Regulations, 2022

185
 Annual Report 2022-23

Sl.
Date Title
No.
35 July 25, 2022 SEBI (Issue of Capital And Disclosure Requirements) (Third Amendment) Regula-
tions, 2022
36 July 25, 2022 SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Reg-
ulations, 2022
37 July 25, 2022 SEBI (Alternative Investment Funds) (Third Amendment) Regulations, 2022
38 June 22, 2022 SEBI (Employees’ Service) (Second Amendment) Regulations, 2022
39 May 10, 2022 SEBI (Collective Investment Schemes) (Amendment) Regulations, 2022
40 May 4, 2022 SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2022
41 April 27, 2022 SEBI(Issue of Capital and Disclosure Requirements) (Second Amendment)
Regulations, 2022
42 April 25, 2022 SEBI (Custodian) (Amendment) Regulations, 2022
43 April 25, 2022 SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment)
Regulations, 2022
44 April 11, 2022 SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment)
Regulations, 2022
45 April 11, 2022 SEBI(Debenture Trustees) (Amendment) Regulations, 2022
46 April 11, 2022 SEBI (Issue and Listing of Non - Convertible Securities) (Amendment) Regula-
tions, 2022
Principal Regulations Repealed – 0

10.5  N
 EW REGULATIONS (AIMS AND of KPIs and past transactions. This has
OBJECTIVES) enabled the investors in the IPOs to have
more information about the issue with
SEBI did not notify any new regulation during respect to the KPIs and past transactions.
2022-23.
B. 
Monitoring of utilization of issue
10.6  P
 ROGRESS OR IMPACT proceeds raised through Preferential
ASSESSMENT OF THE NEW Issue & QIP
REGULATIONS / RULES  Investors are now getting the detailed
status of the deployment / utilization of the
A. 
Disclosure of Key Performance funds raised by the company as against
Indicators and price per share of issuer the disclosed objective of the funds raised
based on past transactions and past by the Issuer.
fund raising from the investors under C. 
Introduction of pre-filing of offer
ICDR Regulations, 2018 documents as an optional alternative
 Subsequent to the amendment of ICDR mechanism for the purpose of IPO on
Regulations, 2018, 27 offer documents the Main Board
have been filed with SEBI in the current Two Companies have pre-filed their
financial year incorporating the details offer document with SEBI in the current

186
 Chapter 10 Regulatory Action, Supervision and Enforcement

financial year. This has allowed the issuer
to make the offer document public only
when it desires to undertake an IPO after
incorporating SEBI’s initial observations.
D. SEBI circular for development of
passive funds
 The circular for development of passive
funds, applicable to all existing ETFs/
Index Funds, was issued on May 23,
2022 and came into force from July 01,
2022. Pursuant to issuance of circular on
development of passive funds, following
developments in passive fund Schemes
(Index funds and ETFs) are observed:
• Number of passive mutual fund schemes
as on March 2023 stood at 349 against
229 as on June 2022, a rise in number of
schemes by 52 per cent.
• In Index funds, the number of schemes
has almost doubled from 94 in June 2022
to 177 in March 2023. Even in ETFs, the
number of schemes has increased from
135 to 172 in the same period.
• Net inflow to Index fund has increased
substantially from a monthly average of
`6,362 crore from April 2022 to June 2022
to `8,509 from July 2022 to March 2023.
However, inflow to ETFs has reduced.
• Net inflow into Index funds in the period
July 2022 to March 2023 is about 45 per
cent of the net AUM of Index funds as of
March 2023.
• Index funds AUM as on March 31, 2023 is
twice of what it was on June 30, 2022, the
same in case of ETFs is about 1.2 times
between that same time periods.

Average Monthly
Net Inflow /
Scheme Category No. of Schemes Net AUM (` crore) Net Inflow /
Outflow (` crore)
Outflow (` crore)
As on June 30, 2022 Apr-Jun 2022
Index Funds 94 83,408 19,086 6,362
ETFs 135 4,18,402 21,516 7,172
Total 229 5,01,810 40,602 13,534
As on March 31, 2023 Jul-Mar 2023
Index Funds 177 1,67,517 76,584 8,509
ETFs 172 5,07,014 38,663 4,296
Total 349 6,74,531 1,15,247 12,805

E. Mandatory Know Your Customer details
for Surveillance Purpose
 SEBI has been taking several measures
to ensure compliance with Know Your
Customer (KYC) requirements for all
investors in securities market. Further, with
surge in number of new investors using
online platform during Covid-19 pandemic,
compliance with KYC requirements become
all the more important. Accordingly, certain
attributes of KYC viz. i) Name, ii) Address,
iii) PAN, iv) Valid mobile number, v) Valid
email-id and vi) Income range have been
made mandatory for existing and new
clients. Various measures were undertaken
by MIIs to create awareness for compliance
with aforesaid attributes. Thereafter, w.e.f.
July 01, 2022, the trading and demat
accounts, which were non-compliant with
any/ all/ any combination of the six attributes

187
Annual Report 2022-23
of the Clients' KYC/ Client Master Database
were made inactive jointly by the MIIs (NSE,
BSE, NSDL & CDSL).

Total non-complaint accounts as on July
01, 2022 that were made inactive jointly by
MIIs were 92.73 lakh with holding value of
`12.53 lakh crore. Post compliance with
aforementioned attributes of KYC, the total
non-complaint accounts and holding value
thereof were reduced to 86.85 lakh non-
complaint accounts and `7.42 lakh crore
respectively as on March 31, 2023.
F. 
Changes to the Framework to Enable
Verification of Upfront Collection of
Margins from Clients in Cash and
Derivatives segments.
 The change in Peak Margin collection
requirements from clients at end of day,
188
caused uncertainty in margin collection
requirements as final settlement price
could be different from the closing price.
Pursuant to representations received
from various stakeholders, the end-of-day
margin collection requirements from clients,
in derivatives segment, was decided to
be calculated as per the beginning of day
margin parameters. Thus, margin collection
requirements of a client with no change in
position during the trading day would not
change at end of day. The said change
would bring certainty in margin collection
requirement, result in better compliance by
market intermediaries and would promote
ease of doing business.

Chapter 11:
International Engagements
11.1 INTERNATIONAL ENGAGEMENTS
HAVING IMPLICATIONS FOR INDIAN
MARKETS
SEBI engages with a range of foreign regula-
tors, international standard-setting bodies and
international fora to promote regulatory and
enforcement co-operation. Some key engage-
ments of SEBI during 2022-23 are as follows:
11.1.1 Engagement with the IOSCO:
International Organization of Securities
Commissions (IOSCO) is recognized as the
global standard-setter for securities markets.
SEBI is an ordinary member of IOSCO and
IOSCO Board. Further, SEBI is a member
of all the eight policy committees of IOSCO
apart from being a member of its various other
groups and IOSCO’s Board-level Financial
Stability Engagement Group (FSEG) which
works towards enhancing IOSCO’s approach
to financial stability issues, including its
engagement with the Financial Stability Board
(FSB). Some of SEBI’s key engagements with
IOSCO during 2022-23 are outlined below:
A. SEBI participated in 15 projects/ surveys
of IOSCO, which include the following
issues:
i.  CPMI-IOSCO Level 3 assessment on
Financial Market Infrastructures Cyber
Resilience;
ii.  Good practices for Exchange Traded
Funds; and
iii. Thematic review on implementation
of IOSCO liquidity risk management
recommendations for collective investment
schemes.
189
Chapter 11 International Engagements
B. SEBI is a member of the Asia-Pacific
Regional Committee (APRC), one of the
four regional committees of IOSCO that
focusses on regional issues relating to
securities regulation. During the year,
APRC discussed topics such as use of
RegTech/SupTech in securities markets,
SME financing, challenges posed by
the use of mule accounts in market
misconduct, sustainable finance, etc.
11.1.2 Engagement with the FSB: SEBI is
one of the three members representing India
on FSB. During the year, SEBI participated in
discussions on FSB’s activities for enhancing
the resilience of the non-bank financial
intermediation (NBFI) sector.
11.1.3 Engagement with the OECD: SEBI
has been closely cooperating with Organization
for Economic Co-operation and Development
(OECD) in the area of corporate governance.
On behalf of India, SEBI participates in the
OECD Corporate Governance Committee
as an Associate in discussions regarding the
review of G20/ OECD Principles of Corporate
Governance and as a Participant in discussions
on other issues.
11.1.4 Other International Engagements
A.  Memorandum of Understanding:
SEBI signs bilateral Memorandum of
Understandings (MoUs) with a number of
foreign securities regulators for enhancing
co-operation and exchange of information
for regulatory and enforcement purposes.
During 2022-23, SEBI has entered into
 Annual Report 2022-23
two bilateral MoUs, i.e., with the securities
regulators of (i) the province of Manitoba
in Canada (namely, Manitoba Securities
Commission) and (ii) Mongolia (namely,
Financial Regulatory Commission),
for mutual co-operation and technical
assistance.

SEBI became a signatory to IOSCO
Enhanced MMoU (EMMoU) in December
2021. EMMoU enables the securities
market regulators to avail an advanced
level of assistance from fellow signatories.
The EMMoU Signing Ceremony was
organized by IOSCO during the IOSCO
2022 Annual Meeting held in Marrakech,
Morocco.
B. 
Issue-specific Information Exchange:
SEBI engages with regulators/
organizations globally in order to exchange
information on topical issues. During the
year, information was exchanged on wide-
ranging issues including cybersecurity,
risk-based supervision, disclosure
requirements, framework for credit
rating agencies, use of AI/ML in financial
services, etc.
Table 11.1: Issue-Specific Information Exchange
with Foreign Regulators /Organisations
Type of References 2021-22 2022-23
References received by SEBI 40 29
References made by SEBI 20 39
11.1.5 Participation in International
Programmes/ Conferences/ Study Tours:
Participation in international conferences/
seminars/ training programmes/ study tours helps
SEBI officials in gaining a deeper understanding
of the systems and mechanisms and improving
processes within SEBI. Some of the notable
190
engagements during the year were: (a)Virtual
meetings held with the Monetary Authority of
Singapore (MAS), and European Securities and
Markets Authority (ESMA) to discuss regulation
of cross-border index providers; and (b) Virtual
meetings held with Brazil’s securities market
regulator and Nasdaq to discuss policies and
practices to achieve zero data loss during data
replication, etc.
SEBI and the Financial Services Agency,
Japan have initiated a series of knowledge
sharing sessions on various ESG related
matters. These include areas like ESG ratings,
investment avenues for sustainable finance,
ESG disclosures by listed corporates, ESG
investing, etc. On-site training program was
organized for SEBI officials at the Israel
Securities Authority (ISA) for learning insights
on the use of innovative tools for surveillance
and investigation.
11.1.6 Exchange of Information with Foreign
Regulators for Enforcement Purposes: The
MoUs, including the IOSCO MMoU/ EMMoU,
signed by SEBI have proven to be an effective
tool, whereby information is exchanged
between SEBI and its foreign counterparts for
the purpose of investigation and regulatory
enforcement. During 2022-23, 71 requests
were received from overseas regulators
seeking SEBI’s assistance. SEBI responded
to such requests subject to the provisions of
the applicable MoU. Similarly, 29 requests
were made by SEBI to its counterparts in
other jurisdictions. SEBI has also made three
unsolicited references to two securities market
regulators. Further, SEBI received information
through four unsolicited references from two
securities market regulators who are members
of IOSCO. The following table highlights the
regulatory assistance made and received by
SEBI:

Table 11.2: Regulatory Assistance under the
MoUs
Type of References 2021-22 2022-23
Requests received by SEBI
62 71
from foreign authorities
Requests made by SEBI 25 29
11.1.7 Engagements with Foreign Dele-
gations/ Dignitaries: SEBI engages with/
hosts delegations from foreign governments,
regulatory bodies, and businesses. These
meetings foster deeper levels of co-operation
and facilitate a better understanding of the
Indian securities market. A few prominent
engagements during the year are listed below:
A. 
Virtual meeting between Chairperson,
SEBI and Chairperson, Belgium FSMA
(July 26, 2022) - Areas of common interest
such as developments in ESG space, use
of data analytics, measures for financial
inclusion, etc. were discussed in the
meeting.
B. 
Visit of Delegates from the USIBC
(September 09, 2022) - Delegates from
the US–India Business Council (USIBC)
paid a visit to the Head Office of SEBI and
met the Chairperson, SEBI. The meeting
provided an opportunity to discuss India-
US co-operation on financial services.
C. IMF Article IV Mission to SEBI Head Office
(September 16, 2022) - The Mission met
the Chairperson, SEBI. The Mission was
provided an update on recent market
developments in India and the priorities of
SEBI.
D. 
Participation in XBRL Asia Roundtable
(November 17, 2022) – Chairperson,
SEBI delivered a keynote on ESG digital
reporting during the 11th XBRL Asia
Roundtable.
191
Chapter 11 International Engagements
E. 
Virtual meeting between Chairperson,
SEBI and Chair of US SEC (February
03, 2023) - Diverse issues such as
enforcement challenges, transition to ‘T+1’
settlement, recent market developments,
etc. were discussed in the meeting.
F. Study Visits of the Delegates from CMA
Kenya (October 31, 2022) and Reserve
Bank of Malawi (September 19, 2022) -
SEBI hosted delegates from CMA Kenya
on a study visit. Further, officials of the
Reserve Bank of Malawi paid a visit to
learn about SEBI’s regulatory framework
for alternative investments.
11.1.8 Contribution to various
International Treaties and Dialogues: During
the year, SEBI provided inputs for international
dialogues of India with other countries such
as Japan, US, UK, Korea, G20 meetings, etc.
SEBI also provided inputs for FTA negotiations
of India with UK, Canada, Korea, EU, etc.
11.2 ISSUES HIGHLIGHTED DURING
VARIOUS ENGAGEMENTS
In addition to the issues discussed in various
engagements as highlighted in the previous
section, the following important and topical is-
sues were also discussed:
11.2.1 Financial Stability: Drawing lessons
from the COVID-19 crisis in March 2020, the
global standard setting bodies are working
towards enhancing the resilience of NBFI sector,
including addressing the liquidity mismatch in
open-ended funds. In the meeting of IOSCO,
SEBI shared its experience of introducing a
unique hybrid swing pricing framework as a
liquidity management tool for open-ended debt
schemes. SEBI also shared that it is working on
setting up a ‘backstop’ facility which will provide
further stability in the corporate bond market,
particularly during stress periods.
 Annual Report 2022-23
11.2.2 Use of RegTech/SupTech: In
the meeting of IOSCO Asia Pacific Regional
Committee (APRC) held on February 23-
24 in Dhaka, Bangladesh, SEBI shared its
experiences in implementing various RegTech/
SupTech solutions and challenges faced
during such implementations. Further, study is
proposed to be undertaken in IOSCO on this
topic to help member regulators learn from each
192
other’s perspectives.
11.2.3 Challenges Posed by Use of Mule
Accounts for Market Misconduct: SEBI shared
its experience in handling the cases of market
misconduct using mule accounts, including the
challenges being faced in enforcement of such
cases. Other regulators too acknowledged
similar issues faced by them.
 Chapter 12
Chapter 12:
National Institute of Securities Markets
The National Institute of Securities Markets
(NISM) has been established in 2006 by SEBI
as a public trust registered under the Bombay
Public Trusts Act, 1950, and as a society under
Societies Registration Act, 1860. Since its
inception, NISM has been carrying out a wide
range of capacity building activities aimed at
enhancing quality standards in the securities
markets and for increasing participation therein,
addressing various stakeholders such as the
investors, issuers, intermediaries, regulatory
staff, academicians who wish to study the
securities markets and students who seek a
career in the securities markets.
Vision of NISM: “To lead, catalyse and deliver
education initiatives to enhance the quality of
securities markets”
Mission of NISM: “To engage in capacity
building among stakeholders in the securities
markets through financial literacy, professional
education, enhancing governance standards
and fostering policy research.”
NISM articulates and implements its mission of
improving market quality through its Six Schools
of Excellence. Considering the diversity in its
stakeholders, activities of NISM are depicted
under following broad sections:
12.1 ACADEMIC PROGRAMS
The School for Securities Education (SSE) has
been involved in designing and offering long-
term academic programs that focus on creating
193
National Institute of Securities Markets
a cadre of professionals in securities markets.
During the academic year 2022-23, 384
students were enrolled for five post graduate
programs under SSE at NISM compared to 278
students enrolled in 2021-22. To provide an
opportunity to interact and learn from market
experts, 96 industry interaction sessions and
four leadership lectures have been conducted
for the learners during the year.
During 2022-23, the placement for students
of Post Graduate Diploma in Management
(Securities Markets) 2021-23 and L.L.M.
(Investment and Securities Laws) 2021-22 have
been accomplished. Some of the recruiters
across both the programs include ICICI Bank,
Federal Bank, IDBI Bank, ISS, NSE, ICICI
Securities Ltd., PNB Investment Services Ltd.
and others.
12.2 TRAINING PROGRAMS
The School for Regulatory Studies and
Supervision (SRSS) conducts capacity-building
programs for regulators and market participants
focusing on policy creation and implementation,
in India and abroad. During 2022-23, the school
conducted 40 such programs (21 per cent more
than previous year) facilitating 1,784 candidates.
However, the number of beneficiaries marginally
decreased to 1,784 from 1,903 during previous
year.
The training programs were conducted for SEBI,
RBI, banks, insurance companies, different
government organisations, market infrastructure
 Annual Report 2022-23
institutions and other regulated intermediaries
on various topics including securities law, risk
management, investigating economic crimes,
anti-money laundering guidelines, securities
market products and processes and for
improving soft skills. The school also conducted
online conclaves for Grievance Redressal
Committee Members and Arbitrators of Stock
Exchanges. In addition, the school conducted
two online programs on securities markets in
collaboration with IIT Bhubaneswar and ICAI.
12.3 RESEARCH AND PUBLICATIONS
NISM faculty publishes papers in various
journals, newspapers and professional
magazines and present them at conferences
organized by reputed institutions. During 2022-
23, the number of research papers published/
presented in various conferences and seminars
increased to 94 as compared to 61 during the
last year. In addition, commodity yearbook was
released in association with MCX.
12.4 CONFERENCES
12.4.1 NISM organized the 3 rd
Annual
International Capital Markets Conference 2022
on ‘‘Role of Capital Markets for Sustainable
Growth of Economy’’ in December 2022.
There were 147 papers received, of which
20 papers were selected for presentation
during the conference. Approximately, 100
participants from all over the country attended
the conference.
12.4.2 NISM in collaboration with SEBI
conducted the 4th SEBI-NISM Research
Conference on “Indian Securities Markets – The
Next Agenda” in March 2023. The conference
was organized in hybrid mode (the details of
the conference is given under the Research
section in Chapter 13). On the occasion of
this conference, 4th issue of ‘Vriddhi’ student
magazine was also released.
194
12.5 INVESTOR EDUCATION AND
FINANCIAL LITERACY
12.5.1 Capacity Building Support to SEBI:
The School for Investor Education and Financial
Literacy (SIEFL) has been instrumental in
designing and implementing various capacity
building initiatives of SEBI. As part of these
efforts, NISM conducted four refresher trainings
for Securities Markets Trainers (SMARTs) at
various locations and one induction training for
newly empaneled SMARTs. In addition, NISM
conducted a faculty development program
at Central Agricultural University, Imphal to
popularize SEBI’s initiative of empaneling
Commodity Trainers.
12.5.2 Investor Education: CSR Project:
NISM and Kotak Securities Ltd. (KSL) launched
“Kona Kona Shiksha Program”, a CSR project
of KSL, to educate young citizens on securities
market investments and career opportunities.
The details of programs conducted during 2022-
23 are given in Table 12.1.
Table 12.1: Kona Kona Shiksha Programmes
Particulars 2022-23
Total Resource Persons enlisted for the
341
project
No. of colleges covered across the
807
country
Total Number of programmes completed 1,000
Total Number of student attendees 81,892
Faculty Development Programs: NISM in
collaboration with one of the industry participants
launched Faculty Development Programs
(FDP) to sensitize the teaching community
about “Investing in Capital Markets”. The theme
of these FDP programs is ‘Investing for Amrit
kaal – India @ 100 years’. The first such FDP
program under this initiative was conducted at
Shri Vaishnav Vidyapeeth Vishwavidyalaya,
Indore in March 2023.
 Chapter 12
12.5.3 
E-learning Modules for various
Financial Courses:
SIEFL in collaboration with industry
Table 12.2 : E-learning Courses at NISM
Sl.
Name of the E-Learning Module
No
1 NISM-CRISIL certified Wealth Management
2 Anti-Money-laundering(AML)/ Combating the
Financing of terrorism (CFT)
3 Certified BFSI Professional Program
4 Certificate course on Cyber Security Foundation
5 NISM & CRISIL Certified Credit Underwriter
(NCCCU)
12.5.4 Other E-Learning Assignments:
To explain the basics of various segments of
Indian securities market, NISM has developed
capsule e-learning courses such as Securities
Market Primer; Equity Derivative – Basic;
Mutual Funds – Basic and Broking Operations
Management. In August 2022, NISM launched a
Certificate Program in Commodity Warehousing
Management (CPWM). This e-learning program
explains the operational aspects of commodity
warehousing management to meet the training
needs to handle the modern warehousing
sector’s functional complexities, operational
challenges and compliance needs.
12.6 CERTIFICATION OF ASSOCIATED
PERSONS IN SECURITIES MARKETS
NISM is mandated to develop certification
examinations for various segments of the market
as per powers conferred by sub-regulation
195
National Institute of Securities Markets
partners developed five e-learning courses. A
brief about the e-learning courses launched to
date is given in Table 12.2:
Partner Agency
Crisil
Kris Konsulting
Indian Institute of Banking and Finance (IIBF),
and National Insurance Academy (NIA)
Ministry of Electronics and Information
Technology (MeiTY)
Crisil
(3) of Regulation 7 of the SEBI (Certification
of Associated Persons in Securities Markets)
Regulations, 2007.
12.6.1  Development and Administration of
Certification Examinations:
NISM offered 22 certification examinations
that are mandated by financial market
regulatory boards and nine non-mandated
certifications through its School for Certification
of Intermediaries (SCI). In 2022-23, NISM
launched new certification examination viz.,
‘Social Auditors’ and two new Continuing
Professional Education (CPE) Programs
viz., ‘Portfolio Management Services (PMS)
Distributors’ and ‘Portfolio Managers’. NISM
also revised 18 certification examinations and
four CPE programs during the period. The
details of the NISM certification programmes is
given in Table 12.3.
 Annual Report 2022-23

Table 12.3 : NISM Certifications

Particulars 2021-22 2022-23
No. of Certification Modules Mandatory* 22 22
No. of Certification Modules Non-Mandatory 9 9
No. of Test Centres 188 268
Number of Cities / locations covered 163 197
Number of Candidates Enrolled 2,33,305 2,93,234
*Includes 3 Valuation examinations of IBBI.

During the Covid-19 pandemic, NISM facilitated 12.7 CONTINUING PROFESSIONAL

examinations on a remote proctored platform.
During 2022-23, out of the total of 2,93,234
enrollments, 42,394 enrollments (14.5 per cent)
were for remote proctored examinations. As all
the test centers are now operational, NISM has
discontinued the remote proctored examinations
since January 2023.
EDUCATION (CPE) PROGRAM
During the Covid-19 pandemic, NISM had
started offering e-CPE Programs on a remote
proctored platform. During 2022-23, out of
86,561 enrollments, 27,391 enrollments were
for e-CPE programs, which was 31.6 per cent of
the total enrollments (Table 12.4).

Table 12.4 : Continuing Professional Education Programmes

Particulars 2021-22 2022-23
Number of CPE Modules* 15 17
Number of Programs 1,871 1969
Number of Locations 135 102
Number of Trainers Empanelled (Cumulative) 304 314
Number of Enrollments 97,810 86,561
* 13 CPE modules offered in e-mode in 2022-23

12.8 OTHER INITIATIVES 12.9 SOURCES OF FUNDS AND

NISM provided continuous support for the
maintenance of three valuation examinations
developed by IBBI. 158 Regulatory Alerts were
sent to the candidates during the year under the
continuous learning initiative.
EXPENDITURE
NISM is at present, a fully self-funded
organisation. The sources of funds and
expenditure of NISM during 2022-23 is given in
Table 12.5.

196
 Chapter 12 National Institute of Securities Markets

Table 12.5 : Sources of Funds and Expenditure: 2022-23 (Audited)

Income Amount Expenditure Amount
(` crore) (` crore)
Income from Certifications & 86.00 Salaries & Allowances 25.77
Programs
Income from Rent (Including Hostel 2.10 Expenses towards Certifications & 18.60
Fee & Food) Programs
Other Incomes 5.39 Depreciation 6.39
Interest Income 16.04 Unavailable Cenvat Credit A/c 5.07
Other Establishment Expenses* 23.19
Professional & Consultancy Fees 0.37
Honorarium Charges 1.16
Purchase of Fixed Assets 7.41
Expenditure towards Capital including 0.12
WIP
Total 109.53 Total 88.07
*Other Establishment expenses include electricity charges, food & beverages, support service charges, housekeeping expenses,
maintenance of internal applications (software main), repairs and maintenance, rent, AMC charges for machinery etc

197
 Annual Report 2022-23

Chapter 13:
Organizational Matters

This chapter details the internal activities of SEBI
contributing towards its seamless functioning in
the market as an efficient regulator. The areas
covered broadly include the activities of the SEBI
Board, Audit Committee, Human Resource
Department, Department of Economic and
Policy Analysis, Official Language Department,
Internal Investigation Department, Vigilance
Cell, Right to Information, Parliament Questions
Cell, etc.
13.1 SEBI BOARD
The composition of the SEBI Board as on March
31, 2023 is given in Table 13.1.

Table 13.1: Composition of SEBI Board (As on March 31, 2023)

Provision of appointment / nomination
Name Position
under SEBI Act, 1992
Ms. Madhabi Puri Buch Chairperson Appointed under Section 4(1)(a)
Shri Santosh Kumar Mohanty
Shri Ananta Barua
Whole Time Member Appointed under Section 4(1)(d)
Shri. Ashwani Bhatia
Shri. Ananth Narayan Gopalakrishnan
Shri Ajay Seth
Part-Time Member Nominated under Section 4(1)(b)
Dr. Manoj Govil
Shri M. Rajeshwar Rao Part-Time Member Nominated under Section 4(1)(c)
Dr. V. Ravi Anshuman Part-Time Member Appointed under Section 4(1)(d)

Shri Ashwani Bhatia and Shri Ananth Narayan
Gopalakrishnan, vide notifications dated March
22, 2022 and September 19, 2022 respectively,
were appointed as Whole Time Members
(WTMs) of SEBI under clause (d) of sub-
section (1) of Section 4 of the SEBI Act, 1992 by
Government of India (GoI). Shri Ashwani Bhatia
and Shri Ananth Narayan Gopalakrishnan
assumed charge as WTMs with effect from
June 1, 2022 and October 10, 2022, respectively.
Dr. Manoj Govil, Secretary, Ministry of Corporate
Affairs, GoI was nominated as a Member of
the SEBI Board in place of Shri Rajesh Verma
vide GoI Notification dated December 9, 2022.
During 2022-23, the SEBI Board met on four
occasions. The details of Board meetings held
during 2022-23 are given in Table 13.2.

198

Table 13.2: Board Meetings during 2022-23
Name
Ms. Madhabi Puri Buch
Shri S.K.Mohanty
Shri Ananta Barua
Shri Ashwani Bhatia
Shri Ananth Narayan Gopalakrishnan
Shri Ajay Seth
Dr. Manoj Govil
Shri M. Rajeshwar Rao
Dr.V. Ravi Anshuman
Shri Rajesh Verma
* Number of meetings held after assuming charge
# Number of meetings held prior to demitting the office.
13.2 AUDIT COMMITTEE
During the year, the Audit Committee met four
times. The present Audit Committee of SEBI
comprises the following members :1
i. Shri V Ravi Anshuman, Chairman
ii. Shri Ajay Seth, Member
During the year, the Audit Committee had
reviewed and discussed the annual statement
of accounts of SEBI for the year 2022-23
with the management of SEBI and internal
auditors. Relying on the review and discussion
conducted with the management and internal
auditors, the Audit Committee believes that
SEBI's annual statement of accounts are fairly
presented in conformity with the Generally
Accepted Accounting Principles (GAAPs) in all
material aspects. The committee also reviewed
the internal control systems put in place and
expressed its satisfaction with the same. The
members of the Committee discussed among
themselves, without the management or the
internal auditors being present, the information
disclosed in the Annual Statement of Accounts.
The Committee fulfilled its responsibilities in
compliance with its charter.
Pursuant to completion of his tenure as a WTM, SEBI on June 23, 2023, Shri S K Mohanty ceased to be a member of the
1
SEBI Board and hence, ceased to be a member of Audit Committee
Chapter 13 Organizational Matters
Number of meetings held Number of meetings attended
Chairperson
4 4
Whole Time Member
4 4
4 4
4 4
2* 2
Part -Time Member
4 2
2* 2
4 2
4 4
2# 1
13.3 HUMAN RESOURCE ACTIVITIES
During 2022-23, Human Resources Department
(HRD) has taken several steps to improve
its activities. To achieve the objectives of
augmenting organization-wide productivity,
harnessing synergy amongst departments,
facilitating domain expertise, digitization and
automation and encouraging officers to better
focus on Key Result Areas (KRAs), reorganization
and restructuring of various departments across
SEBI was undertaken during the first quarter of
2022-23.An entire gamut of new policies and
procedures, including a comprehensive transfer
policy and policy on promotion, upgradation
and switchover, were put in place to enhance
employee engagement and support diversity.
During the year, emphasis was also given on
identifying and meeting the training needs
of the employees so as to foster a culture of
continuous learning and development in the
organization. Further, HRD continued to play
an important role by discharging its mandate of
recruiting suitable candidates.
199
 Annual Report 2022-23

13.3.1 Staff Strength, Recruitment, Resignation expanding marketplace, tackling investment

As on March 31, 2023, the total number of
employees across various grades stood at
1,073 (excluding Chief Vigilance Officer who is
appointed by the GoI in the rank of Executive
Director), out of which, 1,000 employees
are officers and 73 employees comprise of
secretarial and other staff. The male and female
composition is 750 and 323, respectively.
Manpower assessment is carried out on a regular
basis to meet future roles and responsibilities,
especially with respect to regulating the ever-
frauds, etc. In the year 2022-23, the exercise to
recruit 120 officers in Grade A (initiated in the
year 2021-22) in various streams was completed.
Further, another exercise for recruitment of 24
officers in the Information Technology stream
was completed.
A. Grade-wise Distribution
The grade-wise distribution of the staff
members as on March 31, 2023 is provided
in Table 13.3 below:

Table 13.3: Grade-wise Distribution of Staff Members

Staff Members in Various Grades 2021-22 2022-23
Executive Director (ED) 10* 11*
Chief General Manager (CGM) 40 44
General Manager (GM) 63 67
Deputy General Manager (DGM) 124 145
Assistant General Manager (AGM)/ Manager (MGR)/ Assistant Manager (AM) 667 733
Secretarial Staff (SEC/ACC/LIB) 72 71
Jr. Assistant 1 1
Cook/ Messenger 2 1
Total 979 1,073
Note: *Excludes Chief Vigilance Officer appointed by Government of India in the rank of Executive Director

During 2022-23, 44 staff members, across of the Board either by way of retirement /
various grades exited from the services resignation/ death (Table 13.4).

Table 13.4: Staff Members-Retired/ Resigned/ Deceased

Staff Members in Various Grades 2021-22 2022-23
Executive Director (ED) 0 3
Chief General Manager (CGM) 1 1
General Manager (GM) 0 1
Deputy General Manager (DGM) 1 0
Assistant General Manager (AGM)/ Manager (MGR)/ Assistant Manager (AM) 23 37
Secretarial Staff (SEC/ACC/LIB) 0 1
Cook/ Messenger 0 1
Total 25 44

Apart from the above, Chief Vigilance Officer
(CVO) appointed by GoI was relieved from SEBI
upon end of deputation tenure and a new CVO
was appointed by GoI during 2022-23.
B. Age Profile of the Staff Members
The average age of the staff members is
around 39 years. Among the staff members,
majority of staff’s age (60.1 per cent) is in
the range of 21-40 years. The distribution
of staff members across different age
brackets is presented at Table 13.5.

200
 Chapter 13 Organizational Matters

Table 13.5: Age-wise Distribution of Staff Members

2021-22 2022-23
Age (Years)
No. of Staff Members Per cent No. of Staff Members Per cent
51 - 60 160 16.3 176 16.4
41 - 50 262 26.8 252 23.5
31 - 40 354 36.2 370 34.5
21 - 30 203 20.7 275 25.66
Total 979 100.0 1,073 100.0

C. Distribution of Officers by Qualification in the relevant fields. The distribution of

SEBI endeavours to strike a balanced officers by qualification is presented in
composition of generalists and specialists Table 13.6.

Table 13.6: Qualification-wise Distribution of Officers

2021-22 2022-23
Qualification
No. of Officers Per cent No. of Officers Per cent
BE/BTech/ME/MTech 142 15.7 187 18.7
CA/CS/ICWA/CFA 132 14.6 150 15.0
Law (LLB/LLM) 143 15.8 158 15.8
MA (Eco) 55 6.1 62 6.2
MBA/PGDM/PGDBA 347 38.4 352 35.2
MCA/DCA 8 0.9 9 0.9
M.Com 50 5.5 53 5.3
Others * 27 3.0 29 2.9
Total 904 100.0 1,000 100.0
Note: * M.A., M.Sc., etc.

D. Promotions in a time-bound manner. Details of the

Promotion exercises were carried out at promotion exercises conducted during
various grades and successfully completed 2022-23 are provided in Table 13.7.

Table: 13.7: Staff Members-Promotions

No. of Employees Promoted
Promoted From Promoted To
2021-22 2022-23
CGM ED 1 3
GM CGM 0 8
DGM GM 11 13
AGM DGM 22 38
MGR AGM 76 28
AM MGR 27 83
Secretary and Accounts Assistant AM / MGR 1 0

201
 Annual Report 2022-23

E. Job Rotation undertaken during the year.

In order to fill up the vacancies for meeting
organizational needs and to provide wider
exposure to employees for gaining an
all-round experience, officers in various
grades are posted/ transferred as part
of inter-departmental and inter-office job
rotation measures. During 2022-23, 327
officers were rotated/posted among/in
different departments/ Regional/ Local
Offices. Reallocation of departments
amongst the WTMs and EDs was also
F. 
Region-Wise Distribution of Staff
Members
As on March 31, 2023, 112 staff members
(around 10.5 per cent of total employee
strength) in various grades were posted
at Regional and Local Offices of SEBI.
Distribution of staff at Head Office and
Regional Offices, including Local Offices,
is provided in Table 13.8.

Table 13.8: Region-Wise Distribution of Staff Members

2021-22 2022-23
Staff Details Grade Wise No. of Percentage of No. of Percentage of
employees total employees total
Head Office 858 87.6 951 89.5
Northern Regional Office 41 4.2 36 3.4
Eastern Regional Office 28 2.9 26 2.4
Southern Regional Office 28 2.9 27 2.5
Western Regional Office 24 2.5 23 2.2
Total 979 100.0 1,063* 100.0
*Excludes 10 Staff Members who are on Deputation to other organizations as on March 31, 2023.

13.3.2 Policy Initiatives technology and process re-engineering,

A. Reorganization and Restructuring
 Reorganization and restructuring was
carried out in SEBI with the following
objectives:
i. Enhancing organization-wide productivity,
ii. Harnessing synergy amongst departments,
iii. Facilitating domain expertise, digitization
and automation, and
iv. Encouraging officers to better focus on
KRAs.
To achieve the first two objectives, it
was felt that the existing work-allocation
of some of the departments needs to
be modified, resulting in restructuring
of the departments. Further, in order
to create domain expertise, it was felt
that activities may be segregated on the
basis of functions carried out, leading to
functional-reorganization of departments.
A dedicated vertical and division, for
have been created in various departments
so as to underscore the importance of and
incorporate the use of technology in day-
to-day processes.
B. Gender Parity
 It is seen that with evolving roles of
women and men in society and growing
participation of women employees in
the workforce population, men and
women have been sharing the household
responsibilities equally. The traditional
gender-roles and expectations have
changed with time. This has been reflected
in the policies, that promote gender parity,
enacted by SEBI with respect to its Human
Resources during the year. The following
benefits, which were hitherto available
only for female employees, have now been
extended to male employees:

202

i. Special Hardship Leave.
ii. Male employees are given an option /
choice for inclusion of either parents or
parents-in-law for availing medical facilities
offered by the Board.
C. Centre of Excellence
A new concept of “Centre of Excellence
(CoE)” was introduced in SEBI in the year
2022-23. Defined in very simple terms,
a CoE is an officer who, irrespective of
present posting / designation, is relied upon
for inputs and insights w.r.t. a particular
subject area / market segment, has natural
inclination and passion for that area, stays
updated of the latest developments in
that area and is also willing to hone this
expertise further. In short, these officers
are reputed as resource persons for
the organization for any complex matter
pertaining to their area of expertise and
also serve as the custodian of institutional
memory.
D. 
Review of Transfer and Placement
Policy including Job Rotation - for
Employees of SEBI
In order to fill vacancies in an efficient
manner, to place suitable employees in key
positions and to impart overall exposure to
employees, the transfer and placement
policy was reviewed. The policy has laid
down principles for inter-location transfer
and aims to bring transparency and
predictability in transfer exercise, ensure
managing and streamlining the APAR
system through annual transfers, smooth
succession planning and timeliness in
handing over/ taking over to achieve
organisational goals.
E. Automation of Processes
 During 2022-23, HRD has undertaken
various technology initiatives to upgrade
its Human Resources Management
System to facilitate seamless interface to
203
Chapter 13 Organizational Matters
employees and for expeditious processing
of various workflows. A few of these
initiatives are automation of promotion
profiles of employees, online submission
of feedback of WTMs/EDs about officers
appearing for promotion, online submission
of grievances/representations, auto-update
of postings/departments/divisions, system-
driven creation of letters to employees
placing various requests, etc.
13.3.3 Training and Development
Training and Development is an important
function for improving the skill sets of employees
and also for enhancing their functional, technical
and behavioural competencies. Subsequent to
opening up post-pandemic, employees were
encouraged to attend training in physical mode.
As technological innovations play a vital role in
digital transformation, enhancing productivity
and reaching-out to the last mile in the securities
markets, more emphasis was laid on imparting
technical skill sets to employees.
During 2022-23, around 1,163 nominations
were made for various domestic training
programs. Details of training initiatives taken
by SEBI during the year 2022-23 are elaborated
as under:
A. Trainings in Co-ordination with NISM
In co-ordination with NISM, training
programs on, inter-alia, the following
subjects were organized for SEBI
employees across various grades during
the year:
i. Induction program for newly recruited
officers in Grade A: Three Induction
Programmes for Grade ‘A’ Officers were
conducted during 2022-23 to introduce
them to SEBI, its roles and functions,
internal departments and technicalities of
the securities markets. The programme
also helped the Officers to acquaint
themselves with the organisation’s culture
and develop camaraderie amongst
themselves.
 Annual Report 2022-23
ii. Trading in Equities and Equity Derivatives:
Hands-on experience through Trading
Simulator
iii. Training Programme on Official Language:
Two separate workshops in Official
Language (Hindi) were conducted in
collaboration with NISM. These workshops
provided both theoretical knowledge and
practical aspects of translation and helped
in implementing the Official Language
Policy.
iv. Microsoft Excel: Training programmes
were conducted on both basic and
advanced version of Microsoft Excel to
enhance the skill-sets of the officials who
are involved in data analysis.
B. 
Short Term Training Programme on
Technology and Data Processing:
Technological tools and processes help in
enhancing the efficiency and productivity of
the organization. Officers across different
streams were upskilled with appropriate
technological knowledge, especially in the
emerging areas which have practical utility
to SEBI’s functions.
C. 
Digital Forensics and Appreciation of
Digital Evidences : A training programme
titled “Digital Forensics and Appreciation
of Digital Evidences” was conducted in
collaboration with the National Academy
of Direct Taxes (NADT) to provide a
comprehensive understanding of digital
forensic tools, techniques and nuances
related to digital evidence. These skillsets
help SEBI in strengthening its surveillance,
investigation and enforcement.
D. Legislative Drafting: SEBI officers were
also nominated for a training programme
on “Legislative Drafting” conducted by
Ministry of Law and Justice, GoI. The
training was focused on legislative
proposals and preparation of drafts of
subordinate legislation on the subjects
204
administered by the respective Ministries
/ Departments.
E.  raining Programme on Quasi-Judicial
T
Functions: In order to familiarize SEBI
officers with various aspects relating to
Quasi-judicial functions, two batches of
training programmes were conducted
in collaboration with National Judicial
Academy, Bhopal.
F. In-house Sessions : In order to utilize
in-house expertise and experience, and
provide an avenue for inter­
departmental
sharing of knowledge amongst the
employees, six in-house sessions were
organised.
G. SEBI-RBI Knowledge Sharing Sessions:
For the mutual benefit of staff members,
SEBI and RBI jointly organized a series
of knowledge sharing sessions on topics
of interest, such as current account and
capital account convertibility, peak margin
rules, central bank digital currency and
regulatory developments on prohibition
of insider trading. These sessions were
attended by employees of both the
organizations.
13.3.4. Welfare Measures: A webinar on
‘Ergonomics and Pain Management’ was
organized for the SEBI employees and their
family members. Also a health camp was
organised for the SEBI employees during
November as part of ‘Diabetes Awareness
Month’.
13.3.5 Internal Complaints Committee : In
accordance with its mandate to provide a safe
working environment and in compliance with “The
Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act,
2013”, an Internal Complaints Committee (ICC)
at Head Office and separate Committees for
each of the four Regional Offices (and Local

Offices under their purview) are in place. During
2022-23, the ICC received one complaint which
was settled through conciliation.
13.3.6 Review under Regulation 13 (1) of
SEBI (Employees’ Service) Regulations,
2001 (‘ESR’) : With a view to strengthening the
administration, a committee consisting of the
Chairperson and WTMs reviewed the service
records, effectiveness, performance, and
integrity of six employees who have completed
55 years of age or 30 years of service in 2021-
22.
13.3.7 Disciplinary Matters: During 2022-
23, 11 disciplinary proceedings were initiated
under ESR against 11 employees. Out of this,
four proceedings that were initiated in March
2023 are pending. Further, during the year,
27 disciplinary proceedings were concluded
wherein minor penalty in terms of Regulation
79 (1) of ESR was imposed against 15 staff
members. Also, administrative warning/advisory
was issued to 28 staff members during the year.
13.3.8 Rewarding the Wards of Employees:
During the financial year, 25 children of
employees were rewarded for academic
excellence in 10th / 12th standard.
13.4 RESEARCH, DATA INITIATIVES AND
SYSTEMIC STABILITY
The functions of policy-oriented research,
data analysis, data management, data
democratization, financial stability, regulatory
co-ordination and reporting, publications
and organizing international conferences
are discharged through the Department of
Economic and Policy Analysis (DEPA). During
2022-23, the major activities undertaken by the
department are enlisted below:
13.4.1 Research, Regulatory Reporting and
Publications
A. In compliance with Section 18 (2) of
205
Chapter 13 Organizational Matters
SEBI Act, 1992, Annual Report of SEBI
for 2021-22 was submitted to the Central
Government in 2022-23. Under its
publication series, Handbook of Statistics–
which provides historical data on the Indian
securities market was published for the
year 2021. In addition, Monthly Bulletins
and Monthly Market dashboards were also
published. All publications are available
under the Reports and Statistics section in
the Publication tab of the SEBI website.
B. In order to encourage the external
researchers to contribute to policy making
through research on topics of relevance,
SEBI has a Development Research
Group (DRG) Study Series mechanism.
Proposals can be submitted under DRG in
two blocks in a year viz, Jan-Jun (deadline-
June 30th) and Jul-Dec (deadline- Dec
31st). For the block that ended June 30,
2022, eight proposals were received and
for the block that ended December 2022,
seven proposals were received.
C. 
To support policy formulation/ decision
making at SEBI, research studies and data
analysis were undertaken on various topics
encompassing equity markets, commodity
derivatives, fund management activity,
corporate bonds, risk management, etc.
D. 
The SEBI Research Advisory Committee
(RAC) was reconstituted during the year.
The RAC, keeping in view the linkage
of research to policy making, provides
objectives, scope and direction of research
relevant to the development and regulation
of capital markets in India. In 2022-23,
three meetings of the RAC were held.
Under RAC, DEPA undertook 10 research
studies during the year broadly covering
various areas viz., Regtech / Suptech,
Corporate Bond, Infrastructure Financing,
Insider Trading, Electronic Gold Receipts,
Mutual funds etc.
 Annual Report 2022-23

The RAC, through its various sub-groups, E. 

DEPA organises SEBI Discussion Forum
has also contributed to the enhancement of (SDF) as a knowledge enhancement
SEBI DRG Studies The RAC also advised exercise for its officers and management
to facilitate collaborative efforts between wherein experts and other eminent
the regulator and the Market Infrastructure personalities are invited to share their
Institutions (MIIs) using their synergies to thoughts with the SEBI officers. During
effectively contribute to the promotion of 2022-23, four such discussions were
research in the Indian securities market. organised on various topics related
to financial regulation, technology in
securities market etc.

Box 13.1: Windfall Gains through Futures and Options?:

Findings of  Profits and Loss Analysis of Individual Traders
Indian securities market has witnessed significant increase in trading activity in equity F&O
segment in recent past. With the influx of new individual clients, there has been a multi-fold rise
in number of clients participating in the securities market. With this background, during 2022-23,
DEPA conducted a study to analyse trading by individual traders dealing in equity F&O segment.
Equity Derivatives ADT (` Trillion)

200
155
150

100 71

50 27
3 3 4 7 10 14
2
0
14 15 16 17 18 19 20 21 22 23
13- 14- 15- 16- 17- 18- 19- 20- 21- 22-
20 20 20 20 20 20 20 20 20 20

Note: 1. Equity derivatives turnover includes turnover in futures and options (notional). 2. ADT: Average Daily Turnover

The study is based on a sample of all individual clients of the top-10 stock brokers, accounting
for 67 per cent of the overall individual client turnover in the equity F&O segment during 2021-22.
To compare results in a contextual manner before and after the pandemic, the study covers the
periods of 2018-19 and 2021-22. The major findings of the study are as under-
• There has been significant increase in number of individual traders in equity F&O segment
by over 500 per cent in 2021-22 as compared to 2018-19.
• 98 per cent of individual traders in equity F&O segment traded in options during 2021-22.
• 9 out of 10 individuals incurred losses during both 2018-19 and 2021-22.
• On an average, loss makers registered net trading loss close to ` 50,000 in 2021-22. The
average net loss by a loss maker was over 15 times of the net profit made by a profit maker.
• Over and above the net trading losses incurred, loss makers expended an additional 28 per
cent of net trading losses as transaction costs, reflecting frequent trading.
• Even those who made profits, ended up paying 15 per cent to 50 per cent1 of such profits as
cost of transactions.
The study, along with a Press Release, was published by SEBI on January 25, 2023 and is
available on the SEBI website.
1
for the group of active traders excluding outliers

206

13.4.2 Securities Transaction Price Index
As mandated by the Office of Principal Economic
Adviser, Department of Industrial Policy and
Promotion (DIPP), Ministry of Commerce &
Industry (MoC&I), SEBI is computing and
forwarding Securities Transaction Price Index
(STPI) to MoC&I as a part of Business Service
Price Index (BSPI). STPI measures the average
change in cost (or price) of financial services in
securities market covering three main categories
viz. Primary Market Activity; Secondary Market
Activity; and Asset Management Activity.
During 2022-23, the base year for STPI has
been changed to 2017-18 in line with WPI
computation. While changing the base year, the
following revisions were undertaken to calculate
STPI:
• Under primary market, the sub-index was
divided into Equity Transaction Price Index
and Debt Transaction Price Index
• In the secondary market activities,
Commodity Derivatives segment was
included.
• Samples for all segments were revised and
weights for each segment/sub-segment
were assigned on the basis of the average
annual revenue of 2016-17, 2017-18 and
2018-19.
• The sample was selected based on the
average of three years (2016-17, 2017-18
and 2018-19) market share in respective
segments.
• The sample selected in various segments
was either the whole market segment or
the top players in a segment contributing
at least 70 percent market share.
The STPI with new base year 2017-18
was computed starting from quarter ending
September 2022. As per the new methodology,
a total of 11 indices (of which 10 are sub-indices)
are calculated.
207
Chapter 13 Organizational Matters
13.4.3 Systemic Stability and Inter-
Regulatory Coordination
DEPA is tasked with the mandate to have
surveillance and monitoring on the systemic
risks, if any, emanating from the securities
market and to coordinate, research and
provide inputs on systemic risk issues and
developments pertaining to the securities
market. DEPA also acts as the SEBI's interface
for engagement and contribution to Financial
Stability and Development Council (FSDC) and
its various fora such as FSDC Sub- Committee
(FSDC-SC), Inter-Regulatory Technical Group
(IRTG), Early Warning Group (EWG), Macro
Financial Monitoring Group (MFMG), etc.
SSU also participated in the deliberations of
the Committee on Emerging Risks (CER) of
the International Organization of Securities
Commissions (IOSCO). DEPA also coordinated
the proposals from SEBI for the Union Budget
2023-24. Further, DEPA carried out quarterly
reporting of the compliance status of SEBI w.r.t.
non-legislative recommendations of Financial
Sector Legislative Reforms Commission through
the dedicated MIS portal of MoF.
During 2022-23, DEPA contributed to SEBI’s
inputs for bi-annual Financial Stability Report
(FSR), published by the RBI. SEBI's inputs to
FSR included coverage of topics like growth and
performance of IPOs, trends in corporate bond
market, mutual fund stress testing, emerging
risks in commodity derivatives as well as key
measures taken by SEBI for enhancing market
development and systemic stability.
DEPA used various systemic risk monitoring
tools/ templates on a daily/ monthly basis
to track systemic stress in Indian securities
market during the year. Such tools include daily
monitoring of stress (which may emanate from
any segment of domestic and global financial
markets) using financial stress indices, daily
 Annual Report 2022-23
monitoring of swing pricing framework for mutual
fund schemes and monthly analysis of alerts
shared by the CRAs based on Yield Based Risk
Indicator model. Values of existing early warning
indicators related to the securities market as a
part of financial sector vulnerability monitoring
template for the EWG are also computed and
analyzed on a monthly basis.
During 2022-23, DEPA also contributed to
the review by EWG of the list of indicators in
the financial sector vulnerability monitoring
template after back testing the response of the
proposed indicators in the previous episodes of
macroeconomic shocks. During the year, SEBI
took over as the EWG Chair for 2023-24.
13.4.4 Fourth SEBI-NISM Research
Conference
SEBI and NISM had jointly organised the fourth
SEBI-NISM Research Conference on “Indian
Securities Market: The Next Agenda”. The
conference was held in hybrid mode during
March 02-03, 2023 with international panellists
joining virtually. Researchers, faculty members,
market intermediaries, policy makers, regulators,
students and other stakeholders in the areas of
finance across the globe were invited to submit
research papers on a wide range of themes viz.,
‘Financing for Growth – Innovation and Investor
Protection’, ‘Corporate Bond and Hybrids Market
– The Agenda for a Complete Market’, ‘Asset
Management – Emerging Trends, and ‘Policy
Lessons and Market Risk and Supervision –
The New Tech Landscape’.
The conference was inaugurated by Ms. Madhabi
Puri Buch, Chairperson, SEBI on March 02,
2023. Dr C.K.G. Nair, Director, NISM delivered
the opening address to the participants. The
theme address of the conference was delivered
by Shri. Ananth Narayan Gopalakrishnan,
Whole Time Member, SEBI.
In addition to the technical sessions, a session
for Young Researchers was also included. The
208
conference also had four-panel discussions on
the following topics:
• REITs and InvITs - Opportunities and
Challenges;
• Growing with Sustainability - Inspiring
Practices relevant for Emerging Markets;
• Mutual Funds – The Path to USD one
trillion Industry in India;
• RegTech, SupTech & Regulatory
Compliances – Global Trends and
Regulatory Roadmap.
Out of 112 papers received, 18 papers, which
included 12 from the general category and
six from the young research category were
accepted for presentation in technical sessions.
The papers and presentations were judged
by a jury consisting of notable academicians,
regulators, and practitioners.
An amount of ` 10,000 was awarded to the
author/s per selected paper from general
category. The best three papers were awarded
cash prizes of ` 45,000, ` 35,000 and ` 25,000
respectively under regular category and best
paper under young researcher category was
awarded ` 15,000. All the paper presenters
and participants were awarded certificates of
presentation and participation respectively.
13.4.5 SEBI Virtual Museum
SEBI has undertaken a project for development
of a ‘Virtual Museum of Indian Securities Market’.
This project envisages to present decades-
long history of the evolution, achievements and
milestones of the Indian securities market in
terms of market development, infrastructure,
regulation, enforcement, etc. through articles,
info-graphics, interviews, media clippings, audio
visual clippings, etc. In order to implement this
project, SEBI awarded the contract for “Design,
Development and Implementation of Virtual
Museum of Indian Securities Market” to an
agency after following due process. The Virtual
 Chapter 13 Organizational Matters

Museum team in SEBI, in consultation with the multimedia content of historically important
agency, is now working on finding and acquiring events for the museum.

Box 13.2: Data Democratization and Standardisation in the Indian Securities Market

In view of the evolving market dynamics and the increasing scope and role of technology, SEBI
recognised the crucial role that data can play in the development and regulation of today’s Indian
securities market. SEBI, in July 2020, constituted the Market Data Advisory Committee (MDAC).
The MDAC has met 10 times so far, of which, four meetings were held during 2022-23. During
2022-23, MDAC and its working groups/sub-groups, for addressing data related issues relating
to respective segments of securities market, met several times, to deliberate, recommend and
facilitate the implementation of a series of initiatives. The highlights of some of the initiatives
implemented through the MDAC in 2022-23 are as mentioned below:
A. To implement XBRL based compliance filing mechanism, a joint press release was issued by
exchanges on September 5, 2022. Under this initiative, a total of 14 disclosure filings, using
XBRL taxonomy, have been developed.
B. In order to facilitate easier access and usage of data by stakeholders, SEBI vide a circular
dated February 15, 2023, initiated the following:
i. Introduced Issue Summary Document (ISD) in XBRL format for public issues (IPO/
FPO), further issues, buy-back of equity shares, open offer and voluntary delisting of
equity shares
ii. Directed lead managers to disseminate all advertisements in connection with a public
issue under SEBI (ICDR Regulations) on the website of the stock exchange(s)
C. In order to have a standardised approach and facilitate ease of doing business, the data
definitions across the securities market have been made uniform.
D. In order to facilitate ease of access of disclosures made by CRAs, debenture trustees and
valuation agencies, all disclosures have been standardized across the players.
E. An independent mechanism was built to alert investors in case of a regulatory action against
brokers in which, upon expulsion or declaration of default of a member, exchange (s) were
advised to issue a market communication in the form of circular to inform the market about
the action on the member.
F. To increase industry-wide transparency, it was envisaged to prepare a publicly-available
broker fact sheet. The broker fact sheet, which shall act as an early-warning system for
investors, is now available on the exchange(s) website.
G. The scrip names and nomenclature were made uniform for the name of companies across
exchanges.
H. To facilitate easy access to market data and to encourage data backed research in the Indian
securities market, SEBI, on its website, has provided curated links of publicly available data
on various segments of the Indian securities market. These links were updated to include a
section on Corporate Filings.

209
 Annual Report 2022-23
13.5 PROMOTION OF OFFICIAL LANGUAGE
During 2022-23, various initiatives were taken
for implementation of the official language,
Hindi, in SEBI’s Offices to ensure compliance
with the Official Language Policy of the GoI. A
summary of such initiatives is given below:
13.5.1 Bilingualization
During 2022-23, Annual Report, Annual
Accounts, all regulations, notifications, public
notices and registration certificates granted to
various market participants, intermediaries,
etc. were issued in both Hindi and English.
All the papers were submitted before various
Parliamentary Committees in diglot form. In
addition, all the Memorandum of Understandings
(MoUs) signed between SEBI and regulators
etc. of other jurisdictions were also prepared in
diglot form.
13.5.2 Rajbhasha Portal
The Rajbhasha Portal exclusively developed for
the staff members is aimed at providing single point
of access to all the relevant information pertaining
to official language Hindi for the staff members
of SEBI. Quarterly Progress Reports (QPRs)
can be submitted through this portal with ease.
During 2022-23, the process for submission of
QPRs has been further streamlined. Rajbhasha
Portal not only facilitates the staff members in
timely compliance with various requirements of
the Official Language Policy of the GoI, but also
serves as a source of encouragement for the staff
members to use official language Hindi in their
day-to-day official work. One Hindi word (Aaj Ka
Shabd), one phrase / noting (Hindi noting) and
one motivational quote are also displayed on the
computer screens on a daily basis.
13.5.3 Hindi Magazine
During 2022-23, two issues of “Viniyamika” were
published. The first issue showcased the literary
talent of staff members and their family members
in the form of articles, stories, poetry, etc.
Articles of the staff members who were declared
210
winners in the Hindi competitions found a place
in the second issue. During the year, SEBI was
awarded the "First Prize" in region "B" for its
Hindi Magazine (“Viniyamika”) by the Ministry
of Home Affairs, GoI under its "Rajbhasha Kirti
Purskar Yojana" on the occasion of Hindi Diwas
– 2022 at Second All India Official Language
Conference held in Surat, Gujarat.
13.5.4 Rajbhasha Meetings
During 2022-23, meetings of the Official
Language Implementation Committee were
conducted for both the Head Office and Regional
Offices to ensure compliance with the Official
Language Policy (OLP) of the GoI in the offices
of the Board. Several important decisions were
taken towards implementation of the OLP.
13.5.5 Incentive Schemes
With a view to ensure timely compliance with
various requirements of the OLP of the GoI
as well as to encourage usage of Hindi while
carrying out day-to-day official work, staff
members were awarded cash incentives upon
passing examination under one of the incentive
schemes, namely Hindi Kaa Karyasadhak Gyan
- Puraskar Yojana, during the year.
13.5.6 Rajbhasha Competitions
In order to encourage the staff members to use
Hindi in their day-to-day official work, various
Hindi competitions were organized by SEBI
for the staff members during the year, viz. (1)
Katha Lekhan Pratiyogita; (2) Kavita Lekhan
Pratiyogita; (3) Nibandh Lekhan Pratiyogita;
(4) Varg Paheli Pratiyogita; (5) Ashubhashan
Pratiyogita, and (6) Prashnottri Pratiyogita.
Altogether 215 staff members participated in
these competitions.
13.5.7 Rajbhasha Samaroh
During 2022-23, a Rajbhasha Samaroh
was organized to felicitate the winners and
participants of various Hindi competitions.
As a token of appreciation, all the winners
were awarded with silver coins, Hindi books

and cash prize. Chairperson, WTMs and
Executive Directors graced the occasion and
encouraged all the winners and participants of
the competitions.
13.5.8 Participation in Events/Programs/
Conferences
During the year, SEBI actively participated in
the following events/ programs/ conferences:
A. Orientation programme organized online
during 2022-23 by the Central Hindi
Training Institute, Ministry of Home Affairs,
GoI.
B. 12th World Hindi Conference organized by
the Ministry of External Affairs, GoI at Nadi
City, Fiji. Main theme of the Conference
was – “Hindi – Traditional Knowledge to
Artificial Intelligence”.
C. Hindi Day celebrations and the Second
All India Official Language Conference
organized in Surat (Gujarat) by the Ministry
of Home Affairs, GoI.
13.5.9 Hindi Pakhwada
Hindi Pakhwada was organized from September
14-29, 2022 in all the SEBI offices to promote
the usage of official language. During the
Pakhwada, banners were displayed in all the
offices of SEBI. Further, a message from the
desk of Chairperson was also released on the
occasion of Hindi Day. Apart from this, various
competitions were also organized for all the
staff members.
13.5.10 Training for Newly Recruited Officers
As part of induction programme, the newly
recruited officers were made aware of the various
requirements, such as QPR, etc. related to the
OLP of the GoI, so that they may use Hindi in
their day-to-day official work and ensure timely
implementation of the Policy while discharging
their duties.
211
Chapter 13 Organizational Matters
13.5.11 Orders under Rule 8(4)of The Official
Language Rules, 1976
In accordance with the OLP of the GoI, orders
were issued under Rule 8(4) of the Official
Language Rules, 1976 to all the staff members
who possess proficiency in Hindi, to carry out
most of their official work in Hindi.
13.5.12 Presentations for Investor Awareness
In order to spread awareness about the
securities market, financial awareness programs
are organized by SEBI for the general public.
The presentations being used as a tool to create
awareness were also made available in Hindi in
a lucid language for the benefit of the investors.
13.5.13 Hindi Workshops
During 2022-23, 13 Hindi workshops were
organized for the officers and other staff members
out of which, 11 workshops were organised at
the Head Office level and two were organized
at the Regional Offices level. Two workshops,
out of total 13, were conducted exclusively for
the officers who possess proficiency in Hindi.
The workshops were held for awareness of
various requirements of the OLP of GoI and
day-to-day official work, to apprise the salient
features of the Rajbhasha Portal as well as the
mandatory requirements of timely submission of
the Quarterly Progress Report and the relevant
provisions.
13.5.14 Participation in India International
Trade Fair
Hindi was used extensively in the “Bharat
Ka Share Bazaar” pavilion set up at the India
International Trade Fair event organized in the
month of November in New Delhi. The India
International Trade Fair is a platform which
financial and other governmental institutions
make use of to make the general public aware
of their programmes and policies.
 Annual Report 2022-23
13.6 INTERNAL INSPECTION DEPARTMENT
The Internal Inspection Department (IID)
provides for an internal mechanism to review
the functioning of various departments of SEBI
with respect to whether they are adhering to
internal benchmarks/procedures and to suggest
measures for improving their productivity. During
2022-23, IID inspected various departments
of SEBI to, inter alia, check the effectiveness
of systems and procedures and made
recommendations to improve their functioning.
IID also conducted off-site monitoring to review
the implementation of its recommendations
made pursuant to previous inspections.
13.7 VIGILANCE CELL
The Vigilance Cell of SEBI is engaged in
guiding and facilitating impartial, fair and
transparent decision-making in the organization
in accordance with guidelines issued by the
Central Vigilance Commission (CVC) from time
to time.
13.7.1 Training
As part of capacity building, Vigilance Department
organized training sessions on the topic of
‘Preventive Vigilance’ during the induction
program of new recruits in SEBI to sensitize the
young officers of SEBI and creating awareness
among them on the need for maintaining probity,
integrity and honesty in public life. During the
year, Vigilance Department carried out a few
initiatives of leveraging technology for various
activities.
13.7.2 Vigilance Awareness Week 2022
Vigilance Awareness Week for the year 2022
(VAW 2022) was observed in SEBI in a befitting
manner from October 31- November 06, 2022
on the theme of “Corruption free India for a
developed Nation” (^«îQ>mMma ‘w³V ^maV - {dH${gV
^maV).
The program commenced with Ms. Madhabi Puri
212
Buch, Chairperson, SEBI and Shri S K Mohanty,
WTM, SEBI administering the Integrity Pledge
in Hindi and English respectively to SEBI staff
members. The Chairperson delivered keynote
address on the theme of VAW 2022. This was
followed by an address by Shri Ajai Kumar,
Independent External Monitor (IEM) on the
theme of VAW 2022. Shri Ajai Kumar stressed
on the use of technology and e-governance as
instruments to curb corruption. Ms. Yatri Dave
Vitekar, CVO, SEBI also shared her thoughts
around the theme for the year. Banners on VAW
2022 were prominently displayed at the Head
Office of Mumbai as well as at Regional and
Local Offices. The messages of the dignitaries,
viz., Hon’ble President of India, Hon’ble Vice
President of India, Prime Minister and the
Central Vigilance Commission on the theme of
VAW 2022 were displayed on the digital screen
near the reception area of offices of SEBI during
the week.
In order to publicize the theme of VAW 2022,
information about VAW 2022 and a weblink to
CVC integrity pledge were placed on the SEBI
website and the SEBI Investor website. A voice
message was added to the Interactive Voice
Response (IVR) in the toll-free SEBI Helpline
numbers during the week informing callers
about VAW 2022 and e-pledge initiative of
CVC.As part of outreach activities, information
about the integrity pledge and observance of
VAW 2022 was also disseminated to market
intermediaries, investors, demat account
holders etc. through stock exchanges, clearing
corporations, depositories, asset management
companies of mutual funds and the AMFI. A
special thrust was given to clear the pending
investor grievances at SEBI.
Contests on slogan writing, poem writing and skit
performance on the theme of VAW 2022 held
during October 2022 saw wide and enthusiastic
participation by SEBI staff members. The
slogans and poems by all the participants were
displayed on digital screen near reception area of

offices of SEBI.Further, as per CVC instructions,
SEBI carried out various preventive vigilance
cum internal housekeeping activities during the
three-month campaign period (16th August 2022
to15th November 2022) on six focus areas as a
pre-cursor to VAW 2022.
13.7.3 Reports and Returns
Information on Probity Portal and Solve Portal of
DoPT, QPR of works / purchase / consultancy,
Annual Report on vigilance activities are being
regularly submitted to DoPT/ CVC after collating
information from concerned departments.
13.7.4 Liaison with CBI
Vigilance Department in SEBI, as a nodal office,
had effectively liaised with Central Bureau of
Investigation (CBI) in various matters. It has also
actively participated in all activities of Vigilance
Study Circle, Mumbai.
13.8 RTI ACTIVITIES
SEBI, as a public authority, has been
implementing the various provisions of the Right
to Information Act, 2005 (RTI Act) in true spirit.
As per the provisions of the RTI Act, SEBI has
designated Shri Santosh Kumar Sharma, CGM
as a Central Public Information Officer (CPIO) at
its Head Office in Mumbai. SEBI has appointed
two EDs, Shri Anand Rajeshwar Baiwar and Shri
B. Rajendran as the First Appellate Authority
(FAA) to deal with appeals filed against the Order
of the CPIO. In compliance with the direction
of the Central Information Commission (CIC),
SEBI had designated Shri G P Garg, Executive
Director, as the Transparency Officer.
SEBI has endeavoured to provide the
information sought by the applicants within the
stipulated time, irrespective of the information
sought being voluminous, pertaining to number
of issues or being handled by multiple internal
departments. SEBI has also been providing
additional information / guidance voluntarily
to the applicants about the securities market.
213
Chapter 13 Organizational Matters
Applications received in Hindi are replied in bi-
lingual form, while those received in various other
regional languages are internally translated and
replied.
Applications filed at the various Regional/Local
Offices are referred to the CPIO-HO by the
respective Central Assistant Public Information
Officers (CAPIOs). The senior most officials
posted at Regional/Local Offices are appointed
as CAPIOs for the respective Regional/Local
Offices. Where applications received by SEBI
are in the nature of complaints / seeking
redressal of grievances, SEBI guides the
applicants to submit their complaint through a
designated website viz. investor.sebi.gov.in or
through the centralized grievance redressal
system, SCORES (http://scores.gov.in) or
SCORES Mobile App which is available on both
Apple App Store and Google Play Store for the
investors in the securities market.
Around 50 per cent of the RTI applications
received by SEBI in 2022-23, was through
the RTI Request and Appeal Management
Information System (RTI MIS Web Portal). For
applications received in physical mode, the Office
of CPIO, while replying to the RTI application,
requests the applicant to file their application/
appeal online at https://rtionline.gov.in, which
enables them to receive the reply online, thus
encouraging the use of the paperless option.
Section 4(1)(b) of the RTI Act lays down the
information which should be disclosed by public
authorities on a suo moto or proactive basis.
Accordingly, SEBI has made available suo-moto
disclosures on the SEBI website www.sebi.gov.
in.As a public authority, it is SEBI’s continuous
endeavour to fulfill all the obligations, in terms of
Section 4 of the RTI Act, to make disclosures on
a proactive basis and ensure transparency and
accountability in its functioning.
The details of RTI applications and First Appeal
to SEBI Appellate Authority for 2022-23 are
given in Table 13.9.
 Annual Report 2022-23

Table 13.9: Trends in RTI applications and First Appeal to SEBI Appellate Authority
Particulars ( in Numbers) 2021-22 2022-23
No. of Applications received
3,001 3,768
(including applications transferred from other public authorities)
Total no. of issues raised in applications 15,267 16,611
No. of appeals received by the Appellate Authority, SEBI 670 817
No. of orders passed by the Appellate Authority, SEBI 577 912
No. of appeals rejected / dismissed by the Appellate Authority, SEBI 526 888
No. of appeals allowed / partially allowed 51 24

The details of Appeals before Central passed by SEBI AA for 2022-23 is given in
Information Commission (CIC) against Orders Table 13.10.

Table 13.10: Trends in Appeals before Central Information Commission

Particulars (in Numbers) 2021-22 2022-23
No. of hearings held before CIC in SEBI matters 71 91
No. of appeals rejected / dismissed by CIC 59 73
No. of appeals with directions by CIC to furnish part of information 12 18

13.9 PARLIAMENTARY QUESTIONS CELL
The Parliament Questions (PQ) Cell of SEBI
is the interface between SEBI and the GoI for
PQs and Parliament Committee meetings. PQ
Cell deals with the various Ministries of GoI,
for addressing issues relating to PQs and any
assurances thereof.
PQ Cell also co-ordinates the Parliamentary
Committee meetings and their study tours/visits
in co-operation with the Lok Sabha Secretariat
and nodal organisations. The Cell also co-
ordinates with various departments of SEBI
for addressing the various references received
from Honourable Members of Parliament and
various Ministries of the GoI.
13.9.1 Parliament Questions
During 2022-23, SEBI received a number
of PQs, referred by the GoI, mainly from the
Ministry of Finance and Ministry of Corporate
Affairs. Of the 141 questions referred/taken-
up, 76 questions were admitted, with respect to
which SEBI furnished information and material
for replies. The number of PQs received
session-wise is given in Table 13.11.

Table 13.11: Session-wise details of Parliament Questions

No. of Questions
Admitted Questions
Parliament Session Period Received / Taken-Up
Starred Un-starred Starred Un-starred
Monsoon Session July 18-August 12, 2022 9 28 6 23
Winter Session December 7- December 29, 2022 6 22 3 12
Budget Session (Session I) January 31- February 13, 2023 3 13 1 6
Budget Session (Session II) March 13-April 6, 2023 20 40 4 21
Total 38 103 14 62

214

13.9.2 Parliamentary Committees and
Ministry of Finance
During 2022-23, SEBI interacted with and
provided the required information and
clarifications desired by the Parliamentary
Committees & Ministry of Finance in a time
bound manner. This included:
i. Oral evidence of the representatives of
SEBI on the regulatory issues concerning
the capital market with special reference
to (i) Initial Public Offers (ii) Volatility (iii)
International Financial Services Centre
(IFSC) and (iv) Alternate Investment Fund
(AIF) (April 2022);
ii. Forty-sixth report of the Standing
Committee on finance on the subject
‘Strengthening Credit flows to the
MSME Sector’ of the Ministry of Finance
(Department of Financial Services) and
Ministry of Micro, Small and Medium
enterprises (April 2022);
iii. Study tour of Standing Committee
on Finance on the subject of overall
performance including follow-up on
regulatory issues concerning capital market
and on the subject “Strengthening SEBI’s
regulatory and operational capabilities”
(May 2022);
iv. Background notes for examination of the
subjects - Regulatory issues in Indian
capital market (November 2022); and
215
Chapter 13 Organizational Matters
v. Study tour of Standing Committee on
Finance on regulatory issues concerning
the capital market (January 2023).
13.10 F
 EES AND OTHER CHARGES
(SPECIFIC CASES OF INCREASE/
DECREASE DURING THE YEAR)
Details of the amount of fees and other charges
(2022-23 unaudited) collected by SEBI from
market intermediaries on both recurring and
non-recurring basis is provided in Table 13.11.
During 2022-23, the total amount of fees and
other charges received was `1,213.22 crore as
against `1,043.34 crore in 2021-22 (audited).
The recurring fee was 71.75 percent in 2022-
23 as compared to 56 percent in 2021-22 of
the total fee collected. During the year 2022-
23, the largest recurring fee of `467.96 crore
was collected as Regulatory fee from Stock
Exchanges, followed by `122.56 crore collected
from Registration fee from members (Equity
Derivatives Segment) and `89.38 crore from
Foreign Portfolio Investor. In non-recurring fee
category, the highest amount was collected
from Takeover Fees (`87.92 crore) followed by
Buy-back of Shares (`78.89 crore), and Primary
Market Offer Document (`70.85 crore)
 Annual Report 2022-23

Table 13.12: Fees and Other Charges (` crore)

2021-22 2022-23*
Recurring Non-recur- Total Fees Recurring Non-recur- Total Fees
Particulars
fees # ring fees ## Received fees # ring fees ## Received
1 2 (1+2) 1 2 (1+2)
Offer Documents and Pro- 0 248.48 248.48 - 70.85 70.85
spectus filed (Primary Market
– Equity)
Merchant Bankers 4.95 2.36 7.31 4.59 2.07 6.66
Underwriters 0 0.03 0.03 - - -
Portfolio Managers 6.1 2.52 8.62 4.25 6.58 10.83
Registrars to an Issue and Share 0.63 0.24 0.87 0.39 0.15 0.54
Transfer Agents
Bankers to an Issue 2.16 0.02 2.18 0.99 0.02 1.01
Debenture Trustees 0.72 0.21 0.93 0.27 0.01 0.28
Takeover fees 0 86.54 86.54 - 87.92 87.92
Buy Back of Shares 0 60.26 60.26 - 78.89 78.89
Mutual Funds 42.82 0.75 43.57 17.03 9.43 26.47
Stock Brokers and Sub-Brokers 35.88 0 35.88 33.54 - 33.54
(CM segment)
Foreign Portfolio Investors 44.1 16.5 60.61 89.38 5.97 95.35
Foreign Venture Capital 0 1.62 1.62 - 1.43 1.43
Domestic Venture Capital 0 0 0 - 0.08 0.08
Infra Investment Trust 0 0 0 - 0.01 0.01
Depositories 1.7 0 1.7 0.62 - 0.62
Custody charges – Depositories 4.25 0 4.25 6.72 - 6.72
Depository Participants 2.22 0.9 3.12 1.46 0.85 2.31
Custodian of Securities 77.64 0.02 77.66 85.93 0.05 85.98
Approved Intermediaries under 0.06 0 0.06 0.12 0.00 0.12
Securities Lending Scheme
Credit Rating Agencies 0.15 0.2 0.35 0.45 0.60 1.05
Listing Fees Contribution from 27.02 0 27.02 29.66 - 29.66
Stock Exchanges
Alternative Investment Scheme 0 17.94 17.94 - 23.51 23.51
KYC Registration Fees 0.01 0.02 0.03 - 0.04 0.04
Registration fee from members 101.3 0 101.3 122.56 - 122.56
(Equity and Derivatives Seg-
ment)
Registration fee from members 16.63 0.04 16.67 2.29 13.65 15.94
(Commodity Derivatives Seg-
ment)
Investment Advisor 0.09 0.39 0.48 -1.86 -3.62 -5.49
Infrastructure Investment Trust 0 8.88 8.88 - 10.98 .98
Informal Guidance Scheme 0 0.11 0.11 - 0.07 0.07
Share based employee benefits 0 0 0 0.02 0.02
Regulatory Fees-Stock Ex- 210.65 0 210.65 467.96 467.96
changes

216
 Chapter 13 Organizational Matters

2021-22 2022-23*
Recurring Non-recur- Total Fees Recurring Non-recur- Total Fees
Particulars
fees # ring fees ## Received fees # ring fees ## Received
1 2 (1+2) 1 2 (1+2)
Regulatory Fees - Stock 1.73 0 1.73 1.64 1.64
Exchanges commodity
Public Issue of Debt 0 0.33 0.33 - 0.13 0.13
Private Issue of Debt 1.32 0 1.32 1.21 1.19 2.40
Delisting of Shares 0.11 0 0.11 - 0.05 0.05
Research Analyst 0 1.65 1.65 - 3.50 3.50
ICDR Exemption Fees 0 5.59 5.59 - 0.71 0.71
FPI Regulatory fees for ODI 2.01 0 2.01 1.19 - 1.19
Subscription
Scheme of Arrangement fees 0 3.42 3.42 - 3.11 3.11
Real Estate Investment Trust 0 0.01 0.01 - 4.21 4.21
Collective Investment Scheme 0 0 0 - 0.00 0.00
Vault Manager 0 0 0 - 0.31 0.31
Processing Fee - Compounding 0 0 0 1.08 1.08
of Offence
Processing Fees-Consent Order 0 0 0 19.01 19.01
Total 584.25 459.09 1043.34 870.39 342.83 1,213.22
* Subject to audit by Comptroller and Auditor General
# Recurring fees: Fees which is received on annual/3-yearly/5-yearly basis (includes Fee/ Service Fee/ annual fee/ Listing
Fees from exchanges/ Regulatory Fees from stock exchanges).
## Non-recurring fees: Fees which is received on one-time basis. Includes fee for Offer Documents Filed/ Registration Fee/
Application Fee/ Takeover Fees/ Informal Guidance Scheme/ FPI Registration/Conversion etc.
Notes:
• Since the amount realized by way of penalties on or after 29.10.2002 has been credited to the Consolidated Fund of
India, therefore, the same has not been included in the fees income of SEBI since 2003-04.
• Stock brokers and sub-brokers fee includes annual fees and turnover fees.
• Stock brokers and derivatives fees are of recurring nature and depend on the trading turnover of the stock brokers and
members of derivatives segment.

1.1 SOURCES OF FUNDS AND MAJOR AREAS OF EXPENDITURE

Details of the sources of funds and major areas of expenditure for 2022-23 is provided in Table
below:

Table 13.13: Sources of Funds and Major Areas of Expenditure

Source of Funds: Receipts (` crore) Major Areas of Expenditure: Payments (` crore)
Interest earned from Investments 161.42 Establishment Expenses 576.02
Interest on Loans, Advances etc. 14.95 Administrative Expenses 172.45
Other Interest 0.02 Gratuity and Leave Encashment 41.06
Registration Fees 211.36 Purchase of Fixed Assets 40.66
Annual fees/Subscription 583.91 Capital Work in progress 60.35
Application Fees 25.02
Renewal fees 100.62
Filing Fees for offer documents 254.70
Fees for Takeover regulations 7.88

217
 Annual Report 2022-23
Source of Funds: Receipts (` crore)
Listing Fees Contributions 29.66
Fees under Informal Guidance Scheme 0.07
Miscellaneous Income 3.03
Lease Rentals 11.64
Sale of Assets 0.08
Total 1404.36
13.12 OTHER OFFICES/MATTERS
13.11.1 Office of Informant Protection
In order to strengthen the investigation and
enforcement mechanism to curb instances
of insider trading, a need was felt to provide
for a mechanism that incentivises people
having personal knowledge of any incidence
of insider trading to report the same to SEBI.
For the said purpose, Chapter IIIA of the SEBI
(Prohibition of Insider Trading) Regulations,
2015 (PIT Regulations) was published in the
Official Gazette on September 17, 2019, and
the provisions came into force on December
24, 2019. Accordingly, the Office of Informant
218
Major Areas of Expenditure: Payments (` crore)
Total 890.54
Protection (OIP) has been established under
Chapter IIIA of the PIT Regulations for receiving
and processing the information pertaining to the
violation of the insider trading laws submitted
through the Voluntary Information Disclosure
Form (VID Form). The VID Form has been made
available for download on the website of SEBI.
A separate inward and outward channel has
been put in place for communicating with the
informants while maintaining confidentiality. OIP
also maintains a dedicated hotline number for
providing information relating to the submission
of the VID Form. During 2022-23, OIP has not
received any VID Form.
 भारतीय प्रितभूित और िविनमय बोडर्
Securities and Exchange Board of India
प्रधान काय्ार्ालय
सेबी भवन, प्लॉट सं. सी 4-ए, ‘जी’ ब्ल्ाॉक, बांद्रा कु लार् कॉम्प्ल्ोक्स, बांद्रा (पूव्ार् ), मुंबई - 400 051
वेबसाइट: http://www.sebi.gov.in
Head Office
SEBI Bhavan, Plot. No. C4-A, ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051
Website: http://www.sebi.gov.in