trade practices and bringing the Indian market up to international standards, a package of

reforms consisting of measures to liberalise, regulate and develop the securities market was
introduced. The practice of allocation of resources among different competing entities as
well as its terms by a central authority was discontinued. The issuers complying with the
eligibility criteria were allowed freedom to issue the securities at market determined rates.
The secondary market overcame the geographical barriers by moving to screen based trading.
Trades enjoyed counter-party guarantee. The trading cycle shortened to a day and trades
are settled within 2 working days, while all deferral products were banned. Physical security
certificates almost disappeared. A variety of derivative products were permitted. The following
paragraphs discuss the principal reform measures undertaken since 1992.

SEBI Act, 1992: It created a regulator (SEBI), empowered it adequately and assigned it with
the responsibility for (a) protecting the interests of investors in securities, (b) promoting the
development of the securities market, and (c) regulating the securities market. Its regulatory
jurisdiction extends over corporates in the issuance of capital and transfer of securities,
in addition to all intermediaries and persons associated with securities market. All market
intermediaries are registered and regulated by SEBI. They are also required to appoint a
compliance officer who is responsible for monitoring compliance with securities laws and
for redressal of investor grievances. The courts have upheld the powers of SEBI to impose
monetary penalties and to levy fees from market intermediaries.

Enactment of SEBI Act is the first attempt towards integrated regulation of the securities
market. SEBI was given full authority and jurisdiction over the securities market under the
Act, and was given concurrent/delegated powers for various provisions under the Companies
Act and the SC(R)A. Many provisions in the Companies Act having a bearing on securities
market are administered by SEBI. The Depositories Act, 1996 is also administered by SEBI.

SEBI Issue of Capital and Disclosure Requirements (ICDR) Regulations 2009

The SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2009. are applicable
for public issue; rights issue, preferential issue; an issue of bonus shares by a listed issuer;
qualified institutions placement by a listed issuer and issue of Indian Depository Receipts.

The issuer should appoint one or more merchant bankers, at least one of whom should be
a lead merchant banker. The issuer should also appoint other intermediaries, in consultation
with the lead merchant banker, to carry out the obligations relating to the issue. The issuer
should in consultation with the lead merchant banker, appoint only those intermediaries which
are registered with SEBI. Where the issue is managed by more than one merchant banker,
the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund
and underwriting obligations, if any, of each merchant banker should be predetermined and
disclosed in the offer document. The issuer determines the price of the equity shares and
convertible securities in consultation with the lead merchant banker or through the book
building process. In case of debt instruments, the issuer determines the coupon rate and

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