SECURITIES AND EXCHANGE BOARD OF INDIA

Benson Varghese Sarita Sapaliga Aditi Mahapadi Dhananjay Joshi Shruti Kerkar

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SEBI is the regulator for Securities Market in India

SEBI was set up originally in 1988 by Govt. of India

Acquired statutory form in 1992 under SEBI Act 1992 Headquartered in Mumbai

Growth of capital market during 1980s

Increase in investors lead to malpractices on part

of companies These malpractices and unfair trade practices have eroded investors confidence and multiplied investor grievances

Government and stock exchanges were rather

helpless

To protect the interests of investors in securities

Make rules and regulation for the securities market

To promote efficient services by brokers, merchant bankers and financial intermediaries

Power to make rules for controlling stock exchange

To promote self-regulatory organization of intermediaries

To register and regulate the working of mutual funds To provide license to dealers and brokers

To Stop fraud in Capital Market

To Control the Merge, Acquisition and Takeover To issue guidelines to companies regarding capital issues

To audit the performance of stock market

SEBI has to be responsive to the needs of three groups,

which constitute the market:

the issuer of securities the investors

the market intermediaries

SEBI has three functions rolled into one body: Quasi-legislative

Quasi-judicial
Quasi-executive

Name
Upendra Kumar Sinha Prashant Saran Rajeev Kumar Agarwal Dr. Thomas Mathew

Designation
Chairman Whole Time Member Whole Time Member Joint Secretary, Ministry of Finance

V.K. Jairath Magya

Anand Sinha Naved Masood

Member Appointed
Deputy Governor, RBI Secretary, Ministry of Corporate Affairs

Power to issue directions In the best interest of investors To secure the proper management of any such intermediary or person To any company Investigation Inspection of any books, registers and other documents Calling for information and record from any bank or any other authority Conducting research Cease and desist proceedings Suspend the trading of any security Restrain persons from accessing the securities market Suspend any office-bearer from holding such position Regulate or prohibit issue of prospectus, offer document or advertisement soliciting money for issue of securities

Technical Advisory Committee Committee for review of structure of market infrastructure institutions Members of the Advisory Committee for the SEBI Investor Protection and Education Fund Takeover Regulations Advisory Committee Primary Market Advisory Committee (PMAC) Secondary Market Advisory Committee (SMAC) Mutual Fund Advisory Committee Corporate Bonds & Securitization Advisory Committee Takeover Panel SEBI Committee on Disclosures and Accounting Standards (SCODA) High Powered Advisory Committee on consent orders and compounding of offences Derivatives Market Review Committee Committee on Infrastructure Funds

SEBI

Primary Market

Secondary Market

Mutual Funds

Foreign Institutional Investment

Entry norms

Promoters contribution
Disclosure Book building Allocation of shares Market intermediaries

 Market Intermediaries Registration and Supervision department (MIRSD) Registration, supervision, compliance monitoring and inspections of all market intermediaries in respect of all segments of the markets viz. equity, equity derivatives, debt and debt related derivatives. Market Regulation Department (MRD) Formulating new policies and supervising the functioning and operations (except relating to derivatives) of securities exchanges, their subsidiaries, and market institutions such as Clearing and settlement organizations and Depositories (Collectively referred to as Market SROs.)

 Derivatives and New Products Departments (DNPD)

Supervising trading at derivatives segments of stock exchanges, introducing new products to be traded, and consequent policy changes

Stock Exchange:
(a) Board of Directors of stock exchange has to be reconstituted so as to include non-members, public representatives, government representative to the extent of 50% of total number of members. (b) Capital adequacy norms have been laid down for members of

various stock exchanges depending upon their turnover of trade and

other factors. (c) Working hours for all stock exchanges have been fixed uniformly. (d) All the recognized stock exchanges will have to inform about the transaction within 24 hours.

Brokers:
(a) Registration of brokers and sub-brokers is made compulsory. (b) Compulsory audit of brokers book and filing of audit report with SEBI have been made mandatory. (c) In order to ensure that brokers are professionally qualified and financially solvent, capital adequacy norms for registration of brokers have been evolved. (d) To bring about greater transparency and accountability in the broker-client relationship, SEBI has made it mandatory for brokers to disclose transaction price and brokerage separately in the contract notes issued to client. (e) No broker is allowed to underwrite more than 5% of public issue.

(a) Foreign institutional investors have been

allowed to invest in all securities traded in

primary and secondary markets. (b) There would be no restriction on the volume of

investment for the purpose of entry of FIIs.

Holding of single FII will not exceed the ceiling of 5% of equity capital

Tax rate 10% on large capital gain , 30% on short

term capital gains, 20 % on dividend

Issue related manipulations , misstatement in

prospectus, gray market operations and

irregularities in the issue process

Post listing market manipulations like price rigging,

circular trading

Insider trading Manipulations relating to takeovers and acquisitions

Other violations of provisions of SEBI Act /

Regulations

Administrative proceedings

Monetary penalty proceedings

Disciplinary proceedings Prosecution Civil litigation

CONTRAVENTION

PENALTY

Contravention of provisions of Insider Trading Regulations Failure to redress the grievances of investors, after having been called upon by the Board in writing to redress the grievances of investors. Indulgence in any Fraudulent and Unfair Trade Practices.

Penalty of Rs. 25 crore or 3 times the amount of profits made out of such insider trading, whichever is higher. Penalty of Rs.1 lakh per day during which such failure continues or Rs. 1 crore, whichever is less

Penalty of Rs. 25 crore or 3 times the amount of profits made out of such practices, whichever is higher.

SEBI banned 14 life insurance companies

IRDA asked insurers to ignore the order

SEBI IRDA planned to move to the apex Court

The finance ministry broked peace between them

The RBI Act, the Insurance Act, the SEBI Act and the Securities Contracts Regulation Act were amended on 18 June 2010 and clarity on regulation of ULIPs was brought
Finally SEBI allowed insurers to raise money from existing ULIPs, but asked them not to issue fresh ULIPs

RBI FSDC SEBI

DICGC

IRDA

SAT
FMC

PFRDA

Regulator Bodies Financial Sector

SEBI IRDA

PFRDA FMC

United Financial Agency

The Financial Sector Legislative Reforms Commission, headed by former justice B N Srikrishna recommended the creation of a super regulator United Financial Agency

Presently, over 60 Acts and multiple rules and

regulations govern the financial sector.

The fragmented regulatory architecture has led to a loss of scale and scope

UFA would deal with all financial firms other than

banking and payments UFA would lead to economies of scale in the financial

system and provide benefits of minimising the

intermediation cost

THANK YOU