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Chairman: U.K SinhaTwo members from amongst the officials of the ministry of the central Govt. dealing with finance and administration of the Companies Act 1956.Raje Kumar (Joint Secretary, Min. of Finance )Naved Masood (Secretary, Min. of Corp. Affaires)One member from amongst the officials of RBI Anand Sinha (Deputy Gov. RBI)

Five other members of whom at least 3 shall be the whole time members to be appointed by the central Govt.Prashant SaranWhole time memberRajeev Kumar AgarwalWhole time memberS RamanWhole time memberV. K. Jairath MagyaMember appointedPrakash ChandraPart time member

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The SEBI Act, 1992 has entrusted with two functions, they are

Regulation of stock exchange and self regulatory organizations.Registration and regulation of stock brokers, sub-brokers, Registrars to all issues, merchant bankers, underwriters, portfolio managers etc.Registration and regulation of the working of collective investment schemes including mutual funds.Prohibition of fraudulent and unfair trade practices relating to securities market.Prohibition of insider trading

Promoting investors educationTraining of intermediariesConducting research and publishing information useful to all market participants.Promotion of fair practicesPromotion of self regulatory organizations7

Power of inspectionPower of courtPowers in the interests of securities marketPowers regarding protection of investorsPower to issue directions

Powers of investigationPower to cease and desist proceedingsRegistration of stock brokers, sub-brokers, share transfer agents etc.Prohibition of manipulative and deceptive devices

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Failure to furnish information Failure to enter into agreement to clientsFailure to redress investors grievancesDefaults in case of mutual fundsFailure to observe rules and regulations by an asset management company

Default in case of stock brokersInsider tradingNon-disclosure of acquisition of shares and takeoversFraudulent and unfair trade practices

Insider trading

11Rakesh Agarwal Vs.SEBI

Companies must buy back at least 50 per cent under new SEBI rulesAngel Funds Must Not Invest in Cos Older than 3 YearsEasier entry norms and streamlining the categories for foreign investorsSEBI issues guidelines for change in category of AIF

Approval for rules and regulationsApproval for filing criminal complaintsNo autonomy

The market where investment instruments like bonds, equities and mortgages are traded is known as the capital market.

The primal role of this market is to make investment from investors who have surplus funds to the ones who are running a deficit.

The capital market offers both long term and overnight funds.

Help firms and governments raise cash by selling securitiesAllow investors with excess funds to invest and earn a return Channel funds from savers to borrowersAllocate resources optimallySecondary markets, where investors trade existing securities, assures investors that they can quickly sell their securities if the need arises.

It Is Related With New IssuesFollowing are the methods of raising capital in the primary market: i) Public Issue ii) Offer For Sale iii) Private Placement iv) Right Issue

The secondary market is that market in which the buying and selling of the previously issued securities is done. The transactions of the secondary market are generally done through the medium of stock exchange.The chief purpose of the secondary market is to create liquidity in securities.

It creates liquidityIt comes after primary marketIt encourage new investmentsAids in financing the industryEnsures safe & fair dealing.

Provides regular information about the value of security.Helps to observe prices of bonds and their interest rates.Offers to investors for their assets.Secondary markets bring together many interested parties.It keeps the cost of transactions low.

Functions of Secondary Market

The term Depository means a place where a deposit of money, securities, property etc. is deposited for safekeeping under the terms of depository agreement.A depository is an organization, which assists in the allotment and transfer of securities and securities lending.The shares here are held in the form of electronic accounts i.e. dematerialized form and the depository system revolves around the concept of paper-less or scrip-less trading.

CONTD.It holds the securities of the investors in the form of electronic book entries avoiding risks associated with paperIt is not mandatory and is left to the investor to decideDepositories carry out its operations through various functionaries called business partners

LEGAL FRAMEWORK OF A DEPOSITORY SYSTEMA depository system is governed by the following Acts

Securities & Exchange Board of India Act 1992The SEBI(Depositories and Participants) Regulations, 1996Bye laws of depository Business rules of depositoryThe Companies Act 1956

Presently there are two Depositories working in India:National Securities Depository Limited (NSDL)

It was registered by the SEBI on June 7 1996 as Indias first Depository to facilitate trading and settlement of securities in the demat form. It is promoted by IDBI, UTI, NSE

Central Depository Services (India) Limited (CSDL)

It commenced its operations during Feb. 1999 and was promoted by Stock Exchange Mumbai in association with Bank of Baroda, Bank of India, SBI and HDFC Bank

NSEThe BSE , MumbaiCalcutta Stock ExchangeDelhi SELudhiana SEBangalore SEOver the counter exchange of IndiaMadras SEInter connected SEAhmedabad SE

At present 10 Stock Exchanges are connected to the Depositories

DepositoryDepository Participant (DP)Securities, Issuers and Registrars and Share Transfer AgentsStock Exchanges and Stock BrokersClearing Corporation/ Clearing House and Clearing MembersBanking systemInvestors

DematerializationRematerialization Settlement of trades in dematerialized securitiesAccount transferPledge and hypothecationStock lending and borrowingAccount freezingNomination

The Economic Timeshttp://articles.economictimes.indiatimes.comBusiness Standardhttp://www.business-standard.comOfficial website of SEBIhttp://www.sebi.gov.in/sebiwebFinancial Institutions and Markets by Shashi K. Gupta, Neeti Gupta and Nisha AgarwalMoneycontrol.com

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