SEBI Guidelines2003

7/30/2019 SEBI Guidelines2003

1/19

SEBI GUIDELINES

Kuniyorath HishadGeorge SanateMohit Kanodia

Mohammed Anas

FemeeshRahees


2/19

INTRODUCTION

It was established through an executiveresolution in 1988

It was upgraded as a statutory board in 1992 SEBI Act was passed on 30th Jan 1992


3/19

SEBI

The Securities and Exchange Board of India(SEBI) has been mandated to protect theinterests of investors in securities and topromote the development of and to regulatethe securities market so as to establish adynamic and efficient Securities Market

contributing to Indian Economy


4/19

SEBI strongly believes that investors are thebackbone of the securities market. They notonly determine the level of activity in thesecurities market but also the level of activityin the economy

Many investors may not possess adequate

expertise/knowledge to take informedinvestment decisions. Some of them may notbe aware of the complete risk-return profile

of the different investment options


5/19

ESTABLISHMENT OF SEBI

The Securities and Exchange Board of Indiawas established on April 12, 1992 inaccordance with the provisions of theSecurities and Exchange Board of India Act,1992


6/19

Workshops

The workshops are aimed at reaching out tothe common investors and are being heldprimarily in small and medium towns andcities all over the country. At theseworkshops, the aim is to acclimatize theinvestors with the functioning of the

securities market, the basic fundamentals ofinvestment and risk management and theirrights and responsibilities. You can attend theworkshops in your city/town.


7/19

OBJECTIVES

To protect the interest of investors insecurities

To promote the development of SecuritiesMarket

To regulate the securities market

For matters connected therewith orincidental thereto


8/19

ACHIEVEMENTS

The improvement in the securities marketreduced the risk of credit

It has also framed many policies which hasmade dealing in securities both safe andtransparent to the end investors

It also framed different policies for differentintermediaries

It also approved the trading in stock indices in2000


9/19

GUIDELINES ON IPO THROUGH

THE STOCK EXCHANGE

The company shall enter into an agreementwith the Stock Exchange(s) which have the

requisite system of on-line offer of securities Agreement with the Stock exchange

The agreement may also provide for a

dispute resolution mechanism between thecompany and the stock exchange


10/19

Guidelines for Preferential

Issues

The explanatory statement to the noticefor the general meeting in terms ofsection 173 of the Companies Act, 1956shall contain - the object/s of the issue

through preferential offer, intention ofpromoters/ directors/ key managementpersons to subscribe to the offer,shareholding pattern before and after

the offer, proposed time within which theallotment shall be complete the identityof the proposed allottees and thepercentage of post preferential issuecapital that may be held by them.


11/19

APPOINTMENT OF BROKERS

The stock exchange, shall appoint brokers ofthe exchange, who are registered with SEBI,for the purpose of accepting applications andplacing orders with the company

The brokers, so appointed acceptingapplications and application monies, shall be

considered as collectioncentres


12/19

The broker/s so appointed, shall collect themoney from his/their client for every orderplaced by him/them and in case the clientfails to pay for shares allocated as per theGuidelines, the broker shall pay such amount

The company/lead manager shall ensure that

the brokers having terminals are appointed incompliance with the requirement ofnecessities


13/19

GUIDELINES ON ADVERTISEMENT

The Lead Merchant Banker shall ensure

compliance with the guidelines onAdvertisement by the issuer company

An issue advertisement shall be truthful, fair

and clear and shall not contain any statementwhich is untrue or misleading

Any advertisement reproducing or purportingto reproduce any information contained in a

offer document shall reproduce suchinformation in full and disclose all relevantfacts and not be restricted to select extracts

relating to that item


14/19

An advertisement shall be set forth in a clear,concise and understandable language

Extensive use of technical, legal terminologyor complex language and the inclusion ofexcessive details which may distract theinvestor, shall be avoided

An issue advertisement shall not containstatements which promise or guarantee rapidincrease in profits


15/19

An issue advertisement shall not contain anyinformation that is not contained in the offerdocument

No models, celebrities, fictional characters,landmarks or caricatures or the likes shall bedisplayed on or form part of the offerdocuments or issue advertisements

No issue advertisement shall be releasedwithout giving Risk Factors in respect of theconcerned issue


16/19

FACTORS WHICH CONSIDERS AN

AD TO BE MISLEADING Statements made about the performance or

activities of the company in the absence ofnecessary explanatory or qualifyingstatements, which may give an exaggeratedpicture of the performance or activities, thanwhat it really is

An inaccurate portrayal of past performanceor its portrayal in a manner which implies thatpast gains or income will be repeated in the

future


17/19

OPERATIONAL GUIDELINES

Submission of draft and final offer document:

The offer documents of size upto Rs. 20 crores shall

be filed by lead merchant bankers with the

concerned regional office of Board underthejurisdiction of which the registered office of the

issuer company falls

The lead merchant banker shall make ten (10) copies

of the draft offer document available to the dealingoffice of the Board, three (3)copies to the Primary

Market Department, SEBI, Head Office and 25 copiesto the stock exchange's where the issue is proposed

to be listed


18/19

ELIGIBILITY NORMS FOR

COMPANIES ISSUING SECURITIES

Filing of offer document

No issuer company shall make any public issue

of securities, unless a draft Prospectus hasbeen filed with the Board through a MerchantBanker, at least 30 days prior to the filing ofthe Prospectus with the Registrar of

Companies (ROC)


19/19

CONCLUSION

SEBI is a backbone of our nation in its way todevelopment. It has become a guideline forlife to many of the people.

SEBI Guidelines2003

Documents

Transcript of SEBI Guidelines2003