REGULATORY FRAMEWORK

Mission and objectives of SEBI Securities & Exchange Board of India (SEBI) formed under the SEBI Act, 1992 with the prime objective of – Protecting the interests of investors in securities, – Promoting the development of, and – Regulating, the securities market and for matters connected therewith or incidental thereto. “Focus being the greater investor protection, SEBI has become a vigilant watchdog”.

Scope of SEBI:

FUNCTIONS OF SEBI: Regulation of Business of the Stock Exchanges. A review of the market operations, organizational structure and administrative control of the exchange. Registration and regulation of the working of Merchant Bankers, Underwriters, Portfolio Managers, Stock Brokers etc. regulates the working of the Depositories [Participants], Custodians of Securities, Foreign Institutional Investors, Credit Rating Agencies and such other Intermediaries

FUNCTIONS OF SEBI: Cont... Registration And Regulation Of Mutual Funds, Venture Capital Funds. Every new scheme launched by a mutual fund needs to be filed with SEBI with its disclosures for review. Regulations have been laid down regarding listing of funds, refund procedures, transfer procedures, disclosures. SEBI has also laid down advertisement code for mutual fund in making any publicity regarding a scheme and its performance SEBI has prescribed norms for investment management with a view to minimize investment risks. SEBI also has the authority to impose penal actions against any default of MF.

FUNCTIONS OF SEBI: Cont... Promoting & Regulating Self Regulatory Organizations. Prohibiting Fraudulent And Unfair Trade Practices In The Securities Market. Prohibition of Insider Trading Activity. Investor Education And The Training of Intermediaries. Can Conduct Research on Market Areas. Can make Inspection And Inquiries of Intermediaries. Can impose Penalties to Intermediaries for non compliance of any SEBI Guidelines. Can amend/change the bye-laws for intermediaries from time to time.

Listing of Securities Admission of the securities for dealing on a recognized stock exchange. Security may be of Company, Central or State Government, quasi government organizations.

The objectives of listing Provide LIQUIDITY TO SECURITIES. Mobilize savings for economic development Protect interest of investors by ensuring full disclosures.

Listing Process: 1.Minimum Listing Requirements for new companies 2.Minimum Listing Requirements for companies listed on other stock exchanges 3.Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange 4.Permission to use the name of the Exchange in an Issuer Company's prospectus 5.Submission of Letter of Application 6.Allotment of Securities 7.Trading Permission 8.Requirement of 1% Security 9.Payment of Listing Fees 10.Compliance with Listing Agreement

Minimum Listing Requirements for NEW COMPANIES.  In respect of Large Cap Companies:  The minimum post-issue paid-up capital of the applicant company shall be Rs. 3 crores.  The minimum issue size shall be Rs. 10 crores; and  The minimum market capitalization of the Company shall be Rs. 25 crores

Listing of Security: In Respect of Small Cap Company The minimum issue size shall be Rs. 3 crores. The minimum post-issue paid-up capital of the Company shall be Rs. 3 crores The minimum market capitalization of the Company shall be Rs. 5 crores The minimum income/turnover of the Company should be Rs. 3 crores in each of the preceding three years. Minimum number of shareholders after the issue shall be 1000.

Minimum Listing Requirements for companies listed on other stock exchanges: Criterias: The company should have minimum issued and paid up equity capital of Rs. 3 crores. The Company should have profit making track record for last three years. Minimum net worth of Rs. 20 crores (net worth includes Equity capital and free reserves excluding revaluation reserves). Minimum market capitalization of the listed capital should be at least two times of the paid up capital. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%.

Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange The companies delisted by this Exchange and seeking relisting are required to make a fresh public offer and comply with the prevailing SEBI's and BSE's guidelines regarding initial public offerings.

Listing of Security: Submission of Letter of Application As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on the Exchange is required to submit a Letter of Application to all the Stock Exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies.

Listing of Security: Allotment of Securities As per Listing Agreement, a company is required to complete allotment of securities offered to the public within 30 days of the date of closure of the subscription list and approach the Regional Stock Exchange, approval of the basis of allotment. In case of Book Building issue, Allotment shall be made not later than 15 days from the closure of the issue failing which interest at the rate of 15% shall be paid to the investors.

Listing of Security: Trading Permission As per SEBI Guidelines, the issuer company should complete the formalities for trading at all the Stock Exchanges where the securities are to be listed within 7 working days after capital issue. To dispatch of allotment letter and share certificate or Demat form in a due time. Manage the Refund Orders in due time, if any.

Listing of Security: Payment of Listing Fees All companies listed on the Exchange have to pay Annual Listing Fees by the 30th April of every financial year to the Exchange. Initial Listing Fee (one time): Rs.20,000 Annual Listing Fee: (Paid Capital Up To Rs 5 cr.): Rs (Above Rs.5 Cr And Up To Rs.10 Cr):Rs.15,000 (Above Rs. 10 Cr And Up To Rs. 20 Cr): Rs. 20,000 Companies which have a paid-up capital* of more than Rs. 20 crores will pay additional fee of Rs. 750/- for every increase of Rs. 1 crores.

Listing of Security: Requirement of 1% Security Deposit The companies making public/rights issues are required to deposit 1% of issue amount with the Regional Stock Exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates, non- payment of commission to underwriters, brokers, etc.

Listing of Security: Compliance with Listing Agreement The companies desirous of getting their securities listed are required to enter into an agreement with the Exchange called the Listing Agreement and company is required to make certain disclosures and perform certain acts like… A.To forward copies of annual reports and balance sheets to the shareholders B.To furnish financial results on a quarterly basis C.To comply with the conditions of corporate governance D.To provide facilities for prompt transfer of shares E.The requirement of minimum number of shareholders F.To comply with listing regulations from time to time etc.