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Unit 14: Securities and Exchange Board of India

3. SEBI (Central Listing Authority) Regulations, 2003 Notes

4. SEBI (Central Database for Market Participants) Regulations, 2003
5. SEBI (Self Regulatory Organizations) Regulations, 2004
6. SEBI (Criteria For Fit and Proper Person) Regulations, 2004
As a measure of regulatory pro-activeness, the existing regulations were reviewed and the
following amendment to the above regulations were notifi ed:
1. SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2003
2. SEBI (Mutual Funds) (Amendment) Regulations, 2003
3. SEBI (Depositories and Participants) (Amendment) Regulations, 2003
4. SEBI (Debenture Trustees) (Amendment) Regulations, 2003

5. SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2003
6. SEBI (Issue of Sweat Equity) (Amendment) Regulations, 2003
7. SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2003
8. SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2003

9. SEBI (Procedure for Holding Enquiry and Imposing Penalty) (Amendment) Regulations,
2003
10. SEBI (Ombudsman) (Amendment) Regulations, 2003
11. SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2004

Example: Dr. K. M. Abraham, Whole Time Member, SEBI, has passed an order dated

March 08, 2011 imposing a penalty of suspension of the certificate of registration of M/s. Rajendra
Prasad Shah, member, Calcutta Stock Exchange Ltd. (CSE), for a period of five days in respect of

its dealings in the shares of Bakra Pratisthan Ltd.
14.9 Regulation of the Investments of a Mutual Fund

The investments of a mutual fund are subject to a set of regulations prescribed by SEBI. The
important ones are:
1. A mutual fund, under all its schemes taken together, will not own more than 10% of any
company’s paid up capital carrying voting rights.
2. A scheme shall not invest more than 15% of its NAV in debt instruments issued by a single
issuer, which are rated not below investment grade by an authorised credit rating agency.

3. Barring certain exceptions, a scheme shall not invest more than 10% of its NAV in the
equity shares or equity related instruments of any one company.
4. A scheme shall not invest more than 5% of its NAV in unlisted equity shares or equity
related instruments in case of an open-ended scheme and 10% of its NAV in case of a close-
ended scheme.

5. Mutual funds shall mark all investments to market.

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