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Unit 14: Securities and Exchange Board of India

We have highlighted recent trends in the primary, discussed various types of securities Notes
traded, market players and trading arrangements which exits in the can stock market.
Different aspects of the Indian stock market viz. its origin and growth, role and functions,
membership, organization and management, trading systems, stock market information
system, principal weakness of directions of reform have been explained so that you, as a
student of this course, are able to clearly visualize the environment in which investment
and portfolio management decisions are made.
A major development of the 1992 scenario of Indian stock exchanges namely, the promotion
of Over The Counter Exchanges of India (OTCEI), its true features, trading mechanism

and expected benefits to companies, investors and general environment of finance is also
discussed.
In the following unit we shall focus on the legal frame of Indian securities market.
Companies with an issued equity capital of more than ` 300 lakhs seeking listing on the
OTCEI will have to comply with the listing requirements and guidelines as are applicable
to such companies for enlistment on other organized stock exchanges; for venture capital
companies, a minimum of 20% of capital has to be issued for listing in OTCEI.

Companies, which are engaged in investments, leasing, finance, hire-purchase, amusement
parks, etc. will not be eligible for listing on the OTCEI.

14.11 Keywords

DEA: Department of Economic Affairs
MCA: Ministry of Company Affairs
Merchant bankers: are authorized to act in the capacity of lead management co-market advisor or
consultant to an issue, portfolio manager and underwriter to an issue as mandatory required.
Money market: The market for short-term debt securities with maturities of less than one year.
RBI: Reserve Bank of India

SCR Act: The Securities Contracts (Regulation) Act, 1956, which provides for regulation of
transactions in securities through control over stock exchanges
SEBI: Securities and Exchange Board of India

14.12 Self Assessment

Fill in the blanks:
1. The ..................... may specify the matters relating to issue of capital, transfer of securities
and other matters, which shall be disclosed by the companies.
2. The general superintendence, direction and management of the affairs of the .....................
vest in a Board of members, which may exercise all powers and do all acts and things
which may be exercised or done by the Board.

3. For day-to-day functions, the activities of SEBI have been divided into fi ve .....................

4. The first major activity undertaken by SEBI was preparation of an Approach paper on
comprehensive legislation for the .....................
5. The SEBI Act, ..................... which establishes SEBI to protect investors and develop and
regulate securities market

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