SEBI Regulations

SIRISH KUMAR GOUDA 1021021

Agenda
Introduction Functions/Powers SEBI Regulations
Stock Brokers and Sub-Brokers Regulations Mutual Funds Prohibition of Insider Trading Foreign Institutional Investors

NEED FOR REGULATION

Financial Scams in India
Harshad Mehta 1990-92 CRB Scam 1992 -1996 Ketan Parekh 1999/2000 IPO Scam 2004/2005 Satyam Scandal - 2009

About SEBI
SEBI - Securities and Exchange Board of India Headquarters in Mumbai. Regional offices in New Delhi, Kolkata, Chennai and Ahmedabad SEBI has been setup under the SEBI Act 1992 to
Protect the interest of investors in securities Promote the development of securities market Regulate the securities market

History
Capital Issue Control Act 1947 repealed in 1992 SEBI was setup in April 1988 Attained statutory status in 1992 SEBI Act 1992 Amendments made in years 1995, 1999 and 2002 Security Appellate Tribunal (SAT)

Constitution
Present Body of members
Shri U K Sinha Shri Prashanth Saran Dr. Thomas Mathew Shri K. V. Jairath Shri Anand Sinha Shri Naved Masood Chairman, SEBI Whole Time member, SEBI Joint Secretary (Capital Markets) Member Member (Deputy Governor, RBI) Member (Secretary, Ministry of Corporate Affairs)

Shri Rajeev Kumar Aggarwal joins SEBI as a Whole time member - Nov 3rd, 2011

Constitution
Security Appellate Tribunal
Justice N K Sodhi Shri P K Malhotra Shri S. S. N Moorthy Presiding Officer Member Member

SEBI REGULATIONS
Stock Broker and Sub-Brokers Regulations Prohibition of Insider Trading Regulations Merchant Banker Regulations Portfolio Managers Regulations Underwriters Regulations Debenture Trustees Regulations Foreign Institutional Investors Regulations Custodian of Securities Regulations Mutual Funds Regulations Venture Capital Funds Regulations Buy-Back of securities Regulations Credit Rating Agencies Regulations Ombudsman Regulations Self-Regulatory Organization Regulations Central Listing Authority Regulations Central Database of Market Participants Regulations Substantial Acquisition of Shares and Takeovers Regulations

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Functions of the Board

THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

Preamble
..to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto

Regulating business in stock exchange(s) and any other securities market(s) Registering and Regulating the working of stockbrokers, sub-brokers, bankers, custodian of securities, FIIs, credit rating agencies etc Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds

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Functions of the board

THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

Promoting and regulating self regulatory organizations Prohibiting fraudulent and unfair trade practices relating to the securities market Promoting investors education and training of intermediaries of the securities market Prohibiting insider trading in securities Regulating substantial acquisition of shares and takeover of companies Calling for information from, undertaking inspection, conducting inquiries of stock exchanges, mutual funds, banks or any authorities/persons associated securities market

Powers vested in the Board

THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

If SEBI has reasonable grounds to believe that a company has been indulging in fraudulent and unfair trade practices it can
Inspect any books, registers and other documents of the company Issue commissions for the examination of witnesses or documents

In the interests of investors, SEBI may take any of the following actions
Suspending the trading of any security in a recognized stock exchange Restrain persons from accessing stock exchange or any self-regulatory body Suspend any office-bearer of any stock-exchange from holding such a position Impound and retain the proceeds or securities in respect of any transaction which is under investigation Direct any intermediary/person in any manner not to dispose of an asset forming part of any transaction under investigation

SEBI - STOCK-BROKERS AND SUB-BROKERS REGULATIONS, 1992

DEFINITIONS
Stock Broker Member of a stock exchange Sub-Broker - any person not being a member of stock exchange who acts on behalf of a stock broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock brokers Small Investor - investor buying or selling securities on a cash transaction for a market value not exceeding rupees fifty thousand in aggregate on any day as shown in a contract note issued by the stock broker

REGISTRATION/CRITERIA
Registration for Stock Brokers
Application for grant of certificate shall be made through Form A through stock exchange and the same shall be forwarded to the Board not later than 30 days from the receipt of it. Furnishing information, clarification Consideration of the application (based on past experience, eligibility, infrastructure availability)

Criteria for determining a fit and proper person (Schedule II, SEBI Regulations, 2008)
Integrity, reputation and character Absence of convictions and restraint orders Competence including financial solvency and net-worth

REGISTRATION/CRITERIA
Registration of Sub-Brokers
An application by a sub-broker for the grant of a certificate shall be made in Form B along with a recommendation letter in Form C from a stock broker to the Board and the same shall be provided to the Board Eligibility criteria
>21 years of age has not been convicted of any offence involving fraud or dishonesty has at least passed 12th standard equivalent examination from an institution recognised by the Government the applicant is a fit and proper person (Schedule II, 2008) Adequate office space, manpower, equipment

On approval will receive Form E from the board

OBLIGATIONS/RESPONSIBILITIES
Every Stock Broker shall keep and maintain the following books of account, records and documents
Register of transactions (Sauda Book) Clients ledger General ledger Journals Cash book Bank pass book Documents register containing particulars securities Members contract books Counterfoils of notes issued to clients Margin deposit book Registers of accounts of sub-brokers

Every stock broker shall intimate to the Board the place where the books of account, records and documents are maintained and they are to be maintained for a minimum period of 5 years

OBLIGATIONS/RESPONSIBILITIES
Every stock broker shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions, etc., issued by the Board or the Central Government and for redressal of investors grievances. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him. The stock broker shall not deal with any person as a sub-broker unless such person has been granted certificate of registration by the Board

INVESTIGATION/INSPECTION
Where it appears to the Board so to do, it may appoint one or more persons as inspecting authority to undertake inspection of the books of account, other records and documents of the stock brokers for purposes namely
to ensure that the books of account and other books are being maintained in the manner required; that the provisions of the Act, rules, regulations and the provisions of the Securities Contracts (Regulation) Act, and the rules made thereunder are being complied with; to investigate into the complaints received from investors, other stock brokers, sub-brokers or any other person on any matter having a bearing on the activities of the stock brokers; and to investigate suo motu, in the interest of securities business or investors interest, into the affairs of the stock-broker.

OBLIGATIONS/RESPONSIBILITIES
Obligations of stock-broker on inspection by the Board
Duty of every director, proprietor, partner, officer and employee of the stock-broker, who is being inspected, to produce to the inspecting authority such books, accounts and other documents in his custody or control and furnish him with the statements and information relating to the transactions in securities market within such time as the said officer may require Stock-broker shall allow the inspecting authority to have reasonable access to the premises occupied by such stock-broker or by any other person on his behalf and also extend reasonable facility for examining any books, records, documents and computer data in the possession of the stock-broker Duty of every director, proprietor, partner, officer and employee of the stock broker to give to the inspecting authority all assistance in connection with the inspection, which the stock broker may reasonably be expected to give

PENALTIES
Procedure for action in case of default
Liability for monetary penalty for violations, namely
Failure to file any return with the Board Failure to furnish information to Board on asked for within 15 days Failure to maintain the books as per the regulations Failure to redress the grievances of the investors within 30 days Failure to deliver any security or make payment of the amount due to the investor within 48 hours of the settlement of trade unless the client has agreed in writing otherwise Charging of excess brokerage fees Procuring and publishing price sensitive information Indulging in fraudulent and unfair trade practices relating to securities Failure to segregate his own funds or securities from the clients funds or securities or using the securities or funds of the client for his own purpose Failure to seek prior permission of the Board in case of any change in its status and constitution

CODE OF CONDUCT STOCK BROKERS

Code of conduct for stock brokers
Maintains integrity Acts with due diligence and skill Shall not indulge in manipulation, fraudulent or deceptive transactions or schemes or spread rumors Abides by all rules, regulations issued by board and the government of India Faithfully execute all orders at the best available market price Issue contract note without delay to his client Shall not transact with clients who have defaulted with other stockbrokers Shall not disclose personal information of any investments by any individual Shall not reject the deals of small traders just because of the volume of the trade

CODE OF CONDUCT SUB-BROKERS

Code of conduct for sub-brokers
Maintains integrity Acts with due diligence and skill Shall faithfully execute the orders for buying and selling of securities at the best available market price Shall not disclose any personal information about any individuals investments Shall not encourage sales or purchases of securities with the sole object of generating brokerage or commission Shall not furnish misleading or false information to the clients Shall not charge from his clients a commission exceeding one and one-half of one per cent of the value mentioned in the respective sale or purchase notes Shall not transact with clients who have defaulted with other stockbrokers

SUB-BROKERS VIS-A-VIS STOCK BROKER

A sub-broker shall co-operate with his broker in comparing unmatched transactions A sub-broker shall extend fullest co-operation to his stockbroker in protecting the interests of their clients regarding their rights to dividends, right or bonus shares, or any other rights relatable to such securities A sub-broker shall not fail to carry out his stockbroking transactions with his broker nor shall he fail to meet his business liabilities or show negligence in completing the settlement of transactions with them A stock-broker shall not advertise his business publicly unless permitted by the stock exchange A stock-broker shall not resort to unfair means of inducing clients from other brokers

FEES PAID BY BROKERS

Fees to be paid by the Stock Brokers
Registration Fee
For annual turnover < 1 crore , sum of ` 5000/financial year for first five years For annual turnover > 1 crore, sum of ` 5000 + 0.01% of excess turnover/financial year for first five years After five years, ` 5000 for every block of 5 years

Jobbing transactions which have not been taken on behalf of clients 1/200th % of such transaction Transactions related to Govt. Securities 1/1000th % of the turnover Carry forward, renewal or badlaa transactions 1/100th % of turnover

Fees to be paid by the Sub-Brokers

Registration fees
` 10,000/financial year for first five years After five years, ` 5000 for every block of 5 years

SEBI (MUTUAL FUNDS) REGULATIONS, 1996

DEFINTIONS
Mutual Fund - fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets Open ended Scheme - scheme of a mutual fund which offers units for sale without specifying any duration for redemption Close ended Scheme - mutual fund in which the period of maturity of the scheme is specified Fund of funds scheme - mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds Capital Protection Oriented Scheme - mutual fund scheme which is designated as such and, which endeavours to protect the capital invested therein through suitable orientation of its portfolio structure

REGISTRATION/ELIGIBILITY
Registration of mutual fund
application for registration of a mutual fund shall be made to the Board in Form A by the sponsor

Eligibility Criteria
should have a sound track record and general reputation of fairness and integrity in all his business transactions in the case of an existing mutual fund, such fund is in the form of a trust and the trust deed has been approved by the Board the sponsor or any of its directors or the principal officer to be employed by the mutual fund should not have been guilty of fraud or has not been convicted of an offence appointment of trustees to act as trustees for the mutual fund in accordance with the provisions of the regulation appointment of asset management company to manage the mutual fund and operate the scheme of such funds in accordance with the provisions of these regulations appointment of custodian in order to keep custody of the securities or gold and gold related instrument or other assets of the mutual fund

Example
Sundaram Mutual Fund Sponsor: Sundaram Finance Limited Trustee Company: Sundaram Trustee Company Ltd Trustees: Mr R Rajamani - Director Mr. S. Viji - Director Mr.K V Ramanathan Chairman Asset Management Company: Sundaram Asset Management Company Limited Custodian: HDFC Bank Standard Chartered Bank Auditors: M/s Brahmayya & Co, Chartered Accountants M/s Sundaram & Srinivasan, Chartered Accoutants

TRUSTEES
Trustees
All Mutual funds should appoint trustees who are persons of ability, integrity and standing. Two-thirds of the trustees shall be independent persons and shall not be associated with the sponsors or be associated with them in any manner whatsoever No trustee shall initially or any time thereafter be appointed without prior approval of the Board The existing trustees of any mutual fund may form a trustee company to act as a trustee with the prior approval of the Board

RIGHTS/OBLIGATIONS
Rights and obligations of the trustees
Shall ensure that asset management company has all systems in place, appointed key personnel including auditors, compliance officer and registrar Shall ensure that the asset management company has been diligent in its operations and has not given any undue attention to any particular client Shall ensure that the asset management company has been managing the mutual fund schemes independently of other activities and have taken adequate steps to ensure that the interest of investors of one scheme are not being compromised with those of any other scheme Shall inform the board of any misconduct in business of the mutual fund Shall quarterly review all transactions carried out between the mutual funds, asset management company and its associates

RIGHTS/OBLIGATIONS
Rights and obligations of the trustees
Shall quarterly review the networth of the asset management company shall ensure that there is no conflict of interest between the manner of deployment of its networth by the asset management company and the interest of the unit- holders shall periodically review the investor complaints received and the redressal of the same by the asset management company The trustees shall furnish to the Board on a half-yearly basis
a report on the activities of the mutual fund a certificate stating that the trustees have satisfied themselves that there have been no instances of self-dealing or front running by any of the trustees, directors and key personnel of the asset management company a certificate to the effect that the asset management company has been managing the schemes independently of any other activities

ASSET MANAGEMENT COMPANY

Eligibility Criteria for Asset Management Company
Needs to have a sound track record Directors are persons having adequate professional experience in finance and financial services Key personnel are not involved in any fraudulent activities earlier Board of directors have at least 50% of who are not associate of, or associated in any manner with, the sponsor or any of its subsidiaries or the trustees Chairman - not a trustee of any mutual fund Has a networth of not less than ` 10,000 crore

OBLIGATIONS OF AMC
Shall take all reasonable steps and exercise due diligence to ensure that the investment of funds pertaining to any scheme is not contrary to the provisions of these regulations and the trust deed shall submit to the trustees quarterly reports of each year on its activities and the compliance with these regulations The fund managers shall ensure that the funds of the schemes are invested to achieve the objectives of the scheme and in the interest of the unit holders Shall not purchase or sell securities through any broker which is average of 5 per cent or more of the aggregate purchases and sale of securities made by the mutual fund in all its schemes until unless justified to the trustees and the board Shall file with the board and the trustees
Detailed bio-data of all of its directors and any change in the list every six months Quarterly report justifying the purchase/sale of securities by the mutual fund

SCHEMES OF MUTUAL FUND

All schemes have to be preapproved by trustees and the board Offer Document and Advertisement
Shall contain disclosures which are adequate in order to enable the investors to make informed investment decision The Asset Management Company has to make necessary adjustments to the offer documents if the board suggests so Shall contain the disclosure regarding the prior in principle approval obtained from the recognized stock exchange(s), where units are proposed to be listed in accordance with these regulations. The offer document and advertisement materials shall not be misleading or contain any statement or opinion which are incorrect or false

SCHEMES OF MUTUAL FUND

Close ended schemes shall not be repurchased before the end of the maturity period of the scheme Unit holders have an option of converting the same to open-ended at the end of the maturity period or selling them fully Allotment of units and refund of money
Specify minimum subscription amount Company shall be liable to refund the application money to applicants within five days of closure of subscription list if it either fails to get minimum subscription or if money received is excess of subscription In case it does not pay within 5 days, the AMC is liable to pay at 15% interest rate to the applicants

SCHEMES OF MUTUAL FUND

No guaranteed return shall be provided in a scheme
unless such returns are fully guaranteed by the sponsor or the asset management company unless a statement indicating the name of the person who will guarantee the return is made in the offer document the manner in which the guarantee is to be met has been stated in the offer document. Eg: Not even the capital protection oriented scheme can guarantee returns

INVESTMENT OBJECTIVES AND VALUATION POLICIES

A mutual fund may invest, under any of its schemes only in
Securities Money market instruments Privately placed debentures Asset or Mortgage backed securities Gold or gold related instruments Real estate assets

Money collected under any money market scheme of a mutual fund shall be invested only in money market instruments. Same holds for gold exchange traded fund or real estate mutual fund

INVESTMENT OBJECTIVES AND VALUATION POLICIES

A mutual fund shall not borrow except to meet temporary liquidity needs of the MFs for the purpose of repurchase, redemption of units or payment of interest or dividend to the unit-holders provided that it shall not borrow more than 20 per cent of the net asset of the scheme and the duration of such a borrowing shall not exceed a period of six months.

VALUATION OF INVESTMENTS
Net Asset Value = net assets of the scheme by the number of units outstanding on the valuation date Shall be calculated and published at least in two daily newspapers at intervals of not exceeding one week .(for closed scheme, it has to be published everyday) Repurchase price is not lower than 93% of NAV and not higher than 107% of NAV.

GENERAL OBLIGATIONS
Maintain proper books of account and records minimum of eight years Limitation on expenses - The total expenses of the scheme excluding issue or redemption expenses, but including the investment management and advisory fee shall be subject to the following limits
On the first Rs.100 crores of the average weekly net assets 2.5%; On the next Rs.300 crores of the average weekly net assets 2.25%; On the next Rs.300 crores of the average weekly net assets 2.0%; On the balance of the assets 1.75%

GENERAL OBLIGATIONS
A mutual fund may declare dividends in accordance with the offer document and subject to such Guidelines as may be specified by the Board Has to despatch to the unitholders the dividend warrants within 30 days of the declaration of the dividend Every mutual fund or the asset management company shall prepare in respect of each financial year an annual report and annual statement of accounts of the schemes Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management company and the auditor will be appointed by the trustees

INSPECTION AND AUDIT

Board has the right to inspect and investigate the books of account maintained by the mutual fund, the trustees and the asset management company Board also has the right to appoint an auditor to inspect or investigate into the books of account or the affairs of the mutual fund, trustee or asset management company The Board shall be entitled to recover such expenses including fees paid to the auditors as may be incurred by it for the purposes of inspecting the books of account, records and documents of the mutual fund, the trustees and the asset management company

SEBI -PROHIBITION OF INSIDER TRADING REGULATIONS, 1992

INSIDER TRADING CASES

March 1998 HUL June 2001 ABS April 2004 Samir Arora, Alliance Capital Mutual Fund November 2006 Wockhardt December 2006 Dilip Pendse, Tata Finance

DEFINITIONS
Insider person connected with a company or is deemed to have been connected with the company and is reasonably expected to have access to unpublished sensitive information in respect of securities of a company or has received such unpublished price sensitive information No company shall deal in the securities of another company or associate of that other company while in possession of any unpublished price sensitive information. No insider shall
either on his own behalf or on behalf of any other person, deal in securities of a company listed on any stock exchange communicate [or] counsel or procure directly or indirectly any unpublished price sensitive information to any person who while in possession of such unpublished price sensitive information shall not deal in securities

REGULATIONS
In a proceeding against a company in respect of regulation 3A, it shall be a defence to prove that it entered into a transaction in the securities of a listed company when the unpublished price sensitive information was in the possession of an officer or employee of the company, if :
the decision to enter into the transaction or agreement was taken on its behalf by a person or persons other than that officer or employee; and such company has put in place such systems and procedures which demarcate the activities of the company in such a way that the person who enters into transaction in securities on behalf of the company cannot have access to information which is in possession of other officer or employee of the company; and it had in operation at that time, arrangements that could reasonably be expected to ensure that the information was not communicated to the person or persons who made the decision and that no advice with respect to the transactions or agreement was given to that person or any of those persons by that officer or employee; and the information was not so communicated and no such advice was so given.

OBLIGATIONS OF INSIDER
If the Board suspects any violation of the provisions of the regulations
Board may appoint officers to inspect books/records of insiders It can investigate and inspect books/records/documents of insiders

Obligations of Insider on investigation by the board

Insider should produce all books/records/documents Insider should allow the investigation by the board authorities or appointed personnel Director/partner/proprietor of the employee(insider) should assist the authorities investigation Director/partner/proprietor of the employee(insider) should provide any documents related to the insider

POLICY OF DISCLOSURE
Policy on disclosures and internal procedure for prevention of insider trading
All entities shall abide by the regulations provided by SEBI Initial and Continual Disclosure Any person who is a director or officer of a listed company shall disclose to the company the number of shares or voting rights held and positions taken in derivatives by such person and his dependents (as defined by the company), within two working days of becoming a director or officer of the company Any person who holds more than 5% shares or voting rights in any listed company shall disclose to the company the number of shares or voting rights held by such person, on becoming such holder, within (2 working days of)
the receipt of intimation of allotment of shares (or) the acquisition of shares or voting rights, as the case may be

MODEL CODE OF CONDUCT

Model code of conduct for prevention of insider trading
Compliance Officer(from top three tiers of management) Preservation of Price sensitive information Limited Access to confidential Information Closure of trading window Reporting Requirements for transactions in securities to compliance officer

SEBI-FOREIGN INSTITUTIONAL INVESTORS REGULATIONS, 1995

DEFINITIONS
Foreign Institutional Investor- an institution established or incorporated outside India which proposes to make investment in India in securities Domestic custodian- includes any person carrying on the activity of providing custodial services in respect of securities Sub-account - includes those foreign corporates, foreign individuals, and institutions, funds or portfolios established or incorporated outside India on whose behalf investments are proposed to be made in India by an FII

REGISTRATION
An application for the grant of certificate shall be made to the Board in Form A Needs to furnish requisite information for granting the certificate The applicant's track record, professional competence, financial soundness, experience, general reputation of fairness and integrity will be checked for Whether the applicant is regulated by an appropriate foreign regulatory authority Permission granted by the Foreign Exchange Regulation Act, 1973 by the RBI for making investments in India as an FII

REGISTRATION
Board checks whether the applicant is (should be in legal existence for at least 5 years)
an institution established or incorporated outside India as a pension fund, mutual fund, investment trust, insurance company or reinsurance company an International or Multilateral Organisation or an agency thereof or a Foreign Governmental Agency, Sovereign Wealth Fund or a Foreign Central Bank an asset management company, investment manager or advisor bank or institutional portfolio manager established or incorporated outside India a trustee of a trust established outside India and proposing to make investments in India on behalf of broad based funds and its proprietary funds university fund, endowments, foundations or charitable trusts or charitable societies

REGISTRATION
Foreign Institutional Investor
Shall abide by all provisions of the regulations set by the board Shall intimate the board regarding any changes in information already provided to the board Shall appoint a domestic custodian Shall obtain the registration of the sub-account under the regulations

INVESTMENT CONDITIONS AND RESTRICTIONS

An FII may invest only in
Securities in primary and secondary markets including shares, debentures and warrants of companies, unlisted, listed or to be listed on a recognized stock exchange in India Units of mutual funds Dated Government Securities Derivatives traded on a recognized stock exchange Commercial papers

INVESTMENT CONDITIONS AND RESTRICTIONS

Investment limits on equity investments
FII, on its own behalf, shall not invest in equity more than 10% of total issued capital of an Indian company Investment on behalf of each sub-account shall not exceed 10% of total issued capital of an India company For the sub-account registered under Foreign Companies/Individual category, the investment limit is fixed at 5% of issued capital

INVESTMENT CONDITIONS AND RESTRICTIONS

Investment limits on debt investment
Corporate debt - $ 500 million In Government debt
100% Debt route $ 1.55 billion 70:30 route $ 200 million

PAYMENT OF FEES
Registration Fee - $10,000 $ 10,000 fee after registration for every three years Sub account registration - $ 2000 $ 2000 fee after sub-account registration for every three years

CODE OF CONDUCT
FII and its key personnel shall observe high standards of integrity, fairness and professionalism in all dealings in the Indian securities market with intermediaries, regulatory and other government authorities. FII shall, at all times, render high standards of service, exercise due diligence and independent professional judgment. FII shall ensure and maintain confidentiality in respect of trades done on its own behalf and/or on behalf of its subaccounts/clients. FII shall ensure the following:
clear segregation of its own money/securities and sub-accounts money/securities. Arms length relationship between its business of fund management/ investment and its other business.

FII shall maintain an appropriate level of knowledge and competency and abide by the provisions of the Act, regulations made thereunder and the circulars and guidelines, which may be applicable and relevant to the activities carried on by it.

CODE OF CONDUCT
FII shall not make any untrue statement or suppress any material fact in any documents, reports or information furnished to the Board FII shall ensure that good corporate policies and corporate governance are observed by it FII shall ensure that it does not engage in fraudulent and manipulative transactions in the securities listed in any stock exchange in India FII or any of its directors or manager shall not, either through its/his own account or through any associate or family members, relatives or friends indulge in any insider trading FII shall not be a party to or instrumental for
creation of false market in securities listed or proposed to be listed in any stock exchange in India price rigging or manipulation of prices of securities listed or proposed to be listed in any stock exchange in India; passing of price sensitive information to any person or intermediary in the securities market.

REFERENCES
Khan, M. Y. (2011). Indian Financial System. Tata McGraw Hill Education Private Limited www.sebi.gov.in