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× To remove shortcomings and deficiencies

and to regulate the capital market, the
Government of ndia set up the SEB in 1998.

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× To regulate all merchant banks on issue

activity, lay guidelines and supervise and
regulate the working of mutual funds and
oversee the working of stock exchanges in
× To introduce improved practices and greater
transparency in the capital markets in the
interest of the investing public and the
healthy development of the capital markets.

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× aompanies issuing capital in the primary markets are now required

to disclose all material facts and specific risk factors with their
× They should also give information regarding the basis of calculation
of premium leaving the companies free to fix the premium.
× t also introduced a code of advertisement for public issues for
ensuring fair and truthful disclosures.
× To encourage  SEB has permitted companies to determine the
par value of shares issued by them ( now it is Rs. 10 and Rs.100)
× SEB has allowed issues of s to go for B| BUG ie.,
reserve and allot shares to individual investor. But the issuer will
have to disclose the price, the issue size and the number of
securities offer to the public

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× rivate lacement :
± u  u 
 is a direct private offering of securities
to a limited number of sophisticated investors. t is the
opposite of a u 
× Underwriting of issue optional, subject to the
condition that if an issue was not underwritten and
was not able to collect 90% of the amount offered to
the public; the entire amount collected would be
refunded to the investors.

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× The merchant bankers are now to be

authorized by SEB. They have to adopt the
stipulated capital adequacy norms, abide by
a code of conduct which specifies a high
degree of responsibility towards investors in
respect of pricing and premium fixation of
issues and disclosures in the prospectus or
offer letters .

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× SEB advised stock exchanges to amend the

listing agreement to ensure that a listed
company furnishes annual statement
showing variations between financial
projections and projected utilization of funds
in the offer document and the actual

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× UT has now been brought under the

regulatory jurisdiction of SEB
× SEB has relaxed the guidelines for
investment in money market instruments.

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× t has started process of registration of

intermediaries such as the stock brokers and sub-
brokers under the provisions of the Securities and
Stock Exchange Board ct, 1992.
× The registration on the basis of certin eligibility
norms such as capital adequacy, infrastructure etc.
× SEB also made rules for making client/broker
relationships more transparent, in particular,
segregating client and broker accounts.

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× nsider Trading:
± n illegal activity in which persons in a company
having confidential information, such as
expansion plans, financial results, takeover bids,
etc., take advantage of such information to make
a profit on the stock exchange by buying or selling

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× SEB has notified regulations on insider trading

under the provisions of SEB ct.
× Since 1992, SEB has constantly reviewed the
traditional trading systems in ndian Stock
× T is simplifying procedures and achieving
transparency in cost and prices at which consumers¶
orders are executed, speeding up clearing and
settlement, and, finally transfer of shares in the
names of buyers

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× The G has allowed F such as ension Funds,

Mutual Funds, nvestment Trusts, sset or ortfolio
Management companies etc. to invest in the ndian
aapital Markets provided they are registered with
× To prevent Excessive speculation and volatility in the
stock market, SEB has introduced Rolling
Settlements from July, 2001 under which settlement
has to made every day.

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× TH | U

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