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CM & SL
*Institutional investor who buys shares on large scale *They possess expertise in securities market. Primary Market Secondary Market
- Fresh security Trading in securiƟes already issued
- ObjecƟve is to raise fund ObjecƟve is capital appreciation
- It includes issuance of new securities It includes further trading in securities
- Known as new issue market Known as aŌer issue market
- Dealing between co & investor Dealing among themselves
- It provides funds to co for their expansion It does not provide funding to co
- Underwriters Brokers
- Price menƟon in offer doc Price determined by demand & supply
- Fund becomes capital of co It becomes income for investor QIB includes:-
MF,Vent ure capital fund , AIF, FVCI
- FPI, other than individual corporate bodies & family offices
- Public financial institutio n
Schedule Commercial Banks & NBFC
Multilate ral & bilateral financial institutio n
- State industrial developm ent co- operation
Insurance co
Provid- ent fund with corpus of 25 cr
Pensio- n fund with corpus of 25 cr
Nation- al investm ent fund
Insuranc e fund set up by army, navy or air forces & manage by departm ent of post
Systemically important non banking financial insitution TOP 100 TOPICS
- PRIMARY AND SECONDARY MARKET
- QUALIFIED INSTITUTIONAL BUYERs
HNI
Retail investor
with high net
worth
Min
application
size in IPO - 2
lakh
Investible
surpluse over
2 cr Investible wealth
between 25 lakh
to 2 cr - known as
EMERGING HNIs
In USA :- Asset in
excess of USD 1
million excluding
personal assets,
real estate &
collectible.
Using of diverse or complex trading strategies. Investment in listed, unlisted co, derivative or commodity market. Can use leverage or borrowing for investment e.g. Hedge funds Category 3 Other than category 1 & 2. Cannot use leverage for investment. Can obtain loan for operational purpose e.g. private equity or debt funds Category 2 *Investment in startup, early venture, social venture, SME , Infra sector e.g. VCF SME fund Infra fund Social venture fund Category 1
- It is in the form of trust, LLP, co or body corporate
- Privately pooled investment vehicle which collect fund from India oroutside India
- To invest in defined investment policy for the benefit of investors
- Not covered under the SEBI (Mutual Funds) Regulations, SEBI (Collective Investment Scheme) Regulation or any other regulations of SEBI
- HIGH NET WORTH INDIVIDUAL
- ALTERNATIVE INVESTMENT FUNDs and their CATEGORIES
CM & SL
*Investment in Indian securiƟes by foreign investors (individual or insƟtuƟonal
investor).
1.Appropriatly regulated fund not
eligible as category 1
2.Charitable organisation
3.Endowment & Foundation
4.Family offices
5.Individuals
6.Unregulated funds in form of Limited
partnership & trusts
7.Corporate bodies
8.Appropriately regulated entities
investing on the behalf of their clients
Category 2 1.Govt, agencies, central banks, international or multinational organisation or agencies in which 75% owned by such govt. 2.Pension fund & university fund 3.Regulated entities such as insurance co, AMC, investment manager, portfolio manager, stock broker etc. 4.Entities from financial FATF member country or any country as specified which are- i.Appropriately regulated funds. ii.University related endowments which have been in existence for more than 5 years. iii.Unregulated fund but investment manager is regulated 5.Entities whose investment manager is from FATF members country Category 1 INFRASTRUCTURE INVESTMENT TRUSTs Objective to promote infrastructure sector in India Create a pool & invest in infra sector directly/indirectly Established as a trust and registered with SEBI
A.Trustee
-who is registered as debenture trustee. -Invest atleast 80% in infra assets that generate revenue.
B.Investment manager
-BC/LLP which supervise all the operational activities.
C.Sponsor
-BC/LLP or promoter or co having net worth of 100 cr -Holds min 15% of total units with min lock-in of 3 years
D.Project Manager
-Authority is responsible for executing project -In PPP projects supervises ancillary responsibilties. ELEMENTS OF TRUST
- Foreign porƞolio investor
- INVITs
Also known as "Muni Bonds". Funds raised by Urban local Govt & agencies for projects such as infrastructure project, roads, bridges etc. First time such bond was issued by Bengaluru municiple corporation
CONDITIONS-
*Positive Net Worth in previous 3 years *No default in repayment of debt securities avail from bank or NBFC in last year *Not listed in the wilfull defaulter list Municipal Bonds 1.Bond issued by an indian co 2.Subscribed by PROI 3.Expressed in foreign currency 4.Interest & principal denominated in foreign currency 5.Follow ECB guidelines 6.OpƟon either to convert into equity shares of issuing co or redeem the bonds 7.25% of total proceeds can used for general corporate purpose
- FOREIGN CURRENCY CONVERTIBLE BONDS
- MUNICIPAL BONDS
➢ Right Entitlement:- Right issued by the co to its existing shareholders, in a ratio of their existing equity shares held on record date. Entitlements are issued in demat form. OpƟon available to eligible shareholders :-
a) Apply to the full extent of their rights entitlements
b) Full extent of their right enƟtlement & apply for additional.
c) Apply for a part without renouncing.
d) Apply for a part & renounce the other.
e) Renounce the full.
Currency future & option contract on Exchange in IFSC:-
*Trading member can contract max 15% of total contract or 1 billion USD,
whichever is higher
*Institutional investor can hold max 15% of total contract or 1 billion USD,
whichever is higher (same for eligible foreign investor).
*Other – Max 6% of total contract or 100 million USD whichever is higher
•A future contract means an exchange traded forward contract to buy or sell security at a pre- determined price on a pre- determined future date. •a) Long Position:- When a future contract is purchased or the buyer agrees to take delivery •b) Short Position:- Future contract is sold & the seller agrees to make delivery Futures •Option give the holder the right, but not obligation to make or take delivery. Option is given to one party & other party is under obligation to make or take delivery.
- Call Option:- Is for Buyer which gives right to take delivery to the holder
- Put Option:- For seller & gives the right to take delivery
- European option:- option can be exercised only on expiration date. Follwed by Indian STX.
- American Option:- Exercised on or before the date of expiry. Options
CLEARING CORPORATION
1)Clearing & settlement of all trade executed
2)Maintain consistent settlement cycle
3)Counter-party risk gaurantee provider
4)STX transfer the duties to clearing corporation with
the prior approval of SEBI
5)Delivery & payment of security
6)Periodical settlement of contract
7)Clearing corporation shall make bye-laws & submit it
to SEBI
8)Other matter related to transfer
BLOCK DEAL A separate trading window to facillitate large trades in securities
- Morning deal deal window : 8:45 am - 9 am
- Afternoon block deal window : 2: pm - 2:20 pm
- Min order size shall be 10 cr
- Order shall be 1% of the application
- STX furnishes the details of Block Deall on the website on same day BULK DEAL
*Equity shares bought or
sold is more than 0.5%.
*Reveal to the STX on
daily basis.
*Notified to exchange
immediately after
transaction, in multiple
transactions notify after
one hour.
*Regulatory Framework:-
1) Post issue capital less than 25 cr.
2) Min no. of allotees in IPO 50.
3) Observation by STX on DRHP.
4) 100% underwriƟng, 15% by merchant banker.
5) IPO size not less than 1 lakh.
6) Half yearly reporting requirement.
7) Mandatory market making for 3 years
Trading
platform in
India
Main Board
1)In-pinciple approval of draft prospectus 2)Submission of Application 3)IPO registration
SME
Platform
Incorporated under co Act 2013 Paid-up capital not be more than 25 cr Positive Networth Net tangible assets of 1.5 cr Have combined track record of atleast 3 years [If failed to complete its operation for 3 years, co /LLP should funded by Bank/FI, CG/SG or by group co listed for 2 years] Have a websiteTrading in demat mode No change in promoter in last 1 year
NSE EMERGE
Platform
1)Offers emerging business a new & viable option for raising equity capital 2)It offers opportunities to investors to invest in emerging business with exciting growth plans, innovative business models & good governance Social stock exchange Not for profit organisation reg & raise fund through social STX For profit social enterprise indentified as SSE
ELIGIBILITY:-
1)Shall established proirity of its social intent 2)Shall meet following criteria:- (engaged in any 1) A)eradicating poverty, hunger, inequality. B)Promoting health care, mental healthcare, education,employment C)Protecting national heritage, art & culture D)Slum area development , affordable housing etc. E)Shall have 67% of its activity as eligible activity F)atleast 67% 3 yrs Avg revenue & Expenditure form/on eligible activity
- Stock exchange adopt automated surveillance tool to
analyze trading paƩerns.
- Market integrity is achieved through surveillance,
inspecƟon, invesƟgaƟon & enforcement of law & rules.
Market Surveillance:- Market surveillance is categorised in 2 parts:- a) PrevenƟve surveillance (online b) Post trade surveillance (ofline) A] Preventive surveillance:-
- Checking of net worth , back ground, viability etc while boarding of trading members.
- Trading halt in all equity derivaƟve market at 3 stages at 10%, 15%, 20%.
- Order matched & trade take place within the execuƟon range.
- Max order value limit per order.
- On logout all outstanding order are cancelled.
- Trading member can cancel all outstanding orders.
- Shall clarify all rumours. B] Post trade Surveillance:-
- End day alerts generated using staƟsƟcal tool.
- IdenƟfying unfair trade pracƟces through paƩern recogniƟon model.
- TransacƟons alert under 14 different heads. Innovators Growth Platform:-
Co with intensive use of thchnology, IT, IP, bio-technology
or nano-technology in business
25% of pre-issue capital of the co shall be hold for 2 years by:- QIB's Family trust with Net worth of > 500cr Accredit investors Category 3 of foreign portfolio investor Pooled investment fund with min assets of 150 million USD.
- Market Surveillance
Stock exchange recognised by CG
➢ Company
➢ ApplicaƟon to CG
➢ PARTICULAR:
a) Bylaws copy
b)Copy of AOA & MOA
c)ParƟcular of governing body of BOD.
d)Power & duƟes of office bearers of Stock exchange.
e)Power of management.
f)Details regarding the admission of trading member & their
qualificaƟon.
g)Procedure to admit partnership firm as a trading member.
Succession of RSE, being a body of individual into the company registered under
companies Act.
- RECOGNISED STOCK EXCHANGE
- Power to supersede the governing body of stock exchange: Grounds - Governing body is unable to discharge the function effectively or To protect the interest of investor of public CG shall serve written notice & give OOBH to such body. Effect of such order :- Member of Governing body shall cease to hold the office CG shall appoint such person to discharge the function of Governing body. If CG appoints more than one person then one should be Chairman & another person sahll act as a vice chairman All properties of stock exchange shall vest with the person appointed by CG 25.Power to grant immunity If any person has violated the rules & regulations of securities law & made full disclosure about the violation CG after taking recommendations of SEBI may grant the immunity Immunity with respect to prosecution or penalty However CG shall not grant immunity if where the proceedings for such offence have been instituted
If stock exchange refuse to list the securiƟes &:
- Reason for refusal is received 2) Reason for refusal not received Apply to SAT within 15 days from receipt of reason Appeal to SAT within 15 days from expiry of Ɵme specified for stock exchange Extension of 1 month can be granted by SAT. Dispose off appeal within 6 mon. SAT :- a) Confirm, b) Set aside or c) Vary the order (modify). Appeal to SC against SAT within 60 days. Extension of 60 days can be granted. Post issue capital Min Public share holding
Upto 1600 cr. 25% of each class of equity shares &
convertible security
Above 1600 cr. but upto 4000 cr. Such % which is equivalent to 400 cr.
Above 4000 cr. but upto 1 lakh cr. 10% of equity shares & equivalent
Above 1 lakh cr. 5000 cr. & 5% of each class of equity
share & convertible
security
➢ RSE may suspend the dealing in securiƟes REASON: a) Non-compliance of condition b) Other reasons, recorded in writing give OOBH before suspension suspension for above 3 month, may file appeal to SAT SAT may confirm, modify or set aside the decision of STX.
- Right to appeal against Recognised stock exchange
- Min Public Share holding:
- Suspension of dealing in securiƟes on STX:
a)
a)If any person has violated or likely to violate any provision of SEBI ACT, or
rules there under then SEBI may pass Cease & Desist order.
b)SEBI cannot pass Cease & Desist order except in case insider trading or
market manipulaƟon against the listed Co.
15G Galat trade
If any person who
either on his own
behalf or behalf of any
person deals in
securities on the basis
of UPSI
Communication of UPSI
with or without his
request
process or counselling
any UPSI from inside
support
Min
lakh ;
extend
to 25
cr. ; or
3 Ɵmes of profit earned
(whichever is higher)
- CEASE & DESIST ORDER
- PENALTIES UNDER SEBI ACT
- ADJUDICATING AUTHPRITY
Appointed
by CG & SEBI
Not below
the rank of
division chief
To hold
inquiry or
investigation
Power
same as
SEBI
Penalty - Give
opportunity of
being heard
SAT
*ConsƟtuted by CG by noƟficaƟon in official gazeƩe
*To accept the appeal against the order of SEBI, AO, RSE.
- CONSTITUTION OF SAT
Preceeding
Officer
Qualification Sitting/retired judge of SC. Sitting/retired Cheif justice of HC. Sitting/retired judge of HC
Judicial
Member
Sitting or Retired Judge of Hc + 5 years of experience
Technical
Member
Secretary or additional secretary of any department of CG or SG Appeal Procedure:
1) Appeal to SAT
2) Against the order of SEBI within 45 days
3) Sufficient ground - Can grant the extension
4) Dispose off within 6 month
5) SAT shall - confirm
modify
set aside
6) Appeal to SC against the order of SAT within 60 days
7) Extension - 60 days on sufficient grounds
1. Co registered under co Act
2. Obtain cerƟficate of Commencement of SEBI
3. Open demat a/c with the DP
4. DematerialisaƟon/ Rematerialisation
5. Other depository services
6. Two depository NSDL/CDSL
Complaint against Unlisted or delisted co
Complaint is pending in court or quasi judicial
authority
Complaints against order of any other authority like
RBI, IRDAI ect
Complaints pending under insolvency or bankruptcy
code
Complaints against such co where the name of co is struck off
from ROC or against the Vanishing co
Liquidated co
- Complaints shall not be done through SCORES
- Depository
Depository Participants Depository Participant is an agent of depository Link between depository, investor & co Open demat A/c investor with depository Bank, FI, Stock broker can be registered as a DP with depository
Fungibility a) Means interchangability b) SecuriƟes under demat mode shall be in fungible mode c) It means investor loses the right to obtain exact certificate d) It is one of the feature that shares are capable of Mutual SubsƟtuƟon e.g. withdrawing money from bank without bothering the disƟncƟve number. Electronic credit in new issue :- a) Open demat a/c b) Submit application c) Registrar upload the list of allotees to depository d) Depository credit allotee’s a/c. 43.Audit under depository ACT :-
a) Every issuer is required to conduct reconciliaƟon audit
b) On quarterly basis
c) Done by PCS/PCM/PCMA
d) If specified that dematerialisaƟon shall be completed within 21
days from request e)Difference in record, reported to stock exchange
& depository.
a) open
demat a/c
b) It is the process
where physical shares
are converted into
demat mode
c) Investor sybmit DRF & physical share certificate d) Participant intimate Depository electronically e) DP sends physical shares certificate & DRF to co f) Co confirm the dematerializatio n & intimate Depository g) Depository credit the investor's A/c & intimate co h) DP inform investor about the dematerialisation
- DematerialisaƟon
- FUNGIBILITY & ELECTRONIC CREDIT IN NEW ISSUE
