SEBI

Question 1

SEBI in news June to Jan 2022 :

June-

• Surrender of certificate of registration of principal mutual Fund (PMF).
• Aswinin Bhatia take charge as Whole Time member, SEBI.

May-

• SEBI withdraws permanent recognition granted to Indian commodity exchange Limited.
• Grant of recognition to NSDL database management Limited (NDML) as an accreditation agency.
• SEBI constitutes advised committee on environmental social and governance (ESG) matters.

Answer 1

April-

• SEBI signed MoU with Manitoba securities commission ,Canada.
• SEBI issues operational guidelines for security and covenant monitoring using distributed ledger technology (DLT) .
• Surrender of certificate of registration of BNP Paribas mutual Fund (BNP MF)
• SEBI constitutes working groups for mutual funds.
• SEBI constitutes committee of strengthening of governance of market infrastructure institutions.

March-

• ” Manthan “ SEBI’s ideathon to promote innovation in the securities market .
• Ms. Madhabi Puri bach takes charge as chairperson, SEBI.

January -
*SEBI launches “ Saa₹thi “ mobile app on investor education.

Question 2

SEBI history
HQ- Mumbai
Chairman is Ms. Madhabi Puri Bach.

Answer 2

It became statutory body in 1992, as per SEBI act, 1992.
Board constitution: -
*One chairman
*Two members of CG dealing with Finance in law.
* One from RBI officials.
*3/5 are whole time member appointed by CG.
( Whole time members are S.K. Mohanty , Ananta Barua, Ashwini Bhatia.;
Whole time members & chairman should not hold office more than 5 years or after age of 65.)

Question 3

SEBI responsive to the needs of three groups: -
The issuers of security
the investors
the market intermediaries.

Sebi has three functions :

Answer 3

1. Quasi legislative function- for drafting regulations.
2. Quasi judicial - passing ruling and judgements; prosecute and judge directly certain violations.
3. Quasi executive - investigation and enforcement action.

Question 4

SEBI has following powers :-

Answer 4

1. To approve by-laws of securities exchanges
2. To require the securities exchange to amend their by-laws
3. Inspect the books of accounts and call for periodic returns from recognised securities exchanges.
4. Inspect the books of accounts of financial intermediaries.
5. Compulsory companies to list their shares in one or more security exchange.
6. Registration brokers
7. it checks price rigging
8. It prohibits insider trading
9. SEBI prohibits fraudulent and unfair trade practices.

Question 5

SEBI committees :-

Answer 5

1. Technical advisory committee
2. committee for review of structure of market infrastructure institutions
3. advisory committee for the SEBI investor protection and education fund
4. takeover regulation advisory committee
5. primary market advisory committee
6. secondary market advisory committee
7. mutual fund advisory committee
8. corporate bonds and securitization advisory committee.

Question 6

Securities Appellate Tribunal

Headed by Justice Tarun Agarwala

Answer 6

Statutory body established in 1995
under the provisions of section 15k of SEBI act, 1992.

A 3 member body composed of
1 Presiding officer
2 other members nominated via CG.

Tribunal has all powers of Civil court.

Question 7

Forward Markets Commission (FMC)

Answer 7

Was chief regulator of commodity future market but was later merged with SEBI in September, 2015.

Question 8

Changes introduced by SEBI in Capital market :-

Answer 8

1. T+2 trading settlement system
2. Dematerialization of share certificate (1999) an internet trading ( January,2000).
3. Banned entry loads for mutual funds scheme in 2009.
4. SEBI has web based grievance redress system called “ SEBI Complaint Redress System -SCORES”.
5. It is different from other regulators because it is financially independent regulated with its own source of revenue.
6. After amendment of 1999 , collective investment scheme brought under SEBI except NIDHI, chit Fund and corporatives.

Question 9

SEBI offers T+1(giving 1 month notice) or
T+2 settlement system for completion of share transaction.

*Settlement system means time period within which the stock exchanges have to settle Security transaction. T + 1 means settlements will have to be cleared within one day of the actual transaction taking place.

Answer 9

Mutual fund companies are regulated by SEBI, mutual fund companies collect an amount from investors when they join or leave a scheme.

This fee is generally refer to as a load.

Entry load can be said to be the amount of recharged from an investors while entering a scheme or joining the company as an investor.

Exit load is a fee or an amount charge from an investor for exiting or leaving a scheme for the company as an investor.