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SECURITIES AND EXCHANGE BOARD OF INDIA
MEMBERS OF THE BOARD
Shri D. R. MEHTA
Chairman
Member appointed under Section 4(1)(d) of the SEBI Act, 1992 (15 of 1992)
JAYANTH RAMA VARMA
Full-time Member
KUMAR MANGALAM BIRLA
Members nominated under Section 4(1)(b) of the SEBI Act, 1992 (15 of 1992)
RAKESH MOHAN
Adviser to Finance Minister
Ministry of Finance
Department of Economic Affairs
Government of India
S P TALWAR
Deputy Governor
Reserve Bank of India
V GOVINDARAJAN
Secretary
Department of Company Affairs
Ministry of Law, Justice and Company Affairs
Government of India
List of Abbreviations
iii
PART I
POLICIES AND PROGRAMMES
1
A) REVIEW OF THE GENERAL ECONOMIC
ENVIRONMENT AND THE INVESTMENT CLIMATE
10
B) REVIEW OF POLICIES AND PROGRAMMES
15
i. Primary Securities Market
15
ii. Secondary Securities Market
21
iii. Mutual Funds
37
iv. Foreign Institutional Investors
45
v. Intermediaries Associated with the Securities Markets
46
vi. Other Policies and Programmes Having a Bearing on the
Working of the Securities Markets
47
vii. Assessment and Prospects
64
PART II
REVIEW OF THE TRENDS & WORKING OF THE
SECURITIES MARKETS
66
A) Primary Securities Market
66
B) Secondary Securities Market
80
C) Mutual Funds
102
D) Foreign Institutional Investors
110
E) Substantial Acquisition of Shares and Take-overs
112
F) Investigation, Enforcement and Surveillance (IES)
112
G) Litigation, Appeals and Court Pronouncements
134
(i)
Page 4
PART III
FUNCTIONS OF SEBI IN RESPECT OF MATTERS SPECIFIED
IN SECTION 11 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA ACT, 1992
141
A) Regulation of Business in the Stock Exchanges
141
B) Registration and Regulation of the Working of Intermediaries
141
C) Registration and Regulation of Mutual Funds
146
D) Fraudulent and Unfair Trade Practices
147
E) Prohibition of Insider Trading
147
F) Substantial Acquisition of Shares and Take-overs
147
G) Investor Education and the Training of Intermediaries
148
H) Inspection and Inquiries
148
I)
Fees and Other Charges
154
J) Activities of Research Department
155
K) Other Functions
155
PART IV
ORGANISATIONAL MATTERS OF THE SECURITIES AND
EXCHANGE BOARD OF INDIA
159
ANNEXURE 1
A-1
ANNEXURE 2
A-2
ANNEXURE 3
A-4
ANNEXURE 4
A-5
(ii)
Page 5
ABBREVIATIONS
ALBM
Automated Lending and Borrowing Mechanism
ALBRS
Automated Lending and Borrowing Under Rolling Settlement
AMC
Asset Management Company
AMFI
Association of Mutual Funds in India
APRC
Asia Pacific Regional Council
BLESS
Borrowing and Lending of Securities Schemes
BOLT
BSE On-Line Trading
BgSE
Bangalore Stock Exchange
BSE
Bombay Stock Exchange
BSE Natex
BSE National Index (100 Scrips)
BSE Sensex
BSE Sensitive Index (30 Scrips)
CBDT
Central Board of Direct Taxes
CCPS
Cumulative Convertible Preference Shares
CDSL
Central Depository Services Limited
CFRS
Carry Forward Under Rolling Settlement
CIS
Collective Investment Schemes
CNS
Continuous Net Settlement
CRA
Credit Rating Agency
CRISIL
Credit Rating Information Services of India Ltd
CSEKL
Capital Stock Exchange of Kerala Limited
CUG
Closed User Group (Connectivity)
DCA
Department of Company Affairs
DFI
Development Financial Institution
DoT
Department of Telecommunications
DPs
Depository Participants
DRR
Debenture Redemption Reserve
DSE
Delhi Stock Exchange
DVP
Delivery versus Payment
ERO
Eastern Regional Office
ESOS
Employee Stock Options Scheme
ESPS
Employee Stock Purchase Scheme
FCDs
Fully Convertible Debentures
FERA
Foreign Exchange Regulation Act
FIFO
First In First Out Method
FIIs
Foreign Institutional Investors
Fis
Financial Institutions
FVRC
Foreign Venture Capital Investors
GDP
Gross Domestic Product
GIC
General Insurance Corporation
ICAI
Institute of Chartered Accountants of India
IDFC
Infrastructure Development and Finance Corporation
IL&FS
Infrastructure Leasing and Financial Services
IOSCO
International Organisation of Securities Commissions
IPO
Initial Public Offer
(iii)
Page 6
ISDN
Integrated Services Digital Network
ISE
Inter-connected Stock Exchange of India Ltd.
ISIN
International Securities Identification Number
LSE
Ludhiana Stock Exchange
LAN
Local Area Network
MCFS
Modified Carry-Forward System
MF
Mutual Fund
MSE
Madras Stock Exchange
MoU
Memorandum of Understanding
NAV
Net Asset Value
NBFC
Non-Banking Financial Company
NCAER
National Council of Applied Economic Research
NCDs
Non-Convertible Debentures
NCFM
NSE Certification on Financial Management
NPA
Non-Performing Assets
NRI
Non-Resident Indian
NRO
Northern Regional Office
NSCCL
National Securities Clearing Corporation Limited
NSDL
National Securities Depository Limited
NSEIL
National Stock Exchange of India Limited
OCBs
Overseas Corporate Bodies
OCCPS
Optionally Convertible Cumulative Preference Share
OFCDDs
Optionally Fully Convertible Discounted Debentures
OFCDs
Optionally Fully Convertible Debentures
OIC
Overseas Investor Cell
OTCEI
Over-the-Counter-Exchange of India
PCD
Partially Convertible Debenture
PSU
Public Sector Undertaking
RAIN
Registrars Association of India
RTI
Registrar to the Issue
S&P CNX NIFTY
NSE Index (50 Scrips)
SAT
Securities Appellate Tribunal
SC(R) Act
Securities Contract (Regulation) Act, 1956
SEBI
Securities and Exchange Board of India
SGF
Settlement Guarantee Fund
SHCIL
Stock Holding Corporation of India Limited
SRO
Self Regulatory Organisation
STA
Share Transfer Agent
T-Bills
Treasury Bills
UTI
Unit Trust of India
VCU
Venture Capital Undertaking
VSAT
Very Small Aperture Terminal
WAN
Wide Area Network
WAP
Wireless Application Protocol
WDM
Wholesale Debt Market
(iv)
