Sebi & secondary market

Alok johari

SEBI HAS INTRODUCED A WIDERANGE OF REFORMS GOVERING BODY INFRASTRUCTURE SETTLEMENT DEBT MARKET PRICE STABLISATION DELISTING BROKERS INSIDER TRADING

GOVERING BODY
GOVERING BOARD OF THE STOCK EXCHANGE WERE RECONSTITUTED ACCORDING TO THE SEBI DIRECTIVES BROKER AND NON BROKER REPRESENTS ARE MADE 50:50 SIXTY PERCENT OF NON BROKER REPRESENTATION WAS GIVEN IN THE ARBITRATION TRADING MEMBERS WILL BE GIVEN 40%REPRESENTATION IN THE GOVERING COUNCIL OF DERIVATIVES

INFRASTRUCTURE
TO SOPHISTICATE THE TRADE ON THE STOCK EXCHANGE NSE WAS ESTABLISHED WITH THE SCREEN BASED TRADING THE ALLOWED ON LINE SCREEN BASED TRADING TERMINALS TO LOCATION OUTSIDE THEIR JURISDICTION

SETTLEMENT &CLEARING
CARRY FOTWARD TRANSACTION WERE WITHDRAWN AND REINTRIDUCED BY SEBI WITH MODIFIED REGULATION INTRODUCED WEEKLY SETTLEMENT AUCTION WITH IN EIGHT DAYS OF THE SETTLEMENT ALLSTOCK EXCHANGE TO SET UP CLEARING HOUSE

DEBT MARKET SETTLEMENT

FII ALLOWED TO INVEST 100%IN DEBT FUND LISTING OF DEBT INSTRUMENT ON THE STOCKEXCHANGE EVEN IF THE COMPANYS EQUITY WAS NOT LISTED SEBI MADE DUAL RATING MANDATORY FOR THE ISSUES OF SIZE ABOVE 500 RS MILLION

PRICE STABILISATION
MONITORING UNUSUAL MOVEMENTS IN PRICE NECESSARY CIRCUIT BREAKER SYSTEM AND OTHER RESTRICTIONS COULD BE APPLIED IN CASE OF NEWLY LISTED SCRIPS WHEN THERE IS ABNORMAL PRICE VARIATION THE EXCHANGE WOULD IMPOSE a special margin of 25%or more on

in addition to regular margin Also introduced a host of price filters intraday price band of 10%
purchase

DELISTING
Tightending the delisting norms by permitting delisting only in accordance with the norms by chandratre committee 1voluntary delisting 2- the promoters would have to buy or arrange buyers for the security 3- the listing fees for three years should be taken from the companies at the time of delisting and kept in escrow account

BROKERS
Brokers should have submitt a audited balance sheet and p/l ac with insix month brokers are expected to preserve the books of a/c for the min 5 years sebi has right to inspect brokers books of account suspension of registration of a stock broker may be imposed if the stock broker violetes the provisions of the ACT The stock broker does not follow the code of conduct laid down by SEBI The stock- broker fails to resolve the complaint of the investor or fails to give satisfactory reply to the board inthis behalf The stock broker is guilty of misconduct The stock broker fails to pay the fees The stock broker violetes the conditions of registration

INSIDER TRADING
The most profitable technique employed in the stock trading is using one's access to price sensitive information ahead of others for exa HLL announced the merger of BBLTD with itself on APRIL 16 1996 but hectic trading took place on the two scrips preceeding the announcement once the information became public the trading volume and price declined to prevent this SEBI has come out with SEBI insider trading regulation 1992 the act has defined the insider information as Who is or was connected with company Who is deemed to have been connected with the company A subsidiary as per section( 370 (1B)ON 372(11) Who is director or is deemed to be director asper the definition in com act

INSIDER TRADING (CONT)

Unpublished price sensitive info belowrmationareas are given Ffinancial results of the company Intended declaration of dividends