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Financial Markets

Financial Markets. S E B I. S E B I. Securities and Exchange Board of India. Case Study- SEBI-Sahara OFCD case. 23 million people, mostly from villages and small towns subscribed to this scheme. They invested 24,000 crores rupees in these OFCDs of SAHARA. Highlights of the case .

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Financial Markets

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  1. Financial Markets S E B I S E B I Securities and Exchange Board of India

  2. Case Study- SEBI-Sahara OFCD case 23 million people, mostly from villages and small towns subscribed to this scheme. They invested 24,000 crores rupees in these OFCDs of SAHARA. Highlights of the case In 2008 2 companies of Sahara Group had issued OFCD. (Optional Free Convertible Debentures) to collect money from investors. You (SAHARA) have violated rules. If OFCDs are issued then whole Sahara Housing Investment Corporation process should be completed within 10 working days, but here you continue collecting money from people for more than two years! Stop collecting the money and refund the cash with 15%intersest. Sahara India Real Estate Corporation. This is not right!

  3. Case Study- SEBI-Sahara OFCD case Appeal to Supreme Court. My two of these companies are not listed and hence this Well, if you’re unhappy with my order you can go to the Securities Appellate Tribunal (SAT) Case is not under the jurisdiction of SEBI. Pleads before SAT. SEBI is right. You must refund money to those people. We are not convinced with your arguments. It seems you have no intention of returning the investors’ money. Your intentions are shady. We order you to refund the money.

  4. How do you answer? 2. How you will expand OFCD ? Optional Convertible Debentures Try to answer the following questions on the basis of the case study.. More stuff 2. Do you know what is OFCD ? 1. SEBI undertakes --------------- role in the stock Exchange More stuff These debentures can be converted into shares, when debt holder (investor) wishes after expiry of pre-decided date. Supportive role Incorrect Administrative role 3. Why SEBI has issued refund order to SAHARA? Incorrect Regulatory Role More stuff Correct Here SAHARA has violated the rules. If a company is issuing the OFCD its procedures including the cash collection must be completed within 10 working days. None of these Incorrect Reset Questions Classteacher Learning Systems

  5. How do you answer? 4. Now can you explain the purpose of establishment of SEBI? More stuff SEBI has been established for the purpose of controlling and regulating the capital market. Through its regulatory mechanism SEBI protects the interest of the investors from fraud and unfair trade practices. Classteacher Learning Systems

  6. SEBI - History The capital market had witnessed a tremendous  growth during the 1980·s and the brokers and other intermediaries started doing the malpractices by exploiting the loopholes of the Law. The Securities and Exchange Board of India was established by the government of India on 12  April 1988 as an interim administrative body to  promote orderly and healthy growth of the securities market and for investor protection. It was supposed to function under the overall  administrative control of the Ministry of Finance of the government. Harshad Mehta Ketan Parekh Classteacher Learning Systems

  7. SEBI - History In 1992 the govt. redefined the role and powers of SEBI through the enactment of Securities and Exchange Board of India Act. This Act gives more power to SEBI to regulate and control all activities of the Stock Exchanges. New face of SEBI • Autonomous Body • More Powers • Final Regulatory authority of stock exchanges Classteacher Learning Systems

  8. Reasons for establishment SEBI was established as a regulatory authority of the stock exchanges in India to control and prevent the malpractices and unfair trade practices. SEBI protects the investors from malpractices like Price rigging, Insider trading etc. Insider Trading The insiders like directors or promoters of a company are making the inside information for making the personal benefits. Price rigging Making manipulations with the sole object of inflating or depressing the price of securities. Classteacher Learning Systems

  9. Objectives of SEBI Protects the rights and interests of the investors. Preventing fraud and trade malpractices. Regulating the stock exchange and ensuring the orderly functioning. Regulate and develop code of conduct and fair practices by the intermediaries. Providing a market for easy and fair finance. Classteacher Learning Systems

  10. Functions of SEBI Development Functions Regulatory Functions Protective Functions Functions of SEBI Classteacher Learning Systems

  11. Protective Functions Undertaking steps for investor protection. promotion of fair practices and code of conduct in securities market. Controlling insider trading and imposing penalties for such practices. Prohibition of fraudulent and unfair trade practices. Classteacher Learning Systems

  12. Development Function Training of intermediaries of the stock market. Conducting research and publishing useful information to the market participants. Undertaking measures to develop capital markets by adopting flexible approach. Investor education. Classteacher Learning Systems

  13. Regulatory Functions Registration of brokers sub brokers and other players in the market. Registration of collective investment schemes and mutual funds. Regulation of brokers, Merchant banks and other market players. Regulation of takeover bids by the companies. Levying of fees and other charges for carrying the Act. Conducting inspection, enquiries and audit of stock exchanges and intermediaries. Classteacher Learning Systems

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