equity related instruments

In terms of Regulation 34 SEBI , 2018 (“ICDR Regulations”), abridged prospectus shall contain the disclosures as specified in Annexure I of Part E of Schedule VI of ICDR Regulations. Further, Section 33 of the Companies Act stipulates that that every application form for the purchase of any securities of a company shall be accompanied by an abridged prospectus. Thus, all persons or entities belonging to the ‘promoter’ or ‘promoter group’, irrespective of their shareholding in the listed entity, shall be deemed to be related parties. At the same time, the board has to regulate and ensure that all market participants duly comply with the set norms. SEBI is given the power to impose penalties on those market participants that are not complying with the rules and regulations.

Equity funds may focus on certain sectors of the market or may have a specific investment style, such as investing in value or growth stocks. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Debt-oriented hybrid funds are suitable for conservative investors looking for a boost in returns with a small exposure to equity. FMPs, being closed-end schemes are mandatorily listed – investors can buy or sell units of FMPs only on the stock exchange after the NFO. Short term debt funds have to also be evaluated for the credit risk they may take to earn higher coupon income.

sebi definition can sell off large chunks of stock and exit at any point in time. This is in sharp contrast with investing in an IPO, where a 1-year lock-in period exists. Unlike traditional methods of raking up investments which takes time and requires SEBI’s approval, a QIP can be settled quickly, sometimes in a week’s time.

The portfolio is structured to provide capital protection and is rated by a credit rating agency on its ability to do so. FMPs create an investment portfolio whose maturity profile match that of the FMP tenor. Ultra Short-Term Debt Funds hold a portfolio with a slightly higher tenor to earn higher coupon income. Funds holding securities with lower tenors have lower risk and lower return. They are more diversified than Sectoral Funds and hence have lower risk than Sectoral funds.

Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. ClearTax can also help you in getting your business registered for Goods & Services Tax Law. The Controller of Capital Issues was in charge of handling the securities market in India until the time the SEBI was constituted. This was one of the initial acts passed by the independent Indian Parliament. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

There is no requirement to hire a team of solicitors, auditors and bankers to invest. The scheme will hold gold in form of physical gold or gold related instruments approved by SEBI. Gold ETFs are ETFs with gold as the underlying asset – The scheme will issue units against gold held. – The fund takes equal but opposite positions in both the markets, thereby locking in the difference.

  • Federal Reserve regulations are rules put in place by the Federal Reserve Board to regulate the practices of banking and lending institutions, usually in response to laws enacted by the Congress.
  • However, they stop responding when client demands return of amount invested and profit earned.
  • The only mechanisms to check its power are a Securities Appellate Tribunal, which consists of a panel of three judges, and the Supreme Court of India.
  • While such standards are yet to emerge, in the meanwhile, there is a need to introduce disclosure norms for domestic ESG Mutual Fund schemes considering the increased activity in this area.

Rather than investing in an ‘active’ fund managed by a fund manager, when one buy units of an ETF one is harnessing the power of the market itself. – Arbitrage fund buys a stock in the cash market and simultaneously sells it in the Futures market at a higher price to generate returns from the difference in the price of the security in the two markets. Only Units held in dematerialized mode can be traded; therefore investors seeking liquidity in such schemes need to have a demat account. FMPs are closed-ended funds which eliminate interest rate risk and lock-in a yield by investing only in securities whose maturity matches the maturity of the fund.

The listed entity shall also submit as part of its standalone or consolidated financial results for the half year, by way of a note, a statement of assets and liabilities and statement of cash flows as at the end of the half year. There is no separate composition requirement for NRC of listed entities having outstanding SR equity shares. Scope of ‘related entities’ has been expanded to include any company belonging to the promoter group of a listed entity. Further restriction under the clause would not apply for the employment of a relative who is an employee other than in the capacity of KMP. All material RPTs and subsequent material modifications, shall require prior approval of the shareholders through resolution and no related party shall vote to approve such resolutions whether the entity is a related party to the particular transaction or not.

Origin of SEBI

Securities and Exchanges Board Of India is one of the most significant regulatory body responsible for managing the securities market in India. SEBI was set up with the intent of preserving the interest of investors who invest in the securities market and to encourage the development and growth of the securities market. SEBI has enjoyed success as a regulator by pushing systematic reforms aggressively and successively.

SEBI is credited for quick movement towards making the markets electronic and paperless by introducing T+5 rolling cycle from July 2001 and T+3 in April 2002 and further to T+2 in April 2003. The rolling cycle of T+2 means, Settlement is done in 2 days after Trade date. SEBI did away with physical certificates that were prone to postal delays, theft and forgery, apart from making the settlement process slow and cumbersome by passing Depositories Act, 1996. Often simply called QIBs, these are merely associations of like-minded individual investors who come together to raise significant investible amounts, post which they take an indirect route using a third-party’s financial services & knowhow.

The Issuer Company / Merchant Bankers shall ensure that the disclosures in the abridged prospectus are adequate, accurate and does not contain any misleading or mis-statement. In order to further simplify, provide greater clarity and consistency in the disclosures across various documents and to provide additional but critical information in the abridged prospectus, the format for disclosures in the abridged prospectus has been revised and is placed at Annexure A of this Circular. Clarification of a pecuniary relationship or transaction by specifying certain relationships and transactions that would impact independence of an ID Cooling off period for a material pecuniary relationship between the relative and the related entities extended to three years. This threshold of Rs 1,000 crore has been included on account of the fact that certain high value transactions may not get covered under the 10% threshold for materiality.

The modus operandi observed is that once a client pays amount to them, huge profits are shown in his account online inducing more investment. However, they stop responding when client demands return of amount invested and profit earned. Full form of SEBI is Securities and Exchange Board of India and the existence of SEBI means that any unwanted market activities won’t be allowed to occur so easily.


The integrated Surveillance department is responsible for monitoring market activity through market systems, data from other departments and analytical software. Securities Exchanges which are already de-recognised as on date, shall make an application for exit within two months from the date of this circular. Upon failure to do so, the de-recognised exchange shall be subject to compulsory exit process. 10 billion on continuous basis or does not apply for voluntary surrender of recognition and exit before the expiry of two years from the date of this Circular, SEBI shall proceed with compulsory de-recognition and exit of such Securities exchanges, in terms of the conditions as may be specified by SEBI. A self-regulatory organization is able to create and enforce industry regulations and standards by itself.

Issuers have also been directed to use the denotation GB-T for differentiating transition bonds. The Audit Committee of AMC shall comply with the guidelines issued in the Circular, in addition to the requirements of the Companies Act, 2013 and LODR Regulations, as applicable. To ensure that the rectifications, if any, suggested by internal and external auditors, etc. are acted upon. The SEBI Regulations, 2008 and SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 shall stand repealed from the date on which these regulations come to force. NRC (“Nomination Remuneration Committee”) to inter-alia evaluate balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director.

CEAT rallies over 5% in weak market on 5-fold jump in Q4 net

With effect from April 1, 2023, the listed entity to disclose related party transactions every six months on the date of publication of its standalone and consolidated financial results. April 1, 2022, listed entity to disclose related party transactions every six months within 15 days from the date of publication of its standalone and consolidated financial results. The RPT framework was considered to be insufficient to cover transactions which can be done through subsidiaries or by the listed entity with the related parties of subsidiaries to move the assets out of the consolidated entity without having to follow norms applicable to RPTs. SEBI is a market regulator which tries to create a balance in the day to day stock market activities and for this, there are regulatory frameworks established by SEBI. There are 17 exchanges currently operational in India and all exchanges, including NSE and BSE are regulated by SEBI guidelines. Securities and exchange Board of India has headquarters in Mumbai, and has regional offices in New Delhi, Kolkata, Chennai and Ahmedabad.

REIT Regime In India – Fund Management/ REITs – India – Mondaq News Alerts

REIT Regime In India – Fund Management/ REITs – India.

Posted: Tue, 02 May 2023 09:48:34 GMT [source]

ELSS invests at least 80% in stocks in accordance with Equity Linked Saving Scheme, 2005, notified by Ministry of Finance. Underperforming stocks and sectors are picked at low price points with a view that they will perform in the long run. Equity funds may hold a concentrated portfolio to benefit from stock selection. Sectoral funds invest in a particular sector of the economy such as infrastructure, banking, technology or pharmaceuticals etc. Balanced / Hybrid funds are further categorised into conservative hybrid fund, balanced hybrid fund and aggressive hybrid fund. Under Equity category, Large, Mid and Small cap stocks have now been defined.


The recommendations relate to improvement of practices, policies, procedures and disclosures by encouraging asset managers to take sustainability related risks and opportunities into account in their investment decision-making and risk management processes. While such standards are yet to emerge, in the meanwhile, there is a need to introduce disclosure norms for domestic ESG Mutual Fund schemes considering the increased activity in this area. It is understood that these disclosure norms would further evolve and undergo changes based on learnings and experience, both on the domestic and international front.

Provide ‘Direct Plan’ Option To Investors, SEBI Asks AIFs Introduces Trail Model For Distribution Commission – ABP Live

Provide ‘Direct Plan’ Option To Investors, SEBI Asks AIFs Introduces Trail Model For Distribution Commission.

Posted: Tue, 11 Apr 2023 07:00:00 GMT [source]

The traded price of an ETF changes throughout the day like any other stock, as it is bought and sold on the stock exchange. This exception is inserted in addition to transactions entered into between two government companies and transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval. Provided that prior approval of the shareholders of a listed entity shall not be required for a related party transaction to which the listed subsidiary is a party but the listed entity is not a party, if regulation 23 and sub-regulation of regulation 15 of these regulations are applicable to such listed subsidiary. For the purpose of taxation, these funds are considered as non-equity oriented mutual fund schemes. The objective of an equity fund is generally to seek long-term capital appreciation.

Index Funds

Most retail investors follow tried-and-tested avenues including debentures, real estate, FDs, stock purchases and Provident Funds– all of which are governed by rules set down by The Companies Act and the SEBI. – They can hold some portion of the portfolio in money market instruments to manage liquidity. International equity funds may also hold some of their portfolios in Indian equity or debt. – The cash market price converges with the Futures market price at the end of the contract period. “Arbitrage” is the simultaneous purchase and sale of an asset to take advantage of the price differential in the two markets and profit from price difference of the asset on different markets or in different forms.

He specifically said that Finance Minister’s office, and especially his advisor Omita Paul, were trying to influence many cases before SEBI, including those relating to Sahara Group, Reliance, Bank of Rajasthan and MCX. Compel certain companies to list their shares in one or more Securities exchanges. Securities and Exchange Board of India was first established in 1988 as a non-statutory body for regulating the securities market.

equity shares

Hearing a similar petition filed by Bengaluru-based advocate Anil Kumar Agarwal, a two judge Supreme Court bench of Justice Surinder Singh Nijjar and Justice HL Gokhale issued a notice to the Govt of India, SEBI chief UK Sinha and Omita Paul, Secretary to the President of India. Inspect the books of accounts and call for periodical returns from recognised Securities exchanges. After the amendment of 1999, collective investment schemes were brought under SEBI except nidhis, chit funds and cooperatives. SEBI is run by a board of directors, including a chair who is elected by the parliament, two officers from the Ministry of Finance, one member from the Reserve Bank of India, and five members who are also elected by the parliament. It supplanted the Controller of Capital Issues, which had regulated the securities markets under the Capital Issues Act of 1947, passed just months before India gained independence from the British.


– Diversification, since global markets may have a low correlation with domestic markets. Because an ETF tracks an index without trying to outperform it, it incurs lower administrative costs than actively managed portfolios. – Price movements do not affect initial price differential because the profit in one market is set-off by the loss in the other market.

In one such move, SEBI has increased the application limit for retail investors to ₹ 200,000, from ₹ 100,000 at present. This diversity allows portfolio managers to potentially balance risk with reward and deliver steady, long-term returns for investors, particularly in volatile markets. Multi-asset funds may invest in a number of traditional equity and fixed income strategies, index-tracking funds, financial derivatives as well as commodity like gold.

The Regional Office will handle work as per existing delegation and shall continue to report to functional heads for specific departmental functions while reporting administratively to SEBI Executive Directors. The Legal Affairs Department 2 is responsible for all the litigations wherein SEBI is a party (except appeals before the Hon’ble Securities Appellate Tribunal and criminal/prosecution matters). Presently, there are three divisions in LAD2 that handle the functions of the Department. The Human Resources Division will perform all the functions in its role as the principal personnel and human resources authority in SEBI. 10 billion can apply to SEBI for voluntary surrender of recognition and exit, at any time before the expiry of two years from the date of issuance of this Circular.

Cooling off period for a material pecuniary relationship between an ID and the related entities has been extended to three financial years. In case of omnibus approvals for material RPTs, obtained from shareholders in general meetings other than AGMs, the validity of such omnibus approvals shall not exceed one year. CAs, experts and businesses can get GST ready with ClearTax GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner.

The debt component of the portfolio has to be invested in instruments with the highest investment grade rating. These funds carry the risk of getting calls wrong as catching a trend before the herd is not possible in every market cycle and these funds typically underperform in a bull market. Thematic funds select stocks of companies in industries that belong to a particular theme – For example, Infrastructure, Service industries, PSUs or MNCs. Timing of investment into such funds are important, because the performance of the sectors tend to be cyclical. Suitable for investors with higher risk appetite and longer investment horizon. The quorum for a meeting of the Risk Management Committee shall be either two members or one third of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance.