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1. ROLE OF "SEBI" IN NEW ISSUE
MARKET

2. INTRODUCTION
 The Securities and Exchange Board of India,set up in
1988 under an administrative arrangement ,given
statutory powers with the enactment of the SEBI Act
1992.
 The act provides for the establishment of the board to
protect the interest of investors in securities market.
 The board consists of a chairman , two members from
the govt. of india,ministries of law and finance,one
member from the RBI and two other members
 It describe the manner in which SEBI Act 1992,the SCRA
1956,the companies Act 1956 and the depository act
1996.

3.  SEBI has been enjoined upon to develop the Indian
securities market, regulate it, and Importantly, to protect
the investors.
 The power given to SEBI included those to levy penalty
against corporates and individuals for violation of
regulations, manipulation of market, insider trading and
unfair practices.
 It can suspend the trading of any security, restrain
persons from accessing the securities market or prohibit
any person associated with the securities market from
buying selling or dealing in securities.
 The trading system has become on-line, fully
automated, screen-based.
 Open octucry is now out moded and discarded.
 It has cut down the cost, time and risk involved.

4. OBJECTIVES OF “SEBI”
The three main objectives are:-
 To protect the interest of the investors in
securities
 To promote the development of securities market
 To regulate the securities market

5. Functions of SEBI
 Regulating business in stock exchanges and any
other securities market
 Registering and regulating the working of
stockbrokers,subbrokers, share transfer agents,
bankers to an issue,trustees of trust deeds,registrars
to an issue,merchant bankers,underwriters,portfolio
managers,investment advisors and other
intermediaries associated with securities markets.
 Registering and regulating the working of
depositories,custodian of securities,FIIs,credit rating
agencies
 Registering and regulating the working of venture
capital funds and collective investment

6.  Promoting and regulating Self-Regulatory
Organisations(SROs)
 Prohibiting fraudlent and unfair trade practices relating
to securities market
 Promoting investor’s education and training
intermediaries of securities market
 Prohibiting insider trading in securities
 Regulating substantial acquisition of shares and
takeover of companies
 Calling for information from,undertaking
inspection,conducting inquiries and audits of the stock
exchanges,mutual funds,intermediaries and self-
regulatory organizations in the securities market
 Levying fees and other charges for carrying out its

7.  Matters to be disclosed by companies:-
The board may specify the matters relating to the
issue of capital ,transfer of securities
 Power to issue directions:-
The Board conducts an enquiry of the securities
market to protect the interests of the investors.It
maintains proper management and development of
securities market.
 Power of the central government to issue
directions:-
SEBI is bound by the central govt..The central govt.
directs the SEBI on the policies to be adopted,which
it gives in writing form time to time.

8.  Supervision of board:-
The Board of SEBI may be superseded by central
governmrnt if it is of the opinion that ,on account of
grave emergency,the board is unable to discharge
the functions and duties imposed on it under the
provisions of the Act.
 Guidelines / Regulations:-
The guidelines / regulations issued by the SEBI
may grouped under primary market and secondary
markets.Mutual funds are also regulated by SEBI.

9. ROLE OF SEBI IN NEW ISSUE
MARKET
 Any company or a listed company making a public
issue or a rights issue of value or more than Rs50 lakhs
is required to fill a draft offer document with SEBI for its
observation.
 The company can proceed further only after getting
observation from SEBI.
 The company has to open its issue within three months
from the date of SEBI’s observation letter.
Through public issues,SEBI has laid down eligibility
norms for entities accessing the primary market.

10. The Entry Norms :-
Entry Norm I (EN I) :-
 Net tansible assets of atleast Rs 3crore for 3 full years
 Distributable profits in atleast 3 years
 Net worth of atleast Rs 1crore in 3 years
 If change in name , atleast 50% revenue for preceding 1
year should be from the new activity.
 The issue size does not exceed 5 times the pre-issue
net worth.
SEBI has provide two other alternatives routes to
company not satisfying any of the aboveconditions to
provide sufficient flexibility and also to ensure that
genuine companies do not suffer on account of rigidity

11. Entry Norm II (EN II):-
 Issue shall be through book building route with atleast
50% to be mandatory alloted to the qualified institutional
buyers (QIBs)
 The minimum post issue face value capital shall be Rs 10
crore or there shall be a compulsory market-making for
atleast 2 years
Entry Norm III (EN III):-
 The “project” is appraised and participated to the extent
of 15% by Fis / scheduled commercial banks of which at
least 10% comes from the appraisers.
 The minimum post issue face value capital shall be Rs 10
crore or there shall b e a compulsory market-making for