Securities Laws and Compliances

CS: Executive Programme
Paper 6 : Securities Laws and Compliances
[One paper: Three Hours – 100 marks]

Level of Knowledge :

Expert knowledge

Objective . . .

To provide expert knowledge and understanding of securities laws and the regulatory framework concerning capital markets in India.

Contents . . .

Part A : Securities Laws (60 Marks)

1.	An Overview of Legal and Regulatory Framework
	Capital market regulatory framework — Securities Contracts (Regulation) Act, 1956; SEBI Act, 1992; Depositories Act, 1996; authorities governing capital markets; objective, power and functions of SEBI; Securities Appellate Tribunal, appearance before SAT. Profile of securities market; securities market reforms and regulatory measures to promote investor confidence; growth of money market in India – structure and institutional mechanism.
2.	Capital Market Instruments and Rating
	Capital market instruments - equity, debentures, preference shares, sweat equity, non-voting shares ; new instruments of capital market – pure, hybrid and derivatives; money market instruments - treasury bills, commercial bills, commercial paper, participatory notes; rating and grading of instruments; concept, scope and significance; regulatory framework; rating agencies in India, rating methodologies.
3.	Capital Market Intermediaries
	Primary market and secondary market intermediaries – role and functions, merchant bankers, stock brokers, registrars to an issue, underwriters, bankers to issue, portfolio managers, debenture- trustees, foreign Institutional investors etc., self regulatory organisations, guidelines on anti money laundering; surveillance; holding of enquiry.
4.	Secondary Market Institutions
	Functions and significance of stock exchanges; regulatory framework; operations and trading mechanism of stock exchanges; Settlement of securities, surveillance mechanism at stock exchanges, straight through processing, demutualisation of stock exchanges.
5.	Mutual Funds
	Introduction, definitions, types, risks involved, setting up of mutual fund; concept of Trustee and Asset Management Company; regulatory framework.
6.	Venture Capital
	Concept of venture capital, regulatory framework, registration, investment conditions and restrictions, foreign venture capital investors, private capital funds.
7.	Collective Investment Schemes
	Regulatory framework governing collective investment schemes, restrictions on business activities, submission of information and documents, trustees and their obligations.
8.	Buy–Back of Securities
	Objectives of buy-back; available sources for buy–back of securities; conditions to be fulfilled and obligations for buy-back of securities of both listed and unlisted companies; pricing for buy back; modes of buy–back.
9.	Depository System
	Overview of depository system in India; Depositories Act; definitions, setting up of depository; role and functions of depository; depository participants; inspection and penalties; internal audit and concurrent audit of depository participants.

Part B : Issue Management and Compliances (40 Marks)

10.	Issue of Capital
	Listing of securities; SEBI Guidelines for Disclosure and Investor Protection (DIP), procedure for issue of various types of shares and debentures, employee stock option scheme; and employee stock purchase scheme, delising of securities.
11.	Resource Mobilisation in International Capital Market
	Listing of securities issued outside India - Foreign Currency Convertible Bonds, Global Depository Receipts, American Depository Receipts; External Commercial Borrowings, procedure for issue of various instruments.
12.	Indian Depository Receipts
	Indian Depository Receipts, procedure for making an issue of IDRs; conditions for issue of IDRs; listing of IDRs.