SEBI - Stock Exchange in India, Interdisciplinary issues in Indian Commerce

hey folks welcome back to the Iberia
world and I am Abin Agatha and today
again we will continue with the
Securities and Exchange Board of India
act 1992 and shot the SEBI act 1992
right so I hope the previous lecture was
useful for you and you have created
Curtin picturization in your mind
remember what I told you that you have
to have to build up certain
picturization by the certain story or
concept a scene in your mind so that it
remains there for long you will not be
able to search for words you will be
able to search for a movie right so
today as I told you we'll start and
we'll start the discussion with section
11 right the section 11 basically deals
with the functions of Sebby right the
powers in the functions of Sebby so
again section 11 is also divided into
two parts various parts but what we
covered today is two parts 11 Clause 1
and 11 o'clock to right
so cos 1 talks about the duties of savvy
and 2 talks about specific powers so
Duty basically is the general power and
the specific power is accompanying at
the right so what is the duty what is
the general power of the SEBI so if you
general function so if you look at it
the duty of the board is to protect the
interest of the investors and to
regulate the security market so
everywhere whenever you come across
heavy understand the coal land used
behind it behind the concept of bringing
semi right it is to protect the interest
of the investors people who are coming
to invest in the market their interest
has to be protected they need to make
sure the money is going in the right
direction and the money is safe right
when they are spending something that
goes into the right hands right
regulated when they want back they can
take it back so they want their money to
flay into a regulated market plus the
security market itself has to be
developed as a cheaper source of funding
for the new businesses that are coming
up now they want to
raise funds from the markets so stock
exchange is gonna be one market where
you get funds available for cheaper
prices right but now how will somebody
come and invest their savings into this
market and how will somebody come
depending upon the mock market for some
return it is only possible when you
build up a good market right so along
with protecting the interest of the
investors the prime function of Sebby is
to promote that development right and
then to regulate the security market by
whatever measures it thinks fit and
these measures are actually being given
forward in in the clause number 211
close to where you understand and you
get to touch each and every aspect of
semi so now and we are going to
understand the functions and the
measures that have been allotted as per
this section you will get again a brief
of sebby now when there's a movie right
I'll start relating it to it which it's
always on your mind that you have to
have to form a picture in your brain so
in the movie if I ask you about any
movie The Avengers in that case if you
remember there were a lot of superheroes
into it
right if I if I talk to you about final
destination there were a lot of
characters whose life was impacted in
different angles right so those
characters they form the essence of the
movie so when you are going through this
section right today you will get a list
and peep into the major characters of
the scale of the security market who all
are involved who which individuals are
involved who is the hero right whatever
castings right so this that if I told
you this topic is gonna be a little
interesting because if you start
picturing you will get the cast of the
movie over you right so now let us look
into a specific measures what are the
measures that they undertake so as to
protect the interests of the investor as
well as to promote the development and
regulation of the security market so
number one is that they regulate the
business of the stock exchange right and
any other security market so you talk
about any Bhd NSE right so they function
they function in the market they get a
lot of transaction settlement issuing or
share then also a lot of actions that
are happening over the stock market so
whatever business that Stock Exchange
does from the scratch from the
initiation when
the shares are thought to be listed in
an application is made till the disposal
and tell the settlement of the amount
right and then the fluctuation every day
and though calculation and all those
economics and maths going into this is
all part of the business so SEBI makes
sure that CB forms a regulation where
all these aspects have to be regulated
they they have the joints have to be
connected and a regulation has to be
formed right that's a huge terminology
which is used about regulating the
business in stock exchange right next if
you see registering and regulating the
working of brokers or broker etc but we
will not leave with that etc let us see
who are the costs right so when they say
registering and regulating first people
understand all these people maybe
there's a stock broker the sub broker
the share transfer agent bankers to the
issue trustee of the trust deed
registrar to an issue merchant banker
underwriter portfolio manager manager
investment advisors and any other
intermediaries right who are associated
with the security market in any manner
these people have to be registered with
the stock exchange those brokers who are
dealing into the securities they have to
have a license to deal with that I
cannot just set up and say okay you want
some shares let me be a broker I'll get
a shave give me the money I'll transfer
it forward and I'll maintain your
portfolio and everything can I do that
yes I can but for that I'll have to get
myself a gesture with them right unless
I am registered unless I am registered
as an as a broker I'm identified as a
broker I cannot act as a broker that is
a control right and then once I'm
registered in everything they go out to
regulate me right and then that
regulation takes place so when there is
a broker or a sub broker or any other
intermediaries every intermediate orys
actions have to be regulated and that is
what CB looks into so you know who the
stock broker right somebody who do you
think the stock for you some brokers are
brokers for the
getting the point
so brokers are in place now they also
deal with other branches of brokers who
reach out to the end customer and user
investor I would say so a broker has
further divisions which are sub breakers
right vanilla shake transfer agent now
who the shear transfer agent somebody
who holds a share for the transfer if I
go with the entire term it is those
department which is holding the share
before the transfer so application is
made they hold the share when the money
said will they transfer the share right
banker to an issue now who is a banker
to an issue banker to an issue is not a
banker in the cognate sense of banking
right so when you're issuing share you
get money so this money comes into a
bank and that bank is a banker to the
issue so that banker they keep that
money and once the settlement is done
when the entire flow is completed the
money comes to the extra Stock Exchange
and goes to the company somebody who's
issuing the share right so within this
entire flow somebody who holds that
money banker to the issue right then the
trustee to the trust deed by getting the
point if you if you analyze then the
names that have been given to the
intermediate orys are very specific so
there's a trust deed now who's a trustee
to the trustee that person who holds the
trust deed is again an intermediate Ori
because you go ahead with the deed when
you're taking and buying and selling in
shares right then the that registrar to
an issue now is this a registrar the Roc
that we talked about for the company no
this is the registrar to the issue now
when you are issuing shares those shares
have to be registered right those shall
have to be recorded so this is the
registrar to that issue
so whatever shares you issue you
registered those shares with this
registrar right then there's a merchant
banker now who the merchant banker the
merchant banker is the knowledgeable
person who gives you the knowledge about
where to invest not to invest now
merchant banker does not receive the
money and keep it till the circulation
that is done by the banker to an issue
merchant banker is again a smart person
right now even you hear somebody coming
around you say I'm a merchant banker and
you say oh you're a merchant banker you
have that image right why because they
are acknowledged
people who know how to manage the
portfolio and everything there they are
the people who knows about the banking
segment what the investments and stuff
right then there are underwriters you
know who underwriters are see whenever a
company they issue the share 90% of the
subscription has to happen
right so these underwriters are the
people who take that guarantee there
okay do one thing give it to me I will
take care of the issue in the market and
if there is any person remaining to
protect that 90 I will keep those shares
with me so you are safe your
subscription will be done so they
subscribe they block the shares so they
are underwriters right then there are
portfolio managers now I want to make an
investment right
but we know please do not put all your
eggs in the same basket so similarly I
will not put all my investment in the
same company so there is a portfolio
manager a person with a any intermediate
rebou the stock market because based on
that person's portfolio management that
person will say what to take what not to
take where to invest where not to invest
in everything and then I will invest so
who that person is again a link between
me and the stock exchange right I am the
investor and that is the stock exchange
so anybody in between us is an
intermediate Ori so even the portfolio
manager who is managing my portfolio in
specific is also a part of intermediate
Aires right and there are investment
advisers and other people so I am making
an investment I hire an adviser let me
know what investment to make what
investment not to make right
recently I have come across people who
have these investment advisors and it is
not only for securities right I have I
have a couple of friends now right who
are doing very well in their life and
there are there's a lot of money flowing
in now they want to decide where to
invest right I belonging to a family of
traditional business background right my
daddy went into all the business and the
funds came in ferns applied in the
business in the property and yeah all
those things happened right but where to
actually go ahead
with the proper investment informed
decisions to be taken for investment for
that you have investment advisors in the
market now the trend is not very hyped
up because we don't understand but these
people who have those turnovers
month-on-month
who have those profits of month-on-month
they need to divert they fund somewhere
and these people they hire so basically
all these investors or investment
advisors who are directing your fund to
the stock market are those investment
advisors who are intermediaries to the
stock market getting the point so did
you get the picture of all the various
characters in a film when you issue
somebody keeps the money somebody takes
the guarantee of a share somebody guides
me somebody guides my portfolio somebody
makes this issue somebody has the trust
deed a lot of things so all things are
with other indifferent intermediaries a
lot of intermediate or either with this
and all these intermediaries are
regulated and registered that is a
function of seve right registering and
regulating the working of venture
capital fund and mutual funds right so
they register the mutual fund to venture
capital and also regulate their working
right there are collective investment
schemes so you know about these these
topics will also be covered in detail in
different places right now what you need
to understand is what these are for
mutual funds are the funds way you are
community of accumulate your fund and
then they go on to invest in the stock
market so there are a lot of
professionals sitting to manage those
mutual funds you and me and all all of
us we pull in a little of our saving
into one common mutual fund and then
with all our common savings the mutual
fund grows very big and then there are
people in sitting to manage those mutual
funds they make investments with this
money and then gets a return and give us
give that to us that is mutual fund when
I talk about venture capitalists
so venture capital person is somebody
who invests in new businesses not in the
shares of old business but into new
business a new venture coming up lump
sum payment a new venture coming up
learn some funding so they are venture
capitalists right so registering those
venture capitalists and regulating their
flow of funds and their actions is again
a part of semi-tight the collective
investment scheme where you collect the
investment from different people and
then
Keem where you make this investment
further get the return and again give it
back right we missed out a point which
is registering and regulating the
working of depositories the participant
custodian of security foreign
institutional investors credit raging
rating agencies and such other
intermediaries as they be me by
notification specify on this play off so
there are other people also right the
side heroes the friend of the heroes
right who do not have a very long role
but are still there right so generally
when selling these the structure in
deals the deal with all the people in
India but there are people outside also
who are investing right and there are
certain big investors like foreign
institutional investors they are not
individual share institutions that are
investing their credit rating agencies
that provide the credit to a company
right so if I'm gonna issue my share I
would I would require a credit rating so
the large company who come who evaluate
my business and give me a credit rating
and based on that rating my future is
decided so these are also part of an
intermediate or e2 stock exchange why
because their rating will impact my
issue getting the point so they are all
intermediate or EES intermediaries do
not necessarily mean somebody who is in
the process of my money flowing out and
the shares coming in know everything
that impacts my money to flow out that
makes my money to flow out that makes me
prepare my mind to further money out and
that help that company to roll out their
share in the market everything that is
connected here and there and everywhere
but all intermediaries right so credit
rating agency doesn't come and do
anything specific in the process of the
transfer right but they provide a credit
based on which we decide whether the
company can issue the shares or not
right even there are intermediate reefs
promoting and regulating self-regulatory
organization or organizations right now
there are certain self-regulatory
organizations that will pop up
organizations that run on their own but
when they're running on that their own
then they
regulation as to on what parameter
should you run on that only culture
decided is also a function of seve so
they promote self-regulating walk an
organization to come who who regulate
themselves by themselves but a brief
guideline and the baseline is provided
by semi so I'll see you guys back in the
next lecture until then this is Habanera
signing off thank you and bye bye god
bless
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