Sebi as Regularoty Act

Topics: Stock exchange, Stock market, Security Pages: 15 (4708 words) Published: July 14, 2013
ii. Secondary Securities Market Modernization of market infrastructure improves market transparency standard. The improvement of market micro-structure increases trading efficiency. Risk containment measures help in improving market integrity and safety. Rolling settlement enhances liquidity and also provides for faster settlement. These have been the main focus of the SEBI’s efforts in the secondary market. The SEBI extends its oversight to 23 stock exchanges in the country and directs its efforts towards encouraging them to become more effective and efficient selfregulatory organisations. The measures taken by the SEBI in 1999-2000 in the secondary market are discussed below. Depositories and paperless trading and other related issues Dematerialisation of securities is one of the major steps for improving and modernizing market and enhancing the level of investor protection through elimination of bad deliveries and forgery of shares, and expediting the transfer of shares. Recognizing the far reaching benefits that would accrue to the market through the removal of physical securities, the speeding up of dematerialisation process has been high on the agenda of the SEBI. During the year 1999-2000, the SEBI continued its policy to enhance the growth of paperless trading and electronic book entry transfer but in a phased manner so as to allow time for required infrastructure to develop and to gain acceptance of the investors and the market. The following measures have been taken by the SEBI during the year under review : 

The SEBI issued directive to the companies included in the list of securities for dematerialisation to effect compulsory dematerialised trading for all investors and institutional investors on the scheduled dates announced and to sign agreements and complete all formalities with both the depositories and establish connectivity on time so that dematerialisation could proceed on schedule. Companies whose shares are being traded compulsorily in dematerialised form by all investors, are required to compulsorily provide for transfer and dematerialisation of securities simultaneously. This will help the investors in reducing the time taken for transfer of shares. The SEBI (Depositories and Participants) Regulation, 1996 was amended to include registrars to an issue or share transfer agents in the eligible category to become a depository participant. Introduction of procedures for interconnectivity between the various segments and components involved in the process of dematerialisation and its smooth functioning at various levels of participantion in dematerialised securities. In respect of the value of portfolio of securities of the beneficiary accounts, the broker DPs allowed to maintain client assets in custody to the extent of 100 times of broker’s networth from the earlier limit of 35 times upto a networth of Rs.750 lakhs and 50 times above the networth of Rs. 750 lakh . The branch offices of DPs that are handling more than 5000 accounts shall either have direct electronic connectivity with the depository or with office of depository participant that is connected live to the depository. This would adequately equip the infrastructure of the depository participant branches so that the reach of the DPs could be increased and the branches could serve the investors better, while ensuring that the branches have adequate control systems. Every company is required to appoint the same registrars and share transfer agents for

both the depositories.

The registrars and share transfer agents are required to accept partial dematerialisation requests and will not reject or send back the complete lot of dematerialisation request to the DPs in cases where only a part of the request was to be rejected. A Standing Committee co-chaired by the Managing Directors of NSDL and CDSL was formed which will meet at least once a month to resolve issues between DPs, registrars and depositories...
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