SEBI Guidelines For Issue of Securities

SEBI Guidelines For Issue of Securities

The Government has set up the securities Exchange Board Of India in April, 1988. for more than three years.SEBI has issued Guidelines From time to time. such guidelines are issued separately for new issue market, stock exchange, mutual funds, merchant banks, registrar and transfer agent, underwriter, broker, sub broker, portfolio manager etc.  The criteria and eligibility requirement for each category are separately set out by the SEBI.

Free entry and free pricing of new issue in the capital market subject to observance of some guidelines :-

1. minimum public offer of 25% of paid up capital; latter reduces to 20% to be eligible for listing on stock exchange out of which half is reserved for investor applying for Rs. 10000 and less.
2. minimum subscription by promoters and director at 25% or issue less than Rs100 crores and 20% for paid up capital of more than 100 crores.
3. preferential allotment of FFIs is subject to ceiling of 30% later reduced to 20% and lock in period of five years.
4. FFI and foreign security are allowed to operate both in the new issue market and stock market but through Indian bankers.
5. stock invest was introduced as a mode of making payment replacing cash and cheque.
6. applying for shares and debentures. this will save loss of interest for investor from the time of applicants to the time of allotment.