The document discusses secondary markets and listing of securities on stock exchanges. It provides information on the advantages of listing, rules and criteria for listing, listing agreements, and types of listed securities. Listing provides liquidity to companies and allows trading of already issued securities among members of recognized stock exchanges under relevant regulations.

1. INVESTMENT MANAGEMENT
Dr. R. PREMA
ASSOCIATE PROFESSOR
DEPARTMENT OF COMEMRCE CADr. NGPASC
COIMBATORE | INDIA
SECONDARY MARKETS

2. Dr. NGPASC
COIMBATORE | INDIA
Introduction
 Providing liquidity to companies through
sale and purchase of already issues
securities.
It can be done only through members of
the stock exchange.
Trading among members of a recognized
stock exchange is to be done under the
statutory regulations of the stock
exchange.

3. Dr. NGPASC
COIMBATORE | INDIA
Listing of Securities
 Advantages of listing on stock exchange
 Rules for listing of securities
 Criteria for listing
 Listing of agreement
 Specified and non-specified securities

4. Dr. NGPASC
COIMBATORE | INDIA

5. Dr. NGPASC
COIMBATORE | INDIA

6. Dr. NGPASC
COIMBATORE | INDIA
When a private
company can start its
business?

7. Dr. NGPASC
COIMBATORE | INDIA
How many directors
are in a public
company?

8. Dr. NGPASC
COIMBATORE | INDIA
Section 149(1) of the Companies Act, 2013
requires that every company shall have a
minimum number of 3 directors in the case of
a public company, two directors in the case of
a private company, and one director in the case
of a One Person Company. A company can
appoint maximum 15 fifteen directors.

9. Dr. NGPASC
COIMBATORE | INDIA

10. Dr. NGPASC
COIMBATORE | INDIA
A public limited company is a company
listed on a recognized stock exchange and
the stocks are traded publicly. On the other
hand, a private limited company is
neither listed on the stock exchange nor are
they traded. It is privately held by its members
only.

11. Dr. NGPASC
COIMBATORE | INDIA
Advantages of Listing
 Liquidity
 Best Price
 Regular Information
 Periodic Reports
Transferability
Income tax Benefit
 Wide Publicity

12. • Listed companies are subjected to do
various regulatory measures of the stock
exchange and SEBI.
• Essential information has to be submitted
by the listed companies to stock exchange.
• Annual meeting and annual general report.
• Public offers is an expensive exercise.
Disadvantages of Listing
Dr. NGPASC
COIMBATORE | INDIA

13. • Minimum issued capital
• Payment of excess application money
• Listing on multiple exchanges
• The number of shareholders
• Appointment of market marker
• Articles of association
• Cost of public issues
• Advertisement
Dr. NGPASC
COIMBATORE | INDIA
Qualification for Listing

14. • Minimum subscription
• Applying mode
• Public offer size
Dr. NGPASC
COIMBATORE | INDIA
Qualification for Listing

15. • Approval of Memorandum and Articles
of Association
• Approval of draft prospectus
• Submission of Application
• Listing conditions and requirements.
Dr. NGPASC
COIMBATORE | INDIA
Listing Procedure

16. Dr. NGPASC
COIMBATORE | INDIA

17. Dr. NGPASC
COIMBATORE | INDIA
• The memorandum of association is the
document that sets up the company and
the articles of association set out how the
company is run, governed and owned.
The articles of association includes the
responsibilities and powers of the directors
and the means by which the members exert
control over the board of directors.

18. Dr. NGPASC
COIMBATORE | INDIA

19. Dr. NGPASC
COIMBATORE | INDIA
In very simple terms, the articles of
association specifies the rules
that company officers (directors and
secretaries) must implement when running the
business. It covers a range of topics, including:
rights of company members (shareholders or
guarantors) ... procedures for issuing and
transferring company shares.

20. Dr. NGPASC
COIMBATORE | INDIA
Listing Fee
Particulars
Amount
Initial Listing Fees 50,000
Annual Listing Fees (on equity share, bond and/ or debenture capital)
Upto 100 crore 2,90,000
Above 100 Crore and upto 200 Crore 3,80,000
Above 200 Crore and upto 300 Crore 4,90,000
Above 300 Crore and upto 400 Crore 5,95,000
Above 400 Crore and upto 500 Crore 7,30,000

21. • Some of the common cause of delisting are
given below:
• Compulsory
• Non payment of listing fee or violation of
listing agreement.
• Thin trading or thin shareholding base.
• Non redressal of grievances
• Unfair trade practice
Dr. NGPASC
COIMBATORE | INDIA
Delisting

22. • Voluntary
• Unable to pay listing fee
• Business sick/suspended/closed.
• Capital base is small.
• Mergers , demerger ,amalgamations
and takeovers.
Dr. NGPASC
COIMBATORE | INDIA
Delisting

23. Dr. NGPASC
COIMBATORE | INDIA
Listing of Securities
 Advantages of listing on stock exchange
 Rules for listing of securities
 Criteria for listing
 Listing of agreement
 Specified and non-specified securities

24. Dr. NGPASC
COIMBATORE | INDIA
Choice of orders
Spot Delivery
Forward Delivery
Market Orders
Limit Orders
Stop Oder

25. Dr. NGPASC
COIMBATORE | INDIA
Kinds of trading activity
Options
Margin Trading
Writing Options
Wash Sales
Rigging the market
Cornering
Arbitrage
Blank Transfer
Carry over or Budla Transactions

26.  Option dealing is an arrangement of right to buy
or sell a certain number of specified securities at
a predetermined price within a prescribed time.
 Types:
1)Call, 2)Put and
3)Call and Put.
Option Dealings
Dr. NGPASC
COIMBATORE | INDIA

27.  Margin Trading is a system of purchasing
securities with funds borrowed from brokers.
Margin Trading
Dr. NGPASC
COIMBATORE | INDIA

28.  A written option may be covered or
uncovered.
 A covered option is written against an
owned stock position.
 An uncovered or naked option is
written without owning the security.
Writing Options
Dr. NGPASC
COIMBATORE | INDIA

29.  Under this method, the speculator
sells his securities and then
repurchases the same through a
broker at a higher prices.
 No transactions takes place in the
wash sales.
Wash sales
Dr. NGPASC
COIMBATORE | INDIA

30.  Rigging means artificially forcing up the
market price of a particular security.
 The Bull speculators generally carry on this
activity.
 When the price rise, they will sell the
securities and make the profit.
 Rigging is another unhealthy practice,
which disturbs the free interplay of demand
and supply.
Rigging the Market
Dr. NGPASC
COIMBATORE | INDIA

31. A Cornering is the condition of the
market in which an individual or a group
of individuals holds almost the entire
supplier of a particular security.
Cornering
Dr. NGPASC
COIMBATORE | INDIA

32. It is undertaken to make profit out of the
differences in prices of security in two different
markets.
The speculator buys the security in one market
where its price is cheaper and sells it in another
market where its price is high.
Arbitrage
Dr. NGPASC
COIMBATORE | INDIA

33.  Blank transfer is the routine method of
transferring the securities from one
person to another.
 That means, a method of transferring
without mentioning the name of the
transferee in the transfer deed.
Blank Transfer
Dr. NGPASC
COIMBATORE | INDIA

34.  In case of forward delivery contracts, if
both the parties agree, the contract can be
settled in the next statement date(probably
in the next month or fortnight). Such
postponement is called “Carry Over (or)
Budla”.
Carry Over (or) Budla Transactions
Dr. NGPASC
COIMBATORE | INDIA

35. Dr. NGPASC
COIMBATORE | INDIA
Types of Speculators
Bull
Bear
Bullish and Bearish
Bull Campaign and bear rid
Lame duck
Stag
Hedging
https://youtu.be/Lwqz8F-JgqA

36. Dr. NGPASC
COIMBATORE | INDIA
SEBI - ROLE AND ITS GUIDELINESS

37. Dr. NGPASC
COIMBATORE | INDIA
How SEBI Controls Capital Market of India?
• The Securities and Exchange Board of India (SEBI), was
initially constituted on April 12, 1988 as a non
contributory body through a resolution of the
government for dealing with all matters related to
development and regulation of securities market and
investor protection and to advice the government on
all these matters.
• SEBI was given statutory status and powers through an
ordinance promulgated on January 30, 1992.

38. Dr. NGPASC
COIMBATORE | INDIA
Organizational Structure of SEBI

39. Dr. NGPASC
COIMBATORE | INDIA
Functions of SEBI
• To safeguard the interests of investors and to regulate
capital market with suitable measures.
• To regulate the business of stock exchanges and other
securities market.
• To regulate the working of Stock Brokers, Sub-brokers,
Share Transfer Agents, Trustees, Merchant Bankers,
Underwriters, Portfolio Managers etc. and also to make
their registration.
• To register and regulate collective investment plans of
mutual funds.

40. Dr. NGPASC
COIMBATORE | INDIA
Functions of SEBI
• To encourage self-regulatory organisations.
• To eliminate malpractices of security markets.
• To train the persons associated with security markets
and also to encourage investors' education.
• To check insider trading of securities.
• To supervise the working of various organisations
trading in security market and also to ensure
systematic dealings.
• To promote research and investigations for ensuring
the attainment of above objectives.

41. Dr. NGPASC
COIMBATORE | INDIA
Decisions taken by SEBI for Ensuring a Healthy Capital Market
• Control on Utilizing' Application Amount' having
no Interest by Companies Releasing Public Issues
• Share Price and Premium Determination
• Underwriters
• Control on Share Brokers
• Insider Trading
• SEBl's Control on Mutual Funds
• Control on Foreign Institutional Investors-

42. Dr. NGPASC
COIMBATORE | INDIA
Developments in the Stock Market
Free pricing of issue/stock splits
Surveillance on price manipulation
Insider Trading
Regulation of stock brokers
Forward trading and Badla

43. Dr. NGPASC
COIMBATORE | INDIA
Developments in the Stock Market
Options and Derivatives
Regulation of mutual funds
Regulation of Foreign Institutional
Investors
Screen Based Trading

44. Dr. NGPASC
COIMBATORE | INDIA
Developments in the Stock Market
Circuit Breakers
Settlement and Clearing
Bombay on Line Trading Systems
Buyback of Shares
Stock Lending

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Dr. NGPASC
COIMBATORE | INDIA