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  1. 1. SEBI rules for Listing of Securities1.Copies of Memorandum and articles of association ,prospectus, Directors Reports, Balance sheets. 2.Specimen copies of share and Debenture certificates, Letter of Allotment,Acceptance,renunciation. 3.Particulars regarding its capital structure. 4.A statement showing the distribution of shares. 5.Particulars of dividends and cash bonus during the last 10 years.
  2. 2. DepositoryThe depository act was passed in 1996 allowing dematerializing of securities and transfer of security through electronic book entry to help in reducing settlement risks and infrastructure
  3. 3. Advantages of a depository system• It eliminates risks(no physical certificates)• It is an electronic form and provides transfer of securities immediately.• A depositary provides a demat account with a client identification number.• There is no stamp duty on transfer of securities because there is no physical tranfer.• The DP charges a yearly charge for maintaing the member account.
  4. 4. • Because of Depositary system even one share can be sold than selling odd lots.• Shares can be easily transferred at the time of death of a participant.• change in address recorded with DP gets registered with all companies in which investor holds securities electronically.• Automatic credit of bonus,split,consolidation,merger into demat account.
  5. 5. Working of a depositary system• Depositary: it is an institution like bank.• Depositary participant(DP): A DP is an agent of a depositary.• Opening of an account: An investor has to approach a DP and fill up an account opening form and follow the account opening procedure.• Identification Number
  6. 6. • Broker:• Conversion of shares into dematerialized form: In order to dematerialize physical securities an investor has to fill in a demat request form(DRF).• Rematrialization• Distinctive numbers:• Purchase and sale of dematerialization shares.• Transaction statement:
  7. 7. Circuit breakers• Circuit breakers are a check on excessive fluctuation in stock market is a control system introduced by SEBI to be effected when there is a great volatility in trading of a particular scrip.Ex:If NIFTY or SENSEX shows too much volatility on a particular day and there is a fluctuation of 10% in the index automatically circuit breakers will apply.
  8. 8. BOLT• Bombay stock exchange was the first to introduce online computerised trading of scrips to replace manual trading practices. BOLT system provides info on the best buy and sell rates,pending and executed orders,nogotiated and crossed deals.
  9. 9. MARKOWITZ theoryMarkowitz approach determines for the investor the efficient set of portfolio through three important variables ie Return,standard deviation and co effient of correlation.It is called the full covariance model “Do not put all your eggs in one basket”
  10. 10. Assumptions• The market is efficient:• Common goal of avoiding risk.• Maximum rate of return expected by investors.• Expected return can be found out by multiplying probability with expected return and standard deviation by two asset are three asset portfolio.
  11. 11. • Markowitz bought out the theory that correlate each other to reduce the risk.• Every investor should expect maximum return and minimum risk from this theory.• Diversification can reduce maximum risk.
  12. 12. SEBI regulations for Mutual fund• All mutual funds must be compulsorily registered with SEBI.• The sponsors should have contributed a minimum of 40% of the net worth of the Asset mgt company and should have a good reputation.• All new mutual fund schemes have to be approved by the trustees of mutual fund.
  13. 13. • The should follow SEBI rules to protect the investor from high-risk exposure.• A report has to be published for for each new scheme.• SEBI permits MF to participate in its Security lending scheme.• SEBI permits MF to invest in indian and foreign ADR’s and GDR’s.
  14. 14. • SEBI has provided that 90% of the mutual funds profits should be distributed every year.• To protect the investors SEBI can impose monetary penalties on mutual funds for violating regulations and guidelines.
  15. 15. Classification of mutual fund• Open ended• Close ended• Income fund• Growth fund• Dual fund company• Index funds.• ETF• Money market funds
  16. 16. • Municipal bond funds• Pension funds• Off shore funds• Balanced fund• Gilt fund• Sector specific fund.• Tax saving schemes.• Fund of funds
  17. 17. Structure of a mutual fund• Asset mgt company.• Sponsor.• Board of trustees.• Custodian, bankers NAV= value of securities –liabilities No of outstanding units
  18. 18. Types of SWAPSFinancial swaps are a funding technique which permit a borrower to access on market and then exchange the liability for another type of liability.Interest rate swaps.Currency swaps.Cross currency interest rate swaps.
  19. 19. Ratio relevant for equity shareholders• EPS=EAESH no of equity sharesPrice earning ratio P/E ratio= MPS EPSPayout ratio=DPS EPS
  20. 20. • Operating profit margin.• N/P margin.• ROI• ROE• Current ratio• D/E ratio
  21. 21. New policies of LIC• Jeevan mitra.• New Jan Raksha.• Jeevan sathi.• New money back policy.• Bhavishya Jeevan.• Bima sandesh.• Jeevan Chhaya.• Jeevan Griha plan.• Jeevan Sukanya
  22. 22. Types of Preference shares• Cumulative or non cumulative• Participating and non participating preference shares.• Redeemable and non redeemable shares.• Convertible and non convertible
  23. 23. Features of capital market• Diversifying the savings of people through financial institutions,markets,instruments.• To bring in equal information to all investors.• Provides Convenience through the function of transmission of resources through financial intermediaries.• Availability of borrowers and lender in the capital market create allocational efficiency• They bring about financial engineering.
  24. 24. CAPMThe capital asset pricing module has been propounded by Sharpe and is sometimes considered to be an extension of the portfolio theory.
  25. 25. ASSUMPTIONS OF CAPM• Decision depends on risk and return of investors .• All investments are freely bought and sold.• Shares can be sold at any time without any limit.• Transactions costs are nil.• The investor makes an investigation without taking into consideration the amount of tax paid.