REFORMS IN THE SECONDARY MARKET - Accounts and Finance for Managers

  • Guidelines with reference to substantial takeovers and acquisitions - disclosures
  • Guidelines with regards to mandatory public offer to the investors
  • Several mutual funds were allowed
  • UTI brought under the sebi
  • Advertising code was initiated as well as the requirements of pre-vetting of advertisement removed
  • To improve the role of the Mutual fund as well as to develop the market of mutual fund in India, mutual funds were given - right to underwrite the public issues and to make investments in the money market
  • Jumbo transfer was introduced for the institutions
  • Carry forward system of transactions are permitted to SEs after getting the consent and surveillance
  • Carry forward transactions are limited in the case of lenders of the transactions
  • Carry forward transactions should be disclosed on the basis of scrip and broker at the beginning of carry forward session
  • Capital adequacy norms were introduced
  • Depositories were introduced during the year 1995 Sept.; to record the ownership
  • in the book form
  • The introduction of depository requires the changes in the following enactments
    Companies Act
    Stamp Duty Act
    Income Tax Act

Capital Market Reforms: 1996-97

  • Depositories Act 1996 - promulgated in order to reduce the problems associated with the handling of securities
  • Guidelines for the custodian of securities were clearly drafted
  • Custodian of securities- compliance officer should be appointed - to bridge the gap in between
  • Changes are expected to discuss during the monthly meetings of Association of Custodian of security services
  • Bad delivery cell was set up and code was specified
  • System of clearing house or clearance corporation to be set up in the stock exchange
  • Separate committee has been set up for surveillance - inter stock exchange transactions
  • Mumbai and other stock exchanges were allowed to install terminals - where no exchange exists - to have on line trading
  • Norms of the OTCEI were eased to promote more transactions

Capital Market Reforms: 1997-98

  • Daily carry forward margin reduced to 10% from 15%
  • Over all carry forward increased to Rs.20 crs per broker

Capital Market Reforms: 1998-2001

  • Buy back of securities were permitted
  • Circuit breaker system was introduced to control volatility
  • Dematerialized trading was installised
  • Rolling settlement introduced
  • Internet trading was introduced
  • Guidelines were issued in the angle of maintaining the transparency
  • Clause 49 - to maintain corporate governance introduced
  • Stock watch system was introduced
  • Steps introduced to reduce the transaction costs
  • Trading of stock index and futures - BSE and NSE commenced
  • For trading of debt securities - to promote debt market - steps taken

Capital Market Reforms: 2005-2007

  • Golden pegged return funds permitted
  • IPO norms are tightened
  • Grading of IPOs are suggested

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