School of Law and Governance

LAW 456 Financial Market Regulation L T P C

Version: 1.1 6 0 0 6
Pre-requisites//Exposure Constitution-I, Company Law-I
co-requisites SEBI & Investment Laws
Semester VIII
Programme B.A. LL.B.(H) &B.Sc.LL.B.(H)

1.0. Objective of the Course:

 To analyze and impart the basic principles of capital markets in India;

 To impart knowledge of legal frameworks relating to regulation of capital
market;
 To impart the knowledge and skill regarding practical aspects of the capital
markets;
 To train the students in facing contemporary issues development and of capital
market.

2.0.Teaching Learning Methodology:

Lecture Method
Problem Method
Case Study Method

3.0.Evaluation Scheme:

Continuous Assessment 30 Points

Attendance 5 Points
Mid-Term 15Points
End Term 50 Points

4.0. DETAILED SYLLABUS

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Module I: An overview of Financial System

 Financial markets- it’s definition and meaning;

 Role and functions of financial markets;
 Different constituents of financial markets,
 Development and growth of financial markets in India and financial reforms in India.
 Meaning, characteristics, significance and growth of capital market in India;
 Constituents of Indian Capital market;
 The capital market vis-à-vis Money Market;
 Capital Market instruments: Preference shares, Equity shares, Non-voting equity
shares, Company fixed deposits, warrants, Debentures and Bonds, sweat equity.
 Money Market Instruments: Treasury Bills, Treasury bonds, Commercial papers,
Participatory notes, Certificate of deposit, Bankers acceptances.

References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.
 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.
 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.

Module II: New issue Market / Primary Market

 Meaning, Significance and scope;

 Government policies and new issue market;
 Advantages and disadvantages of primary market;
 Functions of new issue market;
 Methods of floating new issues;
 Problems of the new issue markets;
 General guidelines and regulatory aspects for new issues;
 The role of intermediaries- Merchant bankers, Registrars, Underwriters and brokers,
Collecting and coordinating bankers, Portfolio managers, debenture-trustees.
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References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.
 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.
 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.

Module III: Secondary Market/Stock exchanges

 Meaning and significance;

 Functions of secondary market;
 Recognition and organization of stock exchanges in India;
 Listing of securities on the stock exchanges-advantages and disadvantages;
 Listing of securities- Procedure, rules and regulations;
 Secondary Market Intermediaries- Stock brokers- their registration and functions, sub-
brokers;
 Online Trading, BSE-BOLT System, Mobile Trading, ALGO Trading.

References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.
 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
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 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.

 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.

Module IV: Principal Regulator of Indian capital market

 The Securities and Exchange Board of India: establishment and incorporation;

 Powers and functions of the Board;
 Registration certificate;
 Prohibition of manipulative and deceptive devices, insider trading and substantial
acquisition of securities or control;
 Securities Appellate Tribunal- establishment, jurisdiction and authority;
 SEBI (Issue of capital and disclosure requirements) Regulations, 2009:
 Green shoe option, IPO,FPO, Net worth, Offer document, QIB, Rights issue;
 Common conditions for public issues and rights issues;
 Conditions for IPO;
 Bonus issue- conditions & restrictions.

References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.
 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.
 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.

Module V: Depository services

 Overview of Depository system in India, benefits of the system;

 Beneficial owner, Depository, Depository participant ;
 Significance of the system; 4
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 Materialization, Dematerialization and Dematerialization;

 Certificate of commencement of business by depositories;
 Rights and obligations of depositories, participants, issuer and beneficial owners,
 Overview of SEBI (Depositories and participants) Regulations, 1996.

References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.
 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.
 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.

Module VI: Credit Rating and Evaluation of Risk

 Concept, scope and significance;

 Benefit to investors;
 Regulatory framework;
 Credit rating agencies in India and their process.

References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.

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 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.
 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.

Module VII: Other Instruments

 Mutual Funds: Definition, Types, Importance, Risks involved, Net Asset

Value(NAV);
 Overview of SEBI (Mutual Funds) Regulation, 1996;
 Venture capital- meaning and definition, significance, Indian venture capital
industries;
 Instruments Issued Outside India- FCCBs, GDRs, ADRs, ECBs.

References & Readings materials:

 SEBI Manual, Taxman Publications.

 Dr. K.R Chandretre, Bipin S. Acharya, et.al. SEBI compendium ( A guide to listed
Companies), Bharat, 4th edition, 2011.
 Dr. V.A Avadhani, Investment and Securities Market in India, Himalya Publishing
House, eighth edition, 2008.
 Securities Markets and Products, Indian Institute of Banking and Finance, 2011.
 Elis Ferran, Principles of Corporate Finance, Oxford University Press, 2009.
 K.Sekhar, Guide to SEBI Capital Issues, Debentures and Listing, 3rd edition, Lexis
Nexis Butterworths Wadhwa Nagpur, 2003.
 S.R Myneni, Law of Investment and Securities, Asia Law House, 2006.
 Sumit Agarwal, Robin Joseph Baby, Amit Agarwal, Agarwal & Baby on SEBI Act,
Taxmann, 2011.
 Dr. S. Gurusamy, Capital Markets, 2nd edition, Tata McGraw-Hill publication.
 Rajesh Chakrabarti, Sankar De, Capital Markets in India, Sage Publications, 2010.