New Company - is one which has not completed 12

months of commercial production and no audited results are available

- where the promoters do not have a track record

CAN ISSUE ONLY AT PAR

New company set up by an existing company provided

- existing co. has 5 yrs track record of consistent profitability

- holds not less than half of the share capital in the new entity

- FREE TO PRICE ITS ISSUE- CAN ISSUE AT A PREMIUM

Private and closely held companies - has track record of consistent

profitability for at least 3 years. - FREE TO PRICE ITS ISSUE - provided lead managers have been

consulted as regards the issue prce

Existing listed companies - ALLOWED TO RAISE FRESH CAPITAL

THROUGH FREE PRICING provided promoters contribution is

a) 50% on first Rs.100 crores of issue b) 40% on next Rs.200 crores of issue c) 30% on next Rs. 300 crores of issue d) 15% on the balance amount

Reservation of issues under public subscription- made in the following manner

Permanent employees ……………… 10% Indian mutual funds …………............ 20% Foreign Institutional Investors………..15% Development Financial Institutions…..20% Shareholders group of companies…...10%

Composite Issues by listed companies - Differential pricing between public and

right shareholders allowed provided - justification for the same is given in the

offer document

Lock in period5 years for promoter’s contribution from - Allotment Date OR - From the date of commercial production “ Whichever is late” Current lock in period – reduced to 1 year

Abridged prospectus is attached with every application made before SEBI

Risk factors highlighted in the prospectus

Project cost and issue objective stated in the prospectus

Company’s management, past history, and present business highlighted in the prospectus

Incase of issue at premium, justification for the same to be stated

Minimum of 30 collection centre's for the issue

Collection agents not authorized to collect application money in cash

Quantum of issue not to exceed the amount stated in the prospectus under any circumstances

Compliance report to be submitted to SEBI within 45 days from the closure of the issue

Minimum number of shares per application fixed at 500 shares

Allotments to be made in tradeable lots

Issues by way of bonus, rights etc to be made in such an order as to minimize odd lots

Capital issue to be fully paid up within 120 days

Refund of amount to be made to investors within 120 days if minimum subscription of 90% has not been received

Mandatory underwriting Increase in listing limit from 3 crores to 5

crores Gap between closure date of various

issue not to exceed 30 days

Adequate disclosure to be made in the application regarding the terms and conditions of redemption and other relevant features of the instrument

Stock Exchange:- Board of directors to be reconstituted

to include non-members, public representatives, government representatives to the extent of 50% of total members

- Capital adequacy norms laid out for various members of stock exchanges depending on their turnover

- Working hours fixed uniformly for all stock exchanges

- All recognized stock exchanges to inform about the transactions within a period of 24 hours.

For the brokers:- Registration of brokers and sub brokers

made compulsory- Capital adequacy norms laid out to

ensure financial solvency of the brokers- Audit of broker’s book and filing of audit

report made mandatory- 5% cap for brokers to underwrite the

issue

- Disclosure of transaction price and brokerage, before SEBI made mandatory in the contract notes issued to client.

FII’s allowed to invest in all securities traded in primary and secondary markets.

No restriction on the volume of investments for the purpose of entry of FII’s

FII holding in a single company not to exceed ceiling of 5% of equity capital of the company.

Disinvestment allowed only through stock exchanges in India

Tax slabs for FII’s - 10% on long term capital

gain(>1year) - 30% on short term capital gain - 20% on dividend and interest

payouts

General Guidelines: Mutual fund shall be established in the

form of trusts under Indian Trust Act and will be authorized for business by SEBI

Mutual funds shall be operated only by established Asset Management Companies setup for the purpose

At least 50% of the board of AMC must be independent directors with no interest in the sponsoring organization

The minimum net worth to be maintained at all times is prescribed at Rs 5 crore

SEBI vested with powers to withdraw authorization given to AMC incase investor interests are not taken care of

Business Activities : The AMC and the trustees to be treated

as separate legal entities AMC not to undertake any activity

other than management of a fund.

Scheme specific guidelines: Each scheme to be registered with SEBI

before the same is floated in the market. Minimum size of the funs: - 20 crores incase of closed end scheme - 50 crores incase of open end scheme

Closed end schemes not to be kept open for subscription for a period of 45 days or more

Entire subscription amount to be returned to investors incase actual subscription does cross 60% of the target amount.

Closed end schemes to be listed on the stock exchanges for the purpose of liquidity.

Separate and responsible fund manager for each of the schemes

Investment norms Mutual fund investment in a single

script should not exceed 5%of the total scheme amount

Ceiling limit of 5% can be increased upto 10% as allowed by SEBI

No mutual fund can invest 15% of the corpus amount in a single industry

Income distribution:90 % of the gain accrued on the mutual

fund to be distributed to beneficiaries

Disclosure and Reporting: SEBI vested with wide powers to call for

any information at any point of time as deemed necessary by SEBI.

SEBI empowered to lay down accounting policies, format and contents of financial reports.

Common advertising code for all mutual funds can be fixed by SEBI

Provision for the same should exist in the Articles of Association of the Co. If not, a resolution should be passed in the General Body meeting for capitalization of profits. Such proposal should be recommended by the Board of Directors and then the same should be approved in the General Body meeting.

Bonus issue should be made only out of free reserves built out of genuine profits.

Reserves created out of revaluation of fixed assets are not permitted to be capitalised.

Declaration of bonus issue in lieu of dividend is not permitted.

Bonus shares are not allowed until the existing partly shares are fully paid up.

Bonus issue is not permitted if the company has defaulted in respect of payment of statutory dues to employees such as provident fund, gratuity, bonus etc.

Bonus issue will not be permitted if the company has defaulted on the payment of interest to the debenture holders.

No bonus issue can be made within a period of 12 months from the date of public/rights issue.

A company announcing bonus issue after approval of Board of Directors must implement the proposals within a period 6 months from the date of such proposal and the company shall not have the option of changing the decision.

Consequent to the issue of bonus shares, if the subscribed and paid up shared capital exceeds the authorised share capital, a resolution shall be passed in the general body meeting for increasing the authorised share capital

Issue of bonus shares is subject to the condition that no bonus shall be made which will dilute the right of a debenture holder.

New issues: The issuing Co. should provide fair and

correct information. Allotment process should be fair and

not tainted by any bias. The draft prospectus is thoroughly

scrutinised for full and fair disclosure. There is no delay in refunds to

shareholders.

Underwriting is done to inspire confidence in the minds of the investors.

Risk factors are duly highlighted in the prospectus.

Listing is done in a timely manner transparency is ensured.

Both, stock exchange and companies are responsible for investor protection.

All the parties in the new issue viz merchant bankers, collecting banks are responsible for investor protection.

Appointment of SEBI representatives to supervise the allotment process.

Regulation of Insider Trading:A penalty of up to Rs 5 lakhs for those who

indulge in insider trading.

Investor Education:A book published by SEBI on investor

grievancesA common code of advertisements to

ensure investors are not mislead

Grievance Cell:Set up to handle investor complaints.

Visit www.sebi.gov.in

Stock Invest Scheme:Banks act as DP’s incase of new issues.