CAPITAL MARKET & SECURITIES LAWS Important topics & practice paper for IGP students appearing in CS-EXE Dec-2016 exams OVER VIEW OF CAPITAL MARKET 1. What do you mean by financial system and its functions? How the long term growth of financial system is ensured through? 2. Discuss Role of Capital market in economy. 3. Discuss in brief the various legislations governing the Indian Capital Market . 4. IOSCO and its membership. CAPITAL MARKET INSTRUMENTS 1. What do you mean by financial instruments and explain the Factors affecting the preferences for choosing any instruments by issuer and investors. 2. Explain: (a) Sweat equity shares and DVR with conditions (b) Tracking Stock and its advantages (c) Mortgage backed securities (d) Secured Premium Notes (e) Carrot & Stick bonds CREDIT RATING 1. Explain Rating methodologies/process of manufacturing companies and financial companies. 2. What do you mean by asset securitization/structured obligation? 3. Explain the eligibility conditions and procedure registration for Credit Rating Agency. 4. Explain the rating symbols for long term debt instruments and their meaning. STOCK EXCHANGE TRADING MECHANISM 1. Write note on: (a) Rolling settlement (b) Funds and Demat Pay in Pay out (c) Market abuse and suvilience (d) Circuit Breaker and Circuit Filter (e) Trade to Trade (f) Direct market access (g) Institutional Trading Platform (ITP) 2. What is straight through processing? What are its advantages? 3. What is ‘demutualization’? Briefly discuss the important features of demutualization. 4. Explain following terms in short; (a) Bull market and Bear Market (b) Jobber and Arbitrager Page 1
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(c) Long position and short position DEBT MARKET 1. Explain the following: (a) Negotiated Dealing System (NDS) (b) Special Purpose Distinct Entity (SPDEs) (c) Securitized debt instruments (d) Municipal bonds (e) Derived instruments / Mortgage Bonds 2. Which company can issue Shelf Prospectus and What are the eligibility conditions for issuing companies. 3. Briefly discuss the role of Company Secretary as Compliance Officer in Listing of Debt Securities. MONEY MARKET 1. What is the difference between Money market & Capital market? 2. Explain Treasury bills, its types, and benefits. 3. Mr. Investor wishes to buy 91 days Treasury Bill on May 12, 2016 which is maturing on July 6, 2016. The rate quoted by seller is 99.1489 per 100 face values. Calculate the annual yield. 4. Explain Dutch auction and French auction of T-Bills. 5. Write note on: (a) Certificate of Deposits (CDs) (b) Commercial Paper (CP) (c) Bill rediscounting (d) Mezzanine Financing (e) FIMMDA 6. Explain Factoring, its types and its benefits to the seller. MUTUAL FUNDS 1. What are the advantages and disadvantages of investing in a mutual fund? 2. Describe the types of schemes of mutual funds according to maturity period and their differences.. 4. When can a mutual fund provide restriction on redemption in mutual funds 5. What are the requirements for a mutual fund in relation to for issue and updation of Offer document of the schemes? 6. What do you mean Sponsor in relation to mutual fund? What eligibility criteria to be fulfilled by an applicant to get a certificate of registration for Mutual Fund. 7. What is advertisement code for mutual funds?
8. What are DISCLOUSRE requirements for mutual funds. Page 2
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9. What in Infrastructure Debt fund Scheme and role of strategic investor? Briefly explain the Eligibility criteria to launch such scheme. 10. Enumerate the salient features of Real Estate Mutual Fund Scheme. 11. Write short notes on: (a) Net Asset Value (NAV) (b) Hedge funds (c) Exchange traded funds (d) Private equity funds (e) Strategic investors (f) Gold Exchange Traded funds (e) Capital Protection Oriented Schemes. ALTERNATIVE INVESTMENT FUND 1. Explain AIF and its eligibility and investment conditions. 2. What are the key differences between 3 categories of Alternative Invesment funds? 3. What is Angel Fund and what are the investment conditions for them? 4. What do you mean by - Angel investments - Angel Investors 5. Discuss the circumstances under which an Alternative Investment Fund could be wound up? COLLECTIVE INVESTMENT SCHEME 1. What do you mean by Collective Investment Scheme and eligibility conditions for registration under SEBI regulations? 2. Discuss the various restrictions on business activities of Collective Investment Management Company? RESOURCE MOBILISATION IN INTERNATIONALCAPITAL MARKET 1. What do you mean by EURO ISSUE and what are the Purpose/benefits to Issuer and Investor? 2. Explain the provisions, eligibility and procedure for issuance of GDR/FCCB. 3. Write note on following: (a) Sponsored ADR/GDR issue (b) One and two way fungibility (c) Parking of FCCB/ FCEB proceeds (d) Road shows 4. What is difference between FCCB and FCEB. 5. Explain the various tracks and forms available under External Commercial Borrowings (ECB)? 6. Explain External Commercial Borrowings (ECB) reference to: Page 3
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(a) How it can be accessed, who are eligible borrowers under different routes? (b) End use of ECB proceeds. (c) End use not permitted of ECB proceeds (d) Parking of ECB proceeds (e) Recognized Lenders and borrowers (f) Conversion of ECB into equity INDIAN DEPOSITORY RECEIPTSS 1. Eligibility and procedure for making an issue OF IDRs. FOREIGN PORTFOLIO INVESTOR 1. Meaning, categories and eligibility criteria for registration of FPI. 2. Discuss the type of securities where FPIs can invest its money and restrictions imposed as per theSEBI (Foreign Portfolio Investors) Regulation, 2014. 3. What are the eligibility criteria for approval of DDP. NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES 1. What are the Conditions for Company making any public issue of non-convertible redeemable preference shares? 2. Define “Perpetual Non-Cumulative Preference Share” “Innovative Perpetual Debt Instrument” . REAL ESTATE INVESTMENT TRUSTS (REITS) 1. Meaning, categories and eligibility criteria for registration of REIT. 2. Issue and allotment of units of REIT. 3. Investments conditions of REIT. 4. Right of unit holders. 5. Valuation reports by REIT. INFRASTRUCTURE INVESTMENT TRUST 1. Define following terms: (a) Completed and revenue generating project (b) Pre-Cod Project (c) SPV Or Special Purpose Vehicle (d) PPP Project 2. Meaning, categories and eligibility criteria for registration of REIT.
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3. Discuss the type of securities where InvIT can invest its money and restrictions imposed as per the SEBI (Infrastructure Investment Trusts) Regulation, 2014. SCRA-1956 1. State the conditions and procedure for Recognition of Stock Exchanges and Clearing Corporations. 2. What are the guidelines for ownership of Stock Exchanges and Clearing Corporation under SCRA Regulations? Can a stock exchange be a listed company? 3. Explain the following: (a) Corporatisation and Demutualisation of stock exchanges. (b) Clearing Corporation 4. What are the provisions under SCRA-1956 for public issue and listing of securities? 5. State the grounds on which stock exchanges can delist the securities of a company under the SCRR, 1957. 6. What is the remedy available to accompany if a stock exchange refuse to list its securities under SCRA Act, 1956 7. What are the Qualification prescribed for Individual and Corporate Membership of a recognised Stock Exchange? 8. Explain the provisions for Continuous Listing Requirements (Minimum public shareholding under SCRA-1956 SEBI ACT-1992 1. Explain the objects, composition, power and functions of SEBI. 2. Explain the following with respect to SEBI (Settlement of administrative & civil proceedings) regulations, 2014 (a) Consent Order (b) Scope of Settlement Proceeding (c) Settlement Terms (d) Factors to be considered to arrive at the settlement terms 3. Briefly explain the various defaults which cannot be considered for settlement of proceedings under the SEBI (Settlement of Administrative & Civil Proceedings) Regulations. 4. Procedure for making appeal to SAT and its powers. DEPOSITORIES ACT-1996 1. Give an overview of the key features of Depository Systems in India. 2. What are benefits of depository system?. 3. Which are the audits are required for Depositories and Participants? 4. What are Designated Depository Participant (DDP) and Eligibility criteria for DDP?
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5. Briefly explain the guidelines issued by SEBI with respect to single registration of depository participants under the SEBI (Depositories and Participants) Regulations, 1996 6. What is "Basic Services Demat Account" (BSDA)? Who are eligible investors to open it and charges? 7. SARAL account opening for resident individuals. LISTING AND DELISTING OF SECURITIES 1. What are the various types of listing and benefits of listing? What is difference between Listed cleared securities and permitted securities. 2. Explain the legal provisions of listing under Co. Act-2013 and SCRA-1956 3. Explain the legal provisions under the various listing Regulations: (a) Regulation 6 (b) Regulation 17 (c) Regulation 18 (d) Regulation 29 (e) Regulation 31 (e) Regulation 33 (f) Regulation 42 4. Discuss corporate governance provisions under SEBI (LODR), 2015. 5. Distinguish between voluntary delisting of securities and compulsory delisting of securities briefly explain the procedure for voluntary delisting only from some of the stock exchange. 6. State the circumstances where delisting is not permissible. ISSUE OF SECURITIES 1. Explain the eligibility norms for public issue under SEBI (ICDR) Regulations. 2. Explain the following with relevant provisions or conditions: (c) Promoters’ contribution and lock in requirements (d) Reservation on competitive basis (e) Allocation in net offer to public (f) Anchor investor (g) Green Shoe Option (h) ASBA and Self Certified Syndicate Bank. (i) Face value of securities (j) QIB and Anchor investors 3. Explain conditions for bonus issue of securities. 4. Explain Book building and Alternate Method of Book Building. 5. Preferential issue by existing listed companies 6. What are the conditions for making Qualified Institutions placement under SEBI ICDR Regulations? 7. What is Institutional Placement Programme (IPP)? 8. Listing on institutional trading platform.
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9. What are the criteria for issue specified securities by a SME and Briefly discuss the provisions relating to the migration of a listed company from Main Board to SME Exchange under SEBI (ICDR) Regulations migrations? SECURITIES MARKET INTERMEDIARIES 1. When a Merchant Banker deemed to be associated with an issuer. 2. Explain following: (a) (b) (c) (d) (e) (f)
Syndicate Member Research analyst KYC & KRA Registrar and transfer agent Portfolio manager Stock broker and its audit.
3. What are the obligations of intermediaries under prevention of money laundering act, 2002 4. Explain the inspection and disciplinary proceedings which can be initiated by against SEBI registered intermediaries.
INSIDER TRADING 1. Explain the following: (a) Insider (b) Unpublished price sensitive information, (c) Trading plan 2. Regulation for Communication or procurement of unpublished price sensitive information. 3. What are the rules for the Disclosure of interest or holding in listed companies by certain persons? 4. What is the role of Compliance Officer in compliance requirements for Insider? 5. Penalty for insider trading under section 15G of SEBI Act TAKEOVER CODE 1. Describe following: (a) Takeover, (b) Persons Acting in Concert (c) Trigger point for making an open offer by an acquirer (d) Creeping acquisition (d) Public announcement 2. What are the conditions for making Mandatory and Voluntary open offer? 3. What is mode of payment under SAST Regulations? 4. Briefly explain the conditions on which SEBI can grant exemption to an acquirer. 5. What are the Escrow account obligations towards security for performance obligations under SAST Regulations? Page 7
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INVESTOR PROTECTION 1. What are the Investors’ rights and responsibilities under securities Laws? 2. Whom to approach for complaint against stock brokers/depository participants. 3. What is Legal framework for investor protection in India? 4. When can a case relating to Investor Protection be referred for arbitration? 5. Which are the matters that are not considered as complaints of Investor by SEBI?
