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Sebi and irda

  1. 1. By Akshay Krishnan Aakash Singh Reethika S Iyer
  2. 2. Regulators Reserve Bank of India Commercial Banks Urban Co-operative Banks State and District Central Co-operative Banks All India Financial Institutions: IFCI, IIBI, Exim Bank, TFCI, SIDBI, NABARD, NHB Non-banking Finance Companies including Primary Dealers Government Securities Market and Money Market Foriegn Exchange Market Insurance Regulatory and Development Authority Insurance Companies: Public Sector and Private Sector Life and Non-Life Securities and Exchange Board of India Capital Market, Capital Market Intermediaries, Mutual Funds including UTI II, Venture Capital, FIIs, Corporate bond Market State Government Urban Co-operative Banks SIDBI State Financial Corportaions State Indutrial Development Corporate NABARD Rural Co-operative Banks Regional Rural Banks
  3. 3. Salient Features Of The Present Regulations Registration Code of conduct Commission & Fee Monitor Protect interest of the consumer Product Regulation REGULATORY CONTROL
  4. 4. Problems with multiple regulators in India Varying Regulatory Arbitrage • Mutual Fund vs ULIP Differing Standard of Regulation and Distribution • Regulations by RBI • Ponzi Schemes • Chit Funds (Financial Sector Regulations) Overlap between Laws and Agencies • Set back of economic policy • Black market development
  5. 5. Organisational Structure of SEBI  SEBI is working as a corporate sector  Its activities are divided into five departments. Each department is headed by an executive director. Departments Primary Market Department Issue Management and Intermediaries Department Secondary Market Department Institutional Investment Department Legal and Investigation Department
  6. 6. Organisational Structure of SEBI (contd.)  The head office of SEBI is in Mumbai and it has branch office in Kolkata, Chennai and Delhi.  SEBI has formed two advisory committees to deal with primary and secondary markets.  These committees consist of market players, investors associations and eminent persons.
  7. 7. Objectives of the two Committees are Only advise SEBI cannot force Regulation and development of secondary stock exchange. Stock market Transparency Changes in Legal framework Company’s disclosure requirements Issue of securities in primary market Regulate intermediaries
  8. 8. Reasons for Establishing SEBI Malpractices in stock markets such as:  price rigging,  unofficial premium on new issue,  delay in delivery of shares,  violation of rules and regulations of stock exchange and listing requirements Due to these malpractices the customers started losing confidence and faith in the stock exchange. So government of India decided to set up an agency or regulatory body known as Securities Exchange Board of India (SEBI).
  9. 9. Purpose and Role of SEBI  SEBI was set up with the main purpose of keeping a check on malpractices and protect the interest of investors.
  10. 10. Functions of SEBI To meet these objectives SEBI has three important functions. These are:  Protective functions  Developmental functions  Regulatory functions.
  11. 11. Protective Functions These functions are performed by SEBI to protect the interest of investor and provide safety of investment.  Check Price Ranging  Prohibits Insider Trading  Fraudulent and Unfair Trade Practices  Undertakes steps to educate investors  Issues guidelines to protect the interest of debenture-holders  Investigate cases of insider trading  Provisions for stiff fine and imprisonment  Stopped the practice of making preferential allotment of shares unrelated to market prices
  12. 12. Developmental Functions  To promote and develop activities in stock exchange  Increase the business in stock exchange.  Promotes training of intermediaries of the securities market.  Permitted internet trading through registered stock brokers  Underwriting made optional to reduce the cost of issue  Even initial public offer of primary market is permitted through stock exchange
  13. 13. Regulatory Functions  To regulate the business in stock exchange  Framed rules and regulations and a code of conduct to regulate the intermediaries  Intermediaries have been brought under the regulatory purview  Private placement has been made more restrictive.  Registers and regulates the working of stock brokers, sub-brokers, share transfer agents, trustees, merchant bankers  Registers and regulates the working of mutual funds etc.  Regulates takeover of the companies  Conducts inquiries and audit of stock exchanges.
  14. 14. Powers of SEBI  Powers relating to stock exchanges & intermediaries  Power to impose monetary penalties  Power to initiate actions in functions assigned  Power to regulate insider trading  Powers under Securities Contracts Act  Power to regulate business of stock exchanges
  15. 15. Who we are? 1991: Government of India begins the economic reforms programe and financial sector reforms 1993: Committee on Reforms in the Insurance Sector, headed by Mr. R. N. Malhotra, (Retired Governor, Reserve Bank of India) set up to recommend reforms. 1994: The Malhotra Committee recommends certain reforms having studied the sector and hearing out the stakeholders
  16. 16. Private sector to promote insurance companies Foreign promoters Incorporation of independent regulatory body regulated by the Parliament body RECOMMENDED REFORMS
  17. 17. Birth of IRDA  Insurance Regulatory and Development Authority (IRDA) set up as autonomous body under the IRDA Act, 1999 and thereon incorporated as statutory body in 2000  IRDA’s Mission: To protect the interests of policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.
  18. 18. IRDA’s Activities  Frames regulations for insurance industry in terms of Section 114A of the Insurance Act 1938  From the year 2000 has registered new insurance companies in accordance with regulations  Monitors insurance sector activities for healthy development of the industry and protection of policyholders’ interests
  19. 19. Functions and Duties of IRDA Ensuring insurance coverage in rural areas and of vulnerable sections of society Ensuring the maintenance of solvency margin by insurance companies Regulating investment of policyholders’ funds by insurance companies Specifying financial reporting norms of insurance companies Regulating and overseeing premium rates and terms of non-life insurance covers Promoting professional organizatio ns in insurance Registering and regulating insurance companies Protecting policyholder s’ interests Licensing and establishing norms for insurance intermediaries
  20. 20. Indian Insurance Market 52 Insurance Companies 24 Life Insurance Business 28 Non – Life Insurance
  21. 21. Insurance Industry In India Insurance Industry In India Life Insurance Non Life Insurance General insurance Motor Insurance Fire Insurance Health Insurance Marine Insurance
  22. 22. Policy Holders Grievances Redressal System
  23. 23. Ombudsman Created by Government of India Settle complaints of individual policyholders Cost-effective, efficient and impartial 12 Insurance Ombudsman in different locations
  24. 24. You can approach the Ombudsman with complaint if:  You have first approached your insurance company with the complaint and  They have not resolved it  Not resolved it to your satisfaction or  Not responded to it at all for 30 days  Your complaint pertains to any policy you have taken in your capacity as an individual and  The value of the claim including expenses claimed is not above Rs 20 lakh
  25. 25. The recommended settlement process  Act as counselor and mediator  Arrive at a fair recommendation Award:  If a settlement by recommendation does not work, the Ombudsman will:  Pass an award within 3 months of receiving the complaint and which will be  A speaking award with the detailed reasoning  Binding on the insurance company but  Not binding on the policyholder  The Ombudsman can also award an ex-gratia payment Once the Award is passed  You have to accept the award in writing and the insurance company has to be informed of it within 30 days  The Insurance company has to comply with the award in 15 days after that.

Hinweis der Redaktion

  • If you accept this as a full and final settlement, inform the company which should comply with the terms in 15 days