Role and powers of SEBI under the SEBI Act, 1992
SEBI protects investor interests, regulates securities markets and promotes development. Powers include legislative, executive and quasi-judicial functions.
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SEBI & Capital Markets
Navigate the world of listed companies. SEBI Act, LODR Regulations, ICDR, PIT, SAST, listing obligations, corporate disclosures, investor protection, and capital market regulations.
23 questions1 Fresher11 Intermediate11 Senior
What is the secretarial audit requirement under Section 204 for listed entities?
Every listed company + prescribed unlisted (paid-up ≥ ₹50 cr or turnover ≥ ₹250 cr or borrowings ≥ ₹100 cr) must annex a Secretarial Audit Report in Form MR-3 from a PCS to the Board's Report.
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Difference between IPO, FPO, Rights Issue and Preferential Allotment
IPO: first public issue. FPO: subsequent public issue. Rights: pro-rata to existing shareholders. Preferential: selective issue to identified investors.
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Audit Committee composition and powers under LODR Regulation 18
Min 3 directors; 2/3 independent; chairperson independent; financially literate; reviews FS, related-party transactions, internal audit, whistleblower mechanism.
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Difference between QIP and Preferential Allotment
QIP: only to QIBs, faster (no SEBI clearance), 2-week VWAP pricing. Preferential: to identified investors with valuation report, longer lock-in, 90-day VWAP floor.
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Scope of Secretarial Audit — laws covered in MR-3
Companies Act, SCRA, Depositories Act, FEMA (FDI/ODI/ECB), SEBI regulations, industry-specific laws and Secretarial Standards (SS-1, SS-2).
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Difference between Secretarial Audit and Annual Secretarial Compliance Report (ASCR)
MR-3 under §204 covers all laws; ASCR under LODR Reg. 24A covers only SEBI regulations. Different signatories, different filing channels.
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Board committees mandated under LODR — composition and purpose
Audit, Nomination & Remuneration, Stakeholders Relationship, Risk Management and CSR are the five mandatory committees for listed entities.
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Risk Management Committee — composition and key roles under LODR Reg. 21
Mandatory for top 1000 listed entities. Min 3 members with majority directors; at least 1 independent; oversees risk policy, ERM framework and cybersecurity.
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Difference between Friendly Takeover and Hostile Takeover
Friendly: with consent of target board; negotiated price, smooth integration. Hostile: bypassing the board via direct offer or proxy fight.
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What are the SEBI LODR compliance requirements for a company secretary?
Quarterly disclosures (Reg. 13/27/30), annual disclosures (Reg. 34/36), event-based intimations (Reg. 30) and structured digital database (Reg. 3) of UPSI — CS is Compliance Officer under Reg. 6.
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Disclosure obligations of a listed entity under LODR Regulation 30
Disclose material events/information to stock exchanges as soon as reasonably possible but not later than 30 minutes (Para A) or 24 hours / Schedule III timelines.
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Buy-back vs Capital reduction — comparison
Buy-back: company purchases own shares using free reserves; tax favoured pre-2024. Capital reduction: returns capital, requires NCLT order. Both reduce capital base.
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Secretarial compliance for listed companies — annual reporting matrix
Listed entities must file Annual Secretarial Compliance Report (Reg 24A) signed by a PCS, alongside MR-3, within 60 days of year-end. Covers all SEBI regulations applicable.
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Open offer thresholds under SEBI (SAST) Regulations, 2011
Triggered on acquisition of 25% or more voting rights, or any acquisition > 5% in a financial year by an existing holder of 25%-75%. Open offer for minimum 26%.
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Business Responsibility and Sustainability Report (BRSR) — overview
Mandatory ESG report for top 1000 listed companies by market cap from FY 22-23. Covers nine NGRBC principles with quantitative and qualitative disclosures.
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Delisting under SEBI Delisting Regulations, 2021
Voluntary delisting via reverse book-building or fixed-price route; promoter must reach 90% post-delisting. Compulsory delisting by exchange for repeated non-compliance.
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Buyback regulations — modes, conditions and timelines
Via tender offer or open market. Max 25% of paid-up capital + free reserves; debt-equity ≤ 2:1 post buy-back; cooling period of 1 year between buy-backs.
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What is insider trading under SEBI (PIT) Regulations, 2015?
Trading by insiders on the basis of unpublished price-sensitive information (UPSI) is prohibited. Insiders include connected persons and those in possession of UPSI.
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Continuous disclosures under PIT Regulations — Reg. 7 trading window
Designated persons cannot trade while window is closed (from UPSI emergence till 48 hours after announcement). Disclose trades > ₹10 lakh in a calendar quarter.
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Foreign Currency Convertible Bonds (FCCBs) — structure and regulation
Debt instrument denominated in foreign currency, convertible into equity at predetermined ratio. Issued under ECB framework with conversion price floor.
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Conversion of debt to equity — regulatory framework
Banks convert debt to equity under SDR, S4A or strategic restructuring; FEMA permits FCCB / ECB conversion. Listed entities follow ICDR pricing norms.
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Employee Stock Option Plans (ESOPs) — regulatory and tax framework
Issued under Companies Act §62(1)(b) + SEBI SBEB Regulations. Taxed twice: perquisite on exercise (FMV − exercise price) and capital gains on sale.
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