CS Inter :: Securities Laws and Regulation of financial markets : June 2005

Roll No…………………
Time allowed : 3 hours	Maximum marks : 100
Total number of questions : 8	Total number of printed pages : 3
*NOTE :* Answer SIX questions including Question No.1 which is compulsory.

Write notes on any four of the following :

(i)	Central listing authority
(ii)	Electronic data information filing and retrieval system
(iii)	Qualified institutional buyers
(iv)	Money at call and short notice
(v)	Commodity bonds.

(5 marks each)

(a)

Distinguish between any three of the following :

(i)	‘Bull’ and ‘bear’.
(ii)	‘Reduction of capital’ and ‘buy-back of capital’.
(iii)	‘Put options’ and ‘call options’.
(iv)	‘Dematerialisation’ and ‘immobilisation’.

(2 marks each)

(b)

“Open spot trades can be executed outside the stock exchanges.” Comment.

(5 marks)

(c)

Define any five of the following :

(i)	CDSL
(ii)	FCCB
(iii)	ICRA
(iv)	GDR
(v)	BOLT
(vi)	SPN.

(1 marks each)

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P.T.O.

228

: 2 :

Give your brief advice/comments on any eight of the following :

(i)	ABC Ltd. wishes to issue ‘disaster bonds’.
(ii)	NSE has refused listing of shares of PQR Ltd.
(iii)	KLM Ltd. wants to buy-back its own shares.
(iv)	MNG Ltd. wants to appoint a market maker.
(v)	XYZ Ltd. wants to takeover ABC Ltd., which is a listed company.
(vi)	GDR Ltd. wants to appoint market intermediaries for making Euro issue.
(vii)	SEBI has cancelled registration of Scrips Ltd., a Registrar and Share Transfer Agent.
(viii)	The promoters of CBA Ltd. want to make a preferential issue of shares to themselves
(ix)	SQL Ltd. wishes to undertake business as NBFC.

(2 marks each)

(a)

Explain the following credit rating symbols and name the agencies concerned :

(i)	PL-5
(ii)	CS-4
(iii)	A-2
(iv)	BBB (Triple B).

(b)

“SEBI expects the investors to make investments with their eyes and ears open.” Comment.

(c)

What are the prerequisites for option trading ?

(d)

List at least six new financial instruments introduced in the Indian capital market in the recent past and explain the essential features of any two of them.

(4 marks each)

(a)

What are the consequences of non-compliance with the requirements of listing agreements ?

(b)

“Clause 49 of the listing agreement has assumed great significance in the corporate governance of listed companies.” Discuss.

(8 marks each)

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Contind...

228

: 3 :

6.	Fine World Ltd., a listed company, with an authorised, issued and subscribed capital of Rs.25 crore comprised of 2.5 crore equity shares of Rs.10 each and a paid-up capital of Rs.24 crore, wants to issue bonus shares in the ratio of 2:5. Discuss the relevant guidelines and explain the procedure involved.
(16 marks)
7.	(a)	Grow Wealth Ltd. (GWL) is a registered stockbroker of the Bombay Stock Exchange. SEBI has levied on GWL a penalty of Rs.2 crore for violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003. GWL is contemplating to challenge the SEBI’s order before the Securities Appellate Tribunal in an appeal. Discuss briefly the procedure for appeal before the Securities Appellate Tribunal.
(8 marks)
	(b)	What is meant by ‘due diligence’ ? How does a merchant banker perform due diligence of a prospective IPO client ?
(4 marks)
	(c)	Explain ‘insider trading’. Explain the inspection and investigation mechanism for preventing insider trading.
(4 marks)
8.	(a)	Welcome Share Registry Ltd. is appointed as the Registrar for the public issue of your company. You are required to prepare a note detailing the scope of their functions.
(6 marks)
	(b)	What is ‘net asset value’ (NAV) ? How is NAV of a fund calculated ?
(5 marks)
	(c)	What is an ‘NBFC’ ? Discuss briefly the salient features of regulatory framework for NBFCs in India.
(5 marks)

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6/2005/SLRFM