CS Inter :: Securities Laws and Regulation of financial markets : June 2006

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.
1. Write notes on any four of the following :
(i)
(ii)
(iii)
(iv)
(v)		 Securities Appellate Tribunal (SAT)
Asset management company
Promoters quota
Market capitalisation
Depository participants.
(5 marks each)
2. (a) Distinguish between any three of the following:
(i)‘Open-ended scheme’ and ‘close-ended scheme’ of mutual funds.
(ii) ‘Money market’ and ‘capital market’.
(iii) ‘Advertisement’ and ‘statement in lieu of advertisement’.
(iv)‘Dematerialisation’ and ‘rematerialisation’.
(2 marks each)
(b)

On 30th October, 2005, Shan Co-operative Bank buys 91-day treasury bill maturing on 24th December, 2005. The rate quoted by the seller is Rs.99.25 per Rs.100 face value. Calculate the yield percentage of the treasury bill.

(5 marks)
(c) Give full form of any five of the following :
(i) NASDAQ
(ii)ADR
(iii)SEC
(iv)NAV
(v)NSE
(vi)CDSL.
(1 marks each)
3. (a) Discuss the role of securities market in economic growth.
(5 marks)
(b) “Buy-back of shares is a corporate financial strategy.” Comment.
(5 marks)
(c)

Global Systems Ltd., an existing listed company, wants to make a bonus issue of equity shares. As the Company Secretary of Global Systems Ltd., prepare a note on the SEBI guidelines as applicable in this regard.

(5 marks)
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4. (a)

Briefly explain the following credit rating symbols and indicate against each the name of the concerned rating agencies :
(i)mfB+
(ii)PR3
(iii)C(ind)
(iv)Cf .
(1 mark each)
(b) What are the contents covered in the offering circular for euro-issue offerings ?
(4 marks)
(c) What is the eligibility criteria for voluntary delisting of securities ?
(4 marks)
(d)

State the main recommendations of Narasimhan Committee regarding development of Indian capital market.
(4 marks)
5. (a) Define and state the functions of any four of the following :
(i)
(ii)
(iii)
(iv)
(v)		 Lead manager
Banker to an issue
Share transfer agent
Debenture trustee
Underwriter.
(2 marks each)
(b)

You are the Company Secretary of Swift IT Solutions Ltd., which is a newly listed company, and your managing director wants you to prepare a note on the requirements relating to publication of quarterly financial results. Briefly outline the various requirements of clause 41 of the listing agreement in this regard.
(8 marks)
6. (a) What do you understand by ‘IDR’ ? Explain the eligibility criteria for an IDR.
(4 marks)
(b) What do you understand by any two of the following in relation to venture funds:
(i)
(ii)
(iii)		 Incubators
Angel investors
Private equity players ?
(2 marks each)
(c) Why should an investor prefer to invest in government securities ? Discuss the benefits.
(4 marks)
(d) Explain the investment norms applicable to NBFCs.
(4 marks)
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7. (a) What are the requirements for registration of Foreign Institutional Investors (FIIs) ?
(4 marks)
(b) Highlight the provisions of revised clause 49 of the listing agreement.
(12 marks)
8. (a) Explain any two of the following terms of the secondary market:
(i)
(ii)
(iii)		 Forward trading
Kerb trading
Odd-lot trading.
(2 marks each)
(b)

What is ‘escrow account’ ? Discuss the provisions of escrow account as per the SEBI Takeover Code.

(4 marks)
(c)

What are the common grievances of investors in India ? State investors’ grievances redressal authorities in India.

(4 marks)
(d) What do you mean by ‘derivatives’ ? Name the most commonly traded derivatives.
(4 marks)

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