Taxmann's Securities Laws & Capital Markets (SLCM)

Contents % ' ! 0

Chapter-wise Marks Distribution

I-7

Chapter-wise Comparison with Study Material

I-9

PART I SECURITIES LAWS Chapter 1 SECURITIES CONTRACTS (REGULATION) ACT, 1956

1.3

Chapter 2 SECURITIES & EXCHANGE BOARD OF INDIA ACT, 1992

2.1

Chapter 3 3.1

DEPOSITORIES ACT, 1996

Chapter 4 AN OVERVIEW OF THE SEBI (ISSUE OF CAPITAL & DISCLOSURE

REQUIREMENTS) REGULATIONS, 2018

4.1

Chapter 5 SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS)

REGULATIONS, 2015

5.1

Chapter 6 SEBI (SUBSTANTIAL ACQUISITION OF SHARES & TAKEOVERS)

REGULATIONS, 2011

I-5

6.1

3 4 . % 4 . / #

I-6

% ' ! 0

Chapter 7 SEBI (BUY-BACK OF SECURITIES) REGULATIONS, 2018

7.1

Chapter 8 SEBI (DELISTING OF EQUITY SHARES) REGULATIONS, 2021

8.1

Chapter 9 SHARE BASED EMPLOYEE BENEFITS

9.1

Chapter 10 10.1

ISSUE OF SWEAT EQUITY

Chapter 11 SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015

11.1

Chapter 12 12.1

MUTUAL FUNDS

Chapter 13 COLLECTIVE INVESTMENT SCHEMES

13.1

Chapter 14 SEBI (OMBUDSMAN) REGULATIONS, 2003

14.1

PART II CAPITAL MARKET & INTERMEDIARIES Chapter 15 STRUCTURE OF CAPITAL MARKET

15.3

Chapter 16 CAPITAL MARKET INSTRUMENTS

16.1

Chapter 17 IMPORTANT ASPECTS OF PRIMARY MARKET & SECONDARY MARKET

17.1

Chapter 18 SECURITIES MARKET INTERMEDIARIES

SOLVED PAPER : JUNE 2022 (NEW SYLLABUS)

18.1

P.1

T E K R A M Y E N O M N E E W T E B N O I T C N I T S I D F O S T N I O P N I A M E H T E R T A E GK R NA I WM OS L L E O I &T I R U C E S Meaning

G N I W O R R O B D N A G N I D N E L E H T N I S L A E DF T )O R GA NE I WY O R R R O O F B E D NI A G N I D N E L E H T N I S S L S A E E L DFR TO O )

Credit instruments

ESE H HE T T RF NAO H I S DSE I EST K S I R UCU O SS T C T E N ES ER AS MT D UE N RKO T R B S A T NM SN I E NSEM R I E U A I T N T N MI R RE E UB EC V HE EO 4S D G FYL S O L EI NB SO T S N E EMC LN ML A UC A T RE T P S RE NA C I TC TEA I K D ERS N A R AE MO C G NYLN L E I A A NAH R E MOT C MA X EEL LE HH OF 4T CO medium and long-term finance

KLLS CAAR N N O OO OT TI I S T 3T E U U V T T I I ET N T I RS S L N AN L ) A )N SCG M T I IS T NS E D EE R UMON &A TO I T ) $)) S N )& OS$S E S CG R R O RNOT A T S OH S E J E CV A V XN N -%) ) EN SSR A DR I OAD NT )N US ") FE LV2F A N O E UI T S HT LT U A N -N DE ONU T I AI YT R T U T S E TT S T NE I AO UT R K DS OCR NP NI RA I RO M G O J NNCAY G I I E K EMN E NR G EO R AOA HM "&L T

S E I T I R U C E S N I

H C U M S I KE T S I K R ER HA 4M E H T N I

S I K S I R T FE O K ER EA R M G EY DE EN HO 4M

OE TI V T YC L U B D AO FRR E O P F E TR D A N HPA T S E I R U E C L O E T R SN E C MM I S R Y A E O B T L GP E N M H O 4 L E

F O T A H T S I E L O R C I S A B E H 4

15.3

putting

TAXMANN®

Maturity period

short-term finance

capital to work

liquidity

adjustment

Basic role

single day

up to a year

greater

small

Risk

ENESDE R ASEERS E CARSAD N U HS H U OT T CN WE TB R I S N E T EI UET K E S CR B N P R E M AU E E O L R A D C N M P T U E R MT S AS E NSU N SF D R V I ON T SEO OI T S EBG TO E SC N E I KR T DE ABII E RL S H NR A SI LN T E E USF MS E A A R S RA CRO M D A T E E S NOH SHE I S T T A I LE ST I R H E SNL I S I E UR R K CERS4HC U E TO EYT DC C S UNNT E NS TS !BE AEI SYSR EDSI RDO HNDT A T N)T NF AU UT E O F E T N&K S S D R R ME OE SE RE R MR E WEN UA T M F N T OT E YIA A R R R G S T N R M OI I N TO H HDI O M E L R KBSIA RTF R EUEE Q N G E A G LDTIN RNI T ME R I EG ARO R L EFOB YHHI N EWCHTHAA L N XTESI R OTE KFA E R S O S V A D MER SVO L K A E T DOME I ERN S R E E S HAE E R S HA OT 4ML P A T

Major constituents

Securities Market Money Market

Points

STRUCTURE OF CAPITAL MARKET

CHAPTER

ORGANIZATIONAL STRUCTURE OF FINANCIAL SYSTEM

1. Distinguish between: Money Market & Securities Market [June 2006 (2 Marks), Dec 2006 (2 Marks)] Ans.:

Y L E S O L C S I T E K R A M S E I T I R U C E 3

T C ! A I D N ) F O D R A O " E G N A H C X % S E I T I R U C E 3

T C ! N O I T A L U G E 2 S T C A R T N O # S E I T I R U C E 3

T C ! S E I R O T I S O P E $

T C ! S E I N A P M O #

! % & T C ! T N E M E G A N A E G N A H C X % N G I E R O & E R A T E K R A M S E I T I R U C E S F O N O I T A L E R N I D E V L O V N I S E I C N E G ! E C N A N I & F O Y R T S I N I -

! # S R I A F F ! E T A R O P R O # F O Y R T S I N I -

! % $ S R I A F F ! C I M O N O C % F O T N E M T R A P E $

) " 2 A I D N ) F O K N A " E V R E S E 2 E H 4

) " % 3 A I D N ) F O D R A O " E G N A H C X % S E I T I R U C E 3 E H 4

S E G N A H C X % K C O T 3

E E E HUHM T T 4 I T I T HS T NES T I U WIS R R I S F OI ST L E CDH A EENT DSOR TCBO I A L F R HBO D T US L O SPE T S R RA E E KOH R RSS A T A S MNWE E ET I LMN A I R T N U I RAC P AEFE CVOS O EE EGA L H S H S T T E EE FI O HR N ATE TP R HH A MGW PO U TE OE T# A R H H HKT R S T T A D E G SI E T I L NML I I TR A EC D E U H K NT C O RE US S A SF IL MWNTA E I S EA KI YN TR R T A FBAI MOOME R I N O E R Y A C R 0N F C A E ASM R E UNI SI ORH S TP4 I

L A T I P A C Y T I U Q E M R E T G N O L W E N R O F T E K R A M E H T S I S I H 4

O T Y L T C E R I D Y N A P M O C E H T Y B D E U S S I E R A S E I T I R U C E S E H T E U S S I Y R A S MR IO R T PS E AV NN ) I

O T S E T A C l I T R E C Y T I R U C E S W E N S E U S S I D N A Y E N O M E H T S E V I E C E R YS NR AO PS T ME OV N CI EE HH 4T

W E N P U GS NS I E T T N E I S S FU O B EG S N OT I PS RI UX PE E EH HT T RG OI N F Z SI E N I R N E AD PO MM OR CO YG BN I DD EN S UA P EX R E A R SO E UF R SO S I S YS R E A N I MS IU R 0B

regulated by SEBI

Market Regulation

by RBI

regulated

Securities Market Money Market Points

Y L E S O L C S I T E K R A M Y E N O -

S E I T I R U C E S N A I D N ) E H T S N R E V O G H C I H W S E T U T A T S T N A T R O P M I E H T E R A G N I W O L L S O T &E K R A M

3. “Primary market is of great significance to the economy.” Comment. [June 2010 (4 Marks)] TAXMANN®

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.4

2. Discuss briefly the regulatory framework governing the securities in India. [June 2009 (4 Marks)] Ans.:

Ans.:

New Issue Market

Features of Primary Markets:

L A T I P A C G N I T A T I L I C A F F O N O I T C N U F L A I C U R C E H T S M R OY F M R E O PN TO E C KE RE A H MT N YI R A N MI O IT R A PM ER HO 4F

TMT S ) OC Y RU R F D T S O N E R US P OO CP W RE AU N FP G O EI N YV T IA MT E OCR NUC ODR COO ERF P ER S HO D T FN U OWF T EOE CL FH NST E AD S CN I U F U I R F N E T GA T T I S A HL TTE A T H EE R K 4 G R S FAR M O U SYE I N R TA E E R KMP I RR E A R T MPN E HE YT R O A T HS MGR IUO R OT PR S E EHV T HS N 4I I

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

EE T HHE T K 4R FS A O E M HG T Y N G R AA NH EC D R N XO T 3 EC EKE HCS O 4T E H S T D AER OHO RTF BFE AOS I SD EN I T A AI V I H I D C T NC R ) AE NEM I HE ST H R YT E S MBR DE OE F T F S G O UU CA D N OGA T SS SIE Y E T R CT A I E NR V R UC E OT S C E GAK NF R I A R OM E DYY N R EMA O R N M DO I NC R AEP S T N E N O P M O C R O J A M O W T S A H M E T S Y S L A I C N A N I F N A I D N ) E H 4

STS ) R D N E S WD U OE& RE R E ONR BYU T T EI A D R N I E U HQ M I WL R E A TRT I E E TM KH R RT O OR A HF MES V G L FN EO I HSOG S T T N OE OT A T SSR SDSS A R NYD E O U R F I F E A R T R E M E P TR NR E KEOO RTMF T A T R NE MO I K YHGR ESNA I NEA L M G ON EI S -A DH H T CRN O XF I ET E SEB L K R RA E L DAI NMA E V L E A HE DT NS R AI A Ans.:

single day up to a D A H Y L L A R E N E G E R A T E K R A M Y E N O M N I D E S U S T N E M U R T S N )

year

K S I R T L U A F E D W O ,

Y T I L I B A T E K R A M H G I (

SSES R E R D I E A T L N I L TR S O E T E UN S BK CE D R NSAEM E 3 R AA MT G SH E SNS R E S E E E YLI L T M L I UE B R N BSU A RR D CE EN A EV R P ASO E E HE GS E S HEN WA T I EH HD CCNT FN ARIO D L U A P EST P E I AOST N E STUI R I S S D TNTUN N C E O E E E KI P S RT M E C A A SD U MS R RDE N NS T SA T ON E NB RI I I T T I ONSO R UTIEW CNART U EIMT R G 3T E N ENI NHEW E4BO N EL L ACDO CTSF E E SS R S E A E A I T R HH I US R T UTSE CNK K EEC R B S OA ET FD O SM

TO SNEE T S H L E RT K KE RA HA RV S A OG I MGUMT OEI LSR HE A E T H R T I I T O S N P I F G T AAN E E R CPI K E EMD RH HONA 4 T UM F#F E O YM TSNR E I R I A AT I T A T I MT PR B IS UOR TC A PR l N EA HS E T E S CHH W I 4 S T TEN E ) OER. O KNI U RFT SF O A U S D T I T L EI MC E O TDS K S N YN R NO R AI EA A BR UR A MS SOR E O II T S R C E U S 0EE I S HSET R S I T R ) CAU H I HL W CE T BSE I WUWS PEE. SR E NHH L A EOATT E DSFR D O T E TNEE L A L E HA L A HMS WC T

G N I W O L L O F E H T F O Y N A N I E C A L P E K A T N A C S E I N A P M O C Y B S E I T I R U C E S S FD O O EH UT SE S M )

R E F F O C I L B U P L A I T I N )

L A T I P A C F O E U S S I R E H T R U &

E U S S I S T H G I 2

T N E M T O L L A M R I &

(a) Primary Market :

TAXMANN®

R A E Y W O L E B S E I T I R U T A -

SE STS T D N IEN K T ER I RU MU A F TC MM S E E R VSAE NES IT I H TG LT) A N N O I AGL C NHNE ATIS NRWA I O lER R D R RIO N OWB A F C S DS TI E N T T ) K AN RL E A AGM N T MI I P N D R AANE C E V SO L I O F TTO G S E D KMSN RI M A A RA L OS -C E TFS LC L L I A A R E T I P R SR P I E ADC E NAN T #I RRE OBS S TME C EN ED I R I NS D AU ETB R EE A KR RE TA A H HMW T

15.5

4. “A well functioning securities market is conducive to sustained economic growth of a country.” Comment and discuss briefly the regulatory framework of securities market in India. [Dec. 2010 (7 Marks)] Ans.: Please refer to answer of Question No. 2.

5. Securities market has two interdependent and inseparable segments. Comment. [June 2012 (5 Marks)] (1) Money Market :

(2) Capital Market :

Securities Market :

O YW T I L T I R B E AH T T E R KU RF A S MA H ET EE R K F R SA E R M UY SR NA ED TN E O KC RE A 3 M E YG R R A A DH NC OS CI ED S E C RI OR TP E D KN RA A S MYT T I N L KI E CB N OAO I T T P S O M EG HE O 4NC E D E T A I D E M M I R O F D E D A R T E R A S E I T I R U C E S E R T E N HE 7M Y A P D N A Y R E V I L

E R U T U F R O F D E D A R T E R A S E I T I R U C E S E H T E R E T HN 7E M Y A P D N A Y R E V I L E D

EN TM H FSNO O N O E T I RI OM R STP A F TN A EDA S R OC NRRT T AEEN DT PVE EASOOM E H R T T'S S T R E UK E EE DL F V H EP R E DRATN R L U M YIY SUS I BWI O T L ED E DA D N GMNT I N AIETU AODPDE Q I HS ARGL E C S O T CI F OI R A H XY F T T E GA EC I TH L U I I KL EET C O K CO R AR E RR OPF HAA T ST SI U S NMS O ETSSI N LE HNEET A E S T CU C T I IO E RMV P T T A NR E AD O L RE VR CN U E SI P T CV I DC EA O T H S R 'NUDTN N D A A P OANI O S I Y R T T S NMC S P U E I E I T R OUOT DN I D I T T US NO ON N SN AC R I U A P T E) TE D R E E HEO MH KEG Z PLT RHU I L PA A T E D MFONOIN C R O HNEEA LR P T L AB A C SI EHH T I T A L C T HB P L NG AEA EO U CME R SUP O A EOWAE R RE HA S H FT H 4BO I2TT

D E T C E L E S E R A S D N U F E S I A R O T R O T C E S E T A R O P R O C E H T Y B D E S U S T N E M UF RO T S S NI I S EA HB 4E H T N O

D N A T N E M U R T S N I N E V I G A R O F E C N E R E F E R P R O T S E V N )

E H T E U S S I O T S A H Y N A P M O C E H T R E D N U E R E H W K R O W E M A R F Y R O T A L U Y GT ER I R U EC HE 4S

i ii

E U S S I S U N O "

SE S RE E I R T T U I F R T A U EUF HCD E T S N SD A A NES U N WS O S OI I T NY P KL OSO SUS O L D I A N V TE O E KRB RPK E A C MRO E T HS YW R S A A DTH NEC OKU R CA S EM S S T ELN A HI E 4C MD N L AUO R NS T S lN D EIN HLA A T I T SCH I N G AU TN E O KlB R E D A NR MA A

TH RSN SN OEO MD I C CI TA TONEH C ERACUMW E N B R EFR R I Y HME MC D T B R V EEES E R OS H T D E A S GE T S E TN I Y T A C R A S A S O HTBPI E R E T D SKDM NP E E I O T R C S E N CMU H EAN RB T M E T E E MS DK T S OE I TE V RNTS S I I E A E T ES HL I VR TMC A NU O IBP I A L H CNA L L M I A E W RI T A I S D OP C VOE NERAHACR AHECG NR E NTH UEEF D E O T I O N F E R H A S S A H RH H L N 4 M A T OT A W F R TS T D R T TE GNMNEE E K KDNESAR R RIIMI A A D N W W A U E A M G OT RH MSR L N O I L S I C R AT O A D N E O ) T S N BIMPI I L P L A T E A DA AS T E R T D I C N A KI T RPACN N U S E A A A AS DH O -CGN N N 4 Y LOII FNU D O T D A F S I A E T SNL L T I E A M E U P M B R UL T R AILA I D A E #AFIT O T S I L T S V O N ECSG GI E I HTM I NDT E C F 4E I NR OI RN O L O R U XDDC I AE F D LFL NNE L NA OPAAS I -

TAXMANN®

C I L B U P O T R E F F /

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.6

Market :

Spot

Futures

Market :

(b) Secondary Market :

6. The capital market and the stock exchange in particular are referred to as the barometer of the economy. Comment. [June 2016 (4 Marks)] Ans.:

7. “Financial instruments that are used for raising capital resources are affected by the preference factors for choosing and it is different for issuers and for investor.” Explain briefly and also classify the instruments. [Dec. 2017 (5 Marks)]

Ans.:

T N E M T S E V N I R I E H T D N A K S I R S D R A W O T E D U T I T T A R I E H T HN T I O WI Z R YO R A H VT SN E E CM NT ES R E E V F E N I R PD RN OA T S S L E A VO NG )

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

A I D E M T N E M T S E V N I F O E C I O H C E H T S T C E F F A O O T R O T S E V N I E H T F O Y T I L I B A I L X A T E H 4

H ET L I B W I S S D I E ML I RP E PM O OC I T E A B R O YT T I S U E QT I EI L TA B EM R DO EF HE T H YT BD DN EA T L C A ET F I F P A A SC I F DO NE AU HS S RI E E N U HO T S S O SI ENN O HI A T T A G NL N OUI S GI MEA R2R I F E )L E"I H%H 43W

E DH ET R I F U O QG EN R I EL D R O A H SE DR NA UH FS HE CH I T H E WS T N RAE OBM F D U EA R S T OOS PRN RBI UOE PTH ST ES F HE O T N E YGC I NNO I L AL H PI C MWE ODH CNT EAE HYC T N T I E L FI U O BL F YAN T GI I L I L NL B I ACA I I V L Y R N XE A AS P T T M EB HE O 4DC GD NS E I U U SS S T I NN EE EM BU R ET VS AN HI F SO NE OG I T N U A T I R T S E NH I T TR N E EV ME TW S O E V( N I S R L O A T I S C E NV AN NI I F T C DA NR AT T RA OO T W T C ET SO S R R ENA E T A MN R Y OUR PRE T RS V ON L CI L I T EWS HES 4NI O I R A N E C S T N E R R U C E H T N I T N E M U R T S N I R A L U P O P T S S OT ME K ER HA T SM I E EH R UT T M N O ER BF ES DD EN L U B F I T E R S E I VA NR OO #T

R O T S E V N I E H T D N A R O T C E S E T A R O P R O C E H T H T O B R O F T N E M U R T S N I E H T R O F N O I T C A R T T N A I ES HE I 4L

D E W O L L O F S R A E Y L A I T I N I E H T G N I R D UN DA NN RO UI T S E R R E V EN L B AO NC ON SO A N EO R I T AA P SI T C E I GT R RA OP T S Y E T I VU NQ I EE HY 4B

R E S S E L A G N I L I A T N E Y B E R E H T L A T I P A C F O T S O C X A T T S O P R E W O L SY E T I VD L I O U VQ NI I L E UN SO S N I I EA R HT 4S a

ROLE & FUNCTIONS OF SECURITY MARKET

8. “A well functioning securities market is conducive to sustained economic growth.” Explain. [June 2016 (5 Marks)]

TAXMANN®

NE T AHE K C4R A SC E TM I T E I R SY UER CRA EUD T S N N FE O O C BE SE R DS E L L S E T DE S K DNR NOA ABM S SE R Y RR E YAA H US M BL I R ELP E R S E Z HDI N V WA S T EEN CS AAE L HM P CG ARE SUS P I TOO E W T KS T RN S A A OH MI T C T SA E E SK I T NR I R AA UR CTM EOS S E T I N T !I I R RU E T C N E ES

S W O L L O F E R A S T E K R A M S E I T I R U C E S Y B D E M R O F R E P S N O I T C N U F S U O I R A 6

T S) E DS I E V I OI T RR PU TC E E KS RF A MOS EI E SLT A E I S I R T U I DC R UNE CAS E F E 3S O A G HN CL I R L UE PS RD ON F A TG E N KI RY A U MB R SO UF OT UL E NT I U T N O OY CD A DE NR AS YE DI D AV EO R R AP

FSL E O GB NNS I OIS D I L TO O A P UHS L RI I A VEY H ET R T EF S HO U T D RHN OTI R F OE LW U M F A E E US S R UT E SE H I HT TT E N K I RWS O A E I MNN K T AS SOP E I T L I T SME I R R OI C UOC T R CS FP EE T 3VOE NNK I OR SI SA E RM L B A APS N I E EMT O I S# R I U H C 4E E MS S I E H T I T G I Y R U NO UA CT R EA H S T

S L E K S E AB CT A T OKl RS I O PR R ED P HN T O SAT E GN I T NS A I N R T G E S O NI L E I T E CVVA CNAM AISR TGRO I E N F KIEL H V RA A T A T S S I MF T P R A SOE C E TVF I I N T B I OO R A T CN UH CE DE EH NM 3T AU SSR E S T T A S A L N EC I R G N C NA TI ) T S S A N OET S V I NC T I A A MET ) RH OTT F GN LNE A OM T I MT P S AAE CGV FN N O II

S SR S A NE OB SI G TM A NL I L UE A EGM E D2 E H NDT I NN YA T O E SL F E O A L R S U T S2NY E L OE DDCV E I I V ST ONP l C RE EE PD EF F TLKE L E E D KEG E RWN K A C MRAE E H CH SPX C S E EO I A T I S EL D R UEHA T T CC E EU F R O 3D A S NYE ODC COT I EBC R A GR A NP SIT NGN A ON E I T L A C U AMD S U NEA AH R R 4& T

(4) Safety in dealings :

(3) Encourages capital formation :

15.7

Ans.:

(1) Continuous & ready market for securities :

(2) Evaluation of securities :

GL Y NS I I T A E E KT RB A E MD RC OL I F B MU RP OE F S T I A A L R P O AT ST A N SE E M VN R R E E S V TO E KG RS A E L MB A SN E I E T I T R ) U S CE EI 3I T R U C E S T N Y L EK MC I NU RQ E VD ON 'A

YDS E T NU I L AA I C YC AL E F KB EC S IS UU E OQU HSD GR T E NB E I N R M A E E H E L T C M Y AEL SH N E O DTE I G V V I ONE ROC PME TAR E KSR RNO A OY I A MT CP SA E O S I T T N I E A R Y URVI T CTAI L EEHC 3HSA R T F E SB E E S L MU T T EO E S MH TEG ) N HI S R 4 R A E E E BS L C MA EEE H MHT T I F OW O T

SE E R O DDT I NC V OUE RSS PIE T TNA O U I R BT O A SL P UU R OCO REC E PF GS O NEH AV T DS IW TS O EO NCR XG SE E I H NRT OE I V T E A S L WR U O COT E(S P E SE V LG N A NI MAO RHT OCS XU .E O R EE HG T N OA T D SS S I E T NI I S S UA BE L EB R A OR I MS

FO O C HE T L E A H ET HF FO O R E ET T E A T M S O ER HA T SB E A T S A CA I S D T NC I A TT E ) K RY A M MO SN E O I C T I E R L UA CN EO 3I T A N E HS T N DI O NT I AD SN E O I N C AC PI MM OO CN Y E H 4 S E I T I R U C E S D E T S O E I UT I QR FU O C E SS E CE I T R A PR O EP HR T O WC OS T NN KI A YG L I A S A S ER SE KM NO T AS "U C O T S N A O L R E F F O Ans.: Please refer to answer of Question No. 8.

CAPITAL MARKET INVESTMENT INSTITUTIONS TAXMANN®

HE T H I T WR E YD L P N MU OK CR OO T W E VD AN HA T SE E K I N R AA PM MS E OI CI T DR EU T C S E I S , D E NS RE E I CT I NR OO CH T FU O SA NS OU I O T I A R L A U GV F EO R DE NC AN A SL E I L G U I RV [June 2017 (3 Marks)] 9. Explain: Functions of Securities Market

(9) Economic barometer :

(8) Healthy speculation :

T ENSSYH N N TC KODE I EI EC I I LUH TNI ,I MN AUMQW F R TO E S T S YA N E S C E E I T I T I T IFA VSI G U D ND R E R VE I QN URE NC I AR N DU M 0 E EF N E S S O R T A L Y S E RA A T M F T E V S D I U S I I R I U N I N D R U E O G Q O I P A T H Q EE I V S PT T I I R N L E P E D L NT I M F I V NO UA O SI N YMR E I NVLX L OHCSE I A R A0 T TEMH S CEE S I E RCRT I TPHVONEY DSYTNWATB R T E NE NITU NV D I E E O S UN D NY HN NSA FI I D EOAL4HD NM GT E G S U N DYDRE I S E O IHAFI EER ST L HNE L IESEO AOTARDKGO U S S I DCUNDP EMG E A L T KLENEC BHN S O I R UR N L ON E I F S M I T DPU E M Y Y O N T NSNI HL L T ERS R T UO I A U E MFV FT F C S Q T YS EOI RN E W P N E T F E I O E Y I F E V L T T U E DI A NMA QI H NDT S S V T EH I S DDERO R E N EI CV E NU PA SV T T D H A NSR F N NEO VWI I I RDEEUWT R PNINFGFOU F E U I D H O N F H B EO !ET I L E E H S I R C EGH S DT I T DNN T D N H A EFNEU ER O HO VT APFC -

Ans.:

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.8

(5) Regulates company management :

(6) Public borrowing :

(7) Clearing house facility :

(10) Bank lending :

10. Private equity funds are just like hedge funds. Comment. [Dec. 2010 (3 Marks)]

S YEGESSE ESNHRTI I O NNOTT T O I OOLNS R T U MPEIE C H S R D V SE E A FR EI NA I O S S F ND RCE I TI C O H N E N USUEFTT N FPSUT E OO S E B MIY I I T U T M T R I AUI T B RN S I I NBUEUD R Q I I T R T S ETR A T E I T N EH OYD R T OA T PAY E C F PMA CR VO O M I AE I D R DYN TH 0N T S I T ENUR E VER AFO E E F YT NKN HI I T AT T I R N OMA TEU L E T A T Q TDP T M N E I I L NLO T MA A E S R I R T T E E MDE A V NAFVN F D ON I O I E CU I R GUDP O YF Q I S L N L I E L !O L A A D HN RS F T CT S OT I R T FUF P N N O YOFEE EP E T E DM F SY MT I HV SL I R T I U N OETOC S SA T R E L HMP L OV S P T O D E E NS RR M VE S I F TO NV vTG I R N N I I S C N O I E L E YD N L E O T HH MR A I I NC L TETW U O S U V L QF F E A OMST EE T V R GERO I EH E O N P SD T I T TA P A S E VHCMDEV A R h N T I RU I R F OT ONO E 0WT FT I

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

SELD T R N O S UN E A T VN HE L NE C I ED HVT O C SM I E H S CS W I E V D R N N E I S U S U & WB T E N R W EONE M SN TA T C S E UR V DO N O S ) E E RT I V PI I WV T A EI T N NC R NA E I D T L E D ! S EA N V B AFL SOOT NSVH AENG EIII T R Y I MR L Y D N T N DUI R U E NCAP F UEMO S L FD E SRG L A EGPN T T NLA I S I A P I K UN AL A T CNT A C EUR E E R NEL D L UI D T U NEL T Y N N U L C EI I N 6RLR A I A OL T L I MP YA IA GH R PCOS EO DT I L S A G I T NN OE L T A O TP S E E VH NT I E OV HA WH T SA L H A NT S OE I S I S N E A F P O RM PO YC BG NS DI E EWS DOU I RO V OGH RYR PD LE YIW EPO NAP ORC I MGM N SUO I ON LY O A C T NE I I P O ATT #N N I EEP M R O T US L T E E N V VE EN 6I D E OPR T IU DHT ESN R R E E R N 6 E T F R E S A R D SPN I EU ET F CA I VN V I O R R I E PS S N YE DL ELP A T R E A T E L A E NV R EI DGR NEP AR Y LAB A SD T I M E P R D AI N CF U LF EA R T UP I S T E N AI E N V#A EP GR M NU I TOS D N CA I E V D O6EE T R A R PS T R V E I IR NL F I APE DT R EIDO GPLS AAEL GCHA NEYI S ERLL E U S A MTO T N L I RE C P I VR F A # !AO

TAXMANN®

S YEGESSE ESNHRTI I O NNOTT T O I OOLNS R T U MPEIE C H S R D V SE E A FR EI NA I O S S F ND RCE I TI C O H N E N USUEFTT N FPSUT E OO S E B MIY I I T U T M T R I AUI T B RN S I I NBUEUD R Q I T I R T S ETR A T E I T N EH OYD R T OA T PAY E C F PMA CR VO O M I AE I D R DYN TH 0N T S I T ENUR E VER AFO E E F YT NKN HI I T AT T I N R OMA TEU L E T A T Q TDP T M N E I I L NLO T MA A E S R I R T T E E MDE A V NAF FVN D ON I O I E CU I R GUDP O YF Q I S L N L I E L !O L A A D HN RS F T CT S OT I R T FUF P N N O YOFEE EP E T E DM F SY MT I HV SL I R T I U N OETOC S SA T R E L HMP L OV S P T O D E E NS RR M VE S I F TO NV vTG I R N N I I S C N O I E L E YD N E L O T HH MR A I I NC L TETW U O S U V L QF F E A OMST EE T V R GERO I EH E O N P SD T I T TA P S A E VHCMDEV A R h N T I RU I R F ONO OT E 0WT FT I

F O M R O F E H T N I D E H S I L B A T S E E DT NA UR FO YP NR AO SC NY AD EO MB DA NR UO &0 T, N , EA MR TO S E Y VN NA ) EP VM I O T A C N RA E R T O L ! T S U R T A

T SI R F OE T N S E E VB NE I H T MR OO RF F Y SC DL I NO UP FT SN T E C EM L L T O S CE V TN A I HD T E EN L I C F I E H ED VA TH N T EI MW TE S C E N VA ND I R DO EC L C O OA PN YIS T L I R E O G T T A NS VI E T I S R V PEN I AVS N I T SR I I F OO TF )

& ) ! S A D E R E D I S N O C E B T O N L L A H S G N I W O L L O &

S D N U F L A U T U -

S E M E H C 3 T N E M T S E V N ) E V I T C E L L O #

T ENSSYH N N TC KODE I EI EC I I LUH TNI ,I MN AUMQW F R TO E S T S YA N E S C E E I T I T I T VSI IFA G U D ND R E R VE I QN URE NC I AR N DU M 0 E EF N E S S O R T A L Y S E RA A T M F T E V S D I U S I I R I U N I N D R U E O G Q O I P A T H Q EE I V S PT T I I R N L E P E D L NT I M F I V NO UA O SI N YMR E VL I L NI OHCSE XT AE AR TEMH S C 0 R C S I RT E E NE I TPHVOA Y TB DSYTNWR NETNITUNE UVDOEESID N N S FI YHNND A EOAL4HIN M D GT E G U N DYDRSI S E E O F I EER SIHAE T L HNE L I S EK O TAR GO AOS ISUDNDP U C D EMG AET L KLENEC H B S O I N R UR N L ON E I F S M I T DPU E M Y Y O N T NSNI HL L T ERS R T UO I A U E MFV FT F C S Q T YS EOI RN E W P N E T F E I O E Y I F E V L T T U E DI A NMA QI H NDT S S V T EH I S DDERO R E N EI CV E NU PA SV T T D H A NSR F N NEO VWI I I RDEEUWT R PNINFGFOU F E U I D H O N F H B EO !ET I L E E H S I R C EGH S DT I T DNN T D N H A EFNEU ER O HO VT APFC

[Dec 2012 (3 Marks)] 12. Write a short note on: Private Equity Funds

Ans.:

early-stage

start-ups emerging

Ans.:

[June 2011 (2 Marks)] 11. Write a short note on: Venture capital fund

15.9

Risk Capital

13. Write a short note on: Alternative Investment Fund [June 2013 (4 Marks)]

Ans.:

S T S U R 4 0 / 3 %

S T S U R T Y T I U T A R G R O S T S U R T E R A F L E W E E Y O L P M %

S E I N A P M O C G N I D L O (

S T S U R T N O I T A Z I T I R U C E S G N I D U L C N I S E L C I H E V E S O P R U P L A I C E P S R E H T /

Y N A P M O C N O I T C U R T S N O C E R R O YE NH AT PF MO O CS NU O) I T " A 2 S I T E I R H UT CH T EI S W YD BE DE R ET GS AG I NE AR MS I SH DC NI UH &W A I D N ) N I R O T A L U G E R R E H T O Y B D E T A L U G E R Y L T C E R I D E R A H C I H W S D N U F DY NN A!

L SA T I S C E VO NS I S HI E CF I S H I T WA DS NH UI C &H TW N ED MN TA S E S VE NR ) U ET VN I E T V A NA L RI E C T L O ! S NF AO SS NT AI EN MU R DO D NS I A UE L FI S T EI R RM UU R T CO N N EEE VSC N LI A N I A Y C L M OI R 3A R O MR F IE R PP YA T I D T E N N EI A OT .B O S A H T I S S E L N U D N U & T N E M T S E ) V" N% ) E3 VE I H T T A NM RO E T R L F ! N NO I AT A SR A T TI S C G AE LR L A F HO SE NT A OC SI R F E I T PR RE OC Ans.: Registration of Alternative Investment Funds [Regulation 3] :

S E I R O G E T A C E H T F O E N O N I N O I T A R T S I G E R K E E S L L A H S S D N U & T N E M TW S E O VL NE ) B ED VE I T N A O NT I RN E E T L M ! TAXMANN®

S E V I T A L E R @ F O T l E N E B E H T R O F P U T E S S T S U R T Y L I M A &

Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.10

LEES A LD HB I T C N O AU H R SC I F S RIE E OHD R SWYU T E SL N L R D A A E UE E CV T RI l N L I A C EAMI E VROC O P NOS ESO S GR C E AO ESB T T D S C RN Y EOU A YS L YFM R R L A L%S E A EH I A RTC-& OOO3) S S! PR D S O UE A R NE R TR UH R UEFT A D T L T O I C A S S T UN H I NT RO P C I AU SCC SA S T RS D S E R F E ORN N VI T U A A T NR L N I S ED TOUV G ) N SE %R U EF -RDE U 3OL R U RTCT N N OE I C L SML U E AT R NH R S R UE SA T R VDF N EONN VGAI

TA O R NE SP E OO DY HA CD I O H T WY DA ND AT E )E ) ) DM NO AT )N YA R H OT GR EE T H A T #O NG I N LI L A W F O TR O R NO SB E OR DOS ET TG ) N AE R M E VE EI R L U EQ KE AR T R L E A DN NI O UT

DD E NT AS I SL E N I U G ER T O A R D T E S T S GI NL I N D I AT R N T XE EM L T P S E MV ON CI RH OG U EO S R R E H VT I G D N SI Y D OU L L P C N MI EE TG ) A R E V E L Y OS L E P V MI T A EV YR I AE MD

R NNE I ON DI TN EA I CA F I I M L C EP PPE SAH ET SL A BN I AD DI NA UP FE E B R NNO I EOT DN AA MY B ED BE LI L N A HA SP EM T O A C CC I F E AH I TE R T E BF CL LO FA F O O H E TS R N D E AN H R A T G R N O I F D N E I O I F I T N CI A C ED P I L SI E P F P SI A AC E EEP NH ES !T F

Second Schedule

Part A

Part B

Form A

First Schedule

Ans.: Please refer to answer of Question No. 8.

[Dec. 2013 (3 Marks)] 14. Write a short note on: Social Venture Fund Ans.:

15. Discuss briefly the various categories of alternative investment funds. [Dec. 2013 (5 Marks)]

(a) Category-I AIF :

(b) Category-II AIF :

16. A private equity fund, like a hedge fund, is an unregistered investment vehicle in which investors pool money to invest. Explain the concept of private equity fund and distinguish it from hedge fund. [June 2015 (5 Marks)]

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

L OI NA T U H DT T I EW U R A NE PI MA L I OMH CE W ER R S U&R ) T O !T C S UTE RA T V HN S NTI E I E R RU L B A SA L I MNE IEG D S S S E NL YO R R O I E T TWS O VA E N L EU V KN R G A I SEDI L DRNA N&AT U)DE ER &!T Y EA TH L N CI N I ETT SA MRI E M TV H S PT E A O VES W NO D ) E ET E(HE V TG I SYR T DL A A NNNT RUOE E &FR T L LOA ! A S HD UC T N U AU E& -R DE L NB AA & EEG GD AE D R LN E VWA EO& L N) EK! KYN AB E T E R TW E DHT NGE U B UO S NRE ABC CEN BE S R Y E E L EN F F OF I E D HNF A T O C EY S R A UEE T HR C T A USY RA E T S SK T ON E T H ET MME OER R A DI EU G E N Q R EI F R W ELO VAL L ATO I HP & &AS C ) R O !N O T S SEE UV V HA N 4HI -

T N U O M AS TD N N EU F ML TA S U E VT NU I M MR O UF MD IE N I l I MC E OP .S NSEETH HHSK AE T T E A RVFF VL N O OI ON F SSI FR R EIO Z RTOMO I T C E S ECUT V E M R TE D R I N IE I N EWDD C IU MOS T(ESMD E S E E E E E N Y R YE R VO OO S L NR I LHE P I #MPTU M M E RL EEA U E G V R R MSA AT ON II N S&A N &R E I )-M ) O! -! T

Ans.: Please see the answer of Question No. 8.

D E S OS L D # N HU T F O D BE ED BN N% A CN DE NP U/ &D LN A A UD T E U D -N !%

F O E S A C N I G N I L I E C H C US SD ON U NF SL I A EU R T E HU 4M N A H T EE R OM E MH EC VS AY HN TA O NN NI S AR CO &T ) S !E V NN !I

18. A private equity fund, like a hedge fund, is an unregistered investment vehicle in which investors pool money to invest. Explain the concept of private equity fund and distinguish it from hedge fund. [June 2015 (5 Marks)]

TAXMANN®

T# S UR! T AS E SE A T S PU UR TT E R S O SS I DNN NOA P US I D FS O LA T A UHS T HU U CC I D MH N !WA

L A U T U M R O F E R U N E T M U M I N I S MD N OU .F A E V A HS R NA AE CY & ) !N A NH AT R FE O T R EO MH ES HE CR S U N OE .T

Minimum Investment Required from Investor

E&D B) !N D)A L D )E U O)D HYN SR % SO &GD E ) T E !A S O )#L ) # D E H D T DO )N E D Y%BN R O E% D B GE N ES E T NP OA A L ## C/

Number of Investors

SSL S AS T L E T I O T E E B I N S OVP S U R PNA A O I C TD E T A E S HE EET HD H H V T T NN TNTI F I S IO N UMI GE S R T NHRD T E EN I T T NN AI KE S L S W SF U MED I DOTVNOF NSSN TL A I U E R U UEV YFAT C FR L N" P U LU A I A A U M R O US OTTSE T EFEUE K U H R M R SA MT ME R F FOO HT OMO !T C

Legal Structure

Meaning

SDS E E D ERN E T T S U S UI & RG L 4E A RU FE O T BU E O R T US T A) C UH" R#% T S -3S Y EN O A!HI RT WO T A L ESRU ENEG P O R HPSE 2 43A T RNN E I D E NDM E Ul T S I NC E OE V I N T P A S) R E T SV S E I I S I G T R N A EO O R N I G T RA KE E EA TT L EC LU S ! N G AE)E E CR "2 &H%S T ) D !Y3N EU NN H& !AT

Minimum Tenure

S YI NH AC PI MH OW # E T T A S URA ROI 4PD RN AO ) E N B#I NYD ADE H COS &"I L ) B !0 A T N,S !,E

Fund type

SNTT S DBTD S IS I NA N E E T US F T VUI VO &E F N N G I I T SND l TSDT I E NIE CTEN S EHO L E NE E L COL VlB MI ON E TH PC I DE S EWYTRAH T V LAOH E D HFT NN T R T A SIO )U R VEO WF I EFR L T Y C VYP ISEC C I E I N H T NL S AAYEVAOR N O NSBVI DPT RNDT RTS O M EAEN N E CE H TE EOC V L SM RAMI N I !ML F

Registration

Mutual Fund Alternative Investment Fund Points

15.11 17. What do you understand by Alternative Investment Funds? How they differ from mutual funds? [Dec. 2015 (3 Marks)] Ans.:

SL YEH E T CMI S I S OW L A B S T L UNE C IS S TPT E TSA S O ED S NVE A N EEID R A OR HA T T T FTYY A A O L HW C ET I L NSAB OE U IYP L DN L A NAI A T APN N I EMET S COS S NCE E AGS V I NN N I IYI F T T O IT A U R YE T QR I PE O U ED QOT ENA EE FII VD T O TR AA EB0RI V PE TR Y E YDG P T D LT C N I ANA I L B G SAH I N S CUI YI E XPK T ETA T I I U KOT R QU CNF EC OEO ETRN ES S A T O A I SATT VE A N I N RKOHE T A 0T T DS N ET I ODE SE HAS H RAT WT EE NS I TOR S HH E T G VO I NT H I SY YS R L L EE A UCV SCO UAT N D SI DA A E NGL USN FM A YR C T I I F U H C QEI H ET H ES W T A E I VN Y I N R A A PP P SM D M NOO OCC BGE N H I DS T NA F AH O SCS DRE NUC UPR U FYO L"S S A T N US T TEE U E U NM S MS T AES S VE KDEV CIRN OUDI Q N T I N S L A L O EI S S KET I R N E L O S R N S U 5MA T

TE B T A EV DI R FP O ES S N UO I ET I VS I I S U S NQ N EC R T AU X T EEE CR RN I L E A HAC I N T I F N SO I A N STI NTF OBR E I I T DE C H AGT S N NI E S S AU A R T E YR Y" C T I N U I S QDY L ENL OI A EB T T A N VDA L I T E R S I PY B F U H O GS I N EH R A UO FC T S A EMM F RI R RF OF E Y HET T I HU O T NN Q !I E T YRD YI Y L O T EN T I M F S C U AQ ELUP M A R E EO T I I D BM C E P SA OTN N A T #ACV A N D I C E CE R S D P MI E O NNFH TN AWO S O A E RW VPS O N R S J NMO R A A I O TN EOS MS T KCEIEE ACVHH T V N I I ML I N W4I B LL TU A T A NAED HPO T E T F IET H I P I SOT D E ASE U DST CER M NT I C I GN T CT UUS NA CF FON I DYIKLAO NUDRADS ABNOBND O STAWAAI C N L R R DE SE I OUA R T DTNHO P S A T T NEP E G G S VORX NE N NCME EVO I R NL FROST I O R R S O E L O SFI OA F SE G D T T N I O EL Y RO S N S I E O I O I S T N NAANSU O OPRHN TM M I S CO C O T I EI S YC T Y F T NO II T T S I I WU EU I U FS T E QA Q NQOM EV U IEDCSS ER T E A T PTNESE I A A S UK VOV G N F I A I T R R OA R OMC N 0I PT L TAXMANN®

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.12

19. SEBI has classified Alternative Investment Fund (AIF) into broad categories i.e. Category-I, Category-II & Category-III. Discuss the key feature of AIF Categories. [June 2018 (5 Marks)] Ans.: Please see the answer of Question No. 15.

ENI AL O L RA I O OSMF F T ROR WOR O O/F P L C L Y T T 0 A EN ) E NE OSO S T A MD S MTN DH S U OCEEF U S I R SIVF N A E O I TR PN D S GEDED N I V NE N F UI I U D S F YFR L Y O T E I S T HD VK I I N GIUD NUQ A Q E H B OL I T E L I T S WE DAA NRV I SN I AO NA R O MYP P I T ENEU M DAH T O IC NPTT EMYS E T N L O L F C ) CA O N A SDRSR E R T EN OU N S ET EE S S 'SN E MR VI TY TS S S INND I E LN VDAE NAPG U I M F N F YO O!N T I C O D U EI QNCKS I I L N EUB L E OUS ER P T APR A O VN TE A S R I R K E UT OV I 0T L

E H T O T N I D E D I V I D E B N A C S T N E M T S E V N I Y T I U Q E E T A V I R 0

S E I R O G E T A C G N I W O L L O F

Types of Private Equity :

RHFH NO O T S I I A T S WE YI C T N I P Y G UL U L YN T QSA I T S EE CEA I SR GN P E E NS I Y HP I T T K U O S AB N R E I MYE T A DDR FN L E O O E A VN HL YPE E OG GMR V EO A T ND A CHI N R ASSA T T E S I N E H N AC R EA R IR U OH PT T SWUMA C R N OM E E I E F HCR E NT EO R O MHM SI 4 T I O C H Y L ARE 4S F L G A NDA C AE RP I R R T IEY V AUE T Q L E FC L R O A A A T I S C T R I A A N SA H PT T SENS S l A S N FO SAO T I S T N S C E EE S A MN S S TIUN W S S E AO UH E R m VBT T

(a) Leveraged Buyout (LBO) :

[Dec. 2018 (3 Marks)] 20. Write short note on: Private Equity Ans.:

T OA HH WT SS L E A I NN OA I P S S M E O F S CE O R S PGU N YI O BW H DOR ERE DGW I O Y V P L OD RI C PP I YAM ERO NGN ON O C MU E SOO I YT L A N NI T I I P P ATO N L #E E EM V R E TD US T EO N EVT N 6I L A EI T DN I E S T G O NP OE L A H TT S E E V VA NH I

(b) Venture Capital :

E E T RA V SI I R EP CY I L V L A R E R S E N DE EG T A E L R E A R S DM NR Al LL A A T T I I P P AA C# EE R R UU T T N N EE V6 GT NI S I L D A I T V I OP RA PC E NR I U DT EN GE AV GA NO ET MD E RR lR E !F

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

N O I S N E P E T A V I R P Y B D E D N U F S E I N AS PA MD E OR CR EE T F A E VR I R O PL S DA L S E I HL A YT L I E P S OA L # C E RR OU T PN I H E S6 R E S ND T R N A U PF

RN YO T O I I R T DI ON S NA I I U PQ MX C YEA L O R T T S O OA LA J MT IM P SAA T CE N C R EO N MF A TG N S E Nl VIR NKOS S O I S O E T YL N E T I EKS I R U R QAAU ETMB A E OHWH T TET F SS O N E R R I E L N E F O T A E R N R T PE N SMSO I O C H N 4COF I O ET HA E T R G E NP N I A O H SE C T R N A U ET T MC U TUO S RH E T T S VE I NR W I E SMMR NOO U AF RCA T R T EM ADH E FI R E 4R O O TUE Q R G C A AM PAR Y L SEL SI V A A SEC ST L I T E L P N A S Y I ES T C MAN E TSAR S S NA E E I T VNF A I NS FH I O U T YB ES T S I N RU U O OE QT I T EI HC GNTA NUHS I T N S I K A S W AE R S T MNL YF W IL FS O AOL O U C SF I YBP E H G Y PS EYT YA N T A ASTC E R R PE G S T N S E M D I HT L AOO T A OCH R NE T EI AR SH P DO R E CAEE H F I V S E H T L TO R A N R VE SWE I N N R H N I 4IRSE N U G E OCI I D N T E AN C HP AT A EO DT I L S A G I T NN OE L T A O TP S E E VH NT I OE HV A WH ST L A A NH OT I S S S E I E N F O RA PP YM BO C D G EN DI S I E W V S OOU RR O PG H YYR EL E ND W I OP O MA P SRC I GI L A NM T UO I P N AOO #YC N E EI R O UN TT T N I N EEP 6MO T L S E E V VE ND I S E I N A P M O C G N I W O R G Y L D I P A R D N A W E N E C N A N I &

S E R A H S Y T I U Q E S E S A H C R U 0

S E C I V R E S R O S T C U D O R P W E N F O T N E M P O L E V E D E H T N I T S I S S !

T N E M E G A N A M N I N O I T A P I C I T R A P E V I T C A H G U O R H T E S I R P R E T N E E H T O T E U L A V D D !

S R U E N E R P E R T N E N O I T A R E N E G T S R l Y B D E T O M O R P S E S S E N I S U B N O I T A R E N E G T S R I &

Y G O L O N H C E T D N A S T C U D O R P D E T S E T N U D N A S T C U D O R P D E I R T N 5

S U O M R O N E E V A H L U F S S E C C U S F I T U B K S I R H G I H E V A H T A H T S T C E J O R P KS SD I R R HA GW I E (R

LRERYET S DDO TN OCEBA NEO F T T AU S PSNN DRUN E EB E O NEI T T O I LGPMI OMA E A R I S T MIAO A T T S S I N L NOCNSAN A I A N E O N E C C OGY M A ACNPDN I R F T N SO A E S I A N A OIMD L I F R A H T I M Y E F O CMV RI L SO P M E E O R N R T V YHORA I E R O I OWCPE T S OHC L A R SADYSCRL P O D NGESE ET SA MN I S N 3GRE EU D IM0RLV NF MKO AON N . R R S L TU AN RO T I YEEN FEW YE L T K B O M A BM I NG CN L R O N O DE NI O SS SI I U E ER O S T HREHDU L HI N E T SE EETYYGNI T I U L F LR U O H P T B TONLOFS E AS R OPHNI N D E T HE M M O T S E L N I VE T E Y4O MEAS S N E S DOS EG HEOT NLE S I R UPETHC N0A T D W E FMYO OE L R NI ORHA AEL E C ATSH U U SFP NO GASYLOT D E O E T ATML R NN3HN A ENEB U Y N T E AE MEDT FPN I S M NS E HNMESR DS TA ETOOMDP NE RTNIC NE S UV E A U E E EN R R &N FR YE HEHI T D ON NIL W0TENN R OEP O E 2 H A I O T I S G S S L NTM ENF N O A # E E E E Y EZ T T E Y R I M 0N I T P E A P OE N I H L ! A R AT R D AP I )E C I GY E4 EMT R F EM5 HO OBMER T

[Dec. 2018 (3 Marks)]

22. Write short note on: Pension Fund

TAXMANN®

E O R P T I U H DS T ER N R EE R N 6 E T F R E S A R D SPN I EU ET F CA I VN V I O R R I E PS S N YE DL ELP A T R E A T E L A E NV R EI DGR NEP AR Y LAB A SD T I M E P R D AI N CF U LF EA R T UP I S T E N AI E N V#A EP GR M NU I TOS D N CA I E V D O6EE T R A R PS T R V E I IR NL F I APE DT R EIDO GPLS AAEL GCHA NEYI S ERLL E U S A MTO T N L I RE C P I VR F A !AO #

[Dec. 2018 (3 Marks)] 21. Write short note on: Venture Capital

[Dec 2021 (3 Marks)] 20A. Write short note on: Leveraged Buyout (LBO)

Ans.:

15.13

Risk Capital

Ans.:

Risk Capital

Venture Capitalists :

Venture Capitalists invest in :

Ans.:

T YNOC AITA L EMP P G TNEM I H A I DHTE G NCN V I AAI S S GA SA YE MR R OUUM NSOA ONCE CENV EDEA ENEH HUTD A F T L MU FNI OE O OL I L CWO TS N NYDH EER NW OA MPT SA A PI SS LE OH U L I A 4 E T V GI Y E U ETR M Q DEEE K O RHN NA N T O I NIC EMI S L L E YDE O T E RI NVH E EUAL T GQST N UEEN HNDEO UMD AT AI N I T D T S A YN T E A) A T VE L ETN P K SHNIR DTERA I M N E NI M T H UE S L T FO L E A VEI T NR S N P OE A I I A E R S V C I R I NT E C EC N HN 0A T IO R O T C E S O W T O T N I D E D I V I D Y L D A O R B S N O I S N E 0 S N O I S N E 0 R O T C E S L A M R O &

S N O I S N E 0 R O T C E S L A M R O F N )

L D A N SN I I OC D AI T N ESA A R T C N A E I I F S F I OS S S HA S A A W L H L CL SL T E L EW A A H UET S DWR I A V O TF I A E D E HR NNT I R A R I FE OA L O F H C ST TI S H NUP A L OPA C DR DR AE G AO SS DE I AN G SBA ) TE TS .N H (EOT MNH SG ST L A EII USEW DLRS E I E I A HR I V T I T E D EAS V NRL N I ) RH SO E ) HH I T 7.U T R T (I T OO S T WMU FS LO N TOP I E R N R .F UOD I N T HDSI A E GEL N S I I H B T F (S I E E T I K S DR U E GV EA NN H I T ITM SY I) A D .M N( I E TER X O EBR T O# N T OD CE NRO AET D I I D H S NN K ) OA ECL HE T B NY I F AO YM L L E A SG R U E N NLA P R ER GU E SH NE T OL N I B I T I I T H N S T I E L F E VA DI NES W) CE . I RE F I OL( B C ERIG T N P#S I S E G VR O N E NRI M E HE SV I T I EOW S R HEA E T HI SD T WOE HM HST E GL EE UAL U ID OD H HI E WB 4V

F DD Y I EE R R Z YO I L E LGD R A EIO R T SG E A NCNE T E OA G)CC . E R EE Y(RR D NEAA AH USN PT U O) Y.M MR OE (E CDHHH K AC NNL T IT AU I L HU L D WP A NF RND ) L NUEIU D S AON Y O NYUA C I HSWT SK T A E Y N A H R L UNT A T H OAE S MMK YFAOC T IORSR A U O E S F QS BB EE Y E L FCLYG A P X O EP I N M /N A S E 0I U R O ) O S E N RT YH ON S F4I F UI GO E R D NMN R OE I T Y AAS H L ET H P R PORVD N AFEI E H L EYT N II L R A O P F A PETE E UA D H R O T A D U YO NS N FY /A A ) `

TAXMANN®

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.14

23. Write short note on: High Net Worth Individuals [June 2019 (3 Marks)]

Ans.:

E H T F O

T TN S UE GU UQ E !S DB EU T S A DY R O G E T A C N I &E $G N A $H -C )R O 2F )S #N O RI A T L I U D CN R O I C C DG EN UI SW S O I L S L O A F HS )E "D %I 3V O ER HP T N O DHI RCT I A A GHR T EWS R G I S I E H T R N T O )

Ans.: Regulation 7(2) SEBI (Alternative Investment Funds) Regulations, 2012 “An Alternative Investment Fund which has been granted registration under a particular category cannot change its category subsequent to registration, except with the approval of the SEBI.” R E P S !

24. “An Alternative Investment Fund which has been granted registration under a particular category cannot change its category subsequent to registration, except with the approval of the SEBI”. Enumerate the conditions for approval of SEBI. [June 2019 (5 Marks)]

NN I O I YT R A OI C GL EP T P A CA E EK HA T RM E O DT ND UE SW T O N L EL MA TE S B E L VL NA I H YS R NE AI L ER DA AE MD E TR O E NTY S R I EG O VE G AR E HEA T ORC HEN WWI YE SE G &H N ) A !TH H YCC I L R H N O /WF

ONS T T ON I NT E OAM I C T I L A U P CP C I O L AD P PEG AHN 4T I N AH R O EKP KAP ALU M S D LFE L OT A HSA SE D P YEU F R N OO R GI E ET H T AT A CO CL I ! SP T P I EAM GHR NTO AI& W D HG E CN T A OO T LD GAP NEU I ME S OAH PST O E E RH D PT U L &RC O ) N F !) I L L Y"A N%H !3S

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

T O N L L A H S S E E F N O I T A R T S I G E 2 E G N A H C D E S O P O R P ES HN T O I RT OA F C I EP L L A P NA OH I T C A U R S DR NO AF YY L NP AP FA I

L MOE RL OA SOTH T F T D O N R NT H E EF OS NT S IN I M L T I TDRWO A E U A I T CM T I ET MC I E L A E ERCL P N L P ML EAU ASOO I B G L R C C OE LPE L R T T 2 S M I A T E RE E H O & OL E H SC I ) F T R D ! PN WYSOE SE NDTH DSA NTT R C U NOD!F ER J UT H S E B S T FDI E T UD DE WGN SN R R EI S OAEDU U I M H T E A D QN CTW R E I E R OS R ML OI S I T E T E U MLQ I P N A TO EBOL E L E A L CB R MA EN T HE TH WYN I T MS PAAU M R M& YDMO ) E L M HA O!HNT A CETAI DHGTWWT ETNU AN V IOORE D Y D T I H M I R H E T G T T COVI NI S EGOWI WE R E R P KLV T SA E D AN S A EI E R S HCO TI S I NT SRM &I SARAU ) 0 O !EERT M EGVSS MN I E HNNDV I A N EI T SU HT HM NT FC ) IFI

S K N A B ) S D" N% U3 FY DB I U D E QT I L N NA I R NG AS HI T Y RR E O HG T E O T A SC T N N EI ME TG S N E A VH NC I YR NO AF L EA KV AO MR P TP O A NL LI L T A HN SU S &I T ) S !O EP HE 4D

EL L HA T O FT O N YO PI OT CA M AR O DF NN EI S T LN L A A HV SL E &E ) R !R E EH HT T O ) "D %N 3A M MU OD RN F A TR S O E UM QE EM R ET HN T FE M O E LC S A R VAO OLT RPS PDE PEV ASI N I V NE S T /R I n E D U L C N I L L A H S T )

LA T A N E RG T R M N TN EOS L CA AR EE RL SE V AT TO HAA' L I CT RD ON UL SU A D SML ET R N R L OO O E T R S LT M E A N N VN OR NO E I ICV T SO DA E ENI ' T T RI A E TH L T N C E N EU R I S TSGY N NB D I EN D MU D UE L NFC N RHN E W T I VL O A S OE E Y 'W I L T C D NC NNEER R G G O I AI T D A E S TR NE R N E I OR V EV N MOSOI NSNYD L O RSI T E E C T T VKA EL A N ZI R OA I E 'BN DR -

(a) Category-I FPI: i

ESP CR A NE AGW R AS UND SA N NM A I E S TR R N E REL OM A E ETD S CE NV R E AN R K UIO SSR E NI B I N S SA R A PE HMG COA N UC ST A SNM E E I O T MI I L T E O N GF EA T DNR EAO T MP A S L T R U E O S GS S EA I R V SD YK A L E NT T A N A I BE R PSMR S OES TE RI TE L PI A T VE PN ND !E I

N SNG A E I I R E YR T BE N UTV ONO CES R RME E NH BR T MEO V EO H M'I T ELW A CR Y R T OTA N &E E R K#T SER A HO 4T T NYN OB E I T DM C !EE E l LC I R A G n I EA C E NP R ASNA NYAH I RFC & T OI N EU YH HO AW T CWS MY T ONYN RABE F M R SMO N E R ORE I T R EV I F T DO N RR' %O O S D N U F Y T I S R E V I N U D N A S D N U F N O I S N E 0

ii iii

S D N U F D E T A L U G E R Y L E T A I R P O R P P ! )

F SO OTE RRK N POA O PPR T I ANE S S GDI I SE I RNM ROUO E FRR G)E O AYGN A NR O NI AO S GAS ME MI T TA TM N N M E#E O MA C M S TA TF S S E O E D VE VS NR T NC I EI T EA EI S HE S OGTH E T HR RL D E WD LN VA SNEFU DAWOF D ND O Y E UE(TT I T L FA A I B L L R DU U OIG S EGS T ETNE A E R R L VON P Y U NS L U GE I E ET R H R AOE I C I L NR U O HS 5P F T ) )

TAXMANN®

R AO L T U S GE EV N 2I O SI R L O OF T T S R E VO NP ) N G OI I L E O R F O T F R OA 0S NA GN I O E I R T OAW R &T O S L I )G E "E B %R D 3KE N EEO E HS I T T L L N FA O E HM S NTS N E OA I I R T C O A I L L G P U E GPT EAA 2NC E RAH E T P F S O ! E SN NO ON I T I -

Ans.:

15.15

25. The stock market of developing countries is normally attractive for the foreign investors. A foreign endowments fund is planning to invest in equity shares of Indian companies. State the category under which this Foreign Portfolio Investor (FPI) be covered. Will your answer be different if it is a central bank of a foreign country? [Dec 2019 (5 Marks)]

S N O I T A D N U O F D N A S T N E M W O D N %

S N O I T A Z I N A G R O E L B A T I R A H #

S E I D O B E T A R O P R O #

S E C l F O Y L I M A &

S L A U D I V I D N )

T N E I L C R I E HE T M FT I O O FT L A HE EM I BT NM OO GR NF I ) T " S E V% N3 I E H ST E I T Y I B T N D EE DI l EC T E A L P U S GS EN R O I YT L I E D T N A I O R PC OR RE PP PS !A

S T S U R T D N A P I H S R E N T R A P D E T I M I L F O M R O F E H T N I S D N U F D E T A L U G E R N 5

L A N O I T D A E NA T RL E U T G N ) E R NY AL E T NA I I R DP EO HR SP I L P B AA T E S B E O RT OD DE EM T E A E R OD P RE OB CL L NA I H TS N E AT R CN I L E P P# AS E NI C !V R E 3 L A I C N A N I & viii Explanation:

S N O I T A L U G E 2 S D N U & T N E MS TD S N E U VF NL ) E EG VN I T A A R NO RF E T S L N ! O I )S I "V %O 3R EP HG T N FI O W O !L O L F NE OH I T T A S L E U GK EA 2M

&E )H !T )H YT RI OWS GEN ECO T NT I A A #AL D RU RO E G DCE NC2 UA S DND NIN S UT U &S & LET V A NN T I I E P ADM T #NS A E ES R V URN TO) T N S E EE V 6V I T SNA NIN L AE R E EG T L MN! DA NM) UO" FR % LF 3 E GSE D NN H T !U F FO SS E N S O I I A S RI V TO A R HP T

N A N I T S E V N I O T S E S O P O RS PN OO I HT I WD NN OO SC R G E N PI YW NO AL L SO NF AE EH MT F RO OE T S N E O VS NE I I LF E S GT I NA !S D N A D N U F L E G N A

T S A E L T A F O SO T H E S W S A D N EA L B E I G C NN AE T D I TS E E NR SA L A P HI C ON HI R WP RS OH I T S F E VO NE I U LL A A UV DG I N V I I D D NL U I C NX !E

R O T S A E L T A R H RO I T O T R S W A EU E CE L L NN A N T E O ER A I I R P F S E O PE S E R H XT F T EN O R TE R O N L P W EA T I N T MR E E TE SM N S E A V AE S G H N A A I T I E EN W G CA A NM E T T E S I A R R R O Y E O I L P R N P X A E R E ES O C SA S A A Y H HS I D O B !

10 years experi-

D N U & L A T I P A # E R U T N E 6 R O & ) ! N !

ence

[Dec 2019 (3 Marks)]

26. Write short notes on: Angel Fund

iii

N G I E R O F ) Y R O G E T A # S A E L B I G I L E T O N S D N U F D E T A L U GR EO R T S YE L V E N T I A I O R I PL O OF RT PR PO !P

SE EIY NSSL EH GRK OIIB I T R I T HI L TE AF N E CG C T I I U O L R !GH N A O E N LNWEAC D A O A YHR I NS I TCEU C M2T I S N AT/NUBYI NN ESMTME I R T E I OS RDEN OE & N MS T U H MERA A TE ES T EOL HE VO EL N C T C B VNN R OB I MNIAEO I G S I U OYS & L OII S S RNL BUKEI F S AO I YASRMH F L O SHT L I TCARMT R CO C F4E RU OR EO E NGCE R GSPI A ON FD A ND I N T NDI GN C AOU S ANE I ! M T D R N MAR C L N O T YO O A A N TR I F AI Y T T N E A T C ER EN)L H N M C YE T T MUR ATL S TOO R NSL I C E I S I G GD & VAE E R E F VE ANO R T I D NB S A G I E N E YN EM#NSMAT I I O S U K L H I R OEAWA E CI B F HMSOL E U C SS S S WEA B I NS CD Y T YR U RON E T T OR I TSIEPA T V S T & E S RN C EEI N T A E S E EKI L WRP ED SG L EP E O NA NL TU EA HA !4R B(T E T A # R E D N U E L B I G I L E T O N S R O T S E n VS NA I E HH C T U LS L A S R EO DT US L E C V NN I I LO L A I L HO SF T TR ) O P N G I E R O F ) Y R O G ii iii iv v vi vii

TAXMANN®

E V A H T A H T S E I T I S R E V I N U S HR CA UE SY F O N SA T N H ET ME R WO O DM R NO EF DE EC T N A L E E T R S I YX T E I S N R I E VN I E N E 5B ) ) )

` 10 Crore

b c

` 2 Crore

3 % ) 2 ! ) $ % 2 % 4 . ) 4 % + 2 ! , ! 4 ) 0 ! # ) ) 4 2 ! 0

15.16

(b) Category-II FPI:

Ans.:

Angel Fund:

Angel Investor:

4 % + 2 ! , ! 4 ) 0 ! # & / % 2 5 4 # 5 2 4 3 ( #

L SI A OC RN PA HN T I WF S O RA G I D DN L ) E I N Y I DA L NT OP I BA OC I R N A O NN ER CU S T EE CR I R F PO YE T T I A U QR ER NO I S SD E N CE ND EI R V I E D F F I E D T YA BR T DS EE CR UE DT N NI I S SST I TE )C S 0 ES &PA L S A ) N2 O. I T U C T T I T E S S NT ) N NU GO I C E C R OA &B FU O SS PD UN OA RS G ) T& N 1 E MS R TO S T E S VE NV I N S) E DN G UI L E C R NO I S& R OD) E T 0 I S F & E I L VA R NU E ) D O1N I L U O SE ) F ) T R M O&O 0SC NR T GON T I S S E E E R VO ON &) D S OSYE I T D L I I S O T NR E F U I T EC R VO O&I 0NN3 O5E NI L GS B S N I A E E E T I R I N R O0A A &SP H TKM# A NO D HA T N "#A D ES E ET S T E NS A I I U L N M U R AO 4 PP I T E M.L S B )OSA "#AI T SR 2TT NSA EEU H HMR# T E4S GTN SA NO E NNET I I AMA L E TD D-E S N I TV U U E GS NO )S)& "!DT %ENN 3DAE USM WLD W C EN O ND NI UN S&% ER HO L T A S T S U RE D TN E T V U C UT F N-& !) E

TAXMANN®

EO DT I L S A G I T NN OE L T A O TP S E E VH NT I OE HV A WH ST L A A NH OT I S S S E I E N F O RA PP YM BO C D EGS N DI E I W V S OOU RR O PG H YYR EL E ND W I OP O MA P SRC I GI L A NM T UO I P N AOO #YC N E EI R O UN TT T N I N EEP 6MO T L S E E V VE ND I

E OPR T IU DHT ESN R R E E R N 6 E T F R E S A R D SPN I EU ET F CA I VN V I O R R I E PS S N YE DL ELP A T R E A T E L A E NV R EI DGR NEP AR Y LAB A SD T I M E P R D AI N CF U LF EA R T UP I S T E N AI E N V#A EP GR M NU I TOS D N CA I E V D O6EE T R A R PS T R V E I IR NL F I APE DT R EIDO GPLS AAEL GCHA NEYI S ERLL E U S A MTO T N L I RE C P I VR F A # !AO

SCFSN TU I O E S ME N C E N R O VOR I W OF NFT T TLE I SCI FR ECAB A T E O L I R E P SHET T C T E AN SA PON CA EOYEL YL T IL A I T R E TH A B U K N CL T I EWI A N R N T N N E USEI O 6 F A I F MO T S I D NMMG N I AO NA RP EI E F XCHCM E E TNO E S R PYEBAT N L C I S SR I OF T V PA T N T R UEE MSE ODS O M E RN LE MT G AAS S C EL E EV I SH R AD E UI T N T I T PEN I N E EAMAGG N VCYPV I A TDGMI T N S OOE EL EE CR C O R S ET E ER NR E NH F A I F A L D I C E W $Z N E D T T A I N L Y O F A T I O SAL I I " S Y C M I L EG B DRR PN I A A N F T SI EI A C F EHO EN SR T MA UTR N O T ON EN BP 3IN D F EEN I TOV S P CA T X N N EMYAK EN NI S OAI MO CMF R -

Areas of Investment:

[June 2021 (3 Marks)] 27. Write short note on: Foreign Portfolio Investor

15.17

Ans.: Foreign Portfolio Investment (FPI) is investment by non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, infrastructure securities etc. The classes of investors who make investment in these securities are known as Foreign Portfolio Investors.

28. Venture Capital is one of the innovative financing resources for an enterprise. Explain briefly and indicate the areas of investment of Venture Capital. [Dec 2021 (5 Marks)] Ans.:

Risk Capital

R SE E H DT I SO E E "H T E CE NR AA NG I F N I L EI R A UT T E N R E S VDE N I FA N O A SP TS O EM L ANO I SC GU NB E I R T IU C R T AG N R AE T T V A S L F NA O CT EI ET O BU L EA SC A HAY MB RR D OA T E C HR EP U S O DV EN R A A AF WHE R TT F L A O A T SE A H AHT I A D S I ND A ) E ER NMA )

Securities Laws & Capital Markets (SLCM) | CRACKER AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

N.S. Zad TAXMANN July 2022 7th Edition 9789356222663 400 PAPERBACK

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Description This book is prepared exclusively for the Executive Level of Company Secretary Examination requirement. It covers the questions (topic-wise) & detailed answers strictly as per the syllabus of ICSI. The Present Publication is the 7th Edition & updated till 31st May 2022 for CS-Executive | New Syllabus | Dec. 2022/June 2023 exams. This book is authored by CS N.S. Zad, with the following noteworthy features: · Strictly as per the New Syllabus of ICSI · Coverage of the book includes Fully-Solved Questions of Past Exams Solved Paper: June 2022 | New Syllabus · [Topic-wise] arrangement of past exam questions & answers · [Most Amended & Updated] Covers the latest applicable provisions and amendments under the Companies Act, 2013 & SEBI Regulations · [Marks Distribution] Chapter-wise marks distribution · [ICSI Study Material] Chapter-wise comparison for past exams

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