CS Executive Capital Market & Securities Laws key terms

A transferable financial instrument such as shares, debentures, bonds or derivatives, defined under the Securities Contracts (Regulation) Act, 1956, and traded on recognised exchanges.

A stock exchange granted recognition by SEBI under the Securities Contracts (Regulation) Act, 1956, entitling it to provide a regulated market for trading in securities.

A contract whose value is derived from an underlying asset such as a share, index, commodity or currency, including futures, options, swaps and forwards.

An exchange-traded option contract whose payoff depends on the level of a benchmark stock index rather than on a single underlying share.

The segment where issuers raise fresh capital by issuing new securities directly to investors through public offers, rights issues or preferential allotments.

A first public offering of equity shares by an unlisted company to raise capital and obtain listing of its securities on a recognised stock exchange.

A public issue of securities by a company whose shares are already listed, used to raise additional capital from the public.

An offer of new shares to existing shareholders in proportion to their holding, usually at a discount, giving them a right to subscribe before outsiders.

The act by which a shareholder entitled to a rights offer transfers that entitlement to another person, either for consideration or otherwise, before the issue closes.

An offer document that omits the exact price and number of securities to be issued, used during book building before the final price is determined.

A price discovery process in which investors bid within a price band and the issuer, with the lead manager, fixes the final price based on demand.

A qualified institutional buyer allotted shares in a public issue before the issue opens, subject to a lock-in and a minimum application value.

A payment mechanism in which the bid amount stays blocked in the investor's bank account and is debited only on allotment, reducing refund delays.

The segment where already-issued securities are bought and sold among investors on stock exchanges, providing liquidity and price discovery rather than fresh capital.

A body corporate that provides a trading platform, membership and regulatory oversight for buying and selling of securities in accordance with SEBI regulations.

An entity that confirms trades, computes obligations and guarantees settlement by acting as central counterparty to buyers and sellers.

A settlement cycle in which trades are settled on a fixed number of days after the trade date, now followed in India on a T+1 basis.

The paired process by which sellers deliver securities and buyers pay funds into the clearing system, followed by the distribution of securities and funds to entitled parties.

A fund maintained by the clearing corporation to compensate trading members and their clients for losses arising from default in settlement.

A trading member registered with SEBI who executes buy and sell orders in securities on behalf of clients on a recognised stock exchange.

An intermediary registered with SEBI that opens and maintains demat accounts for clients and interfaces with the depository for transfer of securities.

The mandatory identification and verification process through which intermediaries establish client identity, address and risk profile before providing services.

A SEBI-registered intermediary that manages public issues, advises on capital raising and handles offer document preparation and marketing.

A merchant banker appointed by an issuer to coordinate a public issue, including due diligence, document filing, marketing and allotment.

A category of institutional investor such as mutual funds, insurers, banks and foreign portfolio investors eligible for reserved allotment in public issues.

A non-resident entity registered with SEBI to invest in Indian securities within prescribed limits, without acquiring control of the investee company.

The Securities and Exchange Board of India, a statutory regulator established under the SEBI Act, 1992, to protect investors and regulate the securities market.

The statute that created SEBI and confers on it powers to regulate intermediaries, investigate violations, issue directions and impose penalties.

The process under the SEBI Act by which an adjudicating officer, after giving an opportunity of hearing, imposes monetary penalties for specified violations.

A mechanism allowing a person facing enforcement proceedings to resolve charges by paying a settlement amount without admission of guilt, subject to SEBI approval.

An entity registered with SEBI that holds securities in electronic form on behalf of investors and facilitates transfer without physical certificates.

An account opened with a depository participant in which an investor's securities are held in electronic, fungible form instead of physical certificates.

The law that provides for electronic holding and transfer of securities and gives dematerialised securities the same legal standing as physical certificates.

Trading in securities while in possession of unpublished price-sensitive information, or communicating such information, in breach of fiduciary duties and SEBI regulations.

Material information about a company that is not generally available and could affect its security prices once disclosed, such as results, dividends or restructuring.

A person who is or has been associated with a company in a capacity giving access to unpublished price-sensitive information, including directors, employees and advisers.

A period during which designated persons of a listed company may trade in its securities; it is closed around material events and disclosure of financial results.

Acquisition of control over a listed company, triggering mandatory open offer obligations under SEBI regulations once prescribed voting rights thresholds are crossed.

A public offer made to shareholders of a target company to acquire their shares at a stated price, usually triggered by acquisition of substantial shares or control.

A company's purchase of its own shares or other specified securities, subject to limits and conditions, reducing the capital base and returning cash to shareholders.

A reserve that a company must create out of free reserves when it buys back shares, preserving capital that would otherwise have been reduced.

A pooled investment vehicle that collects money from investors and invests it in a diversified portfolio under SEBI regulations, issuing units in return.

A SEBI-registered company that manages a mutual fund's investments and operations under the oversight of the fund's trustees.

The per-unit value of a mutual fund scheme, calculated by dividing total assets minus liabilities by the number of units outstanding.

Any arrangement pooling investor contributions for a common investment objective, regulated by SEBI and requiring registration unless exempted.

A privately pooled investment vehicle that raises funds from sophisticated investors and invests under SEBI regulations in areas such as private equity, venture capital or hedge strategies.

The framework of disclosure, conduct and grievance mechanisms designed to safeguard investors from fraud, mis-selling and unfair market practices.

A statutory fund into which unclaimed dividends and certain other unpaid amounts are transferred, used for investor education and protection activities.

SEBI's online complaint redressal system through which investors lodge grievances against listed companies and registered intermediaries and track their resolution.