‘company secretary’the professional facilitator in capital market
TRANSCRIPT
‘Company Secretary’ The Professional
Facilitator in Capital Market
Contents:
Capital Market: Strength of Economy
Capital Market: An Insight to Past, Present and Future
Company Secretary: The Game Changer
Company Secretary: A Powerful Catalyst in Capital Market
A
B
C
D
PART A: Capital Market-Strength of
Economy
Capital Market: An Institutional setup
CAPITAL
MARKET
Issuers
Investors Intermediaries
Regulators
• FIIs• High Net-worth
Individuals• Retail Investor• Banks & Financial
Institutions• Corporate Entities
• SEBI• RBI• MCA
• Listed Companies• Unlisted Companies• Body Corporates• Government• Statutory
bodies/Authorities
Stock Exchanges Merchant Bankers
Stock Brokers/Sub Brokers
FII/FPIs/Portfolio Managers
RTA/Custodian Credit Rating Agency
Investment Adviser Research Analysts
Debenture Trustee AIFs/REITs/InvITs
Capital Market: Participants & Intermediaries
44850 Brokers & Sub-brokers
856 DPs
184 Merchant Bankers
209 AIFs
737 Research Analysts & Investment Advisers
65 RTAs
212 Portfolio Managers
23 Debenture Trustee
59Banker to
issue
59Banker to
issue
19Custodian
5835 Listed Companies
Source:1. www.sebi.gov.in2. http://data.worldbank.org/indicator/CM.MKT.LDOM.NO
Capital Market: Functions & Significance
Capital formation
Allocation of capital
Allocation of risk
Proper channelization of
funds/savingsFacilitates in
policy making
Boosts Foreign capital
Promotes industrial growth
Easy liquidity
CAPITAL MARKET - A SIGNIFICANT PART OF
FINANCIAL SYSTEM
PART B:Capital Market - An Insight to Past,
Present and Future
esterday
Less Stringent Regulations
Intermed-Iaries :Lesser
Respons-ibilities
Lesser ListedCompanies
More SuspendedCompanies
Several
Stock
Exchanges
Scattered &
Undeveloped
Market
oday
Intermediaries: Established &With Greater
Responsibilities
StricterRegulations
More IPOs/ FPOs/Right Issues
Independent & Hitech Stock
Exchanges
DevelopingMarkets
More ListedCompliantCompanies
MoreCorporate
Restructurings
SEBI+FMC Merged
1998-1999Maximum Index Level : 4280.96
January 2015Maximum Index Level: 29681.77
Capital Market: The Growing Space
Indian Capital Market has seen a remarkable growth rate of 600% as evident from above data. Still have enormous potential of growth.
Capital Market: The Future Ahead!
5
6More StringentRegulations
&Intermediaries
much more responsible
International Listings
More ADRs/GDRs/ FCCBs
GlobalRestructurings
DevelopedMarket
&Enhanced
Globalization & liberalization
2
1
34
More Hybrid Securities and
Funds
Indian market Vs. USA market
INDIAN CAPITAL MARKET
USA CAPITAL MARKET
• Established in 1875BSE
• $ 506 Billion• Rank-15th Market-Cap
• 1.2% of total population people investing in Indian Capital Markets
• Increasing participation; enormous potential of growth
Participation
• Established in year 1792NYSE
• $ 15517 Billion• Rank-1st M-cap
• Nearly 50% but latest figures suggest it is dropping
Participation
Source:Comparative Analysis of Indian Stock Market with International Markets, by Debjiban Mukherjee, T. A. Pai Management Institute, Manipal, India.
Capital Market: Regulatory Framework
Rules & Byelaws of
Stock Exchanges
Securities Contract &
Regulation ActSEBI Act,
Rules & Regulat
ions
Other Laws
Depositories Act Listing Agreement •
Com
panie
s Act
• FEMA, R
ules &
Reg
ulatio
ns
• S
tamp A
ct
• C
ompe
tition
Act
• In
come T
ax Act
SEBI Regulations
Capital Market: Regulatory Framework…Contd
INTER
MEDI
ARIES
• Intermediaries Regulations
• Stock Brokers & Sub-brokers Regulations
• Merchant Bankers Regulations
• Credit Rating Agencies Regulations
• Depositories & Participants Regulations
• Custodian of Securities Regulations
• Research Analysts and Investment Advisers Regulations
• Debenture Trustees Regulations
• RTA Regulations
• Portfolio Managers Regulations
• Foreign Portfolio Investor Regulations
• KYC Regulations
• AIF/REITs/InviTs Regulations
COMPANIES
• SAST Regulations
• ICDR • Buy-
back of securities Regulations
• Prohibition of Insider Trading Regulations
• Delisting of Equity Shares Regulations
• Investor Protection & Education Fund Regulations
• Issue & Listing of Debt Securities Regulations
• Prohibition of Fraudulent & UTP relating to Securities Market Regulations
• DIP Guidelines
PART C: Company Secretary - The Game
Changer
Who is Company Secretary?
Expert
Strategic Planner
Manager of Commerce & Compliances
Effective interface of Company
Representative
IndependentProfessional
A Company Secretary is an expert strategic planner who is the face of the Management and serves as a link between the Board of Directors and the
stakeholders.
Skills of a Company SecretaryKnowledge of
Capital market & other Laws
Knowledge of Finance(Project
Financier)
Familiar to commerce and trade practices
Effective communicat-
ion skills
Entrepreneu-rship skills
Leadership skills
Company Secretary interacts with…
Media
Investors
Suppliers
Lenders
Customers
Board
Departments
Government
Regulators
Advisors
Society
Other Forums
Company Secretary
Company Secretary in Employment
COMPANY SECRETARY
Professional
Bound by Code of Conduct
Aligns various management
functions with company policies
Compliance of all applicable
LawsTakes care of the interest of
stakeholders
Good Corporate Governance
Company Secretary in Practice
Renders Audit, Advisory,
Representation ServicesIndependent
Professional
Bound by Code of Conduct
Renders Audit,
Advisory, Representatio
n Services
In relation to management,
law & Corporate
Governance processes &
Practices
PART D:‘Company Secretary’
A Powerful Catalyst in Capital Market
CS BEST SUITED
FOR SERVICES RELATED TO
CAPITAL MARKET
WHY
HOW??
Company
• Listed Companies
• Unlisted Company intending to be listed
• Companies who intends to acquire a listed Company
Intermedi-
aries
• Merchant Bankers
• RTAs• Broker
s• Deposi
tories etc.
• FIIs and etc.
Others
• Advisors
• Stock Exchanges
Opportunities for CS in Employment
Role in a Listed Company
Key-point betweenCompany &
Stakeholders
Strategic Planner
Face of Management
SUSTAINABLE GROWTH
COMPANY SECRETARYnavigates the
CORPORATE GROWTHwith
GOOD GOVERNANCE
Event Manager
Vigilance Officer
Knowledge ofVarious Securities
Laws
CS: As Strategic Planner
Corporate Planning• Mergers/
Takeovers• FPO
Management• Foreign Issue
Management (ADR/ GDR)
• Listing on Foreign Exchange
• ESOPs & ESOS
• Right Issue• Preferential
Issue• Buy-Back• Delisting
Vigilance• Prohibition of
UTP• Inspection &
Investigation• SEBI (SAST)
Regulations• Insider Trading• Due Diligence• Legal vetting of
agreements of the Company
Representations• SEBI for
consent orders• Securities
Appellate Tribunal (SAT)
• Company Law Board
Routine Compliances• Companies Act• Listing
Agreement• Depositories
Act• SEBI (SAST)
Disclosures• Co-ordination
with various authorities, banks etc.
• Organizing Meetings
Approvals Required
By Company
Due Diligence & Compliance
Appointment of Intermediaries
By Intermediaries
Eligibility Norms
Pricing of securities
Contents of Prospectus
Post Issue obligations
Compliance of various Rules & Regulations
Promoters Disclosures
CS & IPO Management
CS & Takeovers
Strategic Planning
Documentations
Exemptions from Takeover Panel
Appointment of Intermediaries & other Involved
Agencies
Due-Diligence
Post Offer Compliances
AcquirerTarget
CompanyDetermination of
Offer Price
Public Announcement Letter of
Offer
Representing the Company before all Authorities
Legal & Procedural
Aspects
CS & Mergers Documentations
Strategic Planning
Tax Planning
Legal & Financial Aspects
Post- Merger Compliances
Approvals Required
Scheme of Merger Petitions
High Court RD/ OL /
ROCStock
Exchange
Due Diligence of Business
CS & Buyback
Appointment of Intermediaries
Strategic Planning
Approvals Required
SEBI
Stock Exchange
Coordination with
Intermediaries
Legal & Procedural
Aspects
Post- Offer Compliances
Buy- Back offer & Offer Price
Due-Diligence
Role in an Unlisted Company
Unlisted
Company
Object : IPO
COMPANY SECRETARY
Listed Company
Role in an Intermediary
General
Routine Compliances
Event Based Compliances
• Restructuring
• Mergers
• Change in Control
• Change in Directors
• Comply with
various reports to
be sent to
Authorities
• Certificates
• Internal Audit
• Link between
Intermediary/
Clients &
Authorities
• Vetting of
Legal
Agreements
with Authorities
& Clients
Expansion
Representations
For Clients
• Due Diligence of
Companies
• Strategic Planning
• Reports of various
corporate actions such
as Public Issue/ Right
Issue/ Buy-Back etc.
• Issue various
Certificates as
prescribed under SEBI
Act/ Regulations/
Guidelines
• Representations
before SEBI, SAT &
Stock Exchange on
behalf of the
Intermediary as well
as on behalf of the
Clients
• Strategic
Planning
• Restructuring
• Mergers
• Change in
Control
• Expansion of
Business
Role in an Intermediary.. Contd
Role of CS in Stock Exchange
Listing Department
Surveillance
Membership Department
Representation before SAT on behalf of the Exchange
Secretarial Department
Opportunities for CS in Practice
Appearance before :
SEBI SAT CLB
Settlement Proceedings
Brokers Audit Securities Audit Corporate Restructuring Capital Restructuring Unlocking company’s real value Deals & valuations
Due Diligence Certifications as per SEBI Regulations Certifications required for Corporate Actions Secretarial Audit
As PCS
AsAdvisor
As Representa
tor
Widened Horizon as Entrepreneur
Merchant Banker
Registrar & Transfer Agent
Management Consultant
Depository
For this one must have
Broker
Widened Horizon as Entrepreneur Contd…
• More Efforts More Revenue
• As prescribed by Authorities
• Preferably have an experience in the field of Securities Market
• Dealt with SEBI & Exchanges
• Sound legal knowledge
• Familiarity with Capital market functioning
• Good communication skills
• Management skills
• As specified by SEBI from time to time
Investment Skills
RevenueExperience
Corporate Professionals D-28, South Extension –I, New Delhi-110 049
Ph: +91.11.40622200; Fax: +91.11.40622201; E: [email protected]
Pavan Kumar Vijay
Thank You