Annual Report 2014 – 15 Securities and Exchange Board of India • Annual Report 2014-15 SECURITIES AND EXCHANGE BOARD OF INDIA • • This Report is in conformity with the format as per the Securities and Exchange Board of India (Annual Report) Rules, 1994, notified in Official Gazette on April 7, 1994 • • MEMBERS OF THE BOARD (As on March 31, 2015) Appointed under Section 4(1) (a) of the SEBI Act, 1992 (15 of 1992) U. K. SINHA Chairman Appointed under Section 4(1) (d) of the SEBI Act, 1992 (15 of 1992) PRASHANT SARAN Whole Time Member RAJEEV K. AGARWAL Whole Time Member S. RAMAN Whole Time Member P. C. CHHOTARAY Part Time Member Nominated under Section 4(1) (b) of the SEBI Act, 1992 (15 of 1992) ANJULY CHIB DUGGAL Secretary, Ministry of Corporate Affairs, Government of India MANOJ JOSHI Joint Secretary, Ministry of Finance, Department of Economic Affairs, Government of India Nominated under Section 4(1) (c) of the SEBI Act, 1992 (15 of 1992) R. GANDHI Deputy Governor, Reserve Bank of India • MEMBERS OF THE BOARD (As on March 31, 2015) U. K. SINHA Chairman PRASHANT SARAN RAJEEV K. AGARWAL S. RAMAN P.C. CHHOTARAY Whole Time Member Whole Time Member Whole Time Member Part Time Member ANJULY CHIB DUGGAL MANOJ JOSHI R. GANDHI Secretary Joint Secretary Deputy Governor Ministry of Ministry of Finance Reserve Bank of India Corporate Affairs Department of Government of India Economic Affairs Government of India • Chairman, Whole Time Members and Executive Directors Left to Right: Sitting: Shri S. Raman, Whole Time Member; Shri Prashant Saran, Whole Time Member; Shri U.K. Sinha, Chairman; Shri Rajeev K Agarwal, Whole Time Member. Shri R.K. Padmanabhan, Executive Director; Shri Ananta Barua, Executive Director, Standing: Shri J Ranganayakulu, Executive Director; Shri S V Murali Dhar Rao, Executive Director, Shri P K Nagpal, Executive Director; Shri Gyan Bhushan, Executive Director and Shri S Ravindran, Executive Director. • SEBI Annual Report 2014-15 xi • EXECUTIVE DIRECTORS (As on March 31, 2015) Shri P K Nagpal Corporate Finance Department; Official Language Division Shri J Ranganayakulu Legal Affairs Department; Enforcement Department Shri Ananta Barua Investment Management Department - Division of Funds 1, 2 & 3; Foreign Institutional Investors and Custodians; Collective Investment Scheme Shri S Ravindran Investigation Department; Special Enforcement Cell; Facilities Management Division; Establishment Division; Treasury and Accounts Division; Protocol and Security Division Shri R K Padmanabhan Market Intermediaries Regulation and Supervision Department; FATF and KYC related matters; Information Technology Department; Regional Offices Shri SV Murali Dhar Rao Market Regulation Department; Department of Economic and Policy Analysis; PQ Cell; Board Matters. Shri Gyan Bhushan Integrated Surveillance Department, Office of Investor Assistance and Education and Chief Vigilance Officer CHIEF GENERAL MANAGERS (As on March 31, 2015) Shri Nagender Parakh On Deputation to FMC, Mumbai Shri P. K. Kuriachen On Deputation to FSC, Mauritius Shri P.K. Bindlish Market Regulation Department Shri D. Ravi Kumar Enquiry and Adjudication Department Shri S. V. Krishnamohan Eastern Regional Office Shri G. P .Garg On Deputation to NISM Shri A. Rajan Information Technology Department Shri A.K. Sharma CPIO, Parliamentary Question Cell, Official Language Division Shri Suresh B. Menon Southern Regional Office Shri Amarjeet Singh Office of the Chairman Shri Suresh Gupta Investigation Department Shri V. S. Sundaresan Corporation Finance Department Shri Sujit Prasad Market Intermediaries Regulation and Supervision Department Shri Amit Pradhan Northern Regional Office Shri N. Hariharan Communication Division, Office of Investor Assistance and Education Shri Piyoosh Gupta Western Regional Office Ms. G. Babita Rayudu Enforcement Department Shri A. Sunil Kumar Special Enforcement Cell , Enquiry and Adjudication Department Shri Jayanta Jash Human Resources Division, Enquiry and Adjudication Department Shri Parag Basu Investment Management Department Shri R. S. Srivastav Enforcement Department xii SEBI Annual Report 2014-15 • ANNUAL REPORT TEAM Dr. Prabhakar R Patil General Manager Ms. Deepthi L S Assistant General Manager Mr. Laltu Pore Assistant General Manager Ms. Suvidha Nagpal Manager Ms. Sneha Nautiyal Manager Mr. Prasad Patankar Manager Ms. Josephine Fernandes Secretary SEBI Annual Report 2014-15 xiii Chairman’s Statement n a journey that was embarked 26 years ago disgorgement etc. A judicious, righteous and fair with the overarching objective of investor application of these new powers by SEBI would be protection and the development and regula- crucial for achieving our overall objectives. tion of the securities markets in India, SEBI One of the major thrust areas during this Iand the Indian capital markets have grown from year was corporate governance reforms and strength to strength with each passing year. With the alignment of these requirements with the the advent of SEBI, the Indian markets experi- provisions of the new Companies Act. Further, the enced a sweeping evolution from a highly con- derecognized/non-operational stock exchanges trolled merit based regulatory regime to a mar- were facilitated with a clear and detailed regulatory ket oriented disclosures based regulatory regime. framework to enable them to procure a hassle free Over the years, SEBI has been introducing various measures for the betterment and advancement of One of the major thrust areas during the Indian securities market. this year was corporate governance In the course of this remarkable journey, SEBI reforms and the alignment of these has incessantly strived to incorporate and adopt requirements with the provisions various global standards and international best of the new Companies Act. practices within its regulatory framework. It has also stood the test of time through various and efficient exit. Also, as part of our ongoing domestic as well as global crises and came out focus on a robust risk management system, norms stronger every time. This has resulted in enhanced for Core SGF, Default Waterfall and Stress Testing efficiency, integrity and transparency in the as also a well documented and comprehensive Indian securities market and has also catapulted risk management policy at depositories was it into the global league. In fact, in international introduced. The index based market-wide circuit circles today, the Indian securities market is often breaker mechanism was also strengthened. considered as one of the most developed and During the year, SEBI also notified three highly respected market across the globe. new regulations viz., Research Analysts, REITs The year 2014-15 was a year of significant and InvITs to bring these newer categories of accomplishments across all the functional participants and products within its regulatory areas under SEBI and, as always, the mandate purview. Also, the FPI regime that was of protection of interests of investors, market implemented with a view to rationalise and development and regulation guided all our policy harmonize the different foreign investment initiatives during the year. A major highlight routes has definitely made the Indian markets during the year was the passing of Securities Laws an attractive investment destination through Amendment Act, 2014, endowing SEBI with easier entry norms and operational frameworks. enhanced regulatory powers including search Additionally, the investment avenues for FPIs and seizure, attachment and recovery, power to have been expanded to exchange traded currency call for information from any person, powers of derivatives and non-convertible/ redeemable xiv SEBI Annual Report 2014-15 preference shares or debentures of Indian e-IPO, Aadhaar based e-KYC and system driven companies. disclosures. We also propose to significantly The year was also unprecedented in terms of increase our investor education and awareness the enforcement actions taken by SEBI against efforts by tapping the increasing stature of social numerous unregulated collective investment media, through collaboration with other agencies schemes sprouting across the length and breadth and empanelment of more Resource Persons. We of the country and duping numerous investors. also plan to further streamline our enforcement Severe deterrent actions and penalties have been process and develop capabilities to effectively imposed on erring individuals and entities through utilize the additional enforcement powers vested enforcement actions throughout the year. on SEBI. As already mentioned, today the Indian Further, the recent policy announcement of securities market is being hailed as one of the the Government of India to bring the regulation best regulated markets in the world. This indeed of commodity futures market under the is a matter of great pride for us. But, at the same jurisdiction of SEBI presents to us another set of time, this also brings in a huge responsibility on fresh and unique challenges. As the commodities our shoulders to continuously strive to improve markets operate in a different ecosystem, SEBI is the Indian markets as also the quality of our conducting thorough analysis and due diligence regulations. Accordingly, the goals for 2015-16 before articulating its vision for the commodity have also been well laid out for us. derivatives segment. We plan to strengthen the risk-based Thus, our agenda, going ahead, is definitely supervision framework for all intermediaries, ambitious and challenging, particularly in the