Part A 6 Mark Questions

1. Redeemable preference shares.
2. Secured premium notes.
3. Stock Exchange.
4. Statement in lieu of prospectus.
5. Interim Dividend.
6. Redeemable debentures.
7. Investment in other companies.
8. Registration of mortgages by a company.
9. Equity shares
10. Foreign currency convertible debentures
11. Inter connected stock exchange of India
12. Global depository receipts
13. Prospectus
14. SEBI Appellate Tribunal
15. Floating charge
16. Transfer of shares
17. Transmission of Shares
18. Calls and Forfeiture
19. Statement in Lieu of Prospectus
20. Redeemable Debentures
21. Foreign Currency Convertible Debentures
22. Interim Dividend
23. Stock Exchanges
24. Listing of Securities
25. Provisional Contracts
26. Investor Protection
27. Composition of SEBI
28. SEBI Appellate Tribunal
29. What is a Depository?
30. What is Demutualization?

Part B 15 Mark Questions

1. Give an account of the various penalties prescribed under SEBI, 1992.
2. Examine the salient features of Depositories Act, 1996.
3. Distinguish share transfer and share transmission and state the norms governing processing of share transfers.
4. “Inspite of suitable legislative measures, the Indian Financial system remains weak.” – Comment.
5. State the powers and functions of SEBI model SEBI Act, 1992.
6. Explain in brief the various powers of RBI to regulate NFCS.
7. Define “Mutual Funds” and “SPUS” and state their legal incidents.
8. Discuss in brief the guidelines issued by SEBI for protection of the interest of debenture-holders.
9. Explain the law relating to procedure for issue of shares and allotment of shares
10. Explain the administration of company in relation to issue of prospectus into the general public
11. Define share and distinguish from shares and debentures
12. Explain the purpose of inter-corporate loans and investments in the companies
13. Define the terms “Securities” and “Stock Exchange” under the SC(R) Act, 1956
14. Explain the concepts of “Corporatization” and demutualization and discuss the procedure for corporatization and demutualization under the SC(R) Act, 1956
15. Explain the guidelines for disclosure under the SEBI Act
16. Explain the role of SEBI in the process of economic development of India

Part C 10 Mark Questions

1. A debenture holder in a company wanted to inspect the company’s
   a) Debenture Trust Deed
   b) Register of Members and Debenture Holders and to take copies of them.
   Can he do so?
2. Board of Directors of a company in a meeting resolved to declare Interim Dividend and later on passed a resolution rescinding the earlier resolution. One shareholder argues that it amounted to a debt enforceable against a company. Can he succeed?
3. A company created a charge on “all its assets including machinery etc., now lying or that may be brought hereafter until payment” in favour of an institution to secure payment of loan taken by it from an institution. It was argued by the other creditors that it was only a fixed charge. Will they succeed?
4. Coimbatore Stock-Exchange wants to admit a partnership firm as a member. Can it do so?
5. A company forfeited the shares of a shareholder because he made derogatory remarks against the Board of Directors in a public meeting; can it do so?
6. The Directors of a company received money on the sale of their shares more than the money received by the other selling shareholders. The Directors held controlling stock of shares. The other shareholders are claiming that the Directors hold the extra money in trust for the selling shareholders. Can they succeed in their claim?
7. A company borrowed a sum of money against all its machinery, stock in trade and movables, present and future. The possession of the properties was actually given to the lender. The other creditors argued that it is a fixed charge. Do they succeed?
8. ‘A’ and ‘B’, a firm of stock-brokers, bought shares which were registered in the name of their clerk ‘C’. The company went into liquidation. The liquidator applied to the court that the names of ‘A’ and ‘B’ be substituted for that of ‘C’ in the list of members and the list of contributories. Is the liquidator entitled to succeed?
9. A company issued a prospectus to the public for subscription of shares but failed to disclose material facts about its financial liabilities. A subscriber, after investing, discovered the omission and seeks to rescind the contract. Can the subscriber succeed in rescinding the subscription?
10. A shareholder applied for the transfer of shares to a third party, but the company refused the transfer without providing any valid reason. The shareholder argues that the refusal violates the provisions of company law. Can the shareholder challenge the company’s decision?
11. A company issued redeemable debentures secured by a floating charge on its assets. Later, during financial distress, other creditors claimed priority over the debenture holders, arguing that the floating charge does not provide sufficient security. Can the debenture holders enforce their priority over other creditors?
12. A company applied for listing its shares on a recognized stock exchange but was denied due to non-compliance with certain disclosure norms under the Security Contracts (Regulation) Act, 1956. The company argues that the norms are overly stringent. Can the company challenge the stock exchange’s decision?
13. A stock exchange entered into a contract for trading options in securities without obtaining prior approval as mandated by the Security Contracts (Regulation) Act, 1956. A trader affected by this contract seeks to void the transaction. Can the trader succeed in voiding the contract?
14. SEBI imposed a penalty on a listed company for failing to comply with disclosure guidelines under the SEBI Act, 1992. The company appeals to the SEBI Appellate Tribunal, arguing that the penalty is disproportionate to the violation. Can the company succeed in reducing the penalty?
15. A Non-Banking Financial Company (NBFC) failed to comply with the reserve requirements mandated by the RBI under the relevant laws. A depositor, concerned about the safety of their funds, seeks to enforce compliance through legal action. Can the depositor succeed in compelling the NBFC to adhere to RBI norms?
16. Under the Foreign Exchange Management Act, an NBFC engaged in unauthorized foreign currency transactions, leading to penalties imposed by the regulatory authority. The NBFC challenges the penalty, claiming that the transactions were in good faith. Can the NBFC succeed in overturning the penalty?

Syllabus Law of Investments and Securities OU

Unit-I:
Administration of Company Law in relation to issue of prospectus and shares — membership and share capital — Kinds of shares — public issue of shares — procedure for issue of shares — allotment of shares – transfer and transmission of shares.

Unit-II:
Investments — Debentures – Kinds of Debentures and Charges – Dividend — Inter-Corporate Loans.

Unit-III:
Basic features of the Security Contracts (Regulation) Act, 1956 — Recognition of Stock Exchanges – Regulation of Contracts and option in securities — Listing of securities — Guidelines for listing of shares / debentures.

Unit-IV:
Basic features of the Security and Exchange Board of India Act, 1992 — Basic features of the Act — Establishment of SEBI — Functions and Powers of SEBI — Powers of the Central Government under the Act — Guidelines for disclosure — Investors Protection – SEBI Appellate Tribunal — Appeals.

Unit-V:
Non-Banking Financial Institutions – Classification and Law Relating to NBFCs – Protection of Depositors Act – Foreign Exchange Management Act.