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Questions and Answers

Which of the following is NOT classified under Category I Foreign Portfolio Investors?

  • Pension funds
  • Entities from Financial Action Task Force member countries
  • Government-related investors
  • Unregulated funds without an appropriate investment manager (correct)

    • What is a requirement for an entity to be classified as a Category I FPI?

  • Ownership of at least 50% by private investors
  • Registration under SEBI regulations (correct)
  • Operational for less than one year
  • Involvement in speculative trading

    • Which of the following types of investors can be categorized as a Category I FPI?

  • Sovereign wealth funds (correct)
  • Private equity firms
  • Hedge funds
  • Family offices

    • Which statement is true about university-related endowments classified as Category I FPIs?

    <p>They must be in existence for more than five years</p> Signup and view all the answers

    Which of the following is a characteristic of Category I FPIs?

    <p>They include regulated entities such as asset management companies</p> Signup and view all the answers

    What categorizes an investment manager as responsible for unregulated funds within Category I FPI?

    <p>The investment manager must be appropriately regulated and registered</p> Signup and view all the answers

    Which of the following investors is inherently categorized as a Category I FPI?

    <p>Investment advisors associated with regulated entities</p> Signup and view all the answers

    Which of these organizations would NOT be considered a Category I Foreign Portfolio Investor?

    <p>A multinational corporation without regulatory oversight</p> Signup and view all the answers

    What is the primary role of the financial system in a modern economy?

    <p>To encourage savings and allocate resources for economic growth</p> Signup and view all the answers

    Which of the following is NOT included in the basics of capital market according to the index?

    <p>Prohibition of insider trading</p> Signup and view all the answers

    What is one function of a sound financial system in India?

    <p>Mobilizing savings from various households</p> Signup and view all the answers

    Which topic is covered under PART II of the capital market and securities law?

    <p>Prohibition of Fraudulent and Unfair Trade Practices</p> Signup and view all the answers

    What is a key objective related to the issue of capital and disclosure requirements?

    <p>Ensuring financial transparency and accountability</p> Signup and view all the answers

    Which option corresponds to a type of investment product commonly covered in capital market discussions?

    <p>Stocks and Bonds</p> Signup and view all the answers

    Which of the following statements best describes securities market intermediaries?

    <p>They assist in the trading of securities between buyers and sellers.</p> Signup and view all the answers

    What does the acronym IFSCA stand for in a capital market context?

    <p>International Financial Services Centres Authority</p> Signup and view all the answers

    Which of these practices is covered under securities law concerning capital market activities?

    <p>Prohibition of insider trading</p> Signup and view all the answers

    Which type of equity practice focuses on share buybacks?

    <p>Delisting of equity shares</p> Signup and view all the answers

    What is the maximum number of anchor investors permitted for allocation up to Rs. 10 crore on the main board?

    <p>2</p> Signup and view all the answers

    What is the minimum allocation per investor for amounts above Rs. 2 crore and up to Rs. 25 crore?

    <p>Rs. 1 crore</p> Signup and view all the answers

    In case of allocation above Rs. 25 crore, how many additional investors are allowed for every Rs. 25 crore or part thereof?

    <p>10</p> Signup and view all the answers

    What is the total number of anchor investors permitted for allocations above Rs. 25 crore on the SME exchange?

    <p>25</p> Signup and view all the answers

    When does bidding for anchor investors open in relation to the issue opening date?

    <p>One day before the issue opening date</p> Signup and view all the answers

    What is the minimum number of anchor investors required for allocations above Rs. 25 crore?

    <p>5</p> Signup and view all the answers

    For allocation up to Rs. 2 crore on the SME exchange, how many maximum anchor investors are permitted?

    <p>2</p> Signup and view all the answers

    What is the maximum number of anchor investors allowed for an allocation range between Rs. 2 crore and Rs. 25 crore on the SME exchange?

    <p>15</p> Signup and view all the answers

    What is a requirement for an entity to qualify as a Category I foreign portfolio investor?

    <p>The investment manager must be from a Financial Action Task Force member country.</p> Signup and view all the answers

    What percentage ownership is required for an entity to qualify via another entity under Category I?

    <p>Seventy-five percent or more.</p> Signup and view all the answers

    Which of the following is NOT classified as a Category II foreign portfolio investor?

    <p>Investment managers from a Financial Action Task Force member country.</p> Signup and view all the answers

    Which type of entity is categorized as a Category II foreign portfolio investor?

    <p>Individuals.</p> Signup and view all the answers

    What type of funds are classified as unregulated under the Category II foreign portfolio investors?

    <p>Limited partnerships and trusts.</p> Signup and view all the answers

    Which of the following entities is explicitly mentioned as a non-eligible Category I foreign portfolio investor?

    <p>Endowments and foundations.</p> Signup and view all the answers

    Who holds responsibility for the acts of applicants seeking registration under Category I?

    <p>The investment manager or eligible entity.</p> Signup and view all the answers

    What classification does an applicant established in an International Financial Services Centre fall under?

    <p>Appropriately regulated.</p> Signup and view all the answers

    What is a common type of securitized debt that is mentioned?

    <p>Mortgage-backed securities</p> Signup and view all the answers

    Which regulatory body established the framework for public offers of securitized debt instruments in India?

    <p>Securities and Exchange Board of India</p> Signup and view all the answers

    What notable event occurred in 1997 regarding municipal bonds in India?

    <p>First municipal bonds were issued</p> Signup and view all the answers

    What is one of the eligibility criteria for a municipality to issue municipal bonds in India?

    <p>Must not have a negative net worth in each of the previous three years</p> Signup and view all the answers

    Why did municipal bonds struggle after their initial attraction?

    <p>Inadequate funding raised from investors</p> Signup and view all the answers

    What benefit do securitized debt instruments provide to banks?

    <p>Lower interest rates and increased capital availability</p> Signup and view all the answers

    Following which year did SEBI issue guidelines for urban local bodies to issue municipal bonds?

    <p>2015</p> Signup and view all the answers

    Which urban local body was the first to issue municipal bonds in India?

    <p>Bangalore Municipal Corporation</p> Signup and view all the answers

    What do shares with differential voting rights (DVR) primarily allow a company to do?

    <p>Retain control while raising investments</p> Signup and view all the answers

    According to the Companies Act, 2013, what is a requirement for a company to issue equity shares with differential rights?

    <p>Shareholders must approve through an ordinary resolution</p> Signup and view all the answers

    What is the maximum percentage of voting power that shares with differential rights can have in a company?

    <p>74%</p> Signup and view all the answers

    Which of the following is NOT a condition for a company to issue shares with differential rights?

    <p>The company must hold regular shareholder meetings</p> Signup and view all the answers

    What type of shares carry a preferential right to dividends and repayment of capital upon liquidation?

    <p>Preference shares</p> Signup and view all the answers

    Which financial obligation must a company have fulfilled to issue differential voting rights shares?

    <p>It must have filed annual returns and financial statements for the last three years</p> Signup and view all the answers

    What is one of the main advantages of issuing shares with differential voting rights?

    <p>They enable founders to retain control while attracting investment</p> Signup and view all the answers

    What happens to the voting power of shares with differential rights when their limit of 74% is reached?

    <p>No additional shares can be issued</p> Signup and view all the answers

    Study Notes

    Capital Market and Securities Law Index

    • Basics of Capital Market: 1.1 to 1.16
    • Secondary Market in India: 2.1 to 2.18
    • Securities Contracts Act, 1956: 3.1 to 3.16
    • Securities and Exchange Board of India (SEBI): 4.1 to 4.16
    • Laws Governing Depositories and Depository Participants: 5.1 to 5.11
    • Securities Market Intermediaries: 6.1 to 6.11
    • International Financial Services Centres Authority (IFSCA): 7.1 to 7.8
    • Issue of Capital & Disclosure Requirements: 8.1 to 8.13
    • Share Based Employee Benefits and Sweat Equity: 9.1 to 9.9
    • Issue and Listing of Non-Convertible Securities: 10.1 to 10.7
    • Listing Obligations and Disclosure Requirements: 11.1 to 11.17
    • Acquisition of Shares and Takeovers - Concepts: 12.1 to 12.9
    • Prohibition of Insider Trading: 13.1 to 13.10
    • Prohibition of Fraudulent and Unfair Trade Practices: 14.1 to 14.5
    • Delisting of Equity Shares: 15.1 to 15.13
    • Buy-back of Securities: 16.1 to 16.10
    • Mutual Funds: 17.1 to 17.11
    • Collective Investment Schemes: 18.1 to 18.8

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