Secondary Market Reforms : 1992-93 to 1995-95

• Private Mutual Funds permitted and several, like Morgan Stanley, have already been set up. All Mutual Funds are allowed to apply for firm allotment in public issues.
• Fresh guidelines for advertising by Mutual Funds and the earlier requirement of pre-vetting of advertisements removed.
• Mutual Funds allowed to underwrite public issues in order to improve the MFs scope of investments. Guidelines for investment in money market instruments also relaxed.
• SEBI introduced regulations governing substantial acquisition of shares and takeovers. Conditions laid down for disclosure and making mandatory public offers to shareholders. This will protect the rights of minority shareholders and provide an exit route to them at a fair and transparent price.
• The procedure for lodging of securities for transfer eased considerably for institutions, with the introduction of `jumbo' transfer deeds and consolidated stamp duty payment.
• Stock exchanges allowed to introduce carry forward system only with the prior permission of SEBI and subject effective infrastructure and surveillance/monitoring system.
• The financiers funding carry forward transactions will not be permitted to square up their positions till repayment of loans.
• A cap of Rs 100 million announced for members financing carry forward transactions.
• The carry forward position shall be disclosed to the market, scrip-wise and broker-wise by the stock exchanges at the beginning of the carry forward session.
• Capital adequacy norms of 3% for individual members and 6% for corporate members, in their outstanding positions, announced.
• The Depositories Ordinance promulgated in Sept 1995, to provide a legal framework for the establishment of depositories to record ownership details in book entry form.
• A division has been set up within SEBI to monitor unusual price movements , in coordination with stock exchanges (which are to set up dedicated surveillance departments).