SEBI & Capital Markets — Advanced Topics

Market Structure

NSE (National Stock Exchange, 1992) and BSE (Bombay Stock Exchange, 1875) are SEBI-recognised exchanges.

•NSE Nifty 50: Top 50 companies by float-adjusted market cap

•BSE Sensex: 30 companies, oldest index (1979 base)

•GIFT City: International Financial Services Centre (IFSC) — offshore market, different regulatory framework

•NSCCL (NSE Clearing) and ICCL (BSE Clearing): Act as central counterparty — guarantee settlement

•T+1 settlement (since Jan 2023): Equity delivery settled next business day

•DVP (Delivery vs Payment): Securities and funds exchanged simultaneously — eliminates settlement risk

•NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited)

•Hold securities in dematerialised (demat) form

•DPs (Depository Participants) are intermediaries between investor and depository

Type	Underlying	Settlement

|------|-----------|-----------|

Equity Futures	Stocks/Indices	Cash settled (index) or delivery (stocks)
Equity Options	Stocks/Indices	Cash settled (European style for indices)
Currency Futures/Options	USD, EUR, GBP, JPY	Cash settled (RBI regulated)
Interest Rate Derivatives	G-Secs, MIBOR	OTC + exchange traded
Commodity Derivatives	Gold, Silver, Crude, Agri	MCX, NCDEX

•Lot size: Standardized contract size (e.g., Nifty lot = 25 units from 2023 revision)

•Contract expiry: Last Thursday of month (monthly), weekly expiry for indices (every Thursday)

•Open Interest: Total outstanding contracts (not yet settled) — market sentiment indicator

•PCR (Put-Call Ratio): Put OI / Call OI. >1 = bearish sentiment, <1 = bullish

•No single stock can exceed 10% of equity fund corpus

•Single sector (except financial services): 25% cap

•Financial services: 35% cap

•Top 10 holdings typically 40-60% (concentration check in factsheet)

•Direct plans: Lower TER (no distributor commission)

•Regular plans: Higher TER (includes distributor trail commission)

•TER limits: Equity funds max 2.25% (declining slab based on AUM); Debt funds max 2.00%

•SIP (Systematic Investment Plan): Regular fixed investment — rupee cost averaging

•SWP (Systematic Withdrawal Plan): Regular redemption — create income stream

•STP (Systematic Transfer Plan): Transfer between funds — gradually deploy lump sum

Trigger	Requirement

|---------|------------|

Acquire 25%+ stake	Make open offer for additional 26% to public shareholders
Acquire 5%+ in a year (when already hold 25-75%)	Creeping acquisition limit: 5% per year allowed, beyond triggers open offer
Change of control	Open offer required regardless of percentage

Open offer price: Highest of: negotiated price, 60-week average market price, or book value.