MCQs On THE SECURITIES AND EXCHANGE BOARD OF INDIA REGULATIONS Part No - 2

Q.1:- Quantum of issue: The aggregate of the proposed qualified institutional placement and all previous qualifies institutional placements made by the issuer in the same financial year shall not exceed 5 times the……………of the issuer as per the audited balance sheet of the previous financial year.

• Net asset
• Networth
• Working capital
• None of the above

Q.2:- As per SEBI’s recent amendment promoters who are owning 25% or more shares or voting rights in a company can increase their shareholding up to ___% in a year?

• 20%
• 5%
• 10%
• 25%

Q.3:- Variation of terms of the schemes:

• Shall not very the term of the scheme in any case
• Shall entitled to very term even after exercise of option by the employees
• Shall entitled to very the term of the scheme to meet any regulatory requirements
• Shall entitled to very term any time

Q.4:- Indian companies follow which of the regulation for accounting treatment of ESOPs:

• Accounting, treatment as per the Companies Act. 2013
• Accounting treatment as prescribed by SEBI
• Guidance note 18 on accounting for employee share based payment issued by 1CA1
• All of the above

Q.5:- As per the chapter IV of the SEBI (Delisting of Equity Shares) Regulations, 2009, an escrow, account shall consist of:

• Cash deposited with a scheduled commercial bank.
• A bank guarantee in favor of the merchant banker.
• All of the above
• A combination of Both (a) and (b)

Q.6:- As per SEBI (Delisting regulations, an offer for voluntary Delisting of shares is successful only if:

• The post offer promoter shareholding reaches 100% of the total issued shares.
• The post offer promoter shareholding reaches 80% of the total issued shares.
• The post offer promoter shareholding reaches 90% of the total issued shares.
• The post offer promoter shareholding reaches 75% of the total issued shares.

Q.7:- SEBI (ICDR) Regulations, 2009 regarding pricing of first issue of Equity shares of new companies?

• An issuer may determine the price of specified securities in consultation with the lead merchant banker or through the book building process.
• An issuer may determine: the coupon rate and conversion price of convertible debt instruments in consultation with the lead merchant banker or through the book building process.
• The issuer shall undertake the book building process in a manner specified in Schedule XI.
• All of the above.

Q.8:- Which of the following details are required to be disclosing in the explanatory statement to the notice for the general meeting proposed for passing special resolution?

• The objects of the preferential issue.
• The proposal of the promoters, directors or key management personnel of the issuer to subscribe to the offer.
• The shareholding pattern of the issuer before and after the preferential issue.
• All of the above

Q.9:- Cross-listing is the listing of a company's common shares on a different exchange than its primary and original stock exchange

• May be may not be
• False
• True
• None of the above

Q.10:- One of the Pre-Requisites for a Company to be eligible to opt for IPO with respect to SEBI is that the company has a minimum average…….…of rupees fifteen crore, calculated on a restated and consolidated basis, during the three most profitable years out of the immediately preceding five years

• Post-tax operating profit
• Pre-tax operating profit
• Operating income
• None of the above

Q.11:- The provisions of Chapter VII shall not apply Where the Preferential issue of equity shares is made:

• Pursuant to conversion of loan or option attached to convertible debt instruments in terms section 62 of the Companies Act, 2013.
• Pursuant to a scheme approved by a Tribunal under sections 230 to 234 of the Companies Act, 2013.
• In terms of the resolution plan approved by the Tribunal under the insolvency and Bankruptcy Code, 2016.
• All of the above

Q.12:- An issuer making a public issue or rights issue of convertible debt instruments shall comply with the which of following additional conditions:

• It has obtained credit rating from one or more credit rating agencies.
• It has appointed one or more debenture trustees.
• It has created debenture redemption reserve.
• All of the above

Q.13:- Every director, MP and Promoter should make disclosure to company of trading in securities (either in single or in multiple transaction) , if value of such transaction in a calendar quarter exceeds

• Rs 1 Lakhs
• Rs 5 lakhs
• Rs 2 lakhs
• Rs 10 lakhs

Q.14:- As per SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, no acquirer, who together with persons acting in concert with him, has acquired and holds in accordance with these regulations shares or voting rights in a target company entitling them to exercise twenty-five per cent or more of the voting rights in the target company but less than the maximum permissible non-public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise more than _____of the voting rights, unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations:

• Twenty-five per cent
• Five per cent
• Twenty per cent
• Ten per cent

Q.15:- The SEBI (Delisting of Equity Shares) Regulations, 2009 Circumstances where delisting is not permissible

• Unless a period of three years has elapsed since the listing of that class of equity shares; or
• Instruments which are convertible into the same class of equity shares that are sought to be delisted are outstanding.
• Delisting of convertible securities.
• All of the above

Q.16:- Minimum promoters' contribution shall be locked-in for a period of …….from the date of commencement of commercial production or date of allotment in the public issue, whichever is later:

• Three Years
• Five Years
• Two Years
• One Year

Q.17:- The trading plan once approved shall be:

• Revocable and insider can deviate with the approval of compliance officer
• Replaced with new plan
• Revocable
• Irrevocable and the insider shall mandatorily have to implement the plan, without being entitled to either deviatefrom it

Q.18:- The offer shall remain open for a period of ……… during which the public shareholders may tender their bids:

• Two working day
• Seven working days
• Five working days
• Three working days

Q.19:- Which are not procedure followed under voluntary delisting as per SEBI (Delisting of Equity Shares) Regulations, 2009

• Application to be disposed by SE within 60 days from receipt.
• Disclosure of delisting in the 1st Annual Report of the Company prepared subsequent to delisting.
• Board Resolution and Public notice in newspaper.
• Application to stock exchange for delisting.

Q.20:- In case of Employee stock option schemes, what shall be the minimum vesting period:

• One year
• Two years
• Three months
• Six months

Q.21:- As per SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the open offer for acquiring shares to be made by the acquirer and persons acting in concert with him under regulation 3 and regulation 4 shall be for at least ______ of total shares of the target company, as of tenth working day from the closure of the tendering period:

• Ten per cent
• Twenty six per cent
• Twenty five per cent
• Twenty per cent

Q.22:- The acquirer or promoter shall dispatch the letter of offer to the public shareholders of equity shares, not less than……. From the date of the public announcement:

• Seven working days
• Five working days
• Two working day
• Three working days

Q.23:- Which of the following is not covered as connected person:

• A banker of the company
• A concern, firm, trust, Hindu undivided family, company or association of persons wherein a director company or his immediate relative or banker of the company, has more than ten percent of the interest.
• An official or an employee of a self-regulatory organization recognized or authorized by the Board.
• None of the above

Q.24:- As per SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the escrow account may be in the form of:

• Cash deposited with any scheduled commercial bank.
• C. Bank guarantee issued in favour of the manager to the open offer by any scheduled commercial bank.
• . Deposit of frequently traded and freely transferable equity shares or other freely transferable securities with appropriate margin.
• All of these

Q.25:- Google India Limited, a listed company filed a petition to the tribunal for the scheme of Compromise and Arrangement under Section 230. The Scheme included a takeover offer. The Tribunal approved the scheme of C&A but there was no compliance followed by the Listed Company as per the SEBI (SAST) Regulations, 2011. Comment on the following case

• Compromise or Arrangement may include takeover offer but for listed companies, takeover offer shall be according to SEBI (SAST) Regulations, 2011 and compliance needs to be done according to
• Depends on Annual General Meeting
• Depends on Directors
• The Tribunal has sanctioned the scheme and hence binding on company, members, creditors or class thereof and no further compliance is necessary.

Q.26:- The offer price may be paid:

• . All of the above
• By issue, exchange or transfer of listed shares in the equity share capital of the acquirer or of any person acting in concert.
• . In cash
• By issue, exchange or transfer of listed secured debt instruments issued by the acquirer or any personacting in concert with a rating not inferior to investment grade as rated by a credit rating agency registered with the Board.

Q.27:- SEBI (Delisting of Equity Shares) Regulations, 2009 applies to:

• Delisting made pursuant to a scheme sanctioned by the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985.
• Securities listed without making a public issue, on the institutional trading platform of a recognized stock exchange.
• Delisting made pursuant to a scheme sanctioned by the National Company Law Tribunal.
• Equity shares of a company from all or any of the recognized stock exchanges where such shares are listed.

Q.28:- As per SEBI (Delisting of Equity Shares) Regulations, 2009, when delisting is not permissible?

• Pursuant to a buyback of equity shares by the company
• Unless a period of three years has elapsed since the listing of that class of equity shares on any recognized stock exchange.
• All of the above
• Pursuant to a preferential allotment made by the company

Q.29:- . As per SEBI (Delisting of Equity Shares) Regulations, 2009, when a company may delist its equity shares from all the recognized stock exchanges where they are listed or from the only recognized stock exchange where they are listed:

• None of the above
• All public shareholders holding equity shares of the class which are sought to be delisted are given an exit opportunity in accordance with Chapter IV.
• All public shareholders holding preference shares of the class which are sought to be delisted are given an exit opportunity in accordance with Chapter IV.
• Both (a) and (b)

Q.30:- When an offer made under chapter III shall be deemed to be successful:

• None of the above
• At least twenty five per cent of the public shareholders holding shares in the demat mode as on date of the board meeting referred to in sub-regulation (IB) of regulation 8 had participated in the Book Building Process.
• If the post offer promoter shareholding taken together with the shares accepted through eligible bids at the final price determined as per Schedule II, reaches ninety per cent of the total issued shares of that class.
• . Both (b) and(c)

Q.31:- In the event of offer fails:

• All of the above
• No final application shall be made to the exchange for delisting of the equity shares.
• The equity shares deposited or pledged by a shareholder shall be returned or released to him within ten working days from the end of the bidding period.
• The escrow account opened shall be closed

Q.32:- As per SEBI (Delisting of Equity Shares) Regulations, 2009Delisting permitted in the following cases:

• Pursuant to buy back of shares
• If three years not elapsed since listing of that class of shares.
• Convertible securities can be delisted.
• Pursuant to Preferential allotment made by the company

Q.33:- When a recognized stock exchange may, by order, delist any equity shares of a company compulsorily?

• On any ground prescribed by the Companies Act 2013
• On any ground prescribed in the rules made under section 21A of the Securities Contracts (Regulation) Act, 1956
• None of the above
• Both (a) and (b)

Q.34:- The decision regarding compulsory delisting shall he taken by a panel to be constituted by the recognized stock exchange consisting of:

• Two directors of the recognized stock exchange one of whom shall be a public representative
• One representative of the Ministry of Corporate Affairs or Registrar of Companies
• One representative of the investors
• All of the above

Q.35:- Stock appreciation right (SAR) means:

• A right given to employee to purchase share under public issue at predefined price
• A right given to employee to purchase share directly from company at predefined price.
• The difference between the market price of the share of a company on the date of exercise or vesting of SAR, as the case may be, and the SAR price.
• A right given to a SAR grantee entitling him to receive appreciation for a specified number of shares of the company where the settlement of such appreciation may be made by way of cash payment or shares of the company.

Q.36:- As per SEBI (Delisting of Equity Shares) Regulations, 2009 which are not the following right of remaining shareholders

• The promoter shall pay the same final price at which the earlier acceptance of shares was made.
• None of the above,
• Balance released after full payment.
• Remaining public shareholder holding such equity shares may tender his shares to the promoter upto a period of at least one year from the date of delisting

Q.37:- Appreciation means:

• The difference between the market price of the share of a company on the date of exercise of stock appreciation right (SAR) or vesting 'of SAR. as the case may be, and the SAR price.
• None of the above
• SAR Price
• The market price of the share of a company on the date of exercise of stock appreciation right (SAR) or vesting of SAR

Q.38:- Which of following is included in Employee?

• All of the above
• A director of the company who is not an independent director.
• A permanent employee of the company who has been working in India or outside India.
• A permanent employee or director of a subsidiary, in India or outside India, or of a holding company of the company.

Q.39:- Implementation of SEBI (Share Based Employee Benefits) Regulation, 2014 schemes through trust, Secondary acquisition in a financial year by the trust shall ……………………of the paid up equity capital as at the end of the previous financial year

• not exceed one percent
• not exceed three percent
• not exceed two percent
• exceed five percent

Q.40:- An employee shall be eligible to participate in the schemes of the company as determined by the……:

• BOD
• Compliance officer
• Share holders
• Compensation committee

Q.41:- Which of following is not included in Employee?

• A director who either himself or through his relative or through anybody corporate, directly or indirectly, holds more than ten per cent of the outstanding equity shares of the company.
• All of the above
• An employee who is a promoter or a person belonging to the promoter group.
• An independent director.

Q.42:- Implementation of SEBI (Share Based Employee Benefits) Regulation, 2014 schemes through trust, The trust shall be permitted to undertake off-market transfer of shares only in the case

• When participating in open offer under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, or when participating in buy-back, delisting or any other exit offered by the company generally to its shareholders.
• None of the above
• Transfer to the employees pursuant to scheme(s);
• (a)and(c)

Q.43:- stock purchase scheme or ESPS means:Employee

• A scheme under which a company grants SAR to employees
• A scheme under which a company grants employee stock option directly or through a trust;
• A scheme under which a company offers shares to employees, as part of public issue or otherwise, or through a trust
• A scheme under which a company grants shares to existing shareholders at predetermined price;

Q.44:- Whose approval is required for any scheme?

• BOD by Special Resolution
• Shareholder by General Resolution
• Shareholders by Special Resolution
• BOD by Special Resolution

Q.45:- means:Stock appreciation right scheme or SAR sc0heme

• A scheme under which a company grants SAR to employees
• A scheme under which a company offers shares to employees, as part of public issue or otherwise, or through a trust
• A scheme under which a company grants employee stock option directly or through a trust.
• A scheme under which a company grants shares to existing shareholders at predetermined price

Q.46:- A minimum vesting period of…… has been prescriber for Stock Appreciation Rights Scheme (SARS).

• one year
• five year
• Six Month
• three year

Q.47:- The provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 shall not apply to which of the following

• Shares issued to employees in compliance with the provisions pertaining to preferential allotment as specified in the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
• General employee benefits schemes
• None of the above
• Both (a) and (b)

Q.48:- all be the minimum lock in period:In case of Employee stock purchase schemes, what sh

• Five Years
• Three Years
• Ten Years
• One Year

Q.49:- As per SEBI (Share Based Employee Benefits) Regulations, 2014, employee means

• A director of the company, whether a whole time director or not but excluding an independent director
• All of these
• A director of the company, whether a whole time director or not but excluding an independent director
• An employee as defined in clause (a) or (b) of a subsidiary, in India or outside India, or of a holding company of the company.

Q.50:- The into force on Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 came:

• 28th December, 2014
• 28th September, 2014
• 28th October, 2014
• 28th November 2014