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School of Law and Governance

Central University of South Bihar

LAW 407 INVESTMENT LAW L T P C
Version: 1.1 4 0 0 4
Pre-requisites//Exposure Contract, Constitution
co-requisites SEBI & Company Law
Semester VII
B.A. LL.B.(H) & B.Sc.LL.B.(H)

Course Description:

Investment Law is gaining importance day by day with the increase of trade and industry in
our country. The course contains various aspects of investment related laws and regulations
in our country. In fact, investment decision is very important aspect of financial market. The
course will not only give ideas about shares, debentures, venture capital, Mutual Fund
Investment, Depository system, Investors protection, NBFC, & FEMA, but also Investors
protection and Securities and Exchange Board of India. This course, however, will give detail
knowledge about investment related laws, rules and regulations to the students. It will help in
understanding the students the position, role, importance, power; and functions of SEBI also.

Course Objectives

 To analyze and impart the basic principles of investment law and its historical
development in India to the students;
 To impart to the students an understanding of investment in the form of share
and debentures;
 To help in understanding the students the position, role, importance, power;
and functions of SEBI;
 To acquaint students regarding Investors protections and their rights;
 To provide the students the venture capital, Mutual fund, depository system
and FEMA.

Pedagogy
The pedagogy of the course will be as below:
 Class Room Discussion
 Teaching Assignment
 Presentations
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 Case Studies
 Projects
 Seminar
 Panel Discussion

Evaluation Scheme:

 Continuous Assessment 30 Points

 Attendance 5 Points
 Mid-Term 15Points
 End Term 50 Points

Text Books:
1. Dr. S.R. Myneni, Law of Investment and Securities, Asia Law House.
2. M.Y. Khan, Indian Financial System, The Mc Graw-Hill company.
3. Avtar Singh, Company Law, Eastern Book Company,
4. A.K. Majumdar and G.K. Kapoor, Company Law and Practice, Taxman.
5. E. Gordon & K. Natarajan, Financial Markets and Services, Himalaya Publishing House.
6. Taxman’s SEBI Manual, Taxman.
7. Guruswami, Financial Services, Mc Graw Hill Education.
8. Taxman’s Foreign Exchange Management Manuals, Taxman.

Reference Books:
1. Misra-Puri, Indian Economy, Himalaya Publishing House.
2. Sangeet Kedia, Capital Market and securities Laws, Pooja Law Publishing Co.
3. G.Y. Shitole, Gomathy Thyagarajan, Performance evaluation of mutual funds in India,
Adhyan Publishers & Distributors, Financial Markets and Services,
4. Barry G. Dolgin, A handbook of mutual fund investing, A new perspective, A new paradigm.,
Createspace,
5. Gomez, Clifford, Financial Markets, Institutions and Financial Services, PHI Learning Pvt. Ltd.
6. E-Resource Materials e.g. relevant research articles etc. [will be supplied to the students
during class].

Course Contents:

Module I: Preliminary [03 Lectures]

 Historical Background of Investment and securities laws;
 Meaning of investment and market ;
 Nature and risk associated with investment;
 Evolution of Investment and bargaining norms.
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Module-II: Shares & Debentures [08 Lectures]

 Definition and nature;

 Shares and Shareholders ;
 Stock and Shares ;
 Certificate of shares ;
 Call on shares ;
 Share capital;
 Issue and allotment of shares ;
 Transfer and Transmission of shares ;
 Debentures, Charges and Deposits;
 Inter-Corporate loans and investments.

Module III: Securities and Exchange Board of India (SEBI) [08 Lectures]

 Constitution
 Powers and Functions of SEBI
 Securities Appellate Tribunal
 SEBI (Disclosure & Investor Protection) Guidelines.

Module IV: Venture Capital [06 Lectures]

 Concept of venture capital;

 Features of venture capital
 Scope of venture capital;
 Importance of venture capital;
 Venture capital guidelines and legal framework in India;
 Suggestions for the growth of Venture Capital Funds;
 Nitin Desai Committee’s Recommendations.

Module V: Mutual Funds Investment [08 Lectures]

 Introduction and scope of Mutual Fund ;

 Definition and Origin of Mutual Fund[MF];
 Types and classification of MF;
 Importance, Risk and Organization of Fund;
 Evaluation of MF;
 General Guidelines for MF and legal frame work in India;
 Mutual Funds in India- Reasons for slow Growth;
 Future of MF Industry in India.
 Unit Trust of India (UTI).
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Module VI: Depository System [08 Lectures]

 Depository;
 Bank and Depository- Comparison;
 Depository Participant(DP);
 Depository(Demat) Services;
 Demat (Beneficiary) Account;
 Dematerialization and Re materialization;
 Role of CDSL;
 Role of NSDL;
 Legal framework for Depositories in India [SEBI Guidelines].

Module VII: Investors Protection [06 Lectures]

 Need for investors protection;

 Factors affecting investors interests;
 Rights of investors;
 Facilities by BSE;
 Investor’s protection measures.

Module VIII: Investment in Non-Banking Financial Institutions (NBFC)

[08 Lectures]

 Definition and features of NBFC;

 Public Financial Institutions;
 Classification of NBFCs;
 Advantages of NBFCs;
 Causes for the growth of NBFCs;
 Regulation of NBFC by Reserve Bank of India[Guidelines and Directions];
 The Chit Funds Act, 1982.
 The Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
 “Know Your Customer” Guidelines for NBFCs.

Module IX: Foreign Exchange Control Regime in India [06 Lectures]

 Concept of foreign exchange regulation;

 Foreign Exchange Management Act (FEMA) 1999.
 FEMA Vs. FERA
 Foreign Institutional Investment;
 Foreign Direct Investment.