CMSL Marathon | CS Executive December 2025 / June 2026 | CS Shivani Miglani

CMSL Marathon | CS Executive December 2025 / June 2026 | CS Shivani Miglani

Summary

This video is a marathon session by CS Shivani Miglani covering key concepts, amendments, PYQs, and exam-focused topics for the CMSL (Corporate and Management Skills and Law) exam for CS Executive students appearing in December 2025 and June 2026. The session focuses on providing a scoring edge through comprehensive revision. The instructor covered Mutual Funds, Trading Platforms, and Investor Protection (comprising Stock Exchange, SCRR Act and Regulation).

Key Takeaways

* **Focus:** The video provides a comprehensive revision of CMSL topics, amendments, and past year questions, tailored for the December 2025 and June 2026 exams.

* **Topics Covered**:

* Mutual Funds

* Securities Contract Regulation Act (SCRA)

* Various types of financial markets and securities and the role of brokers and market operators

* **Approach:** The session emphasizes understanding, memorization, and exam-oriented knowledge to help students score well.

Detailed Notes

#### Part 1: Mutual Funds

* **Relevance:** 10 marks in the paper

* **Regulations:** SEBI Mutual Fund Regulations 1996

* **What is a Mutual Fund?**

* Investors give money to the mutual fund.

* They receive units.

* Those who hold units are called unit holders.

* **Components of Mutual Fund**

* Unit Holders

* Trust

* Trustees

* Sponsor

* AMC (Asset Management Company)

* Custodian

* Registrar and Transfer Agent

* **Sponsor**

* Is the promoter of the mutual fund.

* The sponsor should contribute 40% of the net worth of the AMC.

* **Schemes/Types of Mutual Funds**

* Open-ended Scheme

* It has no fixed corpus.

* It is not listed on the stock exchange.

* There is free entry and exit.

* High liquidity

* NAV (Net Asset Value)

* Closed-ended Scheme

* It has a specific time period

* Has a fixed corpus.

* The listing on the stock exchange is mandatory.

* Liquidity may be limited.

* Redemption takes place at maturity.

* NAVs (Net Asset Value)

* **Types of schemes**

* Income Oriented Schemes - the investor wants a fixed income

* Investments - Bonds, Debentures, Government Securities and Money Market Instruments.

* Risk - Low

* Growth Oriented Schemes - the investor wants a high capital

* Investments - Equity share of a strong company

* Risk - Medium

* Hybrid or Mixed Scheme

* Investments - Mix of growth and income

* Risk - Medium

* High Growth Schemes

* Investments - in the equity shares of strong and growing companies

* Risk - High

* Capital Protection Oriented Schemes - Capital protection

* Portfolio is designed in a way that reduces the risk.

* Tax saving schemes - Equity Linked Savings Schemes, Pension Schemes

* Tax Benefits

* Risk - Medium

* Real Estate Funds - investments in property market

* Risk - Medium to High

* Funds of Funds

* No direct investment in India

* Offshore Funds-

* Investments made outside India

* Risk - Medium to High

* Leveraged Funds

* Borrowing of funds is used for greater market participation.

* Risk- Very High

* Special Schemes

* Industry specific

* Index funds

* Sector focused

* New Direction Funds

* Investing in Companies doing Scientific & Tech Research

* **Mutual Funds terminology**

* *Offer Document*

* *SID (Scheme Information Document) and SAI (Statement of Additional Information) - two parts*

* *SID* - contains the important points regarding the scheme, must be updated every year, risk

* *SAI* - shows a legal perspective.

* *NFO (New Fund Offering) - When AMC raises money for a new mutual fund*

* *Fact Sheet*

* Provides the performance of Mutual Funds

* Monthly-basis

* *KIM (Key Information Memorandum)*

* It is a summary of the offering documents.

* It must be attached to every application.

* Updated every year

* **NAV (Net Asset Value)**

* The formula for finding NAV of the Scheme: Market value of the securities / Total Units issued

* Formula: Net Asset value per unit = NAV of the Scheme / total units issued

* The Net Asset Value of the Scheme is calculated as: Market value of the investment + Receivable + Other accrued income + Other assets – Accrued expense – Other Payables – other liabilities.

* *Holding Period Return* - It is the total return.

* The formula for holding period return - (Income + (Ending Value-Initial value)) / Initial Value x 100

* *Redemption Price* = NAV *(1 +Back-end load)*

* *Price Offer* = NAV (1 - Front-end load)

* **Components of a Mutual Fund Structure**

* Sponsor – The promoter of a mutual fund and contribute at least 40% of the Net Worth of AMC.

* Trust

* Trustees

* AMC (Asset Management Company)

* Custodian

* Registrar and Transfer Agent

* **Regulations**

* *SEBI Mutual Fund Regulations 1996*

* **Component of a Mutual Fund Structure**

* The Sponsors

* Should have a good track record with no past record of financial offences.

* Must contribute 40% of AMC's net worth.

* Must contribute at least 40% of the net worth of AMC

* The Trust

* Operates in the form of a trust.

* The Trustee

* The trustee must:

* Must be a person of integrity and expertise with no history of moral turpitude

* Must have filed form C with SEBI

* Should be a person of integrity and expertise, no past record of financial offences.

* Two or more trustees.

* At least 2/3rds should be independent

* AMC (Asset Management Company)

* The AMC must have:

* A good track record.

* Integrity and fairness in transactions

* Should have the best employees.

* The Directors should have relevant experience.

* That the key officials of the company hold experience of at least 3 years each.

* Net worth should be Rs. 500 crores.

* The AMC is responsible for the following:

* The Management of the assets of the scheme.

* Providing the fact sheet

* To pay fees, expenses from the scheme, etc.

* Custodian

* Acts as a custodian of securities.

* Registrar and Transfer Agent

#### Securities Market - Overview

* **Role of Stock Exchange**

* Investors can invest in any security and can exit as they wish.

* It facilitates economic growth.

* It acts as a place to bring the savings.

* Provides the public with information about the company.

* Encourages entrepreneurs and provides healthy speculation.

* Allows an opportunity to liquidate the stock immediately.

* The Market Price indicates stability

* Transparency.

* **Types of Securities**

* Listed - securities of those companies who have signed listing agreement with the stock exchange.

* Unlisted - securities.

* **Market and Trading**

* *Primary Market*- Where fresh securities are issued.

* *Secondary Market* - Where existing securities are traded.

#### Trading Platforms in India

* **Types of Trading Platform**

* Main Board

* *Trading Hours of Main Board : 9:15 to 3:30 pm.*

* IGP (Innovators Growth Platform)

* *In this platform there is no minimum limit for the offers. The IPO size is not less than ₹10 lacs.*

* SME (Small and Medium Enterprises)

* Two Exchange: BSC, NSE EMERGE.

* *The basic requirements of a SME platform:*

* * Incorporation under the Companies Act 2013

* Paid up capital not more than 25 crore.

* Net worth must be positive

* Net Tangible assets are at least 1.5 crore.

* *Track Record*

* The SME should have a track record of 3 years of profit.

#### Anti Insider Trading regulations

* *What is Insider Trading?*

* The definition is a person who is in the management

* They use unpublished price sensitive information to make profit.

* **Consequences:**

* You can get a penalty of ₹25 crores or three times of the profit, whatever is higher.

#### General Principles of Good Practices

* **The following principles are observed while dealing in the market**

* *Honesty*

* *Fairness*

* *Diligence*

* *Due skill care*

* *Exercise Due Diligence*

* *Integrity*

* **Obligations of a Listed Company/Issuer Company**

* The Obligations of a Listed Company / Issuer Company, the following are:

* Disclose all material events or information to the stock exchanges as required.

* To conduct its business in a responsible manner.

* Shareholders must be kept informed about every decision.

* Must furnish all of their information on time

* **Public Offering**

* You can offer it to the public.

* Make public

* File a DRHP.

* **The Process**

* Make Application to Stock Exchange.

* The Listing Requirements are that:

* The company must meet all the requirement.

* Ensure transparency.

* Inform the investors about its financial information.

* The company can also make a decision to not undertake the offering.

#### Types of Markets

* *Commodity Market* - Is the physical good.

* *Derivatives Market* - Any instrument which derives from the underlying assets.

* *Future*

* *Options*

* **Future and Options**

* *Buying and selling

* *To remove those.

#### Section 68 (Buyback) - Company's Act, 2013

* **Source for buyback**

* *Free Reserves*

* *Security Premium Account*

* *Proceeds of Fresh Issue*

* **Limits of buyback**

* 10% - Board Resolution

* 25% - Special Resolution

* **Limits of buyback from Equity shares**

* Max = 25% of paid-up capital + free reserves

* Where - Total value of buyback offer must not exceed 25% of the total paid-up capital and free reserves.

* **Provisions**

* Article of Association.

* Non-declaration of default

* Debt Equity Ratio - 2:1

* Shares must be fully paid

* For public companies, the process of issuing the buyback needs to be as per the SEBI regulation.

* **For a voluntary delisting**

* Not more than one stock exchange.

#### Buyback of Securities Regulations

* What are the grounds on which buyback can be done.

* * Free Reserves

* * Share premium account

* * Fresh Issue

* Limit in the case of equity shares - 25% of the paid-up capital + free reserves

* *Limits in case of preference Shares*

* *The requirements are the same*

* Approval required.

* Up to 10% - Board of Directors

* More than 10% - Special Resolution

* The provisions relating to buyback.

* Article of association

* The debt equity ratio not more than 2:1

* Must be fully paid up

* *Exemptions from SEBI Buyback regulations*

* * Company with paid-up capital - ₹10 crores

* If the market value of shares remains below the fair value of the price

* **Requirements for buyback, as per Buyback Regulations**

* Must file an offer document with the SEBI

* The company is required to deposit a specific amount in escrow accounts

* Within 6 months from completion of the buyback,

* There is no minimum time for a company to start the buyback process

* **Tender Offer**

* Boad Resolution

* Separate trading window

* A Separate public announcement

* Record date has to be announced.

* Public shareholders

* Letter of Offer

* Offer is valid for at least 5 days

* **Re-purchase Price Should Not be**

* Lower than 95% of NAV

* **Duties of the Manager of Buyback**

* Review the information available, the financial condition, and the operation of the entity for compliance.

* Review the advertisement to ensure compliance.

* Ensuring that a legal opinion is taken with regard to the tax implication.

* **Compulsory Delisting**

* Power to take steps to trace the promoters.

* Can take the steps regarding the compliance.

* Cannot do the wrong thing.

* The person must be punished.

#### Buyback through Stock Exchange

* Maximum limit to 10% with Board Resolution.

* An approval from the authorities

* A separate public announcement.

* A separate trading window.

#### The Buyback Process

* 1. Board passes a resolution.

* 2. Public Announcement (Newspaper ads + website)

* 3. Record Date

* 4. Letter of Offer

* 5. Issue Open for 5 days.

* 6. Verification

* 7. Payment to those who has offered.

#### Rules Regarding Delisting

* Rules

* *Compulsory or Voluntary*

#### Non Applicability

* For listing the IPO.

#### Rights of Shareholders

* Fair Value

* Exit price (based on 52 weeks' high)