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Introduction:
The Indian stock market lies in a continuous loop and is a linked financial structure in which different forms of securities can be sold and purchased and funds can be raised by the companies. However, such complex operations are supported with the help of regulatory authorities that strive to maintain the principles of justice and transparency in the process. This paper shall attempt to discuss the usefulness of these regulatory bodies to the Indian stock market in as much as they must protect the principles of trust and transparency.
1. Securities and Exchange Board of India:
> Establishment and Objectives of SEBI:
The Securities and Exchange Board of India is the major and premier regulatory body in the Indian stock market. It was established in the year 1992 as an autonomous, statutory body. The major objective behind the formation of SEBI is to protect the interest of the investors and for the promotion of the development of the securities market in India.
> Major responsibilities of SEBI:
It formulates and enforces regulations concerning the securities market to ensure that it becomes a place for fair and transparent trading.
Investor Protection: The board implements measures for safeguarding the interest of the investors and preventing fraudulent activities.
Market Development: SEBI works for market development. It introduces new investment products and also introduces new financial technologies in the market.
Intermediary Regulation: It regulates different types of market intermediaries, such as stockbrokers, mutual funds, and rating agencies.
Enforcement of Regulations: SEBI enforces action against violations of securities laws and regulations, thus making people responsible in the market.
2. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE): National Stock Exchange (NSE) and Bombay Stock Exchange (BSE):
> Exchange Regulations:
This note is to present NSE and BSE which are the two stock exchanges of India. They are part of the essential foundations of the performance of the stock market because, for securities to be exchanged, they need to be tendered on platforms offered by the brokers. These are not regulatory bodies in the proper sense, but they do have regulations that traders and companies are expected to adhere to while trading in the market.
> Listing and Delisting Criteria:
These exchanges follow a strict criterion for listing and delisting of firms. It ensures that the firms need to comply with certain financial and governance requirements for it to be traded publicly.
> Market Surveillance:
Monitoring systems are adopted by both NSE and BSE to detect irregularities in trading and to keep the integrity of the market intact.
3. Reserve Bank of India (RBI):
> Monetary Policy Regulation :
The Reserve Bank of India is the country's central bank. Though essentially a monetary policy regulator of the banks, it has a somewhat indirect role in the stock market. Indeed, some of its monetary policies, notably changes in interest rates by the RBI, can significantly move the stock market.
> Regulation of Foreign Investments:
RBI controls the FII in the stock market. It specifies the maximum limit of FDI in different segments and controls the inflow of capital.
4. Ministry of Finance:
> Policy and Regulation:
Over all policy and regulation of the financial market in India lies with the Ministry of Finance in India. They encompass the general rules and policies about fiscal affairs and affect the stock market in making its decisions over certain standards.
> Budgetary Measures:
Many times, provisions and changes in the Union Budget presented by the Finance Minister have an impact on stock markets, particularly with respect to tax policies and incentives to investors.
5. Institute of Chartered Accountants of India (ICAI):
> Accounting and Auditing Standards:
ICAI lays down accounting and auditing standards for India. Such standards are very important in assuring transparency and reliability in the financial reports of companies listed on the Stock Exchanges.
6. Competition Commission of India (CCI):
> Prevention of Monopolistic Practice:
But being primarily responsible for the competition that exists in various fields, it also notes that there aren’t any anti-competitive factors that exist in the stock markets. It eliminates any acts that are monopolistic in nature as well as fosters healthy competition among the players in the market.
Some of the regulatory bodies existing in India to operate in the stock market have very important functions that include maintaining the integrity of the market, transparency, and investor confidence. These bodies all operate harmoniously to build an effective and good environment for regulation that would make sure the market is fair and beneficial. The investors could invest with ease in the stock market since these regulatory bodies were performing their duty with all their might to try and safeguard the investors’ interest and, at the same time, put the credibility of the market above board. They are, in fact, an extension of somewhat important in the improvement of the Indian stock market and, indirectly, to the nation’s development as a whole.
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