SEBI
is regulator to control Indian capital market. Since its
establishment in 1992, it is doing hard work for protecting the
interests of Indian investors. The role of security exchange board of
India (SEBI) in regulating Indian capital market is very important
because government of India can only open or take decision to open
new stock exchange in India after getting advice from SEBI.
Power
to make rules for controlling stock exchange :
SEBI has power to make new rules for controlling stock exchange in India. For example, SEBI fixed the time of trading 9 AM and 5 PM in stock market.
SEBI has power to make new rules for controlling stock exchange in India. For example, SEBI fixed the time of trading 9 AM and 5 PM in stock market.
To
provide license to dealers and brokers :
SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any financial product is of capital nature, then SEBI can also control to that product and its dealers. One of main example is ULIPs case. SEBI said, " It is just like mutual funds and all banks and financial and insurance companies who want to issue it, must take permission from SEBI.
SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any financial product is of capital nature, then SEBI can also control to that product and its dealers. One of main example is ULIPs case. SEBI said, " It is just like mutual funds and all banks and financial and insurance companies who want to issue it, must take permission from SEBI.
To
Stop fraud in Capital Market :
SEBI has many powers for stopping fraud in capital market.
SEBI has many powers for stopping fraud in capital market.
To
Control the Merge, Acquisition and Takeover the companies :
Many big companies in India want to create monopoly in capital market. So, these companies buy all other companies or deal of merging. SEBI sees whether this merge or acquisition is for development of business or to harm capital market.
Many big companies in India want to create monopoly in capital market. So, these companies buy all other companies or deal of merging. SEBI sees whether this merge or acquisition is for development of business or to harm capital market.
To
audit the performance of stock market :
SEBI uses his powers to audit the performance of different Indian stock exchange for bringing transparency in the working of stock exchanges.
SEBI uses his powers to audit the performance of different Indian stock exchange for bringing transparency in the working of stock exchanges.
To
make new rules on carry - forward transactions :
Share trading transactions carry forward can not exceed 25% of broker's total transactions.
Share trading transactions carry forward can not exceed 25% of broker's total transactions.
To
create relationship with ICAI :
ICAI is the authority for making new auditors of companies. SEBI creates good relationship with ICAI for bringing more transparency in the auditing work of company accounts because audited financial statements are mirror to see the real face of company and after this investors can decide to invest or not to invest. Moreover, investors of India can easily trust on audited financial reports. After Satyam Scam, SEBI is investigating with ICAI, whether CAs are doing their duty by ethical way or not.
ICAI is the authority for making new auditors of companies. SEBI creates good relationship with ICAI for bringing more transparency in the auditing work of company accounts because audited financial statements are mirror to see the real face of company and after this investors can decide to invest or not to invest. Moreover, investors of India can easily trust on audited financial reports. After Satyam Scam, SEBI is investigating with ICAI, whether CAs are doing their duty by ethical way or not.
Introduction
of derivative contracts on Volatility Index :
For reducing the risk of investors, SEBI has now been decided to permit Stock Exchanges to introduce derivative contracts on Volatility Index.
For reducing the risk of investors, SEBI has now been decided to permit Stock Exchanges to introduce derivative contracts on Volatility Index.
To
Require report of Portfolio Management Activities :
SEBI has also power to require report of portfolio management to check the capital market performance. Recently, SEBI sent the letter to all Registered Portfolio Managers of India for demanding report.
SEBI has also power to require report of portfolio management to check the capital market performance. Recently, SEBI sent the letter to all Registered Portfolio Managers of India for demanding report.
To
educate the investors :
Time to time, SEBI arranges scheduled workshops to educate the investors.
Time to time, SEBI arranges scheduled workshops to educate the investors.
