Securities & Exchange Board of India (SEBI) formed under the SEBI Act, 1992 with the prime objective of Protecting the interests of investors in securities, Promoting the development and Regulating the securities market and matters connected with it. The act empowered sebi with necessary power to regulate the activities connected with marketing of securities and investment of stock exchange, merchant banking, port folio management, stock brokers and others in India. The Securities and Exchange Board of India is perhaps the most important regulatory body similar to the Securities Exchange Commission in the US, it is the authority that has to always be active, moreover when the markets are doing well and there are a spate of IPOs (initial public offerings) or FPOs (follow-on public offerings).
Why SEBI is Required
Stock market indices reflects the economic conditions and the strength of a country’s economy. The indices increases when there is a export surplus, So it becomes crucial for every country that the indices figures show a true and clear picture about growth and strength of the economy. SEBI has a great responsibility in this scenario, therefore all modern economies recognized the need for sound regulation of securities markets. This is needed not just for proper functioning of these markets, but also for their survival. It is a regulation that will ensure that markets are safe and perceived to be safe by the public at large. It is good regulation that will ensure that necessary information is available to the public so that they can take informed decisions about investments. Today securities market regulation has evolved to include three principal objectives: (a) Fair, efficient and transparent markets; (b) Investor protection; (c) Reduction of systemic risk
The Essay on Initial Public Offering
An initial public offering (IPO) is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital, to possibly monetize the investments of early private investors, and to ...
FUNCTIONS AND POWERS OF SEBI
Protective Functions
These functions are performed by SEBI to protect the interest of investor and provide safety of investment. As protective functions SEBI performs following functions:
(i) It Checks Price Rigging:
Price rigging refers to manipulating the prices of securities with the main objective of inflating or depressing the market price of securities. SEBI prohibits such practice because this can defraud and cheat the investors. (ii) It Prohibits Insider trading:
Insider is any person connected with the company such as directors, promoters etc. These insiders have sensitive information which affects the prices of the securities. This information is not available to people at large but the insiders get this privileged information by working inside the company and if they use this information to make profit, then it is known as insider trading, e.g., the directors of a company may know that company will issue Bonus shares to its shareholders at the end of year and they purchase shares from market to make profit with bonus issue. This is known as insider trading. SEBI keeps a strict check when insiders are buying securities of the company and takes strict action on insider trading. (iii) SEBI prohibits fraudulent and Unfair Trade Practices: SEBI does not allow the companies to make misleading statements which are likely to induce the sale or purchase of securities by any other person. (iv) SEBI undertakes steps to educate investors so that they are able to evaluate the securities of various companies and select the most profitable securities.
REGULATORY FUNCTIONS
1. Regulation of Business in the Stock Exchanges.
2. Registration and Regulation of the Working of Intermediaries and Mutual Funds, Venture Capital Funds & Collective Investment Schemes. 3. Prohibiting fraudulent and unfair trade practices and insider trading in the securities
The Term Paper on Information System Security Principles
Availability Availability assures that a system’s authorized users have timely and uninterrupted access to the information in the system and to the network. Other important terms Also important to network security are the following four C-I-A–related terms: ? Identification—The act of a user professing an identity to the system, such as a logon ID ? Authentication—Verification that the user’s ...
market. 4. Investor education and the training of intermediaries.
5. Inspection and inquiries.
6. Regulating substantial acquisition of shares and take-overs. 7. Performing such functions and exercising such powers under the provisions of the Securities Contracts (Regulation) Act, 1956 as may be delegated to it by The Central Government; 8. Levying fees or other charges for carrying out the purposes of this section.
DEVELOPMENTAL FUNCTIONS
1. Promoting investor’s education and training of intermediaries. 2. Conducting research and publishing information useful to all market participants. 3. Promotion of fair practices and self regulatory organizations.
POWERS OF SEBI
1. Power to call periodical returns from recognized stock exchanges. 2. Power to compel listing of securities by public companies. 3. Power to levy fees or other charges for carrying out the purposes of regulation. 4. Power to call information or explanation from recognized stock exchanges or their members. 5. Power to grant approval to byelaws of recognized stock exchanges. 6. Power to control and regulate stock exchanges.
7. Power to direct enquiries to be made in relation to affairs of stock exchanges or their members.
Comparison of India, US and china
Between the US and China, India has scored top rankings when it comes to putting in place necessary regulations to ensure soundness of the financial market infrastructure.
The assessment forms a part of a study by global groupings of capital market and banking regulators from across the world, which have analysed the necessary regulatory framework put in place in various markets to match the Principles for Financial Market Infrastructure (PFMIs).
These PFMIs work as global standards for the financial sector entities across the world and have been finalized by the International Organisation of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS).
IOSCO is a global grouping of capital markets regulators in different countries, including the Securities and Exchange Board of India (Sebi), while BIS is known as the central bank for all central banks across the world.
The Term Paper on The Creation of a Common Market for Financial Services in the European Union
Of all the global achievements in the last 50 years, economic integration in Europe may be considered as the most notable of all. From a continent separated by war and differences in culture, Europe has proceeded to become an economic and political leader today. The formation of the European Union (EU), the accession of the 15 European countries to the Community, and the introduction of a single ...
As per the latest assessment of 27 jurisdictions, including India, conducted by IOSCO and BIS, a total of six countries, including India have got the top-most rating on a scale of one-to-four. The Rating Level 4 implies full compliance in terms of completing the process of having necessary regulations for Financial Market Intermediaries (FMIs) to ensure soundness of the financial market, as per the study. The other five fully-compliant jurisdictions are Australia, Brazil, Japan, Hong Kong SAR and Singapore. The US, China, Russia, Switzerland, Turkey, Chile, Mexico, Argentina did not score rating of four in any of the four parameters. European Union scored the top rating on three parameters. The assessment took into account regulations for central counter-parties, trade repositories, payment systems, central securities depositories and securities settlement systems. India has scored top ratings on all these counts. The latest findings are based on first-level assessment that looked at jurisdictions having completed the process of adopting the legislation, regulations and other policies that would enable them to implement the principles and responsibilities related to financial market infrastructures.
Conclusion
However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration. Growth in 2013 fell to a decade low, as India’s economic leaders struggled to improve the country’s wide fiscal and current account deficits. Rising macroeconomic imbalances in India and improving economic conditions in Western countries, led investors to shift capital away from India, prompting a sharp depreciation of the rupee. However, investors’ perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee.
The Business plan on Derivative market
... regulation. It covers all aspects of law that are material to financial transactions and markets. ... -grade and non investment-grade ratings. FOUNDATION INTERNAL RATINGS BASED APPROACH- The term Foundation ... Shekhar’s tenure as Prime Minister of India. With more than 11,111 branches and ... broadly into Financial, Business, Industrial and Management Risks, each of which is scored separately. ( ...
References
1. http://www.business-standard.com/article/international/india-scores-above-us-china-for-financial-market-regulation-114060100138_1.html 2. http://www.yourarticlelibrary.com/education/sebi-the-purpose-objective-and-functions-of-sebi/8762/ 3. http://www.indexmundi.com/factbook/compare/china.india/economy
