Commerce Notes

Role of SEBI in Regulating the Capital Market

3 years ago
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by Anjali Yadav
  • Role of SEBI in Regulating the Capital Market
    Role of SEBI in Regulating the Capital Market

Explain the role of SEBI in regulating the capital market? 

Role of SEBI in Regulating the Capital Market Or Investors’ Protection in Secondary Market Operations

Following reforms / steps have been taken to ensure proper capital market operations / investor’s protection on-going basis:

1. Strict Watching over Stock Exchanges : SEBI ensures strict watching on the functioning of stock exchange. Abnormal occurring comes under eyes of the Securities and Exchange Board of India.

2. Listing of Securities: Companies have to comply with the provisions of SEBI Act, SCRA, Companies Act, rules, regulations and guidelines. They have to file various documents, certificates, approvals, reports etc. These are scrutinised by SEBI at the time of listing.

3. Compulsion of Share Capital Audit: Every listed company has to get secretarial audit by the Chartered Accountant or a Company Secretary.

4. Corporate Governance: All the listed companies must adhere to the corporate governance code. Under it financial and non-financial disclosure is must.

5. Prohibiting Insider Trading: SEBI has not allowed to deal in securities on the basis of any unpublished price-sensitive information.

6. Filing of Standardised Quarterly Results: Listed companies file unaudited results every quarter.

7. Share Registry Work to One Unit Only: SEBI asks to listed. companies to entrust share registry work to only one unit.

8. Entire Disclosure on Negotiated Deals: SEBI asks for full disclosure on negotiated deals.

9. Code of Ethics for SEBI Directors Officials: SEBI has made a code of ethics for direction and financial of stock exchange.

10. Establishment of Clearing Houses: Stock exchanges must set up clearing house.

11. Unique Identity Number to Investors: A unique identity number to investors with over Rs. 1 lakh exposure is provided,

12. Stop Loss Facility in Trading System: Stock exchanges have introduced stop-loss facility.

13. Segregation in Owner ship, Management and Trading Membership: To encourage fair operation of stock exchanges’ owner, ship investment and trading membership is segregated.

14. Show Cause Notice: In the case of price rigging SEBI issues show cause notice to promoters, brokers and even to clients.

15. Redressal through Ombudsman : SEBI (Ombudsman) Regulation 2003 has been issued by SEBI for taking up complaints against companies brokers and other intermediaries.

16. Representation of Public : In the committees of stock exchange SEBI introduced the policy of public representative directors and public representatives.

17. Compulsory Settlement: Stock exchanges are required to necessarily complete their settlement with certain period.

18. Bad Delivery Cells: SEBI has made uniform good-bad delivery procedures. These are related to time bound resolution.

19. Conduct Code for AMC Staff: A code of conduct for AMC staff has been prepared to ensure that there is no conflict between transactions of employees and the mutual fund.

20. Revision of the Functioning of Surveillance Department: It is advised to review the functions of their surveillance departments.

21. Special Margins of Scrips: Instructions have been given to stock exchanges to commence special margins on the surplus which have more fluctuation in prices.

22. Disclosure of Scrip-wise Purchases: It is mandatory that scrip wise short sales and long purchase should be disclosed.

23. Broker Directors Away from Decision-Making: SEBI has decided to keep broker directors away from decision-making.

24. Full Disclosure on Negotiated Deals: Full disclosure on negotiated deals is essential.

25. Quality of Securities: SEBI has tried to improve the quality of securities listed and traded.

26. Reduction in Rolling Settlement Cycle: Rolling settlement is essential for certain listed companies T +5 basis.

27. Low Cost: Efforts have been made to keep the shares trading at low cost.

28. Sector-Wise Indices: Bombay Stock Exchange has provided following sectoral indices.

  1. BSE Information Technology Index (33 scrips)
  2. BSE Fast Moving Consumer Goods Index (47 scrips)
  3. BSE Health Care Index (45 scrips)
  4. BSE Capital Goods Sector Index (52 scrips).
  5. BSE Consumer Durables Index (23 scrips)

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Anjali Yadav

इस वेब साईट में हम College Subjective Notes सामग्री को रोचक रूप में प्रकट करने की कोशिश कर रहे हैं | हमारा लक्ष्य उन छात्रों को प्रतियोगी परीक्षाओं की सभी किताबें उपलब्ध कराना है जो पैसे ना होने की वजह से इन पुस्तकों को खरीद नहीं पाते हैं और इस वजह से वे परीक्षा में असफल हो जाते हैं और अपने सपनों को पूरे नही कर पाते है, हम चाहते है कि वे सभी छात्र हमारे माध्यम से अपने सपनों को पूरा कर सकें। धन्यवाद..

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