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Protecting Your Money SEBI's Regulations for Safe Stock Exchange | Gurugrah






How SEBI Regulates the Stock Exchange....

| Gurugrah

How SEBI Regulates the Stock Exchange....


(SEBI)


The Securities and Exchange Board of India (SEBI) is the primary regulator of the securities market in India, with the main objective of protecting the interests of investors and promoting the development of the securities market. SEBI was established in 1988 as a statutory body with the power to make regulations and enforce them. SEBI's jurisdiction extends to the entire country, including the stock exchanges, intermediaries such as stock brokers, portfolio managers, and merchant bankers, and all issuers of securities.


One of SEBI's primary responsibilities is the regulation of the issuance and trading of securities. This includes ensuring that the securities are issued in compliance with the regulations and that the trading of securities is fair, transparent, and orderly. SEBI lays down the norms for the issuance of securities, including the preparation of the prospectus and the disclosure of information to investors. SEBI also regulates the trading of securities, including the setting of trading hours and settlement procedures, and ensures the fair and transparent functioning of the stock exchanges.


In addition to regulating the issuance and trading of securities, SEBI is also responsible for regulating intermediaries in the securities market. Intermediaries play a crucial role in the securities market by connecting issuers of securities with investors. SEBI regulates the intermediaries to ensure that they comply with various regulations issued by SEBI, such as disclosure norms, minimum net worth requirements, and investor protection measures. SEBI also monitors the intermediaries to prevent any unethical or illegal practices and takes appropriate action in the event of non-compliance.


SEBI also plays a crucial role in promoting the development of the securities market in India. It has taken various measures to increase the participation of retail investors in the securities market, such as introducing the concept of demat (dematerialized) securities and launching various savings schemes. SEBI has also taken steps to develop the bond market in India, with the introduction of regulations for the issuance and trading of debt securities. SEBI's efforts to promote the development of the securities market have helped to create a more diverse and vibrant market, and have contributed to the growth of the Indian economy.


SEBI has a dispute resolution mechanism in place to resolve disputes between market participants. The mechanism includes an appeal process to the Securities Appellate Tribunal (SAT), which is a specialized forum for resolving securities market disputes. SAT's decisions can be appealed to the Supreme Court of India. The dispute resolution mechanism is an important tool for ensuring that disputes are resolved efficiently and effectively, and that the interests of investors are protected.


SEBI is also responsible for enforcing regulations and taking action against any violations. SEBI has the power to impose penalties, suspension or cancellation of licenses, and launch investigations and proceedings in the event of non-compliance. The enforcement of regulations by SEBI helps to maintain the integrity of the securities market and to prevent any unethical or illegal practices.


SEBI is governed by a board of directors, consisting of a chairman and four members, who are appointed by the government of India. The board of directors is responsible for making regulations and for the overall management of SEBI. The chairman and members of the board of directors have extensive experience in the securities market, and are appointed from various backgrounds, including finance, law, and academics.


SEBI is a critical regulator of the securities market in India. Its primary objectives of protecting the interests of investors and promoting the development of the securities market have been instrumental in the growth and development of the securities market in India. SEBI's efforts to regulate the issuance and trading of securities, to regulate intermediaries, and to promote the development of the securities market have helped to create a more diverse and vibrant market, and have contributed to the growth of the Indian economy. SEBI's


Stock Exchange Market


A stock exchange is a market where securities such as stocks and bonds are bought and sold. It is a platform for companies to raise capital by issuing and selling new securities to the public and for investors to buy and sell existing securities. The stock exchange acts as a mediator between buyers and sellers, facilitating the trading of securities and ensuring that the transactions are conducted in a fair, transparent, and efficient manner.


There are several stock exchanges around the world, with the largest being the New York Stock Exchange (NYSE) and the NASDAQ in the United States, the Tokyo Stock Exchange in Japan, and the Shanghai Stock Exchange in China. In India, the two main stock exchanges are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).


To be listed on a stock exchange, a company must meet certain eligibility criteria, such as having a certain minimum number of shareholders and a minimum level of market capitalization. The company must also meet the stock exchange's listing and disclosure requirements, including the preparation of financial statements and regular reports to investors.


Once a company is listed on a stock exchange, its shares can be bought and sold by investors. The price of a company's shares is determined by supply and demand, with the price rising when demand is high and falling when demand is low. The stock exchange acts as a facilitator of these transactions, ensuring that the transactions are conducted in a fair, transparent, and efficient manner.


Investors can buy and sell securities through brokers, who act as intermediaries between the investors and the stock exchange. Brokers charge a fee for their services, which may include executing trades, providing market information, and offering investment advice.


Stock exchanges also play an important role in promoting transparency and accountability in the securities market. Companies listed on the stock exchange are required to disclose financial information and other material information to the public, which helps investors make informed investment decisions. Stock exchanges also enforce rules and regulations to prevent insider trading, market manipulation, and other forms of fraudulent activity.


Stock exchanges play a crucial role in the capital market by providing a platform for companies to raise capital and for investors to buy and sell securities. The stock exchange acts as a mediator between buyers and sellers, facilitating the trading of securities and ensuring that the transactions are conducted in a fair, transparent, and efficient manner. Stock exchanges also play a role in promoting transparency and accountability in the securities market by requiring companies to disclose financial information and enforcing rules and regulations to prevent fraudulent activity.


In India


The stock exchange market in India has a rich history and has evolved over the years to become one of the largest and most developed markets in the world. The two main stock exchanges in India are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).


The Bombay Stock Exchange, established in 1875, is the oldest stock exchange in Asia. It is located in Mumbai and is one of the largest stock exchanges in the world by market capitalization. The BSE operates a system called BSE Sensex, which is a benchmark index that tracks the performance of 30 of the largest and most actively traded companies listed on the exchange.


The National Stock Exchange, established in 1994, is located in Mumbai and is the largest stock exchange in India by market capitalization. It is also one of the largest stock exchanges in the world and is known for its advanced trading systems and technology. The NSE operates a benchmark index called the Nifty 50, which tracks the performance of 50 of the largest and most actively traded companies listed on the exchange.


To be listed on a stock exchange in India, a company must meet certain eligibility criteria, such as having a minimum market capitalization, a minimum number of public shareholders, and a minimum level of public float. Companies must also comply with the stock exchange's listing and disclosure requirements, including the preparation of financial statements and the submission of regular reports to investors.


Investors in India can buy and sell securities through brokers, who act as intermediaries between the investors and the stock exchange. Brokers charge a fee for their services, which may include executing trades, providing market information, and offering investment advice.


In recent years, the stock exchange market in India has experienced rapid growth, with increasing numbers of companies going public and increasing participation from domestic and foreign investors. The Indian government has taken a number of measures to promote the development of the securities market, such as streamlining regulations, improving the infrastructure, and promoting investor education and awareness.


It is one of the largest and most developed markets in the world. The two main stock exchanges in India are the Bombay Stock Exchange and the National Stock Exchange, which are located in Mumbai and are known for their advanced trading systems and technology. The Indian government has taken measures to promote the development of the securities market and to attract more domestic and foreign investment.


Why SEBI Introduced


The Securities and Exchange Board of India (SEBI) was established as a non-statutory body to regulate the securities market in India. The main reason for the establishment of SEBI was to protect the interests of investors and to ensure the development of the securities market in a fair, transparent, and efficient manner.


Before the establishment of SEBI, the regulation of the securities market in India was fragmented, with different government departments and agencies responsible for different aspects of the market. This fragmented system of regulation was considered to be inefficient and inadequate and was seen as a barrier to the development of the securities market.


In the 1980s, there was a growing recognition of the need for a unified and independent regulator for the securities market in India. The establishment of SEBI was seen as a way to address this need and to promote the development of the securities market.


Since its establishment, SEBI has played a critical role in the development of the securities market in India. It has implemented a range of regulations and measures to protect the interests of investors, promote transparency and accountability, and ensure the efficient functioning of the securities market. SEBI has also taken steps to promote the growth of the mutual fund industry, the development of the primary market, and the growth of the derivatives market.


In conclusion, the Securities and Exchange Board of India (SEBI) was established in 1988 to regulate the securities market in India and to protect the interests of investors. The main reason for the establishment of SEBI was to address the inefficiencies and inadequacies of the fragmented system of regulation that existed before and to promote the development of the securities market in a fair, transparent, and efficient manner. Since its establishment, SEBI has played a critical role in the development of the securities market in India and has implemented a range of regulations and measures to protect the interests of investors and promote the growth and development of the market.


How (SEBI) Regulates


The Securities and Exchange Board of India (SEBI) plays a critical role in regulating the stock exchanges in India. SEBI's primary objective is to protect the interests of investors and promote the development of the securities market, and this includes regulating the stock exchanges to ensure that they operate in a fair, transparent, and orderly manner.


One of SEBI's key responsibilities is the licensing and regulation of stock exchanges. SEBI lays down the eligibility criteria for stock exchanges, and all stock exchanges in India must be registered with SEBI and obtain a license from SEBI in order to operate. SEBI also regulates the operations of the stock exchanges, including the setting of trading hours and settlement procedures.


SEBI also regulates the listing and trading of securities on the stock exchanges. SEBI lays down the norms for the issuance and trading of securities, including the preparation of the prospectus and the disclosure of information to investors. SEBI also ensures that the stock exchanges have adequate systems and procedures in place to prevent insider trading, market manipulation, and other unethical practices.


In addition to regulating the stock exchanges, SEBI also regulates intermediaries such as stock brokers, portfolio managers, and merchant bankers. These intermediaries play a crucial role in the securities market by connecting issuers of securities with investors. SEBI regulates the intermediaries to ensure that they comply with various regulations issued by SEBI, such as disclosure norms, minimum net worth requirements, and investor protection measures.


SEBI also monitors the stock exchanges to ensure that they comply with the regulations issued by SEBI. In the event of non-compliance, SEBI has the power to take action against the stock exchanges, including imposing penalties, suspension or cancellation of licenses, and launching investigations and proceedings. The enforcement of regulations by SEBI helps to maintain the integrity of the securities market and to prevent any unethical or illegal practices.


SEBI also has a dispute resolution mechanism in place to resolve disputes between market participants, including disputes between investors and stock exchanges. The mechanism includes an appeal process to the Securities Appellate Tribunal (SAT), which is a specialized forum for resolving securities market disputes. SAT's decisions can be appealed to the Supreme Court of India. The dispute resolution mechanism is an important tool for ensuring that disputes are resolved efficiently and effectively and that the interests of investors are protected.


The Securities and Exchange Board of India [SEBI] is the regulator of the securities market in India. Originally formed to monitor trade, SEBI was later granted legal status by the Government of India in May 1992. What is the function of the primary market within SEBI? What role does SEBI play? What is the procedure for issuing securities?SEBI's role in eliminating insider trading?


Primary market functions under SEBI


• The primary market facilitates capital growth by encouraging individuals to turn their savings into investments.


• The primary market, which is part of the capital market, also issues new securities.


• State or public bodies and corporations may obtain funds against new issues of stocks or bonds through investment banking or financial syndication from securities dealers.


• Encourages Initial Public Offerings [IPO]


The role of the SEBI


Protection of Investors' Interests


• SEBI guarantees that investors will not fall for fraudulent and misleading advertising. In turn, SEBI has issued guidelines to protect investors and ensure advertising is fair and concise.


• Pricing Ordinance: Pricing is the manipulation of prices through price fluctuations to increase and decrease the market price of securities.


• SEBI makes every effort to educate investors so that they can choose between the offerings of different companies and select the most profitable stocks.


• SEBI has issued guidelines to investigate fraud and insider trading. In addition, there are provisions on fines and imprisonment.


Ensuring the development activities of the exchange


• E-Trading: The concept of e-trading was introduced by SEBI a few years ago to eliminate the inconvenience. Simplify the process of buying and selling securities.


• Primary market IPO (part of the capital market) is allowed through the stock exchange.


• SEBI promotes the training of securities market intermediaries to operate efficiently.


Regulate stock exchange business and stock exchange business


SEBI has a relevant code of conduct that applies to everyone involved in the process of buying and selling securities, the stock market, etc. Here are the areas of interest:


• Rules and regulations on intermediaries such as brokers, underwriters, etc.


• Registers and regulates the business of investment bankers, sub-brokers, stockbrokers, securities transfer agents, trustees, etc.


• Records of operation of mutual funds.


• SEBI regulates sales.


• Also conducts investigations and audits.


Regulation of insider trading


Insider trading has been a problem since the introduction of the securities trading market, stock exchange etc. An insider is a person or group of people who has first-hand knowledge of internal affairs and the ups and downs from a company. As soon as an insider learns that a loss is imminent, the shares are immediately sold on the insider's behalf. As a result, the company suffers enormous losses.


Securities issuance process


Preparation of the issue prospectus


The prospectus must contain the following information:


• Name


• Address


• Headquarters


• Names and addresses of


• Business promoters


• Managers


• MD’s


• Director


• Company secretary


• Legal Counsel


• Auditors


• Bankers


This also includes details of the project, plant location, technology, partnerships, products, export commitments, etc. Intermediaries include underwriters and brokers engaged by the company to sell a minimum number of shares. Prospectuses issued by the Company must be approved by the SEBI. The company is offering at least 49 percent of the shares in the public offering.


Below is the list of methods for issuing shares on the market,


IPO


When a company offers shares publicly for the first time, it is called an IPO. The process of IPO under SEBI guidelines includes: First, issuance of the prospectus is the first and foremost task, the prospectus must contain all the details about the company and the issue; Second, the issuance of subscription forms by intermediaries (guarantors and brokers); Third, brokers compile a list of orders collected from clients and then place orders with the company. Fourth, the company starts allocating the shares at the exchange rate of After the allotment, the share certificates are delivered to the investors or registered in the relevant demat accounts. Investors should be on the lookout for additional offers and enticing IPOs from the company.


Factors to Consider When Studying the IPO Offering Document


• Promoter


• Power


• Views


• Price


Private Placement


Private offer Securities are offered for private sale to specific individuals and other institutions. No prospectus will be issued to reduce the cost and time associated with the allotment and issuance process. This method is currently very popular among investors. In this way, the stocks are concentrated in a few hands. Therefore, it temporarily raises the price and is sold to small ordinary investors.


Offer to Sell - The process for making an offer to sell is similar to a private offer. Stockbrokers negotiate the price and terms of the shares with companies. After the trade, the brokers buy shares in the company. The securities are then sold to investors at a higher price to generate additional profits. This method is used to save processing time and cost.


Repurchase agreements - Repurchase agreements are transactions in which a company sells all of its stock to a single intermediary to market its stock. A purchase sale is similar to an offer sale.


Rights Increase - The rights increase is made by the Company to the existing shareholders in proportion to the number of shares held by them.


Guidelines by SEBI


• Only a listed company can make such a publication. The right can only be exercised on fully paid shares.


• Prior to any such issue, the Company must make a declaration that cannot be withdrawn.


• The correct number must be open for a minimum of 30 days and a maximum of 60 days.


• The Company enters into an agreement with the Depositary to issue Shares in the form of Demat.


Bonus Edition


The additional bonus received is equated with the profit from the share capital and is thus distributed among the shareholders of the company.


Book building


Under normal circumstances, brokers are the intermediaries through which shares are allotted while the book-building process seeks investor feedback to determine the share price.


Before SEBI, who regulated the stock markets in India?


The Capital Emissions Controller regulated the stock market before SEBI took over in 1992. He acted as the authority responsible for safeguarding private sector jobs and ensuring that investments did not violate the five-year plans or flow into the non-productive sector.


After 1988, the Securities and Exchange Board of India (SEBI) was established as the non-statutory governing body of the stock exchange. However, on April 12, 1992, it became an autonomous body as it received legal rights from the Indian Parliament. SEBI is based in the Bandra Kurla complex in the Mumbai district.


SEBI Structure


SEBI consists of different departments managed by department heads. Currently, SEBI has 20 divisions: Finance, Debt & Hybrid Securities, Economic & Political Analysis, etc. The hierarchy of SEBI is as follows:-


• President of SEBI appointed by Union Government of India.


• Two members of the Treasury


• The Reserve Bank of India appoints a member of the SEBI


• Union Government of India appoints five more members


SEBI Functions


1. It promotes the development of the securities market and regulates the development of enterprises.


2. SEBI's primary objective is to protect the interests of stock market investors.


3. Prohibits insider trading, such as B. Fraudulent practices in the securities market.


4. SEBI takes over the central research and development department and ensures that the market is always efficient.


5. SEBI provides a platform for stockbrokers, sub-brokers, investment advisers, portfolio managers, etc. to regulate work.


6. Monitor the activities of custodians, participants, securities custodians, etc.


In this way, SEBI protects investors from fraudulent and illegal business activities.


Can SEBI stop the stock market for a few days?


If you look at it from a value investor's perspective, it probably isn't. But if you're a speculator, definitely.


Basically, value investors are overjoyed at times like these because the stock price doesn't really reflect the valuation of the company in question. Therefore, you have a good chance of buying shares cheaply.


Although this is not the time for speculators, they simply follow the trend and sell short.


I personally think SEBI shouldn't freeze stock trading now because now is the perfect time to make huge profits.


Many organizations (that own a large part of the business) tend to focus on short-term gains and end up running short, and most people in this space are speculators so it would make sense for them to freeze operations!


Development Features


SEBI carries out development tasks in order to promote and further develop the exchange business and to increase the exchange turnover. The functions performed by SEBI within the development functions are as follows:


i) promoting the training of securities market intermediaries.


ii) Its purpose is to promote the functioning of the stock exchange. To this end, it adopts a flexible and adaptable approach as follows:


• SEBI allowed online trading through registered stockbrokers.


• To reduce issuance costs, SEBI also made the drawing optional.


• Finally, it allows an IPO on the primary market through the stock exchange.


Control Functions


The SEBI performs regulatory functions that regulate exchange activity. The functions performed by SEBI within the regulatory functions are as follows:


Regulation of intermediaries such as insurers, brokers, etc.SEBI has developed a set of rules and regulations and a code of conduct.


• Conducts foreign exchange surveys and audits.


• SEBI registers and regulates the operation of mutual funds, etc.


• SEBI placed intermediaries under regulatory control and introduced more restrictive private market offerings.


• SEBI regulates the acquisition of companies.


Finally, it registers and regulates the activities of stockbrokers, securities transfer agents, sub-intermediaries, stockbrokers, custodians and all persons connected in any way with the stock exchange.


SEBI regulates stock exchanges and ensures that they operate in a fair, transparent, and efficient manner. It lays down rules and regulations for the functioning of stock exchanges, including listing norms, trading norms, and settlement procedures. SEBI also regulates the functioning of brokers, sub-brokers, and depository participants who provide services to investors.


SEBI has the power to take disciplinary action against any stock exchange, broker, or depository participant that violates the regulations or causes harm to the interests of investors. SEBI can impose penalties, revoke licenses, and order compensation to investors for any losses suffered due to the violation of regulations.


SEBI also plays a crucial role in registering and regulating mutual funds. A mutual fund is a pool of funds collected from investors to invest in a variety of securities such as stocks, bonds, and money market instruments. SEBI lays down the rules and regulations for the functioning of mutual funds, including investment guidelines, disclosure norms, and accounting standards.


SEBI has the power to approve or reject applications for the launch of new mutual funds, and it can also take disciplinary action against mutual funds that violate regulations or cause harm to investors. SEBI also monitors the performance of mutual funds and ensures that they are managed in a transparent and fair manner.


SEBI plays a critical role in ensuring the functioning of the capital market in India. SEBI's regulations ensure that the securities market operates in a fair, transparent, and efficient manner, which protects the interests of investors and promotes the development of the securities market. SEBI's role in registering and regulating mutual funds is also crucial in ensuring that mutual funds are managed in a transparent and fair manner, which protects the interests of investors.


SEBI: Measures in place to ensure market integrity


The Securities and Exchange Board of India (SEBI) assured participants on Saturday that the market was stable. The Markets Authority said the Indian financial market, represented by Sensex and Nifty, has shown continued stability and continues to operate transparently, fairly and efficiently.


In addition, SEBI indicated that Indian markets are viewed positively by long-term investors. In an international comparison of dollar-adjusted market returns with peers and developed countries over the last 3 years to date, the Indian market ranks as a positive outlier.


“Over the past week, there has been an unusual movement in the share price of a conglomerate company. As part of its mandate, SEBI aims to maintain an orderly and efficient functioning of the market and has put in place a set of well-defined and publicly available regulatory measures (including the ASM framework) to address excessive market volatility in certain securities. This mechanism is automatically activated under certain conditions of price volatility in each warehouse,” said SEBI.


In addition, in all company-specific matters, when SEBI receives information, it will be investigated in accordance with applicable regulations and appropriate action will be taken after proper investigation. SEBI has always applied this approach to corporate-level matters and will continue to do so in the future.


SEBI is committed to market integrity and ensuring it has the appropriate structural strength to operate as seamlessly, transparently and efficiently as it does today, SEBI said.


SEBI committed to ensuring market integrity, says measures in place to address excess volatility


“As part of its mandate, Sebi aims to maintain an orderly and efficient functioning of the market and has put in place a clearly defined and publicly available set of oversight measures (including the ASM framework) to address the excessive volatility of some measures. ”


"This mechanism is automatically activated under certain conditions of price volatility for each security," Sebi said in a statement.


Without giving a specific action, the market regulator said an unusual movement in the trading conglomerate's share price was observed last week.


Sebi also clarified that in all specific cases involving companies, it will investigate according to the applicable law if it becomes aware of any news and, after proper investigation, the appropriate measures will be taken.


"Sebi has always taken this approach to corporate-level matters and will continue to do so in the future," he added.


SEBI improves the operational framework of rating agencies However, the regulator refrained from explicitly stating whether or not it was investigating the matter. Sebi added that the Indian financial market, represented by Sensex and Nifty, has shown continued stability and continues to operate in a transparent, fair and efficient manner.


“Indian markets are also viewed positively by investors in the long term. A comparison of dollar-adjusted market returns between countries with those of developed and similar countries over the last three years to date identifies the Indian market as a positive outlier,” he noted.


The regulator said it is committed to ensuring market integrity and that markets continue to have the structural strength to function as consistently, transparently and efficiently as they have up to now.


Achievements


SEBI was successful as a regulator, aggressively and successively pushing for systematic reforms. The rapid evolution towards dematerialization and electronics of the markets can be attributed to SEBI, with the introduction of the T+5 mobile wheel in July 2001 and T+3 in April 2002, then until T+2 in April 2003. T+ 2 means that settlement will occur within 2 days of the trade date. SEBI has been actively involved in the development of statutory regulations. SEBI eliminated physical certificates, which were vulnerable to postal delays, theft and tampering, and slowed and disrupted the settlement process by passing the 1996 Deposit Act.


SEBI also helped act quickly and effectively in the face of the global meltdown and Satyam fiasco. In October 2011, he increased the scope and scope of information to be disclosed by Indian business developers. In the face of the global meltdown, he liberalized the Acquisitions Code to facilitate investment by removing regulatory structures. In one of these moves, SEBI increased the retail investor application limit to Rs 200,000 from the current Rs100,000 to the present.


On the occasion of Global Investor Week 2022, SEBI Executive Director Shri G.P Garg published a book on financial literacy. This book is a collaborative effort between the Metropolitan Stock Exchange of India Limited and CASI New York.


Controversies


The Supreme Court of India has heard a Public Interest Litigation (GDP) brought by the India Rejuvenation Initiative challenging the Indian government's central appointment process. The petition states: "The statute of the Selection Committee responsible for recommending the name of the President and all full-time members of the SEBI for an appointment has been amended, which has directly affected its balance and could undermine the role of the SEBI's guarantor.


"The Chief Justice of India denied the Treasury Department's request for an exemption from GDP, saying the court was well aware of what was happening at SEBI. After hearing a similar petition from Bengaluru lawyer Anil Kumar Agarwal, two Supreme Court Justices gave, in place composed of Judges Surinder Singh Nijjar and Judges HL Gokhale, Observations to the Government of India, SEBI UK Chief Sinha and Omita Paul, Secretary to the President of India.


It also turned out that Dr. KM Abraham (then still a member of the SEBI board) had written to the Prime Minister about a malaise at SEBI. He said: "The regulator is under duress and vicious attacks from powerful business interests working together to undermine SEBI."In particular, he alleged that the Office of the Treasury Secretary, and in particular his adviser Omita Paul, attempted to influence numerous dossiers before SEBI, including those involving Sahara Group, Reliance, Bank of Rajasthan, and MCX.


SEBI and regional grants


SEBI published the exit guidelines in its circular dated 30 May 2012 – Guidelines for Exchanges. This is primarily due to the illiquidity of trading on many of the more than 20 regional exchanges. He asked many of these exchanges to meet the required criteria or date gracefully. The new SEBI standards for exchanges require a minimum net worth of Rs1bn and an annual turnover of Rs10bn. India's securities regulator, SEBI, has given recognized stock exchanges two years to close or shut down operations.


Unsubscribe and exit


Here are excerpts from the circular:


Exchanges can seek a way out by voluntarily forgoing loans.


Securities that generate less than Rs10 billion in annual turnover on their platform may apply to SEBI to voluntarily waive recognition and withdraw it at any time up to two years from the date of publication of this circular.


If the Exchange is unable to sustainably meet the required turnover of Rs10 billion or does not apply for a voluntary waiver of recognition and withdrawal within two years of the date of this circular, SEBI will proceed with the mandatory recognition and closure of these Exchanges on the terms set by SEBI.


Scholarships that have already been booked must apply for cancellation within two months of the date of this circular. If this fails, the deleted process is subject to a mandatory exit process.


SEBI departments


SEBI regulates the Indian financial market through its 20 departments.


• Commodity Derivatives Market Regulation Department (CDMRD)


• Corporation Finance Department (CFD)


• Department of Economic and Policy Analysis (DEPA)


• Department of Debt and Hybrid Securities (DDHS)


• Enforcement Department – 1 (EFD1)


• Enforcement Department – 2 (EFD2)


• Enquiries and Adjudication Department (EAD)


• General Services Department (GSD)


• Human Resources Department (HRD)


• Information Technology Department (ITD)


• Integrated Surveillance Department (ISD)


• Investigations Department (IVD)


• Investment Management Department (IMD)


• Legal Affairs Department (LAD)


• Market Intermediaries Regulation and Supervision Department (MIRSD)


• Market Regulation Department (MRD)


• Office of International Affairs (OIA)


• Office of Investor Assistance and Education (OIAE)


• Office of the Chairman (OCH)


• Regional offices (ROs)


SEBI (Securities and Exchange Board of India) works by formulating and enforcing regulations for the securities market in India. The following are the key functions of SEBI:


Regulation of Securities Market: SEBI regulates the securities market by laying down rules and regulations for the functioning of stock exchanges, brokers, depository participants, and other market intermediaries. SEBI also sets the standards for disclosure, accounting, and reporting by companies listed on stock exchanges.


Investor Protection: SEBI is responsible for protecting the interests of investors by ensuring that the securities market operates in a fair, transparent, and efficient manner. It investigates complaints and takes disciplinary action against market intermediaries and companies that violate regulations or cause harm to investors.


Approval of Issues: SEBI approves or rejects applications for new securities issues, such as initial public offerings (IPOs) and follow-on public offerings (FPOs), to ensure that the interests of investors are protected.


Monitoring of Market: SEBI regularly monitors the securities market to ensure that it operates in a fair and transparent manner. It collects and analyzes data on market trends, prices, and volumes to identify any anomalies or potential threats to market stability.


Education and Awareness: SEBI conducts educational and awareness programs for investors to help them make informed investment decisions. It also provides information and guidance on various investment options and the risks involved.


SEBI works through a governing board, which is responsible for making decisions on regulatory and policy matters. The board is composed of a Chairman and six members, including representatives from the Ministry of Finance and the Reserve Bank of India. SEBI also has several departments, including a legal department, an enforcement department, and a market regulation department, that carry out its functions and enforce regulations.


Conclusion


SEBI works to regulate the securities market, protect the interests of investors, and promote the development of the securities market in India. It does this by formulating and enforcing regulations, monitoring the market, conducting investor education and awareness programs, and taking disciplinary action against market intermediaries and companies that violate regulations.


The Securities and Exchange Board of India (SEBI) plays a crucial role in regulating the stock exchange market in India. SEBI was established to ensure that the securities market in India operates in a fair, transparent, and efficient manner, and to protect the interests of investors. Over the years, SEBI has implemented a range of regulations and measures aimed at promoting the development of the securities market and protecting the interests of investors.


SEBI regulates the stock exchange market in a number of ways. First, it sets the eligibility criteria for companies that want to be listed on the stock exchange and ensures that listed companies comply with the listing and disclosure requirements. This helps to ensure that the financial information that is available to investors is accurate and up-to-date and that investors have access to information that is relevant and meaningful.


Second, SEBI regulates the activities of brokers and intermediaries in the securities market. This includes setting minimum standards for broker-dealers and intermediaries, monitoring their compliance with these standards, and taking enforcement action against those that violate these standards. This helps to ensure that the securities market operates in a fair and transparent manner, and that investors receive adequate protection.


Third, SEBI promotes the growth of the mutual fund industry in India. This includes setting minimum standards for mutual funds, regulating the activities of mutual fund managers and intermediaries, and promoting investor education and awareness. This helps to ensure that mutual funds are managed in a manner that is consistent with the interests of investors, and that investors have access to investment options that are safe, reliable, and effective.


Fourth, SEBI regulates the primary market and the issuance of new securities. Ths includes setting minimum standards for initial public offerings (IPOs) and ensuring that companies comply with these standards. This helps to ensure that new securities are issued in a fair and transparent manner and that investors receive adequate protection.


Finally, SEBI regulates the derivatives market and the trading of derivatives. This includes setting minimum standards for the trading of derivatives, monitoring the activities of derivatives market participants, and taking enforcement action against those that violate these standards. This helps to ensure that the derivatives market operates in a fair and transparent manner and that investors receive adequate protection.


Implementing a range of regulations and measures aimed at protecting the interests of investors and promoting the growth and development of the securities market, SEBI has helped to establish India as one of the largest and most developed stock exchange markets in the world.


The Stock Exchange of India, also known as the Bombay Stock Exchange (BSE), is one of the oldest and largest stock exchanges in Asia. Established in 1875, it has played a crucial role in the development of the Indian capital market and has been instrumental in attracting foreign investments to the country. The BSE offers a platform for buying and selling securities and has a wide range of listed securities including equities, bonds, and derivatives.


Over the years, the BSE has undergone several transformations to keep up with the changing times. In 1995, it introduced electronic trading and became the first exchange in India to do so. The BSE has also implemented several measures to enhance market efficiencies, such as the introduction of online trading systems and the rolling settlement system.


Despite its rich history and legacy, the BSE has faced several challenges in recent years. The global financial crisis of 2008 had a major impact on the Indian stock market and led to a significant decline in the value of listed securities. However, the Indian economy has since recovered and the BSE has been able to bounce back, with the benchmark S&P BSE Sensex reaching new highs in recent years.


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By Harshit Mishra | March 24, 2022, | Writer at Gurugrah_Blogs.

 

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