The question can also be better framed as (Who regulates the Stock market in India?)By now we are aware of why one must invest in stock market, on which healthy domain the investor must invest on and also about market participants and market intermediaries. Now let’s understand the regulator of the stock market called “SEBI”, which regulates the entire stock market forum in India with a set of rules and regulations. For simple understanding, we all know that the entire number of Indian banks fall under the rules and regulations of Reserve bank of India (RBI), similarly we have “The Securities and Exchange Board of India” (SEBI) which regulates the overall stock market forum in India. SEBI has its own functioning committees to regulate Indian Stock market is mentioned below:
Technical Advisory Committee: Role is to review the available cyber security system and advise to use the upgraded and faithful technologies in securities market to transact the fair transaction.
Committee for review of structure of market infrastructure institutions: These committees’ checks for the issues with regard to the emerging market microstructure and also the evolving role of market infrastructure institutions, which calls for a review of their ownership and governance structure to ensure that they remain effective and relevant.
Advisory Committee for the SEBI Investor Protection and Education Fund: To recommended investor education and protection activities that may be undertaken directly by the board, or through any other agency, for utilization of the SEBI investor protection and education fund for the purposes stated in the SEBI under Investor protection and education fund regulations.
· Takeover Regulations Advisory Committee: These committees hears the public comments, wherein public comments on report of the Takeover Regulations Advisory Committee may be sent to [email protected]
Primary Market Advisory Committee (PMAC): This committee plays a role on issues related to regulation and development of IPOs and other primary market segments; it also suggested that norms should be reviewed as the matter progresses.
Secondary Market Advisory Committee (SMAC): This committee is to advise on matters relating to secondary market, the committee was reconstituted on following issues like,
o Frequent change of face value of shares by listed companies,o Frequent change of names by listed companies.
Mutual Fund Advisory Committee: The advisory committee is mandated to advise SEBI on issues related to regulation and development of mutual fund industry, besides it can advise the regulator on disclosure requirements and measures required for a change in the legal framework to introduce simplification and transparency in mutual fund regulations
Recently, SEBI board had cleared a slew of proposals for the mutual funds such as setting up of a self regulatory organization for all distributors, who would also be allowed to access the bourses infrastructure to do their businessA proposal for allowing mutual fund houses to trade directly on the debt segment of the stock exchanges was also cleared by the board.
Corporate Bonds & Securitization Advisory Committee: These committee works on the issues related to the development of the corporate bonds market and the market for securitized instruments in India, by implementing the recommendations of the High Level Committee on Corporate Bonds and Securitization.
Works on removal of regulatory hurdles under its purview and advise on issues which need to be taken up with other regulators. Also facilitate coordination among SEBI, RBI, IRDA, PFRDA and concerned departments of Government of India, on development and policy issues.This committee also has a look on any other item relevant to Corporate Bonds & Securitization Markets, on issues for addressing the operational and systemic risks, if any, in the market for corporate bonds and securitized instruments SEBI also ensures the listed below:SEBI advocate certain rules and regulations to encourage and to develop the stock exchange. SEBI always ensures that the retail investor’s interest shouldn’t be harmed. It regulates the functioning of financial intermediaries and market participants.SEBI prescribes, unique legal framework on each entities and those rules and regulations prescribed by SEBI are available on each specified entities website.SEBI keep a track on the work culture of market participants like small and large investors, also checks for intermediaries like stock exchanges, brokers and sub brokers, clearing corporate entities, depositories, banks etc. SEBI succeeds as a regulator which implies with systematic reforms aggressively and successively. SEBI’s quick movement towards making the markets electronic and complete paperless by introducing the rolling cycle of SEBI did away with physical certificates that were prone to postal delays, theft and forgery.Over the years SEBI has increased the numbers of applications limit for retail investors from 1 lakh to 2 lakh at present.SEBI’s new norms for securities exchanges have given the target of minimum net worth of rs.100 to prescribed turnover of Rs 1000 crores for individual entity with a given time duration of two years, so based on this criteria SEBI asked to maintain the turnover of the exchanges to either to meet the required target or can take a graceful exit.
Finally I am concluding this topic with required information, hope this information benefits to understand the SEBI regulator.