Financial Services Assignment: 1. Explain The Role of Securities Exchange Board of India (SEBI) ?

Financial Services Assignment
1. Explain the role of Securities Exchange Board of India (SEBI)?
The Government of India has initiated liberalization and reform process, Indian
capital market has become quite different today from what it was about 10 years
earlier .Now it has become larger in size with foreign investors, more exchanges
and strong regulatory authority. With a view to develop an effective and efficient
monitoring and control system for Indian capital markets, Government of India has
passed the Securities Exchange Board of India Act 1992. Under the provisions of
this Act, a board was established in the name of “Securities Exchange Board of
India”. SEBI is a body corporate, having perpetual succession and a common seal.
It has power to acquire, hold and dispose of movable and immovable property. It
has the power to enter into contracts. It can sue and to be sued in its name. The
head office of SEBI is at Mumbai with power to establish offices at other places in
India.
Role of SEBI as a regulatory authority:-
The important role of SEBI as a regulatory authority is as follows:-
1. To act as an apex institution for development and regulating of securities

market.
2. To register stock exchanges and to regulate trading on them. Co-ordinate,
integrate and monitor the working of stock exchange and to establish new
stock exchanges.
3. To register, monitor, co-ordinate and regulate the activities pertaining to
the issue and trading of securities.
4. To grant permission for issue of securities and to formulate guidelines for
issue and listing of securities.
5. To define and enforce disclosure requirements on issue of securities both
at the time of issue and at regular intervals after listing either in its own
or in consultation with professional bodies.
6. To check insider trading and excessive speculation and to control such
practices which are not in the interest of investors.
7. To monitor and regulate the functioning of mutual funds and investment
companies.
8. To regulate takeover deals, mergers and amalgamation. 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 merger or acquisition is for development of business or
harm the capital market.
9. To conduct inspection, to order special audit of books of brokers, jobbers,
merchant bankers, underwriters, investment advisors, to call for evidence
and to institute civil and criminal proceeding were ever required.
10. To conduct investment research and analysis to build up the data bank in
working of public limited companies and to help in setting of national
information system.
11. Power to make rules for controlling stock exchange
12. To provide license to dealers and brokers in the capital markets.
13. To stop fraud in capital markets like ban the trading of those brokers who
are involved in fraudulent and unfair trading practices.
14. To audit the performance of stock market.
15. To require report of portfolio management activities to check the capital
market performance
16. To educate the investors SEBI arranges time to time workshops.
Q2. Reason for the Formulation of Insurance Regulatory
Development Authority (IRDA) and the role it plays in regulating
insurance business in India?
The insurance sector is an infrastructural pillar of the financial services

sector and the economy as a whole. It plays a key role in economic
development. Several
empirical studies suggest a strong correlation between the development
of financial intermediaries and economic growth.
Insurance Regulatory Development Authority (IRDA) is a regulatory
and development authority under Government of India in order to protect
the interests of the policy holders and to regulate, promote and ensure
orderly growth of the insurance industry. IT is basically a ten members
team comprising a Chairman, five full time members, all appointed by
Government of India.
Reason for Formulation of IRDA:-

The Insurance Act, 1938 had provided for setting up of the controller
of Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance. Post nationalization, the role of controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies.
But the scenario changed with private and foreign companies foraying
in to the insurance sector. This necessitated the need for a strong,
independent and autonomous insurance regulatory. As the enacting of
legislation would have taken time the then government constituted
through government resolutions an Interim Insurance Regulatory
Authority pending the enactment of a comprehensive legislation.
The Insurance Regulatory and Development Authority Act,1999 is
an Act to provide for the establishment of an Authority to protect the
interest of holders of insurance policies, to regulate, promote and ensure
orderly growth of insurance industry and for matters connected
therewith or incidental there to and further to amend the Insurance Act
1938, the LIC Act 1956 and General Insurance Business Act 1972 to end
the monopoly of the LIC of India (for life insurance) and General
Insurance Corporation and its subsidiaries (for general insurance)
Role of IRDA as a regulatory authority:-

1. To regulate, promote and ensure orderly growth of the insurance
business and re-insurance business.
2. Issue to the applicant a certificate of registration, renews , modify,
withdraw, suspend or cancel such registration.
3. Protection of interest of policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable
interest, settlement of insurance claim, surrender value of policy
and other terms and conditions of contracts of insurance.
4. Specifying requisite qualifications, code of conduct and practical
training for intermediary or insurance intermediaries and agents.
5. Specifying the code of conduct for surveyors and loss assessors.
6. Promoting efficiency in the conduct of insurance business.
7. Promoting and regulating professional organizations connected
with insurance and re-insurance business.
8. Levying fees and other charges for carrying out the purpose of this
act.
9. Calling for information from undertaking inspection, conducting
enquiries and investigations including audit of insurers,
intermediaries and other organizations connected with the
insurance business.
10. Control and regulation of the rates, advantages, terms and
conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the Tariff
Advisory Committee.
11. Specifying the form and manner in which books of account shall
be maintained and statement if accounts shall be rendered by
insurers and other insurance intermediaries.
12. Regulating investment of funds by insurance companies.
13. Regulating maintenance of margin of solvency.
14. Adjudication of disputes between insurers and intermediaries or
insurance intermediaries.
15. Regulating investment of funds by insurance companies.
16. Supervising the functioning of the Tariff Advisory Committee.
17. Specifying the percentage of premium income of the insurer to
finance schemes for promoting and regulating professional
organizations.
18. Specifying the percentage of life insurance and general insurance
business to be undertaken by the insurer in the rural or social
sector.

Financial Services Assignment: 1. Explain The Role of Securities Exchange Board of India (SEBI) ?

Uploaded by

Copyright:

Available Formats

Financial Services Assignment: 1. Explain The Role of Securities Exchange Board of India (SEBI) ?

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Services Assignment: 1. Explain The Role of Securities Exchange Board of India (SEBI) ?

Uploaded by

Copyright:

Available Formats

Financial Services Assignment

1. Explain the role of Securities Exchange Board of India (SEBI)?

Role of SEBI as a regulatory authority:-

The important role of SEBI as a regulatory authority is as follows:-

1. To act as an apex institution for development and regulating of securities

The insurance sector is an infrastructural pillar of the financial services

Reason for Formulation of IRDA:-

Role of IRDA as a regulatory authority:-

You might also like