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    FMBM NCFM 18-19

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    mysoftwarebackup2018

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    FMBM NCFM 18-19

    Uploaded by

    mysoftwarebackup2018
    3 views2 pages

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    fmbm ncfm 18-19

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    3 views2 pages

    FMBM NCFM 18-19

    Uploaded by

    mysoftwarebackup2018

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    2.

    1 Regulator

    Why does Securities Market need Regulators?

    The absence of conditions of perfect competition in the securities market


    makes the role of the Regulator extremely important. The regulator ensures
    that the market participants behave in a desired manner so that securities
    market continues to be a major source of finance for corporate and
    government and the interest of investors are protected.

    Who regulates the Securities Market?

    The responsibility for regulating the securities market is shared by


    Department of Economic Affairs (DEA), Department of Company Affairs
    (DCA), Reserve Bank of India (RBI) and Securities and Exchange Board of
    India (SEBI).

    What is SEBI and what is its role?

    The Securities and Exchange Board of India (SEBI) is the regulatory authority
    in India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992
    provides for establishment of Securities and Exchange Board of India (SEBI)
    with statutory powers for (a) protecting the interests of investors in
    securities (b) promoting the development of the securities market and (c)
    regulating the securities market. Its regulatory jurisdiction extends over
    corporates in the issuance of capital and transfer of securities, in addition to
    all intermediaries and persons associated with securities market. SEBI has
    been obligated to perform the aforesaid functions by such measures as it
    thinks fit. In particular, it has powers for:

    ■ Regulating the business in stock exchanges and any other securities


    markets
    ■ Registering and regulating the working of stock brokers, sub-brokers
    etc.
    ■ Promoting and regulating self-regulatory organizations
    ■ Prohibiting fraudulent and unfair trade practices
    ■ Calling for information from, undertaking inspection, conducting
    inquiries and audits of the stock exchanges, intermediaries, self-
    regulatory organizations, mutual funds and other persons associated
    with the securities market.

    14
    2.2 Participants

    Who are the participants in the Securities Market?

    The securities market essentially has three categories of participants,


    namely, the issuers of securities, investors in securities and the
    intermediaries, such as merchant bankers, brokers etc. While the corporates
    and government raise resources from the securities market to meet their
    obligations, it is households that invest their savings in the securities market.

    Is it necessary to transact through an intermediary?

    It is advisable to conduct transactions through an intermediary. For example


    you need to transact through a trading member of a stock exchange if you
    intend to buy or sell any security on stock exchanges. You need to maintain
    an account with a depository if you intend to hold securities in demat form.
    You need to deposit money with a banker to an issue if you are subscribing
    to public issues. You get guidance if you are transacting through an
    intermediary. Chose a SEBI registered intermediary, as he is accountable for
    its activities. The list of registered intermediaries is available with exchanges,
    industry associations etc.

    What are the segments of Securities Market?

    The securities market has two interdependent segments: the primary (new
    issues) market and the secondary market. The primary market provides the
    channel for sale of new securities while the secondary market deals in
    securities previously issued.

    15

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