The Securities and Exchange Board of India (SEBI) plays a pivotal role in regulating and developing the Indian stock market. This article explores its functions and impact.
SEBI’s Role and Functions
- Regulation: SEBI formulates rules and regulations to ensure fair and transparent trading practices.
- Investor Protection: It implements measures to protect investors from fraudulent activities.
- Market Development: SEBI also focuses on developing and modernizing the Indian stock market infrastructure.
Major SEBI Regulations
- KYC Norms: Know Your Customer (KYC) norms are crucial for preventing fraud and ensuring investor safety.
- Circuit Breakers: These mechanisms prevent excessive volatility by halting trading during extreme market movements.
- Disclosure Requirements: Companies are required to disclose financial information regularly, ensuring transparency.
SEBI’s Impact on Investors
- Confidence Building: SEBI’s regulations have increased investor confidence in the market.
- Access to Information: Mandatory disclosures provide investors with essential information for making informed decisions.
- Dispute Resolution: SEBI addresses grievances and disputes between investors and market participants.
SEBI and Market Development
- Technological Advancements: SEBI has encouraged the adoption of technology in trading and settlement processes.
- Market Expansion: Initiatives to broaden the market, including introducing new financial instruments and easing norms for IPOs, have been significant.
SEBI’s comprehensive regulatory framework ensures the smooth functioning of the Indian stock market, fostering growth and protecting investor interests.