partner-pub-7354 ISO-8859-1 w w w .svtuition.o w w w .svtuition.

Bottom of Form

•
Role of SEBI in Indian Capital Market

SEBI is regulator to control Indian capital market. Since its establishment in 1992, it is doing
hard work for protecting the interests of Indian investors. SEBI gets education from past cheating
with naive investors of India. Now, SEBI is more strict with those who commit frauds in capital
market.
The role of security exchange board of India (SEBI) in regulating Indian capital market is very
important because government of India can only open or take decision to open new stock
exchange in India after getting advice from SEBI.

If SEBI thinks that it will be against its rules and regulations, SEBI can ban on any stock
exchange to trade in shares and stocks.

Now, we explain role of SEBI in regulating Indian Capital Market more deeply with following
points:

1. Power to make rules for controlling stock exchange :

SEBI has power to make new rules for controlling stock exchange in India. For example, SEBI
fixed the time of trading 9 AM and 5 PM in stock market.

2. To provide license to dealers and brokers :

SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any
financial product is of capital nature, then SEBI can also control to that product and its dealers.
One of main example is ULIPs case. SEBI said, " It is just like mutual funds and all banks and
financial and insurance companies who want to issue it, must take permission from SEBI."
3. To Stop fraud in Capital Market :

SEBI has many powers for stopping fraud in capital market.

It can ban on the trading of those brokers who are involved in fraudulent and unfair trade
practices relating to stock market.

It can impose the penalties on capital market intermediaries if they involve in insider trading.

4. To Control the Merge, Acquisition and Takeover the companies :

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 merge or acquisition is for
development of business or to harm capital market.

5. To audit the performance of stock market :

SEBI uses his powers to audit the performance of different Indian stock exchange for bringing
transparency in the working of stock exchanges.

6. To make new rules on carry - forward transactions :

Share trading transactions carry forward can not exceed 25% of broker's total transactions.

90 day limit for carry forward.

7. To create relationship with ICAI :

ICAI is the authority for making new auditors of companies. SEBI creates good relationship with
ICAI for bringing more transparency in the auditing work of company accounts because audited
financial statements are mirror to see the real face of company and after this investors can decide
to invest or not to invest. Moreover, investors of India can easily trust on audited financial
reports. After Satyam Scam, SEBI is investigating with ICAI, whether CAs are doing their duty
by ethical way or not.
8. Introduction of derivative contracts on Volatility Index :

For reducing the risk of investors, SEBI has now been decided to permit Stock Exchanges to
introduce derivative contracts on Volatility Index, subject to the condition that;

a. The underlying Volatility Index has a track record of at least one year.

b. The Exchange has in place the appropriate risk management framework for such derivative
contracts.

2. Before introduction of such contracts, the Stock Exchanges shall submit the following:

i. Contract specifications

ii. Position and Exercise Limits

iii. Margins

iv. The economic purpose it is intended to serve

v. Likely contribution to market development

vi. The safeguards and the risk protection mechanism adopted by the exchange to ensure market
integrity, protection of investors and smooth and orderly trading.

vii. The infrastructure of the exchange and the surveillance system to effectively monitor trading
in such contracts, and

viii. Details of settlement procedures & systems

ix. Details of back testing of the margin calculation for a period of one year considering a call
and a put option on the underlying with a delta of 0.25 & -0.25 respectively and actual value of
the underlying. Link

9. To Require report of Portfolio Management Activities :

SEBI has also power to require report of portfolio management to check the capital market
performance. Recently, SEBI sent the letter to all Registered Portfolio Managers of India for
demanding report.

10. To educate the investors :

Time to time, SEBI arranges scheduled workshops to educate the investors. On 22 may 2010
SEBI imposed workshop. If you are investor, you can get education through SEBI leaders by
getting update information on this page.
Steerers of the Indian Capital Market

If you think the stock market of India is predictable you are wrong. The unpredictability of
market arises from volatility causing the rise and fall of the values of stocks. You cannot expect
the market to remain stable for days together. If one particular sector is witnessing an upward
trend for some time, it will go down and another sector will take its place; similar is the case with
companies in the varied segments.
Beginners are the worst sufferers of the unpredictable market. As they have not experienced
trading, they are bound to incur losses. If they happen to become registered members of some
reliable and reputed online share trading platforms that are backed by market experts they will no
doubt gain to some extent if not fully. Whether it is information on NSE India or BSE India or
about the respective indices, i.e, nifty and sensex India besides a wealth of latest news,
information and market statistics concerning the stock market of India, you can bank upon an
online share trading portal. You will also get stock tips from experts from time to time. Get
registered and start availing the benefits.
Currently, sensex India is the talk of the town, especially in the investors' world because of the
fast recovery with little downs being witnessed. Milestones have been added to the sensex India
cap year after year till the big recession that took place a few months ago. But investors are not
disheartened; this has resulted in BSE India gaining back its lost glory in no time. It is first
recuperating; a similar trend is noticed in case of NSE India too. Both BSE and NSE account to
major share transactions happening in the country.
What closed above 10000 on 7th Feb 2006 reached an all-time high of 21206.77 on 10th Jan
2008; sensex India is currently perched at the 19,400+ mark. Very soon, it will reach the record
that it has once created. Thousands of companies of all categories right from blue chip to small
are registered at BSE India. Since the last several months investments amounting to crores are
being invested by foreign investors; this well corroborates the status of BSE India in the world
capital market.
Incorporated in 1992, NSE India in a short span of time has been able to carve a niche as one of
the most prominent stock exchanges not only in India but across the world. This bourse has
always remained in the forefront of modernization of India's capital and financial markets. The
electronic limit order book (LOB), also termed NSE model (as trading of securities with this
model was first started by NSE), is followed by many existent and new market structures.
There are numerous online share trading platforms in India. Do not be allured by the stock tips
offered here. Of course stock tips do steer beginners in their investing spree. Conduct a research;
read reviews from investors to find the best share trading platform.