A Case Study on SEBI Act and Rules in India

Abstract: Economy of any country largely depends on its capital market now more than ever before. A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise funds by selling securities to general public and other financial institutions. The capital market includes the stock market (equity securities) and the bond market (debt). Capital markets of India are monitored by financial regulator SEBI (Securities Exchange Board of India).




SEBI oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among other duties. The need for a financial regulator for a country like India is due to the following reasons as India is an ‘informationally’ weak market, to boost the confidence of lay investors who have been beaten by repeated scams, to soften interest rates and to enhance investing skills in India. But since the formation SEBI in the year 1992 every 2-3 years there has been a new ‘scam’. Each scam has led to SEBI being conferred with greater powers. Scams are administered by SEBI officials.



A Case Study on SEBI Act and Rules in India

Sentencing and prosecution is done by SEBI officials. Recent rise in scams and scandals in Indian market have made investors to doubt on the efficiency of Indian Financial regulator SEBI (Securities Exchange Board of India). Even though SEBI is confronted with numerous powers it is still observed that SEBI is unable to minimize or curb the violations which costs huge to investors and also to the whole economy….
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