There has been a tremendous growth in the capital market in recent times, especially due to increasing public participation. By ensuring investor safety, investor confidence in the capital market can be sustained to a large extent. To this end, the government decided to immediately pledge SEBI as statutory powers were required to deal effectively with all matters related to capital markets.
SEBI is the regulator to regulate the Indian capital market. Since its inception in 1992, it has been working hard to protect the interests of investors. SEBI learns from past deception with investors in India. Now, SEBI is more strict with those who commit fraud in the capital market.
The role of the Security Exchange Board of India (SEBI) in regulating the capital market is very important as the Government of India can decide to open or open new stock exchanges in India only after consulting SEBI. If SEBI feels that it will be against its rules and regulations, SEBI may impose restrictions on any stock exchange for trading in shares and shares.
Role of SEBI in regulating capital market are:-
- Power to make rules for controlling stock exchange
- To provide licence to dealers brokers
- To stop fraud in capital market
- To control the merge, acquisition and takeover the companies
- To audit the performance of stock market
- To make new rules on carry forward transactions
- To create relationship with ICAI
- Introduction of derivative contracts on volatility index
- To require report of portfolio management activities
- To educate the investors
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