|Market Regulation Department|regulated by the Capital Markets |REGULATORY FRAMEWORK in capital market|
- In India, the capital market is regulated by the Capital Markets Division of the Department of Economic Affairs, Ministry of Finance.
- The division is responsible for formulating the policies related to the orderly growth and development of the securities markets (Le. share, debt and derivatives) as well as protecting the interest of the investors.
- In particular, it is responsible for (i) institutional reforms in the securities markets, (ii) building regulatory and market institutions, (iii) strengthening investor protection mechanism, and (iv) providing efficient legislative framework for securities markets, such as Securities and Exchange Board of India Act, 1992 (SEBI Act 1992); -Securities Contracts (Regulation) Act, 1956; and the Depositories Act, 1996.
- The division administers these legis/ations and the rules framed thereunder.
- The Securities and Exchange Board of India (SEBI) is the regulatory authority established under the SEBI Act 1992, in order to protect the interests of the investors in securities as well as promote the development of the capital market.
- It involves regulating the business in stock exchanges; supervising the working of stock brokers, share transfer agents, merchant bankers, underwriters, etc; as well as prohibiting unfair trade practices in the securities market.
- The following departments of SEBI take care of the activities in the secondary market:-
- Market Intermediaries Registration and Supervision Department (MIRSD)- concerned with the registration, supervision, compliance monitoring and inspections of all market intermediaries in respect of all segments of the markets, such, as equity, equity derivatives, debt and debt related derivatives.
Market Regulation Department –
- Market Regulation Department (MRD) – concerned with formulation of new policies as well as supervising the functioning and operations (except relating to derivatives) of securities exchanges, their subsidiaries, and market institutions such as Clearing and settlement organizations and Depositories.
- Derivatives and New Products Departments (DNPD)concerned with supervising trading at derivatives segments of stock exchanges, introducing new products to be traded and consequent po/icy changes.