Basic Financial
Management
SEBI’s Role In the Capital Market
Introduction
01
Overview of
SEBI
Establishment and Purpose
The Securities and Exchange Board of India (SEBI) was
established in 1988 and granted statutory powers in 1992. Its
primary purpose is to protect the interests of investors in
securities, promote the development of the securities market,
and regulate its operations.
Key Responsibilities
SEBI's main responsibilities include regulating
stock exchanges and securities markets,
registering intermediaries, and ensuring fair
trading practices. It also focuses on investor
education and awareness.
Regulatory Framework
SEBI operates under the SEBI Act, 1992, along with various
regulations and guidelines for different participants in the
capital market. These regulations provide a framework for the
functioning of the markets and the entities involved.
02
Capital Market
Structure
Components of Capital Markets
The capital market is divided into primary and secondary
markets. The primary market facilitates new issues of
securities, while the secondary market enables trading of
existing securities.
Market Participants
Key participants in the capital market include issuers
(companies), investors (individuals and institutions), stock
exchanges, and intermediaries like brokers and underwriters.
Types of Securities
The main types of securities traded in the capital
market are equity shares, debentures, and other
long-term debt instruments. Each type serves
different investment goals and risk profiles.
03
SEBI Regulations
Market Conduct Regulations
SEBI enforces conduct regulations that prevent market
manipulation and insider trading. These regulations ensure that
all market participants operate on a level playing field,
promoting fairness and transparency.
Investor Protection Measures
To safeguard investors, SEBI implements measures like
mandatory disclosure requirements and investor education
programs. These initiatives help investors make informed
decisions and understand their rights.
Corporate Governance
Standards
SEBI's regulations establish rigorous corporate
governance standards for listed companies,
focusing on accountability, transparency, and
ethical conduct. These standards aim to enhance
investor trust and improve market integrity.
04
SEBI's Impact
Market Development
SEBI plays a crucial role in the development of
the Indian capital market by facilitating new
products and enhancing market infrastructure.
This has contributed to increased liquidity and
participation.
Investor Confidence
Through its regulatory framework and enforcement actions,
SEBI has significantly boosted investor confidence in the capital
markets, leading to greater participation from both domestic
and foreign investors.
Case Studies
Several case studies illustrate SEBI's effectiveness in
addressing market irregularities and enforcing compliance,
thereby reinforcing the legal framework and boosting market
credibility.
05
Challenges and
Recommendations
Regulatory Challenges
SEBI faces challenges including adapting to rapid
market changes, managing cross-border
transactions, and addressing emerging risks
associated with technological advancements.
Technological Adaptation
In response to the growing influence of technology, SEBI is
working towards enhancing its regulatory frameworks to
accommodate innovations like digital trading and blockchain
technology.
Future Directions
Future directions for SEBI include strengthening regulatory
practices, enhancing investor education, and promoting
sustainable investment strategies in line with global trends.
Conclusions
In conclusion, SEBI has been instrumental in the
development and regulation of the capital
markets in India, ensuring investor protection and
promoting market integrity. Continued adaptation
and improvement are essential for future growth.
Thank you!
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