“If we want our regulators to do better, we have to embrace a simple idea: regulation isn’t an obstacle to thriving free markets; it’s a vital part of them.” ~ James Surowiecki
To control the smooth functioning of any department there should be one controller who will look after its performance. They prepare the rule which needs to be followed and make necessary amendments when they see any loophole in it. It is necessary to regulate the capital market to make it’s functioning smooth and hassle-free, a major reason for capital market regulation is to make it’s functioning more fair and transparent.
Some of the major regulators are:
Ministry of Finance: This is the topmost office in the country as far as financial matters in the country are concerned and overlooks all the Financial Participants in the Country.
Following are the major law under this segment which regulates the Indian Capital Market.
Securities Contract (Regulations) Act 1956,
Securities exchange board of India Act, 1992
Reserve Bank of India: Reserve Bank of India mainly controls the Banking and monetary systems in the Country making Monetary Policies, looking after the working of Banks. It is governed under the RBI Act 1934.
Securities Exchange Board of India: Securities and Exchange Board of India is the main head of the Financial Markets and the main regulator in the Capital Markets. It performs various functions to maintain the smooth flow of financial markets.
Major functions are:
Regulation of business at the stock market
To control unfair means & practice of trading in the market
Controlling Insider Trading in the securities
Investor Awareness campaign to make investor awareness about the regulation of the market.
AMFI: Association of Mutual funds India an authorized regulatory body headed by Mr C.V.R Rajendran, regulates the whole mutual fund industry in India, It regulates licenses work for the betterment of the industry and aims to develop the mutual fund market in India.