Why was sebi introduced

The organization was created to meet the requirements of the following three groups:. The fundamental objective of SEBI is to safeguard the interest of all the parties involved in trading. It also regulates the functioning of the stock market. SEBI carries out the following tasks to meet its objectives: Protective functions, Regulatory functions, and developmental functions.

Functions that SEBI performs as a part of its protective functions are:. As a part of its regulatory functions , SEBI performs the following role:. It is known to be a regulatory body of goverment in India. SEBI plays an essential part in monitoring all the performers working in the Indian capital markets.

It ventures to guard the interest of investors in mutual fund investment. Also, points at improving the capital markets by implementing different rules and regulations. The government purpose is to assure that the capital money which the public was investing was secure. Over the years this drives to a framework of trust and respect of the stock exchange and capital market.

SEBI has a corporate structure including different departments all controlled by a department head. Some of the departments are as follows :. A platform to promote, improve and monitor the securities market in India. In accordance with Sebi guidelines, mutual funds need to register as trusts under the Trusts Act, Then a firm needs to be set up as a separate AMC asset management company to manage a mutual fund.

The net worth of AMC needs to be Rs. Mutual funds need to register with the SEBI. Also, there is the existence of a self-regulation agency for mutual funds i. It is centred on improving the Indian Mutual Fund Industry with expert and upright qualities. AMFI strives to improve the standards in all fields with a way to guard and promote mutual funds. Read more about: Mutual funds calculator.

SEBI holds in position the administrative structure. Critics say SEBI lacks transparency and is insulated from direct public accountability. The only mechanisms to check its power are a Securities Appellate Tribunal, which consists of a panel of three judges, and the Supreme Court of India.

Both bodies have occasionally censured SEBI. Still, SEBI has been aggressive at times in doling out punishment and in issuing strong reforms.

It also established the Financial Stability Board in , in response to the global financial crisis, giving the board a broader mandate than its predecessor to promote financial stability. Financial Stability Board. International Markets. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.

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