SECURITIES MARKET REFORMS AND REGULATORY MEASURES TO PROMOTE INVESTORS CONFIDENCE

In nineteeth century, origin of joint stock companies helped to grab a little amount of savings from the public in to the treasury  of the company. It is issued as shares to the investors in the company. Through the representatives of investors, they control the management at board meetings and the other affairs [or] other company meetings are handle [or] managed by professionals.

Protection for investors

Company and its management requires some mechanisms to protect the investors. Investor needs protection as follows:

To build confidence in investor’s mind

To the development and success of capital market, investor’s confidence is more important so to build the confidence of investor, company has to provide a good environment to the investor.

Create a quality step for investment

To develop the industry, proper and sound investment climate is important, for corporate consumers, it is easy to raise capital at minimum cost, through sufficient and secured investment climate.

Make sure that there is transparency in dealing

Investors invest amount in the company, when the company dealings are in transparent, it builds the confidence of investor to invest capital in it.

To create active capital market

When the interest of investor can be protected from all angles, then the investors can enter in to capital market  in large numbers.

To governing the market on sound lines

Investors has some protection measures in the form of governance. All market players work within the boundary  of regulation then it leads to smooth and stable, comfort functioning of capital market.

To create discipline in the market

It take some steps to minimise the unnecessary malpractices, unhealthy practices, undue speculation e.t.c  it develops good discipline among market players.

To create accountability amount market players

It has strict disclosure rules to be a sense of accordingly, it take some steps to develop the accountability in market players.

To create awareness among investors

All investors must know about their rules and liabilities and to know the type of frauds can also takes place. So, it is to educate the prospective of investor, these aspects can be helpful to protect themselves from unfair environment.

Investor education and protection fund [IEPF]

This protection is under SEBI and includes the government of India under 1956 company act. Which company completed 7 years in business that company has to handover matured deposits, debentures, unclaimed fund, dividends, share application money e.t.c to the government through this investor education and protection fund [IEPF].

Investor protection fund

This protection scheme is framed by inter connected stock exchange and its take guidelines from ministry of finance for investor protection in order to compensate the claims against the member of exchanges who have failed to pay. The investor can ask for the the compensation a member in BSE [Bombay stock exchange] or NSE [national stock exchange].

Investor awareness programme

Protection steps of investor by SEBI and it follows the slogan “An informed investor is a state investor”. SEBI launched a campaign as securities market awareness in the year 2023, in the month of January. These types of campaigns [or] programmes are organised by SEBI [securities and exchange board of India] to educate investors and create awareness to the investors. This programme cover major concepts like mutual funds, tax, investor protection fund, port folio management, provisions, investor grievance redressal system of SEBI. It conducts on workshops on sensex, stock exchange trade, derivatives e.t.c. This programme conducted 2000 workshops  in 500 cities across the country.

Role of AMFI

Association of mutual funds in India [AMFI] was set up in the month august 22, in the year1995, under this association SEBI is registered. It was set up to regulate, all mutual funds in India. And this association protects the investor from unfair investment.

FACTORS AFFECTING INVESTOR’S INTEREST

Some factors that are affecting the interest of investor, there as follows:

  • Insider trading
  • Excessive speculation
  • Short selling
  • The dominance of institutional and foreign institutional investors
  • Grievances against listed companies
  • Guidelines to investors
  • Measures taken by central government
  • Measures taken by SEBI
  • Measures taken by stock exchanges
  • Lack of transparency
  • Price rigging
  • Restrictive trading
  • Dominance of few stock exchanges
  • Investor’s protection measures
  • Measures taken by the company law board [NCLI]
  • Measures taken by the court
  • Measures taken by the department of corporate affairs

SECURITIES MARKET REFORMS AND REGULATORY MEASURES TO PROMOTE INVESTOR’S  CONFIDENCE

Settlement guarantee

it is taken by a risk in the market to get more capital and development in economic growth. By default of brokers, guarantee settlement were set up by the trade and settlement guarantee funds.

Green shoe option

SEBI introduced green shoe option in intial public offering [IPO]’

Derivatives

Derivatives is to assist the participants of market to merge the risk through speculation, arbitration and hedging.

Securities lending and borrowing

Clearing corporation after the registration with SEBI. Securities lending and borrowing is the intermediary of the SEBI scheme.

Establishment of regulator

Under SEBI, it gives assuarance and safe transactions in securities.

Screen based trading

It is a major capability in nation-wide online auto maded screen based trading system, it gives computer qualities of securities and do transactions. It can find the sale [or] buy from the counter party.

Control over issue of capital

It is liberalisation of the regulation of market. SEBI gives supply of disclosure and investor protection guidelines. Through this guidelines market more from merit to disclosure based regulation.

Depositories act

In earlier settlements, there was risk in the market. This is due to time taken for settlement and physical movement of paper. Further, it is in favour of purchaser by the company. To control there problems. Depositories act were established.

Securities market awareness

SEBI launched the nation-wide securities market awareness campaign that educate investors about the risk of market and the rights and obligation of investors.

Risk management

It has number of measures were taken by risks in the market, so, the investors [or] participants can be protected through this risk management.

Corporate governance

To increase [or] to enlarge the models of corporate administration, SEBI attered the clause 49 in listing agreements do changes in new clause 49, arrangements in it is identifying the meaning of free chiefs, enhancing nature of money, expecting boards to receive formal implicit rules, reinforcing the obligations of review advisory groups, those relating to regulate gathering exchanges and continues from rights or special issues, requiring CEO or CFO affirmation of monetary proclamations and enhancing divulgences to investors.

Debt listing agreement, main concept of this agreement is to build up the corporate administration, SEBI recommended a model i.e. debenture posting assertion for all debenture securities, it is issued by a backer independent of the method of issuance.

Gold exchange traded funds in India : There under to the declamation made by honourable finance minister in his budget speech 2005-2006, SEBI delegated a committee for the presentation of GETF in India. Based on the committee suggestions, SEBI regulates and were amended and issued a notice on 12 January 2006, allowing the shared assets to make familiar GETFs in India subject with certain speculation limitation.

Guidelines for issue of Indian depository receipts [IDR]: SEBI given guidelines on relevance and related necessities for organisations showing a great desire to possess of issuing IDR in India.

Introduction of fast track issuances: SEBI presented quick track issue system. The primary necessity of this, is to record draft offer archives was corrected.

Setting up of SME exchange: This exchange is to set up the system of new trade or separate stage of existing stock trade having across the nation terminals for SME [stock market exchange]. To set up system and to operate structure, it makes vital changes and made to appropriate controls, e.t.c. According to structure, it required in regard to all scrips exchanged and recorded on SME trade.

REFERENCES

https://www.corporateslaw.com/2018/09/securities-market-reforms-regulatory.html

https://www.fincash.com/l/investor-protection-measures-sebi

https://www.cciindia.org/investor.html

 

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

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The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

 

 

 

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