MARKET REGULATION :

It is important to ensure smooth working of capital market, as it is the arena for the players associated with the economic growth of the country. Various laws have been passed from time to time to meet this objective. The financial market in India was highly segmented until the initiation of reforms in 1992-93 on account of a variety of regulations and administered prices including barriers to entry. The reform process was initiated with the establishment of Securities and Exchange Board of India.

The main legislations governing the Capital Market are:–

1. The SEBI Act, 1992 which establishes SEBI to protect investors and develop and regulate securities market.

2. The Securities Contracts (Regulation) Act, 1956, SC(R) Act which regulates transactions in securities through control over stock exchanges.

3. The Depositories Act, 1996 which provides for electronic maintenance and transfer of ownership of demat securities.

4. The Companies Act, 2013, which sets out the code of conduct for the corporate sector in relation to issue, allotment and transfer of securities and disclosures to be made in public issues.