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Securities
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What is meant by Securities?
Securities includes instruments such as shares, bonds, stocks or other marketable securities of similar nature issued by incorporate company or body corporate, government securities, derivatives instruments, units of collective investment scheme, interest and rights in securities, or any other instruments so declared by the Central Government.
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What is the function of Securities Market?
Securities market is a place where buyers and sellers of securities meet each other to enter into transactions for purchase and sale of shares, bonds, debentures etc.
Further, it performs an important role of enabling corporate, entrepreneurs to raise capital for their companies and business ventures through public issues. Transfer of amount from those who have idle savings (investors) to those who have a need (corporate) is effectively met achieved through the securities market.
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Who are the participants in the Securities Market?
The securities market essentially has three categories of participants, namely,
- The issuers of securities
- Investors in securities
- The intermediaries, such as merchant bankers, brokers
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Which are the securities one can invest in?
- Shares
- Government Securities
- Derivative products
- Units of Mutual Funds etc.,
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Why does Securities Market need Regulators?
The absence of conditions of perfect competition in the securities market makes the role of the regulator extremely important. They develop fair market practices and regulate the conduct of issuers of securities and the intermediaries. It ensures that the market participants behave in a desired manner so that securities market continues to be a major source of finance for corporate and government.
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Who regulates the Securities Market?
Securities and Exchange Board of India(SEBI) looks into the regulation and supervision of stock exchanges and mutual funds. It regularly comes out with comprehensive regulatory measures aimed at ensuring that end investors benefit from safe and transparent dealings in securities.
Role of SEBI:
- Protecting the interests of investors in securities
- Promoting the development of the securities market.
- Regulating the business in stock exchanges and any other securities market.
- Registering and regulating the working of stock brokers and sub-brokers.
- Promoting and regulating self regulatory organizations
- Prohibiting fraudulent and unfair trade practices
- Calling for information from, undertaking inspection, conducting enquires and audits of the exchanges, intermediaries, mutual funds and other persons associated with the securities market.
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