Regulatory Bodies of The Indian Stock Market

• The Indian stock market is playing a crucial role in contributing to the growth of the economy.
• This is making its proper maintenance and regularizations an important factor.
• There are several regulatory bodies that have been set up either for some purpose or might have been given the role of a regulatory authority by the Government of India.
• This main objective of this regulatory body in India is to maintain fairness, parity, and the functioning of the Indian stock market.
• This will not only ensure the ethical standards of the trading in India but will also maintain the stability of the entire economy.

The primary regulatory bodies in India consist of the following:

Reserve Bank of India (RBI)

• The Reserve Bank of India (RBI) is considered to be the central bank of India.
• It is managing the credit supply, regulating the operations of the banks, and will also help to maintain the balanced economic system.
• This will ensure price stability in the country.
• In addition, it will also stabilize the value of the Indian currency and will also ensure that the Indian stock market is stable as well as robust.
• It is one of the most important regulatory bodies of the Indian stock market.

The main functions of the RBI are as follows:

1. It has to maintain the infrastructure of the Indian stock market, such as the Securities Settlement System (SSS), Real Time Gross Settlement System (RTGSS), and Clearing Corporation of India (CCIL), etc.
2. RBI will also ensure the growth of electronic payments and compliance with international trends.
3. RBI is authorized to conduct the audits and inspections in case of any kind of fraud or blue collar crime.

Securities and Exchange Board of India (SEBI)

• SEBI is the most important of all the regulatory bodies.
• It has authority over everything that is related to the Indian stock market.
• It is protecting the interests of the traders and will also enforce a set of rules so as to ensure that the market is functioning effectively.
• SEBI will also govern the various stock exchanges in India, including the NSE and BSE.

It is promoting safe and fair practices in the stock market in the following ways:

1. It is preventing insider trading and unfair trade practices.
2. RBI is authorized to regulate the takeover of the companies, conduct audits, and also set the guidelines and the code of conduct that need to be followed for the proper functioning of the Indian stock market.
3. One of the primary roles of the regulatory bodies is to prevent fraud in the Indian stock market.

• SEBI is doing this by monitoring the activities of the brokers, sub-brokers, etc. and also preventing malpractices.
• This will provide a healthy environment for the investors.

Ministry of Corporate Affairs (MCA)

• MCA is one of the stands at the apex of all the regulatory bodies in India, and that too regardless of whether it is related to the Indian stock market or not.
• It will oversee the functioning of the industrial and service sectors, and the aforementioned regulatory bodies are also falling under its purview.
• MCA is also responsible for the implementation of the Competition Act of 2002, which will prevent the countermeasures against the unfair trade practices and the fraud in the Indian stock market.

Conclusion

This blog will help the traders in making informed choices while trading and will also ensure that they know which regulatory body to approach in case their trades are threatened due to unfair trade practices.

Frequently Asked Questions (FAQs)

Q1) Who are the regulatory bodies of the financial market in India?

Main regulators are SEBI, RBI, and Insurance Regulatory and Development Authority of India (IRDAI).

Q2) Who is the regulatory authority of the Indian stock market?

SEBI is the regulatory authority of the Indian stock market.

Q3) Who is the governing body of the stock market in India?

SEBI is the governing body of the stock market in India.

Q4) Who regulates Nifty?

The Reserve Bank of India (RBI) regulates Nifty.

Q5) What is the difference between SEBI, RBI, and IRDAI?

SEBI is holding the platform to protect the stock market. RBI is managing the monetary funds whereas IRDAI will regulate the insurance policies.

About Us

Nifty Trading Academy is our academy where we teach you about the stock market as well as technical analysis. We also provide live trading sessions and upload blogs for the same.