Regulation of Stock Exchanges in India Essay

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Regulation of Stock Exchanges in India Stock Exchanges are the organized securities markets regulating the trading in shares, debentures and other securities in the interest of the investors. Stock Markets in India play a predominant role in its efforts in the industrialization. A fair and efficient securities market contributes to a large extent towards industrial development by its many fold operations. Stock exchanges are primarily responsible for mobilizing and channelizing savings of the household sector into productive enterprises. By effectively monitoring available resources, the securities market offered attractive returns and capital appreciation. Slowly and steadily a consciousness has been built up among the common savers on account of several investment opportunities made available in the securities market, though most of them have to rely on the advice of brokers, sub – brokers or specialized agents. Trading Mechanism Trading at both the exchanges takes place through an open electronic limit order book, in which order matching is done by the trading computer. There are no market makers or specialists and the entire process is order-driven, which means that market orders placed by investors are automatically matched with the best limit orders. As a result, buyers and sellers remain anonymous. The advantage of an order driven market is that it brings more transparency, by displaying all buy and sell orders in the trading system. However, in the absence of market makers, there is no guarantee that orders will be executed. Role of SEBI in monitoring the Stock Exchange Market Regulation The overall responsibility of development, regulation and supervision of the stock market rests with the Securities & Exchange Board of India (SEBI), which was formed in 1992 as an independent authority. Since then, SEBI has consistently tried to lay down market

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