{"id":50,"date":"2021-10-06T10:47:06","date_gmt":"2021-10-06T10:47:06","guid":{"rendered":"https:\/\/gauravheera.com\/sharemarket\/?p=50"},"modified":"2021-10-11T10:00:11","modified_gmt":"2021-10-11T10:00:11","slug":"what-are-regulators","status":"publish","type":"post","link":"https:\/\/assetscholars.com\/blog\/what-are-regulators\/","title":{"rendered":"What are Regulators?"},"content":{"rendered":"

We have read in the earlier chapter<\/a> that equity is one such investment option that has the potential to deliver returns much higher than the rate of inflation. Now the question comes that how to invest in it? Before knowing the answer, it is important to know who invests in equity and how the whole system works.<\/span><\/span><\/p>\n

Just like we go to the grocery store next to us and buy the things we need, similarly we invest in equity, or buy and sell in the stock market. While investing in equities, one word \u2013 Transact, you will hear again and again. Transact means buying and selling. And you cannot do this buying and selling of equity without the stock market. <\/span><\/span><\/p>\n

The stock market mixes buyers and sellers of equities. But this stock market does not appear as a store or building, as your grocery stores look. The stock market is held in electronic form. You go to it through the computer and do business buying and selling there. Keep one thing in mind here that you cannot do the buying and selling of these shares without a stockbroker. A stockbroker is a registered intermediary, which we will explain in more detail later. <\/span><\/span><\/p>\n

India has two main stock exchanges in the country – Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Apart from this there are also some regional stock exchanges like Bangalore Stock Exchange, Madras Stock Exchange and Delhi stock exchange. Now few people participate on the regional stock exchange.<\/span><\/span><\/p>\n

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Who participates in the stock market and why do they need to be regulated? <\/span><\/span><\/h2>\n

From an individual to companies invest in the stock market. People who buy and sell in the stock market are called market participants. These market participants are divided into several categories. Some categories of information are given below. <\/span><\/span><\/p>\n

Domestic Retail Participants<\/strong> \u2013 Citizens of Indian Origin who reside in India, like us and you. <\/span><\/span><\/p>\n

NRI\u2019s and OCI<\/strong> \u2013 Citizens of Indian Origin who have settled abroad. <\/span><\/span><\/p>\n

Domestic Institutional Investors<\/strong> \u2013 Under this, large Indian companies come, such as Life Insurance Company of India- LIC. <\/span><\/span><\/p>\n

Domestic Asset Management Companies<\/strong> \u2013 This category usually includes domestic mutual fund companies such as SBI Mutual Fund, DSP BlackRock, Fidelity Investments, HDFC AMC etc. <\/span><\/span><\/p>\n

Foreign Institutional Investors<\/strong> \u2013 This includes foreign companies, foreign asset management companies, hedge funds, etc. <\/span><\/span><\/p>\n

Be it any category or category of investors, every entity participating in the stock market wants to earn profits. And when it comes to money, there is a lot of greed and fear in a human being. Any person can easily do wrong things by falling prey to greed and fear. <\/span><\/span><\/p>\n

Some scams have also happened in India like Harshad Mehta scam etc. That is why it is necessary that there should be such a body, which makes rules and regulations and ensures that there is no wrongdoing in the market, and everyone gets the right opportunity to earn money. That’s why a regulator is needed. <\/span><\/span><\/p>\n

Regulator<\/strong> <\/span><\/span><\/p>\n

The regulator of the stock market in India is the Securities and Exchange Board of India<\/strong>, which we know as SEBI. The object of SEBI is to protect the interests of investors investing in securities, to promote and regulate the development of the securities market and to make provisions for matters connected therewith or incidental thereto. <\/span><\/span><\/p>\n

SEBI ensures that Both the stock exchanges \u2013 NSE and BSE<\/strong>, do their job the right way. Stockbrokers and sub-brokers work as per rules. Any entity participating in the stock market should not do anything wrong. Companies should not use the stock market solely for their own benefit. <\/span><\/span>Big investors, who have a lot of capital, should not manipulate the market according to their own benefits. <\/span><\/span><\/p>\n

Keeping these objectives in view, it is necessary that SEBI regulates all the entities. All the entities listed below are directly linked to the share market. The wrong action of any one can cause a ruckus in the stock market. <\/span><\/span><\/p>\n