Regulation of Stock exchanges in India¶
Stock exchanges in India are regulated by several key regulatory authorities and follow a comprehensive regulatory framework to ensure fair and transparent trading practices. The primary regulatory authorities and regulations governing stock exchanges in India include:
Securities and Exchange Board of India (SEBI): SEBI is the primary regulatory authority overseeing the securities markets in India. Its role includes:
Formulating regulations and guidelines for stock exchanges, market intermediaries, and market participants. Monitoring and supervising stock exchanges and market intermediaries to ensure compliance with regulations. Promoting investor protection and market integrity. Securities Contracts (Regulation) Act, 1956 (SCRA): This act provides the legal framework for the regulation of stock exchanges and contracts traded on these exchanges. It empowers SEBI to regulate stock exchanges and securities markets.
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Listing Agreement: Stock exchanges in India require listed companies to enter into listing agreements with them. These agreements outline the obligations, disclosure requirements, and corporate governance norms that listed companies must adhere to.
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SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: These regulations, often referred to as LODR, provide detailed provisions for listing and continuous disclosure requirements for listed companies. It covers matters such as corporate governance, financial reporting, and information disclosure to ensure transparency.
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SEBI (Prohibition of Insider Trading) Regulations, 2015: These regulations aim to prevent insider trading in listed securities. They prohibit insider trading and require companies to establish a code of conduct for prevention of insider trading.
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SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: These regulations govern the acquisition of shares or voting rights in listed companies and provide guidelines for making open offers to shareholders.
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SEBI (Buyback of Securities) Regulations, 2018: These regulations govern the buyback of shares by listed companies, specifying the conditions and procedures for buyback offers.
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SEBI (Depositories and Participants) Regulations, 2018: These regulations pertain to the functioning of depositories and their participants (Depository Participants or DPs) in facilitating electronic trading and settlement of securities.
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SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992: These regulations govern the conduct and registration of stockbrokers and sub-brokers, ensuring that they adhere to ethical and operational standards.
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SEBI (Market Intermediaries) Regulations, 2008: These regulations apply to various market intermediaries, such as mutual funds, portfolio managers, and investment advisors, outlining their registration, conduct, and compliance requirements.
These regulations collectively create a robust framework for the operation of stock exchanges and the conduct of market participants in India. SEBI plays a central role in enforcing and updating these regulations to maintain the integrity and transparency of the Indian securities market. Additionally, stock exchanges themselves have their own set of rules and bylaws that complement these regulatory frameworks.
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