Functions of (Primary Market) Under SEBI: Protecting The Interest of Investors

Functions Of {Primary Market} Under SEBI
 Primary Market facilitates capital growth by encouraging individuals to convert savings into
investments.
 Primary Market being the part of Capital market also issues new securities.
 Government or Public sector institutions and companies can obtain funds in exchange of a new
stock or bond issues via an investment Bank or financial Syndicate of securities dealers.
 It encourages Initial Public Offerings [IPO]
Role of SEBI
Protecting the interest of investors
 SEBI ensures that the investors do not get befooled by misleading and false advertisements. In
return, SEBI issued guidelines so as to protect investors and also ensured that the advertisement
is fair and concise.
 Regulation of price rigging: Price rigging refers to manipulation of prices by way of fluctuating
the prices with the object of inflating and depressing the market price of securities.
 SEBI make efforts to educate investors so that they are able to make choices between the
offerings of different companies and choose the most profitable securities.
 SEBI has issued guidelines to investigate cases of fraud and insider trading. Adding to this the
provisions for fine and Imprisonment.
To ensure Development activities in Stock Exchange
 E-Trading: Concept of E-trading have been introduced few years back by SEBI to eliminate the
discomfort. It simplifies the process of buying and selling of securities.
 The initial public offering of Primary Market (which is a part of Capital market) permits through
stock exchange.
 SEBI promotes training of intermediaries of securities market with the object of smooth
functioning.
Regulate the business of stock exchange and activities of stock exchange
SEBI introduced proper Code Of Conduct applicable to everyone who is a part of the process of
buying and selling of securities, stock exchange, etc. Following are the areas of concern:
 Rules and Regulations to regulate intermediaries such as Broker, underwriters, etc.

 Registers and Regulates the working of merchant Bankers, sub-brokers, stock-brokers, share
transfer agent, trustees, etc.
 Registers the working of mutual Funds.
 SEBI regulates turnover of the companies.
 It also conducts inquiry and audits.
To Regulate Insider Trading
Insider Trading have been a problem since the introduction of the Market dealing with buying
and selling of securities, stock exchange, etc. An Insider is a person or a group of people having
first- hand knowledge about the internal issues and Ups and downs of a company. The moment
insider gets to know about the loss which is going to occur, the shares under insider’s name are
sold immediately. Hence, company suffers a huge amount of loss.
Functions Of Primary Market Under SEBI

 Primary Market facilitates capital growth by encouraging individuals to convert savings into
investments.
 Primary Market being the part of Capital market also issues new securities.
 Government or Public sector institutions and companies can obtain funds in exchange of a new
stock or bond issues via an investment Bank or financial Syndicate of securities dealers.
 It encourages Initial Public Offerings [IPO]
Role of SEBI
Protecting the interest of investors
 SEBI ensures that the investors do not get befooled by misleading and false advertisements. In
return, SEBI issued guidelines so as to protect investors and also ensured that the advertisement
is fair and concise.
 Regulation of price rigging: Price rigging refers to manipulation of prices by way of fluctuating
the prices with the object of inflating and depressing the market price of securities.
 SEBI make efforts to educate investors so that they are able to make choices between the
offerings of different companies and choose the most profitable securities.
 SEBI has issued guidelines to investigate cases of fraud and insider trading. Adding to this the
provisions for fine and Imprisonment.
To ensure Development activities in Stock Exchange
 E-Trading: Concept of E-trading have been introduced few years back by SEBI to eliminate the
discomfort. It simplifies the process of buying and selling of securities.
 The initial public offering of Primary Market (which is a part of Capital market) permits through
stock exchange.
 SEBI promotes training of intermediaries of securities market with the object of smooth
functioning.
Regulate the business of stock exchange and activities of stock exchange
SEBI introduced proper Code Of Conduct applicable to everyone who is a part of the process of
buying and selling of securities, stock exchange, etc. Following are the areas of concern:
 Rules and Regulations to regulate intermediaries such as Broker, underwriters, etc.

 Registers and Regulates the working of merchant Bankers, sub-brokers, stock-brokers, share
transfer agent, trustees, etc.
 Registers the working of mutual Funds.
 SEBI regulates turnover of the companies.
 It also conducts inquiry and audits.
To Regulate Insider Trading
Insider Trading have been a problem since the introduction of the Market dealing with buying
and selling of securities, stock exchange, etc. An Insider is a person or a group of people having
first- hand knowledge about the internal issues and Ups and downs of a company. The moment
insider gets to know about the loss which is going to occur, the shares under insider’s name are
sold immediately. Hence, company suffers a huge amount of loss.
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Role of SEBI in regulating the secondary market
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Written by
Vidisha Joshi
February 18, 2017
Secondary Market
Secondary Market is considered to be a market where securities (collateral) are exchanged after
originally being offered to the public in the primary market and registered on the Stock Exchange.
Major trading is usually done in the secondary market. Secondary market includes equity markets
and the debt markets.
The secondary market presents a well-organized platform for the general investor for trading of his
securities. Secondary equity markets acts as an examining and control channel for the organization
of the company by promoting value-enhancing control activities, authorizing execution of incentive-
based management contracts, and accumulating information (through price discovery) that aids
management decisions.
Role of SEBI
The SEBI (The Securities and exchange Board of India) is the administrative body formed under
Section 3 of SEBI Act 1992 to secure the interests of the people investing in securities and to
encourage the growth of, and to manage the securities market and for the matters which are
connected with it.
Various departments of SEBI regulating trading in the secondary market
The following units of SEBI take care of the activities happening in the secondary market:
Sr.No. Name of the Department Major functions

Market Intermediaries Registration, management, acquiescence monitoring and examines all mark
1. Registration and Supervision intermediaries as concerns all sections of the markets namely equity, equity
department (MIRSD) derivatives, debt as well as debt related derivatives.
Developing new policies and instructing the functioning and working (exce
2. Market Regulation matters relating to derivatives) of securities exchanges, their divisions, and
Department (MRD) market organizations such as Clearing and settling of organizations and
repositories (referred to as ‘Market SROs’.)
Derivatives and New
3. Administering trading at derivatives sections of stock exchanges, introduci
Products Departments
new products to be traded, and making certain changes in policy
(DNPD)
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Functions Of {Primary Market} Under SEBI

To ensure Development activities in Stock Exchange

Regulate the business of stock exchange and activities of stock exchange

 Rules and Regulations to regulate intermediaries such as Broker, underwriters, etc.