Financial Market and Service Laws in India
Find Financial Market and Service Laws expert lawyer in India.
What is Financial Market?
What is Financial Service?
Who are the primary regulators of the financial sector in India?
What is the aim of regulating the financial sector globally?
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About the Financial Market and Service Laws
As per Black’s Law Dictionary, Financial Markets refer to the market for stock, bonds, bills of exchange, commodities, futures, and options. They are exchanges for capital or credit. Refer to capital market and money market.
As per Black’s Law Dictionary, Financial Services refer to the skills and offers that are offered by a bank or financial institution. It can be a savings account, checking account, confirming, leasing, or money transfer.
Indian Capital Markets are managed and checked by the Ministry of Finance, The Securities and Exchange Board of India and The Reserve Bank of India.
The Ministry of Finance manages through the Department of Economic Affairs - Capital Markets Division. The division is in charge of detailing the arrangements identified with the systematic development and improvement of the securities markets (i.e. offer, obligation and subordinates) and in addition ensuring the enthusiasm of the financial specialists. Its primary aim is reformation in the securities market on an institutional level, the building of a regulatory framework, bolstering investor protection mechanism, provision for the efficient legal framework for securities markets.
Regulators of Financial Market and Service Laws
The primary regulators of the financial sector in India are:
The Securities and Exchange Board of India (SEBI) which sets up regulatory policy, carries out implementation as well as has the power of enforcement of the regulatory rules. Complaints regarding decisions of SEBI are adjudicated by the Securities Appellate Tribunal
Reserve Bank of India which looks into the aspect of implementation of monetary and credit policies. RBI is the banker to the government. RBI has several policies which affect the financial sector. These policies also influence the rates of inflation.
National Stock Exchange (NSE) – it provides specific regulations for the domain of securities market.
Need of regulating the financial sector
The goal of regulating financial sector is to protect the de facto principles of regulation which include things like protection of stability in pricing, safeguarding of the small investors, prevention of market misconduct, and so on.
Regulation of financial sector universally is comprehensively guided by two aims: prudential regulation and direct of business regulation, including consumer protection. The four key institutional frameworks for regulation of the financial sector globally – Institutional Approach (element based regulation), Functional Approach (movement based regulation), Integrated Approach (all-inclusive controller model) and Twin Peaks Approach (division of prudential regulation and lead of business regulation) – all endeavour to address the above destinations through various formal structures. Post-crisis, another measurement of 'systemic stability' is being tried to be included as another goal of financial sector regulation yet the correct shapes in such manner are still in progress.