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Sebi Act

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Submitted By johnaholic
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THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT 1992
Firms and institutions can raise medium and long term funds by issuing securities. Securities issued can be tradable or non-tradable. Tradable securities include corporate securities(shares & debentures), govt securities, public securities, bonds, units of mutual fund, are tradable securities i.e. transferable . Non-transferable securities include bank deposits , company deposits, loans and advances of bank & financial institutions and post office certificates & deposits
Capital market can be classified into primary & secondary markets

Primary markets : provides for channel for sale of new securities. The issuer of securities(create and sell) new securities in the primary market to raise funds, either through public issue or private placement. If the issue is made to particular class of people it is called a private placement

Secondary markets : Deals with securities already issued or offered to the public in the primary market. Thus secondary market facilitates exchange of securities of listed companies which is called as Stock Markets. This market enables participants who hold securities to adjust their holdings in response to their assessment of risk and return. They can also sell these securities as per their liquidity needs

The securities market has three types of participants 1] issuer of securities 2] investors of securities 3] intermediaries. The issuer and investors are customers of the services rendered by the intermediaries. Those who receive funds in exchange of securities and those who receive securities in exchange of funds often need reassurance that it is safe to do so. This reassurance is provided by laws enforced by regulators.
The four main legislations that govern the securities markets : 1. The SEBI Act 1992- which establishes SEBI to protect investors and…...

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