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Unit 14: Securities and Exchange Board of India

(c) The total number of each category of security actually delivered at each clearing. Notes

(d) The number and classes of contracts in respect of which settlements shall be made or
different through the clearing house.
(e) The regulation, or prohibition of badlas or carry-over facilities.
(f) The fixing, altering or postponing of days for settlements.

(g) The determinations and declaration of market rates, including the opening, closing,
highest and lowest for securities.
(h) The terms, conditions and incidents of contracts, including the prescription of market
requirement and conditions relating there to and the forms of contracts in writing.
(i) The regulation of the entering into, making, performance, recession and termination,
of contracts between members or between a member and his constituent or between
a member and a person not a member, and consequences of a breach by a seller
buyer, and there responsibility of member not parities to such contracts.

(j) The regulation of taravani business including the placing of limitations thereon.
(k) The listing of securities on the stock exchange, the inclusion of any security for
the purpose …and the suspension or withdrawal of any such securities, and the
suspension or prohibition of trade specifi ed securities.
(l) The method and procedure for the settlement parties to contracts in any capacity.
(m) The levy and recovery of fees, fines and penalties.

(n) The regulation of the course of business between parties to contracts in any
capacity.
(o) The fixing of a scale of brokerage and other charges.

14.6 Regulatory Framework of Security Market

The four main legislations governing the securities market are: (a) the SEBI Act, 1992 which
establishes SEBI to protect investors and develop and regulate securities market; (b) the
Companies Act, 1956, which sets out the code of conduct for the corporate sector in relation
to issue, allotment and transfer of securities, and disclosures to be made in public issues;
(c) the Securities Contracts (Regulation) Act, 1956, which provides for regulation of transactions
in securities through control over stock exchanges; and (d) the Depositories Act, 1996 which
provides for electronic maintenance and transfer of ownership of demat securities.

Legislations

SEBI Act, 1992: The SEBI Act, 1992, establishes SEBI with statutory powers for (a) protecting
the interests of investors in securities, (b) promoting the development of the securities market,
and (c) regulating the securities market. Its regulatory jurisdiction extends over corporate
entities in the issuance of capital and transfer of securities, in addition to all intermediaries and
persons associated with the securities market. It can conduct enquiries, audits and inspection of
all concerned and adjudicate offences under the Act. It has powers to register and regulate all
market intermediaries and also to penalise them in case of violations of the provisions of the Act,
rules and regulations made thereunder. SEBI has full autonomy and authority to regulate and
develop an orderly securities market.
Securities Contracts (Regulation) Act, 1956: It provides for direct and indirect control of virtually
all aspects of securities trading and the running of stock exchanges and aims to prevent undesirable
transactions in securities. It gives the Central Government/SEBI regulatory jurisdiction over (a)

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