Financial Regulatory Bodies In India:The financial system in India is regulated by independent regulators in the field of banking,insurance, capital market, commodities market, and pension funds. However, Government ofIndia plays a significant role in controlling the financial system in India and influences the rolesof such regulators at least to some extent.The following are five major financial regulatory bodies in India:(A) Statutory Bodies via parliamentary enactments: 1. Reserve Bank of India : Reserve Bank of India is the apex monetary Institution of India. It is also called as the central bank of the country. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India. It acts as the apex monetary authority of the country. The Central Office is where the Governor sits and is where policies are formulated. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India. The preamble of the reserve bank of India is as follows: "to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." 2. Securities and Exchange Board of India : SEBI Act, 1992 : Securities and Exchange Board of India (SEBI) was first established in the year 1988 as a non-statutory body for regulating the securities market. It became an autonomous body in 1992 and more powers were given through an ordinance. Since then it regulates the market through its independent powers.
3. Insurance Regulatory and Development Authority : The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India and is based in Hyderabad (Andhra Pradesh). It was formed by an Act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. 4. Forward Market Commission India (FMC) : Forward Markets Commission (FMC)headquartered at Mumbai, is a regulatory authority which is overseen by the Ministry ofConsumer Affairs, Food and Public Distribution, Govt. of India. It is a statutory body set up in1953 under the Forward Contracts (Regulation) Act, 1952 This Commission allows commoditytrading in 22 exchanges in India, out of which three are national level. 4. PFRDA under the Finance Ministry : Pension Fund Regulatory and Development Authority : PFRDA was established by Government of India on 23rd August, 2003. The Government has, through an executive order dated 10th October 2003, mandated PFRDA to act as a regulator for the pension sector. The mandate of PFRDA is development and regulation of pension sector in India.
INTRODUCTION:The Securities and Exchange Board of India (SEBI) is the regulatory authority in Indiaestablished under Section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for establishment ofSecurities and Exchange Board of India (SEBI) with statutory powers for (a) protecting theinterests of investors in securities (b) promoting the development of the securities market and (c)regulating the securities market. Its regulatory jurisdiction extends over corporates in theissuance of capital and transfer of securities, in addition to all intermediaries and personsassociated with securities market. SEBI has been obligated to perform the aforesaid functions bysuch measures as it thinks fit. In particular, it has powers for: Regulating the business in stock exchanges and any other securities markets Registering and regulating the working of stock brokers, sub-brokers etc. Promoting and regulating self-regulatory organizations Prohibiting fraudulent and unfair trade practices Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, intermediaries, self - regulatory organizations, mutual funds and other persons associated with the securities market.The SEBI is managed by six members, i.e. by the chairman who is nominated by centralgovernment & two members, i.e. officers of central ministry, one member from the RBI & theremaining two are nominated by the central government. The office of SEBI is situated atMumbai with its regional offices at Kolkata, Delhi & Chennai.
Role or Functions of SEBI as Regulatory Authority:The role or functions of SEBI are discussed below.1. To protect the interests of investors through proper education and guidance as regards their investment in securities. For this, SEBI has made rules and regulation to be followed by the financial intermediaries such as brokers, etc. SEBI looks after the complaints received from investors for fair settlement. It also issues booklets for the guidance and protection of small investors.2. To regulate and control the business on stock exchanges and other security markets. For this, SEBI keeps supervision on brokers. Registration of brokers and sub-brokers is made compulsory and they are expected to follow certain rules and regulations. Effective control is also maintained by SEBI on the working of stock exchanges.3. To make registration and to regulate the functioning of intermediaries such as stock brokers, sub-brokers, share transfer agents, merchant bankers and other intermediaries operating on the securities market. In addition, to provide suitable training to intermediaries. This function is useful for healthy atmosphere on the stock exchange and for the protection of small investors.4. To register and regulate the working of mutual funds including UTI (Unit Trust of India). SEBI has made rules and regulations to be followed by mutual funds. The purpose is to maintain effective supervision on their operations & avoid their unfair and anti-investor activities.5. To promote self-regulatory organization of intermediaries. SEBI is given wide statutory powers. However, self-regulation is better than external regulation. Here, the function of SEBI is to encourage intermediaries to form their professional associations and control undesirable activities of their members. SEBI can also use its powers when required for protection of small investors.6. To regulate mergers, takeovers and acquisitions of companies in order to protect the interest of investors. For this, SEBI has issued suitable guidelines so that such mergers and takeovers will not be at the cost of small investors.
7. To prohibit fraudulent and unfair practices of intermediaries operating on securities markets. SEBI is not for interfering in the normal working of these intermediaries. Its function is to regulate and control their objectional practices which may harm the investors and healthy growth of capital market. 8. To issue guidelines to companies regarding capital issues. Separate guidelines are prepared for first public issue of new companies, for public issue by existing listed companies and for first public issue by existing private companies. SEBI is expected to conduct research and publish information useful to all market players (i.e. all buyers and sellers). 9. To conduct inspection, inquiries & audits of stock exchanges, intermediaries and self- regulating organizations and to take suitable remedial measures wherever necessary. This function is undertaken for orderly working of stock exchanges & intermediaries. 10. To restrict insider trading activity through suitable measures. This function is useful for avoiding undesirable activities of brokers and securities scams.ROLE OF SEBI IN INDIAN CAPITAL MARKET:SEBI is regulator to control Indian capital market. Since its establishment in 1992, it is doinghard work for protecting the interests of Indian investors. SEBI gets education from past cheatingwith naive investors of India. Now, SEBI is more strict with those who commit frauds in capitalmarket.The role of security exchange board of India (SEBI) in regulating Indian capital market is veryimportant because government of India can only open or take decision to open new stockexchange in India after getting advice from SEBI.1. Power to make rules for controlling stock exchange :SEBI has power to make new rules for controlling stock exchange in India. For example, SEBIfixed the time of trading 9 AM and 5 PM in stock market.2. To provide license to dealers and brokers :SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any
financial product is of capital nature, then SEBI can also control to that product and its dealers.One of main example is ULIPs case. SEBI said, " It is just like mutual funds and all banks andfinancial and insurance companies who want to issue it, must take permission from SEBI."3. To Stop fraud in Capital Market :SEBI has many powers for stopping fraud in capital market It can ban on the trading of those brokers who are involved in fraudulent and unfair trade practices relating to stock market. It can impose the penalties on capital market intermediaries if they involve in insider trading. 4. To Control the Merge, Acquisition and Takeover the companies : Many big companies in India want to create monopoly in capital market. So, these companies buy all other companies or deal of merging. SEBI sees whether this merge or acquisition is for development of business or to harm capital market. 5. To audit the performance of stock market : SEBI uses his powers to audit the performance of different Indian stock exchange for bringing transparency in the working of stock exchanges. 6. To make new rules on carry - forward transactions : Share trading transactions carry forward cannot exceed 25% of brokers total transactions 90 day limit for carry forward. 7. To create relationship with ICAI : ICAI is the authority for making new auditors of companies. SEBI creates good relationship with ICAI for bringing more transparency in the auditing work of company accounts because audited financial statements are mirror to see the real face of company and after this investors can decide to invest or not to invest. Moreover, investors of India can easily trust on audited financial reports. After Satyam Scam, SEBI is investigating with ICAI, whether CAs are doing their duty by ethical way or not.
8. Introduction of derivative contracts on Volatility Index :1. For reducing the risk of investors, SEBI has now been decided to permit StockExchanges to introduce derivative contracts on Volatility Index, subject to the conditionthat;a. The underlying Volatility Index has a track record of at least one year.b. The Exchange has in place the appropriate risk management framework for suchderivative contracts.2. Before introduction of such contracts, the Stock Exchanges shall submit the following:i. Contract specificationsii. Position and Exercise Limitsiii. Marginsiv. The economic purpose it is intended to servev. Likely contribution to market developmentvi. The safeguards and the risk protection mechanism adopted by the exchange to ensuremarket integrity, protection of investors and smooth and orderly trading.vii. The infrastructure of the exchange and the surveillance system to effectively monitortrading in such contracts, andviii. Details of settlement procedures & systemsix. Details of back testing of the margin calculation for a period of one year considering acall and a put option on the underlying with a delta of 0.25 & -0.25 respectively andactual value of the underlying.9. To Require report of Portfolio Management Activities :SEBI has also power to require report of portfolio management to check the capitalmarket performance. Recently, SEBI sent the letter to all Registered Portfolio Managersof India for demanding report.10. To educate the investors :Time to time, SEBI arranges scheduled workshops to educate the investors. On 22 may2010 SEBI imposed workshop.
INTRODUCTION: Capital market is one of the most important segments of the Indianfinancial system. It is the market available to the companies for meeting their requirements of thelong-term funds. It refers to all the facilities and the institutional arrangements for borrowing andlending funds. In other words, it is concerned with the raising of money capital for purposes ofmaking long-term investments. The market consists of a number of individuals and institutions(including the Government) that canalise the supply and demand for long -term capital andclaims on it. The demand for long term capital comes predominantly from private sectormanufacturing industries, agriculture sector, trade and the Government agencies. While, thesupply of funds for the capital market comes largely from individual and corporate savings,banks, insurance companies, specialised financing agencies and the surplus of Governments.The Indian capital market is broadly divided into the gilt-edged market and the industrialsecurities market. The gilt-edged market refers to the market for Government and semi-government securities, backed by the Reserve Bank of India (RBI). Government securities are tradable debt instruments issued by the Government for meeting its financial requirements. The term gilt-edged means of the best quality. This is because the Government securities do not suffer from risk of default and are highly liquid (as they can be easily sold in the market at their current price). The open market operations of the RBI are also conducted in such securities. The industrial securities market refers to the market which deals in equities and debentures of the corporate. It is further divided into primary market and secondary market. Primary market (new issue market): deals with new securities, that is, securities which were not previously available and are offered to the investing public for the first time. It is the market for raising fresh capital in the form of shares and debentures. It provides the issuing company with additional funds for starting a new enterprise or for either expansion or diversification of an existing one, and thus its contribution to company financing is direct. The new offerings by the companies are made either as an initial
public offering (IPO) or rights issue. Secondary market/ stock market (old issues market or stock exchange): is the market for buying and selling securities of the existing companies. Under this, securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange. The stock exchanges are the exclusive centres for trading of securities. It is a sensitive barometer and reflects the trends in the economy through fluctuations in the prices of various securities. It been defined as, "a body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating and controlling the business of buying, selling and dealing in securities". Listing on stock exchanges enables the shareholders to monitor the movement of the share prices in an effective manner. This assist them to take prudent decisions on whether to retain their holdings or sell off or even accumulate further. However, to list the securities on a stock exchange, the issuing company has to go through set norms and procedures.Regulatory Framework of Capital Markets:In India, the capital market is regulated by the Capital Markets Division of the Department ofEconomic Affairs, Ministry of Finance. The division is responsible for formulating the policiesrelated to the orderly growth and development of the securities markets (i.e. share, debt andderivatives) as well as protecting the interest of the investors. In particular, it is responsible for (i)institutional reforms in the securities markets, (ii) building regulatory and market institutions,(iii) strengthening investor protection mechanism, and (iv) providing efficient legislativeframework for securities markets, such as Securities and Exchange Board of India Act, 1992(SEBI Act 1992); Securities Contracts (Regulation) Act, 1956; and the Depositories Act,1996. The division administers these legislations and the rules framed thereunder.The Securities and Exchange Board of India (SEBI) is the regulatory authority establishedunder the SEBI Act 1992, in order to protect the interests of the investors in securities as well aspromote the development of the capital market. It involves regulating the business in stockexchanges; supervising the working of stock brokers, share transfer agents, merchant bankers,underwriters, etc; as well as prohibiting unfair trade practices in the securities market. The
following departments of SEBI take care of the activities in the secondary market: Market Intermediaries Registration and Supervision Department (MIRSD) : concerned with the registration, supervision, compliance monitoring and inspections of all market intermediaries in respect of all segments of the markets, such as equity, equity derivatives, debt and debt related derivatives. Market Regulation Department (MRD) :concerned with formulation of new policies as well as supervising the functioning and operations (except relating to derivatives) of securities exchanges, their subsidiaries, and market institutions such as Clearing and settlement organizations and Depositories. Derivatives and New Products Departments (DNPD) : concerned with supervising trading at derivatives segments of stock exchanges, introducing new products to be traded and consequent policy changes.
Role of capital market in increasing investor protection:Capital Markets play a key role in the development of every economy, and as a result,governments in various countries deem it necessary to regulate these markets. And Financial markets have only one asset that really matters and that asset is PUBLIC CONFIDENCE. In order for capital markets to thrive, there must be adequate safeguards, which will enhance public confidence in the markets. These safeguards are usually the investor protection roles and functions of regulatory bodies of the capital markets. Investor protection is intended to enhance investors‟ confidence in the capital markets. Confidence in any capital market, is perhaps the single most important pre-requisite for its sustenance and growth.For a market to foster business development it must be attractive to prospective investors lookingfor investment opportunities. In order for a market to be attractive to potential investors, it musthave earned investor confidence, which in turn is achieved through the imposition and effectiveenforcement of rules which ensure the market is operated efficiently and fairly.Principles of Regulation in capital market:Key to a successful securities trading system is that all investors share equally in the risks andopportunities of investment. A number of principles have been developed in securities regulationto ensure fairness in the market. In the market, the fundamental principle which ensures equalopportunity is that all trading in securities must take place in an environment where there hasbeen full, true and plain disclosure of all material facts. This is brought about through a set ofrules which impose significant disclosure requirements upon businesses, which seek to raisefinances from the public through the capital market, as well as their controllers and insiders, andrules which ensure fair trading practices among all those who trade in the market. While it isnever possible for there to be perfect information available to investors, it is the objective ofsecurities regulation to ensure that sufficient information is always available to permit buyers andsellers of securities to make informed decisions. Issuers are faced with obligations for full and
timely disclosure of any information about the issuer, as well as its key shareholders, where thetiming of access to such information can have a significant impact on investors.The regulation of securities in market has also been designed to ensure that trading is conductedfairly, and that issuers and those that deal in securities on their behalf, provide fair treatment toinvestors.There are two primary means used to promote public confidence in securities traded onmarkets. These are;a) full disclosure at the time of the initial offering,b) continuous disclosure requirements anda. Prospectus Disclosure:Before an issuer is permitted to distribute its securities through an exchange, there are substantialdisclosure requirements that must be fulfilled. Although each jurisdiction in market is responsiblefor establishing its own disclosure criteria, the prescribed level of disclosure is consistent amongthe provinces. The levels of disclosure required to make an informed investment decision are, ofcourse, substantially different as between an established business with a well known history, anda new venture capital enterprise.A business listing for the first time on an exchange is subject to substantial disclosurerequirements. Disclosure on the following major topics is required in the prospectus which isfiled with the securities commission as the initiation of the application process: Description and general development of the business summary and analysis of the financial objectives business objectives milestones (i.e. significant events required to meet the stated business objectives) material acquisitions and dispositions management experience and expertise organizational structure products developed or to be developed with the proceeds of the distribution
proprietary protection operation (i.e. method of production) market by segment and specific geographic location marketing plans and strategies administration costsb. Continuous Disclosure:While the disclosure of an issuer through the prospectus filed in support of its initial publicoffering provides investors with access to important information.It includes a summary of any significant event or transaction which occurred during the reportingperiod. Specifically: the issuer is required to reconcile previously disclosed “intended use of proceeds” with actualuse details of significant transactions, including consideration received or paid, with related partiesmust be disclosed details of investor relations activity undertaken by the issuer during the reporting period mustbe disclosed the report must include details of other significant events or transactions discussion of details relating to the acquisition or disposition of any material capital asset mustbe included material expenditures, including discussion of their nature, must be included details of significant events or transactions previously disseminated through material changereports during the reporting period should also be included where the has been a breach of any corporate, securities or other laws, or of the issuers listingagreement with an exchange, disclosure is required where there has been a change in any of the material assumptions used in the preparation offuture oriented financial information, that information must be updated in accordance with thechange.These financial statements must be filed with the commission by all reporting issuers.
And the are three Core objectives of capital regulation to increase investor protection: Investor protection Ensuring that market are fair efficient and transparent The reduction of systemic risk. Investor Protection: o Protection against misleading, manipulative or fraudulent practices, including insider trading, and the misuse of client assets o Full disclosure of information which is material to investors‟ decisions . o Quality of disclosure should be disclosed o Only duly licensed or authorized persons should be permitted to hold themselves out to the public as market operators o Supervision of market participants at all the time. Ensuring that markets are fair, efficient and transparent o The regulator‟s approval of exchange and trading system operators and of trading rules helps to ensure fair markets. o Dissemination of relevant information is timely and widespread and is reflected in the price formation process o Information about trading in the market is to be made publicly available on a real- time basis The reduction of systemic risk o Reduce the risk of failure (through measures including capital and internal control requirements) o Respond to market disruptions through facilitation of stable domestic and global cooperation and information sharing. o Ensure that capital and other prudential requirements are sufficient to address appropriate risk taking.
SEC’S (Securities and Exchange Commission) ROLE IN INCREASING INVESTORPROTECTION: To maintain surveillance over activities in securities to ensure fair, orderly and equitable dealings in securities. To license, authorize and regulate stock exchanges, dealers, investment advisors, other operators and their representatives. To license, authorize and regulate collective investment schemes such as unit trusts and mutual funds. To maintain proper standards of conduct and acceptable practices in the industry and monitor the solvency of license holders. To protect the integrity of the market against any abuses arising from the practice of insider trading. To adopt measures to minimize and supervise any conflict of interests that may arise for dealers. To formulate principles for the guidance of the securities industry. To review, approve and regulate takeovers, mergers and acquisitions and all forms of business combinations. Legal and Enforcement o The Enforcement Department is responsible for investigating breaches of the securities laws. o It is charged to initiate investigations on complaints and evidence of possible violations of the securities laws. Market Surveillance: o Responsible for establishing and maintaining standards for the fair, orderly, and efficient operation of the securities market. o It is also responsible for licensing operators, monitoring their operations to ensure compliance with the securities laws. Corporate Finance o Responsible for overseeing the disclosure of material information to the investing public by issuers of securities.
o Ascertaining whether the disclosures meet with the disclosure requirements and standards required by law. Investment Management o Responsible for supervising and regulating all aspects of the operations of collective investment schemes such as unit trusts and mutual funds. o It administers the securities laws applicable with a view to improving disclosure and minimizing risk for investors without imposing undue costs on regulated entities. Market Development o Undertaking market-related research activities to assist the Commission in creating the necessary atmosphere for the orderly growth and development of the securities industry. o Formulating and implementing the market development and investor/Public education strategies of the Commission. o Advising the Ministry of Finance on all matters relating to the securities industry.Policy Measures and Initiatives of capital markets for increasing Investor Protection :A number of initiatives have been undertaken by the Government, from time to time, so as toprovide financial and regulatory reforms in the primary and secondary market segments of thecapital market.These measures broadly aim to sustain the confidence of investors (both domestic and foreign)in the country‟s capital market.The policy initiatives that have been undertaken in the primary market during 2006-07 include: SEBI has notified the disclosures and other related requirements for companies desirous of issuing Indian depository receipts in India. It has been mandated that: (i) the issuer must be listed in its home country; (ii) it must not have been barred by any
regulatory body; and (iii) it should have a good track record of compliance of securities market regulations. As a condition of continuous listing, listed companies have to maintain a minimum level of public shareholding at 25 per cent of the total shares issued. The exemptions include: (i) companies which are required to maintain more than 10 per cent, but less than 25 per cent in accordance with the Securities Contracts (Regulation) Rules, 1957; and (ii) companies that have two crore or more of listed shares and Rs. 1,000 crore or more of market capitalisation. SEBI has specified that shareholding pattern will be indicated by listed companies under three categories, namely, shares held by promoter and promoter group; shares held by public and shares held by custodians and against which depository receipts have been issued. In accordance with the guidelines issued by SEBI, the issuers are required to state on the cover page of the offer document whether they have opted for an IPO (Initial Public Offering) grading from the rating agencies. In case the issuers opt for a grading, they are required to disclose the grades including the unaccepted grades in the prospectus. SEBI has facilitated a quick and cost effective method of raising funds, termed as Qualified Institutional Placement (QIP) from the Indian securities market by way of private placement of securities or convertible bonds with the Qualified Institutional Buyers. SEBI has stipulated that the benefit of „no lock-in‟ on the pre-issue shares of an unlisted company making an IPO, currently available to the shares held by Venture Capital Funds (VCFs)/Foreign Venture Capital Investors (FVCIs), shall be limited to:- (i) the shares held by VCFs or FVCIs registered with SEBI for a period of at least one year as on the date of filing draft prospectus with SEBI; and (ii) the shares issued to SEBI registered VCFs/FVCIs upon conversion of convertible instruments during the period of one year prior to the date of filing draft prospectus with SEBI. In order to regulate pre-issue publicity by companies which are planning to make an issue
of securities, SEBI has amended the Disclosure and Investor Protection Guidelines to introduce Restrictions on Pre-issue Publicity. The restrictions, inter alia, require an issuer company to ensure that its publicity is consistent with its past practices, does not contain projections/ estimates/ any information extraneous to the offer document filed with SEBI.Similarly, the policy initiatives that have been undertaken in the secondary market during 2006-07 include: In continuation of the comprehensive risk management system put in place since May 2005 in T+2 rolling settlement scenario for the cash market, the stock exchanges have been advised to update the applicable Value at Risk (VaR) margin at least 5 times in a day by taking the closing price of the previous day at the start of trading and the prices at 11:00 a.m., 12:30 p.m., 2:00 p.m. and at the end of the trading session. This has been done to align the risk management framework across the cash and derivative markets. In order to strengthen the „Know Your Client‟ norms and to have sound audit trail of the transactions in the securities market, Permanent Account Number (PAN) has been made mandatory with effect from January 1, 2007 for operating a beneficiary owner account and for trading in the cash segment. In order to implement the proposal on creation of a unified platform for trading of corporate bonds, SEBI has stipulated that the BSE Limited would set up and maintain the corporate bond reporting platform. The reporting shall be made for all trades in listed debt securities issued by all institutions such as banks, public sector undertakings, municipal corporations, corporate bodies and companies. In line with the Government of India‟s policy on foreign investments in infrastructure companies in the Indian securities market, the limits for foreign investment in stock exchanges, depositories and clearing corporations, have been specified as follows:- (i) foreign investment up to 49 per cent will be allowed in these companies with a separate Foreign Direct Investment (FDI) cap of 26 per cent and cap of 23 per cent on Foreign institutional investment (FII); (ii) FDI will be allowed with specific prior approval of Foreign Investment Promotion Board (FIPB); (iii) FII will be allowed only through
purchases in the secondary market; and (iv) FII shall not seek and will not get representation on the board of directors. The application process of FII investment has been simplified and new categories of investment (insurance and reinsurance companies, foreign central banks, investmentmanagers, international organizations) have been included under FII. Initial issue expenses and dividend distribution procedure for mutual funds have been rationalised. Mutual funds have been permitted to introduce Gold Exchange Traded Funds. In the Government securities market, the RBI has ceased to participate in primary issues of Central Government securities, in line with the provisions of Fiscal Responsibility and Budget Management Act (FRBM Act). Foreign institutional investors have been allowed to invest in security receipts.CONCLUSION: Thus, the capital market plays a vital role in fostering economic growth of the country, as it augments the quantities of real savings; increases the net capital inflow from abroad; raises the productivity of investments by improving allocation of investible funds; and reduces the cost of capital in the economy. Thus the capital markets safeguarding, public confidence in the markets. These safeguards are usually the investor protection roles and functions of regulatory bodies of the capital markets. Thus the Investor protection is intended to enhance investors‟ confidence in the capital markets. Confidence in any capital market, is perhaps the single most important pre-requisite for its sustenance and growth.