Securities and Exchange Board of India (SEBI) Report
Securities and Exchange Board of India (SEBI)
Securities and Exchange.doc (Size: 194 KB / Downloads: 49)
Financial market liberalization since early 1990s has bought major changes in the financial market in India. The creation and empowerment of Securities and Exchange Board of India (SEBI) has helped in providing higher level accountability in the market. With the modern technology in hand, microstructure changes brought about reduction in transaction cost that helped investors to lock in a deal faster and cheaper.
One decade of reforms saw implementation of policies that have improved transparency in the system, provided for cheaper mode of information dissemination without mush delay, better corporate governance, etc. The capital market witnessed a major transformation and structural change during the period. The reforms process have helped to improve efficiency in information dissemination, enhancing transparency, prohibiting unfair trade practices like price rigging. The objective has been to move Indian market to such a level where it would fully integrate with the global developed markets.
The growth of mutual funds in fourth phase since February 2003 with repeal of Unit Trust of India Act, UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of UTI, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
Sharekhan, one of India's leading brokerage houses, is the retail arm of SSKI Investor Services Pvt. Ltd., a company in the securities and equities segment decided to harness the power of the Internet and offer services to its customers through an online stock trading portal. With over 510 share shops in 170 cities, and India's premier online trading portal http://www.sharekhan.com. It deployed solutions from BEA that could support a large and growing user base in efficient, secure, reliable and fast trading services and provide a platform to run trading and risk management applications. The services provided by Sharekhan are (1.1.a)
THE HEART OF THE BUSINESS
At the heart of the company's business is the trading platform and the risk management system and customers of the related products and financial services are the retail end-users. In such a scenario the company runs every individual profile through a risk management system before fulfillment. Therefore IT is at the heart of the business.
The company believes in deploying the best technology available. So evaluated solutions from BEA and IBM, since they were the only solution providers in this space at that time. The decision was based on a number of parameters like security, reliability, scalability, the ability to integrate with legacy applications, interoperability with other environments, and ease-of-use.
BEA kicks in Sharekhan deployed BEA's WebLogic platform and currently uses versions 5.1 and 7.0. The platforms run on 12 Sun Solaris servers. BEA's WebLogic is the foundation of Sharekhan's online trading application. BEA's middleware platform has the business logic to interface with the various technology aspects, and provides encrypted transactions. It aims to support more than 150,000 hits everyday between a five hour period of 9.30 AM and 5.30 PM.
The Bombay Stock Exchange, the oldest stock exchange in Asia, was established in 1875 as the Native Share and Stock Brokers Association at Dalal Street in Mumbai. A lot has changed since then when 318 persons became members upon paying Re 1. In 1956, the BSE obtained permanent recognition from the Government of India -- the first stock exchange to do so -- under the Securities Contracts (Regulation) Act, 1956.
The BSE SENSEX (also known as BSE 30) is a value-weighted index composed of 30 scripts representing a sample of large and financially sound companies, with the base April 1979=100. The set of companies which make up the index has been changed only a few times in the last 20 years. These companies account for around one-fifth of the market capitalization of the BSE.
The National Stock Exchange of India (NSE) is one of the largest and most advanced stock market in India located in Mumbai, the financial capital of India. The NSE was promoted by leading Financial Institutional at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchange in the country. The NSE got recognized as a stock exchange under the Securities Contract (Regulations) Act, 1956 in April 1993. The NSE is a nationwide trading facility for equity, debt instrument. It commenced its operations in Wholesale Debt Market (WDM) segment in June 1994, commenced its operations in Capital Market (Equities) segment in November 1994 and commenced its operations in Derivatives segment in June 2000.
The annual turnover (revenue) for 2004-2005 was Rs.45,38,422 crores that is equivalent to $942.56 billion (U.S). In July 2007, the NSE had a total market capitalization of 42,74,509 crore INR making it the second-largest stock market in South Asia in terms of market-capitalization. It is one of the largest interactive VSAT based stock exchanges in the world and the first extended C-Band VSAT network in the world. Today it supports more than 3000 VSATs, cover more than 1500 cities across India. There are over 15 large computer systems which include non-stop faculty-tolerant computers and high end UNIX servers, operational under one roof to support the NSE applications. This coupled with the nation wide VSAT network makes NSE the country’s largest Information Technology user.
A Mutual Fund is a trust that pools the savings of a numb
er of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.