The stock exchanges are meant to facilitate mobilisation of resources by companies. Their effective regulation is required for protecting the interests of investors and safeguarding their developmental role.
The Securities Contracts (Regulation) Act 1956 along with the Securities Contracts (Regulation) Rules 1957 has been the main laws to regulate the securities market in India. As per the Securities Contracts Regulations Act, 1956 a stock exchange is defined as "an association, organisation or body of individuals whether incorporated or not, established for the purpose of assisting, regulating and controlling business in buying, selling and dealing in securities”. A look at the powers given stock exchanges in India to make and enforce by laws under the Act and the rules reveals that Indian Stock Exchanges have been envisaged as self regulatory organisations.
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