regulation in market
TRANSCRIPT
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APresentation
On
Market regulators
Name : Parth B. RavalEnrl : 117150592018
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The objectives of financial regulators are usually
market confidence to maintain confidence in the financial system
financial stability - contributing to the protection and enhancement of
stability of the financial system
Consumer protection - securing the appropriate degree of protection
for consumers.
Reduction of financial crime - reducing the extent to which it is
possible for a regulated business to be used for a purpose connected
with financial crime.
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Acts empowers organizations, government or non-government, to monitor
activities and enforce actions. There are various setups and combinations in
place for the financial regulatory structure around the global. Leaf parts are
in any case:
Superv is ion o f stock exchanges
Exchange acts ensure that trading on the exchanges is conducted in a
proper manner. Most prominent the pricing process, execution and
settlement of trades, direct and efficient trade monitoring
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Financial regulators ensure that listed companies and market participants
comply with various regulations under the trading acts. The trading acts
demands that listed companies publish regular financial reports, ad hoc
notifications or directors' dealings. Whereas market participants are required
to publish major shareholder notifications. The objective of monitoring
compliance by listed companies with their disclosure requirements is to
ensure that investors have access to essential and adequate information for
making an informed assessment of listed companies and their securities
Superv is ion o f l is ted companies
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Superv is ion of ant i -mo ney launder ingThe anti-money laundering supervision ensures that criminal activities do not
threaten the reputation and financial strength of an institution, or also endanger
the integrity and stability of the whole financial market. All companies concerned
need to have policies in place which prevents transactions with criminal
background
Superv is ion of investment m anagement
Asset management supervision or investment acts ensures the frictionless
operation of those vehicles
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Supervis ion o f banks and f inanc ial serv ices pro viders
Banking acts lays down rules for banks which they have to observe when they
are being established and when they are carrying on their business. These
rules are designed to prevent unwelcome developments that might disrupt the
smooth functioning of the banking system. Thus ensuring a strong and
efficient banking system
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Unique jur isd ic t ions
In most cases, financial regulatory authorities regulate all financial activities. But in
some cases, there are specific authorities to regulate each sector of the finance
industry, mainly banking, securities, insurance and pensions markets, but in some
cases also commodities, futures, forwards, etc. For example, in Australia,
the Australian Prudential Regulation Authority (APRA) supervises banks and
insurers, while the Australian Securities and Investments Commission (ASIC) isresponsible for enforcing financial services and corporations laws.
Sometimes more than one institution regulates and supervises the banking
market, normally because, apart from regulatory authorities, central banks also
regulate the banking industry. For example, in the USA banking is regulated by a
lot of regulators, such as the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of the Comptroller of the Currency the National
Credit Union Administration, the Office of Thrift Supervision, as well as regulators
at the state level.
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Regulatory rel iance on credit rat ing agencies
Think-tanks such as the World Pensions Council (WPC) have argued that
most European governments pushed dogmatically for the adoption of
the Basel II recommendations, adopted in 2005, transposed in European
Union law through the Capital Requirements Directive (CRD), effective since
2008. In essence, they forced European banks, and, more importantly,
the European Central Bank itself e.g. when gauging the solvency of EU-based
financial institutions, to rely more than ever on the standardized assessments
of credit risk marketed by two private US agencies- Moodys and S&P, thus
using public policy and ultimately taxpayers money to strengthen an anti-
competitive duopolistic industry. Ironically, European governments have
abdicated a key component of their regulatory authority in favor of a non-
European, highly deregulated, private cartel
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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 of India plays a
significant role in controlling the financial system in India and
influences the roles of such regulators at least to some extent.
The following are five major financial regulatory bodies in India:-
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(A) Statutory Bodies via par l iamentary enactments:
Reserve Bank o f Ind ia: 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.
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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.
Secu r i t ies 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 power.
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Insurance Regulatory and Development Author i ty : 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."
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(B) Part of th e Ministr ies of the Gov ernment of India :
Forward Market Comm ission India (FMC): Forward Markets Commission
(FMC) headquartered at Mumbai, is a regulatory authority which is overseen by
the Ministry of Consumer Affairs, Food and Public Distribution, Govt. of India. It is
a statutory body set up in 1953 under the Forward Contracts (Regulation) Act,1952 This Commission allows commodity trading in 22 exchanges in India, out of
which three are national level.
PFRDA under the Finance Minis try : Pension Fund Regulatory and
Development Authority : PFRDA was established by Government of India on23rd August, 2003. The Government has, through an executive order dated
10thOctober 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.
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REGULATORS-INDIA
Securities and Exchange Board of India
Reserve Bank of India
Ministry of Finance
Ministry of Corporate Affairs
Insurance Regulatory Authority of India
PFRDA
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MARKET REGULATORS WORLDWIDE
Asia
Capital Market Board (Turkey)
Securities Bureau of the Ministry of Finance (Japan)
Securities Commission (Malaysia)
Securities and Exchange Commission (Bangladesh)
Securities and Futures Commission (Hong Kong)
Securities and Exchange Commission of Pakistan
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Europe
BAWe - Bundesaufsichtsamt for den Wertpapierhandel (Germany)
Central Bank of Cyprus
CNMV - Comision Nacional del Mercado de Valores (Spain)
COB - Comission des Operations de Bourse (France)
CONSOB - Commissione Nazionale per le Societa e la Borsa (Italy)
Financial Services Department (Jersey)
Financial Services Authority (United Kingdom)
Australia
Australian Securities Commission
The New Zealand Securities Commission
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North America
British Columbia Securities Commission (Canada)
Canadian Grain Commission
CFTC - U.S. Commodity Futures Trading Commission
SEC - U.S. Securities& Exchange Commission
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Others
BID - Banco Interamericano de Desarollo
BIS - Bank for International Settlements
COSRA - Council of Securities Regulators of the Americas
FASB - Financial Accounting Standards Board
FIABV - Federacion Iberoamericana de Bolsas de Valores
FIBV - Federation Internationale des Bourses de Valeurs
ICI - Investment Company Institute
IFC - International Finance Corporation
World Bank
WTO - World Trade Organization
Association of National Numbering Agency
International Organization of Securities Commissions
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TH NKYOU