Advantages and Disadvantages of SEBIIn 1988, the Securities and Exchange Board of India (SEBI) was established to regulate the securities market's activities. It encourages the stock market to develop in an orderly and healthy manner. However, SEBI did not previously have total authority over stock market transactions. It was merely left as a watchdog to keep an eye on things but was powerless to control or regulate them. Because of this, SEBI received legal character in May 1992 and is now a body corporate with a distinct legal existence and perpetual succession. As the volume of stock market transactions increased, so did the number of stock market frauds, including price rigging, share delivery delays, and violations of stock exchange laws and regulations. The existence of these unethical actions caused customers to lose trust and confidence in the stock market. As a result, the Indian government decided to create SEBI, a regulating body or agency. Goals and Functions of SEBIThe major goal of SEBI's establishment was to prevent fraud and safeguard investors' interests. Simply put, SEBI was established to meet the demands of three groups:
Purpose of SEBIThe ultimate purposes of SEBI are to safeguard investor interests, advance stock exchange development, and control stock market activity. The following are the main objectives of SEBI:
Powers of SEBI
Advantages of SEBI1. Short-term likelihood of increased returns Compared to other investment options like PPF and fixed deposits, investing in the stock market has the potential to produce higher inflation-beating returns in a shorter amount of time. By sticking to the fundamentals of the stock market, such as planning the trade and conducting due diligence, people can significantly increase their chances of securing superior returns. 2. Purchased stock in the listed company and became a shareholder Regardless of how few shares you purchase, you gain proportionate power over the company's stakes the instant you do. 3. Unparalleled liquidity Stock investing offers a level of liquidity that is practically unmatched compared to other investment strategies. Of course, investors can quickly determine whether to buy or sell a security. People can always sell their shares and get access to the cash if they need a quick flush of liquidity. 4. A regulatory agency that protects the interests of the public India's Securities and Exchange Board controls and oversees the stock market. The responsibility of SEBI is to oversee all developments and protect the interests of all parties. Again, this goes a long way toward protecting their interests in the face of any fraudulent behaviour or business, for that matter. Disadvantages of SEBI1. Volatility risks are rising Investment in equities entails its risks because of how volatile and dynamic markets are. Within a single day, share prices frequently experience peaks and troughs. Although the odds of a major failure are few, it can take years for the market to recover from the worst effects of a crisis. These swings are frequently unpredictable and can, as a result, put assets at risk. 2. The profit margins can be eroded by the brokerage An investor must pay the broker a set percentage of the purchase price or sale price of each share they choose to buy or sell. Profitability could thus be put in danger. |