Importance Of Capital Market Essay

IMPORTANCE OF CAPITAL MARKET

The capital Market sector part serves a to a great degree valuable need by pooling the capital resources of the country and making them open to the venturesome financial specialists, all around created capital markets expand assets by drawing in and loaning stores on the worldwide scale. A very much created capital Market sector segment can deal with this issue of lack of benefits. For a composed capital Market sector area can activate and pool together even the little and scattered store finances and expand the openness of investible resources. While the quick advancement of capital markets, the improvement of joint stock Market has in its turn enabled the change of capital markets. A created capital Market sector division gives different productive speculation open doors for little savers.

To provide license to dealers and brokers: SEBI has power to provide authorization to dealers and brokers of capital market, in the form of licences. If SEBI sees that any financial product is of capital nature, then SEBI can also manage that product and its dealers. One of main example is UPIL’S case SEBI said, " It is just like mutual funds and all banks and financial 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 controlling fraud and unethical trade practices in the capital market. It can impose a prohibition on the trading by those brokers who are involved in unethical, fraudulent and unfair trade practices relating to stock market. It can impose sanction, penalties and fines on capital market intermediaries if they are involve in insider trading.

4. To Control the Merger, 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