Introduction to the Indian Capital Market

Capital Market: A platform that enables the transfer of resources from those with idle resources to others who have a productive need for them, thereby decoupling savings and investments.
Role of Capital Market: Provides channels for allocation of savings to investments, enhancing savings and investment in the economy.
Participants: Includes investors, borrowers, intermediaries, and regulatory bodies.

Key Components of the Capital Market

Primary Market: A platform where new securities are issued by companies to raise capital from investors.
Secondary Market: A platform where existing securities are traded among investors, providing liquidity to the primary market.
Intermediaries: Include merchant bankers, mutual funds, financial institutions, foreign portfolio investors (FPIs), and individual investors.

Securities and Exchange Board of India (SEBI) Act, 1992: Regulates the securities market, protects investor interests, and promotes market development.
Securities Contracts (Regulation) Act, 1956: Regulates securities trading, stock exchanges, and listing of securities.
Depositories Act, 1996: Facilitates the transfer of securities electronically, ensuring speed, accuracy, and security.
Companies Act, 2013: Regulates issue, allotment, and transfer of securities, as well as company management.
Prevention of Money Laundering Act, 2002: Prevents money laundering and requires market participants to maintain records and report suspicious transactions.

Securities and Exchange Board of India (SEBI): Regulates the securities market, registers and regulates market intermediaries, and penalizes violations.
Reserve Bank of India (RBI): Exercises concurrent powers with SEBI in respect of certain securities.
Department of Economic Affairs (DEA): Exercises powers under the Securities Contracts (Regulation) Act, 1956.
Ministry of Corporate Affairs (MCA): Administers the Companies Act, 2013, in respect of issue and transfer of securities.