Difference between Stock Exchange and SEBI

Stock Exchange and SEBI: The two major entities that stand out in India's financial markets are the SEBI (Securities and Exchange Board of India) and the stock exchanges. SEBI serves as the regulatory watchdog entrusted with overseeing the functioning of the securities market, ensuring fairness, transparency, and investor protection.

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What is SEBI?

Functions of SEBI

• Regulatory Oversight : SEBI is the guardian of the securities market, formulating regulations and guidelines to ensure a level playing field for all participants and promote fairness and ethical conduct.
• Investor Safeguarding : SEBI protects investor interests by promoting fair trading practices, ensuring timely disclosures, combating fraud, and promptly addressing grievances.
• Market Advancement : SEBI fosters a vibrant securities market by encouraging innovation, diversification, and adoption of international best practices.
• Supervision and Vigilance : SEBI conducts inspections and investigations to monitor regulation compliance, detect market manipulation, and maintain integrity.
• Investor Education : SEBI educates investors about their rights, responsibilities, and risks associated with market participation through various outreach programs and collaborations.

What Is Stock Exchange?

Function Of Stock Exchange

• Trading Platform : The stock exchange's primary role is to provide a centralised platform for securities trading. It facilitates the buying and selling of securities by matching buy and sell orders, ensuring transparent price discovery, and reflecting market sentiment.
• Listing and Delisting : Stock exchanges facilitate the listing of securities, allowing companies to raise capital from investors by going public. They regulate the listing process, ensuring compliance with disclosure requirements and corporate governance norms. Additionally, exchanges oversee delisting procedures, removing securities from trading for reasons like mergers, acquisitions, or non-compliance with listing regulations.
• Market Surveillance : Stock exchanges maintain market integrity by monitoring trading activities to detect irregularities or market manipulation. They employ advanced surveillance systems to identify suspicious trading patterns, insider trading, or any activity undermining market fairness.
• Liquidity Enhancement : Stock exchanges enhance market liquidity by facilitating easy buying and selling of securities. Continuous trading throughout trading hours ensures efficient price discovery, allowing investors to enter and exit positions without significant price impact.
• Index Compilation : Stock exchanges compile various market indices representing the performance of selected securities. These indices, such as Nifty 50 and Sensex in India, serve as benchmarks for overall market performance, providing valuable insights to investors and industry participants.

Difference between SEBI and Stock Exchange

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