SEBI

Securities & Exchange Board of India (SEBI) – The security market in an

economy is that segment of a financial market which raises Long-term
Capital through instruments like shares, securities, bonds, mutual funds,
debentures. This market is known as the security market of economy.

The security market in India comprises of a Security regulator (SEBI), stock

exchanges, different share indices, brokers,etc.

The security market has two complementary markets – Primary and secondary
markets.

Primary Markets: It is a market where those instruments are traded directly

between the entity raising capital and the instrument purchasing entity.

Secondary Markets: The market where those instruments of security market are
traded among the primary instrument holders. These transactions require an
institutionalized floor for trading, this platform is known as the stock exchanges.

The regulator of Indian stock market, is Securities and Exchange Board of

India(SEBI). It is working since 1988 but was granted the statutory status in 1992 by
the SEBI Act of 1992.

SEBI has its headquarters located in Mumbai with regional offices in Kolkata,
Chennai, New Delhi and Ahmedabad.

Objectives of SEBI:
The Securities and Exchange Board of India has been established under the Section
3 of the SEBI Act of 1992. This act provides for the establishment of SEBI full with
statutory powers for working towards the following :

(a) The protection of interests of the investors in securities market.

(b) The promotion for the development of the securities market.

(c) Work for the regulation of the securities market.

Composition of SEBI:
The Board of Securities & Exchange Board of India (SEBI) is comprised of 9
members, excluding the Chairman. It is managed by its members, in the following
manner:

 A Chairman is nominated by the Union Government.

 2 members of SEBI, are officers from the Union Ministry of Finance.
 1 member of SEBI, is from the Reserve Bank of India.
 There are 3 whole-time members, who are nominated by the Government of
India.
  There are 2 Part-time members, who are also nominated by the Government
of India.

CORPORATE CONTROL

The term "corporate control" refers to the authority to make the decisions of a
corporation regarding operations and strategic planning, including capital allocations,
acquisitions and divestments, top personnel decisions, and major marketing,
production, and financial decisions. This concept is frequently applied to publicly
traded companies, which may be susceptible to changes in corporate control when
large investors or other companies seek to wrest control from managers or other
shareholders.
The notion of corporate control is similar to that of corporate governance; however,
it is usually used in a narrower sense. Corporate control is concerned with who
has—and, moreover, who exercises—the ultimate authority over significant
corporate practices. Governance, by contrast, involves the broader interworkings of
the day-to-day management, the board of directors, the shareholders at large, and
other interested parties to formulate and implement corporate strategy.

'Statutory Audit'

A statutory audit is a legally required review of the accuracy of a company's or

government's financial records. The purpose of a statutory audit is the same as the
purpose of any other type of audit: to determine whether an organization is providing
a fair and accurate representation of its financial position by examining information
such as bank balances, bookkeeping records and financial transactions.

Understanding Statutes

The term statutory is used to denote the audit is required by statute. A statute is a
law or regulation enacted by the legislative branch of the organization’s associated
government. Statutes can be enacted at multiple levels, including federal, state or
other municipality. In business, statute can also refer to any rule set forth by the
organization’s leadership team.

Understanding an Audit

An audit is an examination of records held by an organization, business, government

entity or individual. Generally, this involves the analysis of various financial records
but can also be applied to other areas. During a financial audit, an organization’s
records regarding income or profit, investment returns, expenses and other items
may all be included as part of the audit process.

The purpose of a financial audit is often to determine if funds were handled properly
and that all required records and filings are accurate. At the beginning of an audit,
the auditing entity makes known what records will be required as part of the
examination. The information is gathered and supplied as requested, allowing the
auditing entity to perform its analysis. If inaccuracies are found, appropriate
consequences may be levied.
 Business Ethics'

Business ethics is the study of proper business policies and practices regarding
potentially controversial issues, such as corporate governance, insider trading,
bribery, discrimination, corporate social responsibility and fiduciary responsibilities.
Law often guides business ethics, while other times business ethics provide a basic
framework that businesses may choose to follow to gain public acceptance.

Business ethics ensure that a certain required level of trust exists between
consumers and various forms of market participants with businesses. For example,
a portfolio manager must give the same consideration to the portfolios of family
members and small individual investors. Such practices ensure that the public
receives fair treatment.

The concept of business ethics arose in the 1960s as companies became more
aware of a rising consumer-based society that showed concerns regarding the
environment, social causes and corporate responsibility. Business ethics goes
beyond just a moral code of right and wrong; it attempts to reconcile what companies
must do legally versus maintaining a competitive advantage over other businesses.
Firms display business ethics in several ways.