ABSTRACT has also influenced the structure of banking sectors




markets plays an important role in the growth of a country’s economy.
Similarly, the financial regulators plays an important role in the growth of
financial markets. The role of the financial regulator is to implement the regulations
consistently. For the effective control and supervision of financial markets,
the regulatory authorities ensures that the participants of the market behave
in a desired manner.

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       The paper shows the work of regulators
by defining how they see the financial market and act upon it to control and
supervising the functions. In most cases, financial regulatory authorities
regulate all financial activities. But in some cases, there are specific
authorities to regulate each sector of the finance industry, mainly banking,
securities, insurance and pension markets.


Keywords: Financial regulation, control and supervision, regulatory authorities.




            Financial regulation is control or
supervision, which subjects financial institutions to certain requirements,
restrictions and guidelines, aiming to maintain the integrity of the financial
system. This may be handled by either a government or non-government organization.
Financial regulation has also influenced the structure of banking sectors by
increasing the variety of financial products available.


of Supervision:

empower organizations, government or non-government, to monitor activities and
enforce actions. There are various setups and combinations in place for the
financial regulatory structure around the global.


Supervision of stock exchanges:

acts ensure that trading on the exchanges is conducted in a proper manner. Most
prominent the pricing process, execution and settlement of trades, direct and efficient
trade monitoring.


of listed companies:

regulators ensure that listed companies and market participants comply with
various regulations under the trading acts. The trading acts demands that
listed companies publish regular financial reports, ad hoc notifications or
directors’ dealings. Whereas market participants are required to publish major
shareholder notifications. The objective of monitoring compliance by listed
companies with their disclosure requirements is to ensure that investors have
access to essential and adequate information for making an informed assessment
of listed companies and their securities.


of investment management:

management supervision or investment acts ensures the frictionless operation of
those vehicles.


of banks and financial services providers:

acts lay down rules for banks which they have to observe when they are being
established and when they are carrying on their business. These rules are
designed to prevent unwelcome developments that might disrupt the smooth
functioning of the banking system. Thus ensuring a strong and efficient banking




Regulatory Bodies in India:

In India, the financial system is regulated with the help of independent
regulators, associated with the field of insurance, banking, commodity market,
and capital market and also the field of pension funds. On the other hand, the
Indian Government is also known for playing a significant role in controlling
the field of financial security and also influencing the roles of such
mentioned regulators.


RBI – Reserve
Banks of India:

          Reserve Bank of India is the apex
monetary Institution of India. It is also called as the central bank of the
country. It was established on April 1, 1935 in accordance with the provisions
of the Reserve Bank of India Act, 1934. The Central Office of the Reserve Bank
was initially established in Kolkata (then Calcutta) but was permanently
shifted to Mumbai in 1937. It has other offices in New Delhi, Chennai and
Kolkata. The Reserve Bank is fully owned by the Government of India.


         Reserve Bank of India (RBI) is the
supreme authority of Indian financial market. So the decisions taken by RBI is
very important for the Indian market. It regulates all the financial actions of
banking sectors. RBI decides the interest rate, bank rate, repo rate, SLR ratio
etc. It creates the balance between inflation and deflation. Inflation is high
demand and less supply, deflation is less demand and excess supply. Both
inflation and deflation are bad for the economy and financial market, so RBI
monitors the conditions in the economy and accordingly decides the interest
rates to maintain the economy growth. Stock markets investors and traders
closely watch the RBI actions as RBI cuts the interest rate that boost up the
sentiment of equity market because it increases the liquidity in the market
while higher interest rate demotivate the investors to invest in stock market.


The Role
of RBI:

Safety of public money.

Ensure productive use of funds.

Ensure sound and healthy banking

Stable monetary position.

Maintain value of rupee.

Ensure effective coordination and
control among various participants of Indian financial system.

Control over credit and price level
in the country.






Securities and Exchange Board of India:

          SEBI forms a major part under the
financial body of India. This is a regulator associated with the security
markets in Indian Territory. Established in the year 1988, the SEBI Act came
into power in the year 1992, 12th April. The board comprises of a Chairman,
Whole time members, Joint secretary, member appointed, Deputy Governor of RBI,
secretary of corporate affair ministry and also part time member. There are
three groups, which fall under this category, and those are the investors, the
security issuers and market intermediaries.

has framed a set of regulations, bye-laws and surveillance system so as to
provide the end users with safety and transparency while dealing in securities.
It has introduced many regulatory measures and code of conduct for various
intermediaries which include portfolio managers, brokers and sub-brokers,
underwriters, merchant bankers and so on.


The Role of

Restricts illegal practices:

forbids illegal and fraudulent practices of the firm which operate in the
securities market.

Safeguard investor’s interest:

protects investor’s interest in the capital market through guidance and proper

Regulate working of exchanges:

regulates and keeps a check on the workings of stock exchanges and other
aspects of the securities market.

Monitor the workings of mutual funds:

monitors and regulates the working of mutual funds. It keeps a tight
supervision on their business operations and protects investors from any unfair

Monitor the functioning of intermediaries:

a tight check on the functioning of the intermediaries like merchant bankers,
stockbrokers and other intermediaries present in the capital market.

Regulate takeovers and acquisitions:

issue guidelines to regulate takeovers, mergers, and acquisition of firms to
protect investor’s interest.

Prohibition of insider activity:

prohibits insider activity and also restricts undesirable practice of brokers
and other agents in the capital market.

Conducting audit:

conducts audit, inspection and other suitable measures to keep a check on the
workings of stock exchanges and other intermediaries.


Insurance Regulatory and Development Authority:

        The Insurance Regulatory and
Development Authority of India (IRDAI) is an autonomous, statutory agency
tasked with regulating and promoting the insurance and re-insurance industries
in India. IRDA Act was passed by parliament in December’1999 and it received
president approval in January’2000. The main aim of the authority is “to
protect the interest of holders of Insurance policies to regulate, promote and
ensure orderly growth of Insurance industry & for matters connected
therewith or incidental thereto.” The agency’s headquarters are in Hyderabad,
Telangana, where it moved from Delhi in 2001.


The Role of

To safeguard the interest of and
secure fair treatment to insurance policy holders.


To bring quick and systematic growth
of the insurance industry or sector in order to provide benefits to the common
man and also to provide long term funds for accelerating growth of the economy.


To set, promote, monitor and apply
high standards of integrity, fair dealing, financial viability and capability
of those it regulates.


To make sure that insurance policy
holder receives precise, accurate, clear & correct information about the
products & services provided by insurance companies & also make
customers aware about their duties & responsibilities in this regard.


To ensure quick settlement of genuine
claims, to prevent insurance frauds, scams & other malpractices and put in
place operative grievance redressal machinery.


To boost transparency, fairness, and
orderly conduct in financial markets dealing with insurance & build a
trustworthy management information system in order to enforce high standards of
financial soundness amongst market players.


To take appropriate actions where
such standards do not prevail or are inadequate & ineffectively enforced.


To bring about optimal amount of
self-regulation in day-to-day activities of the industry reliable with the requirements
of prudential regulation.






Pension Fund Regulatory and Development Authority:

         The Pension Fund Regulatory and
Development Authority (PFRDA) is the pension regulator of India which was
established by Government of India on August 23, 2003 and was authorized by
Ministry of Finance, Department of Financial Services. Upon introduction of the
PFRDA Bill by the Government of India in the Parliament of India and the
subsequent passage of the PFRDA Act in 2013, the Authority became a Central
Autonomous Body.

other financial sector regulators namely Reserve Bank of India (RBI),
Securities and Exchange Board of India (SEBI), Insurance Regulatory and
Development Authority (IRDAI) and Insolvency and Bankruptcy Board of India
(IBBI), PFRDA is a quasi-government organization having executive, legislative
and judicial powers. PFRDA promotes old age income security by establishing,
developing and regulating pension funds and protects the interests of
subscribers to schemes of pension funds and related matters.

PFRDA is regulating and administering the National Pension System (NPS) along
with administering the Atal Pension Yojana (APY) which is a defined benefits
pension scheme for the unorganized sector, guaranteed by the Government of India.
PFRDA is responsible for appointment of various intermediate agencies such as
Central Record Keeping Agency (CRA), Pension Fund Managers, Custodian, NPS
Trustee Bank, etc.


The Role of

Monitor the performance of the
various intermediaries.


Safeguarding the interest of


Regulate the manner in which
subscriber contributions are invested by PF(s) and will make all efforts to
ensure fair play for subscribers.


It ensure that all stakeholders
comply with the guidelines/ regulations issued from time to time.


It creates the rules and regulations,
time to time.


example, it makes sure that the pension funds are investing your money in
profitable assets. Also, it takes care of the resolution of your complaints. It
orders the related stakeholder to resolve the issues you are facing. If
stakeholders do not resolve it at the given time period. Then PFRDA takes
action against them. PFRDA is also responsible for establishing, promotion and
development of the pension system.




FMC – Forward
Markets Commission:

          FMC is the chief regulator of the
commodity (MCX, NCDEX, NMCE, UCX etc.) of the Indian futures market. As per the
latest news feed, it has regulated the amount of Rs. 17 trillion, under the
commodity trades. Headquarter is located in Mumbai, and the financial
regulatory agency is working in collaboration with the Finance Ministry. The
chairman of FMC works together with the Members of the same organization to
meet the required ends. The main aim of this body is to advise the Central Government
on matters of the Forwards Contracts Act, 1952.


The Role of

as a sole institution governing the functioning of the commodities market in
India executes a plethora of roles. Some of the major roles that the entity
performs are henceforth:

The Commission counsels the Central Government on matters concerning the
recognition or retraction of the previously accorded recognition from any of
the association. Additionally, the institution also provides advice on other
matters that surface as a result of the administration of the Forward Contracts
(Regulation) Act 1952.

FMC time and again provides suggestions to uplift the functioning of the
organization as well as forward markets.

As and when required, the entity holds rights to cross-check and inspect
accounts as well as other documents of registered associations as well as their

The entity also keeps a vigil on the forward commodities market and exercises
such assigned discretionary powers that are in the interest and growth of the

FMC sources, collects and publishes information concerning trading conditions
for different commodities. The details of such information generally comprise
demand, supply and price.



        Financial regulators plays an important
role in all the fields of the financial system. Their role has an effective
impact on the working of the financial system. They stabilizes the financial
system by controlling and supervising the every activity taking place. Hence,
the regulators are the very important factor for the financial system of the