Major Indian Capital Market Reforms

The major Capital market reforms can be classified into three,

•         Change in the structure and functioning of Stock Exchanges.
•         Automation of Trading and Post trade systems.
•         Introduction of Surveillance and Monitoring systems.

Market Surveillance and Monitoring systems were introduced to detect the Insider trading or market manipulation transactional activities and a protocols were established for investigation of abnormal stock fluctuations and in case of an wrong going to curb the excessive volatility in the market, suspension of stock scrip trade for a period of time in the way of "Circuit breakers" were introduced.

Financial Institutional Investors(FII) under SEBI regulated 1995 governing the regulation of portfolio investment by FII's and allowing the FII to participate by making the investment in the Indian securities market and a proper pricing procedures were made mandatory for the purpose of transparency in the trade execution for e.g., a proper separation in levering the order and brokerage charges. Further a modification of Takeover Code, which comes under play when an acquisition takes places.

Over the years for the proper functioning of Capital market, a collaboration with ICAI and formed National Committee on Accounting standards(NACAS) and made mandatory the presentation of the company's performance report in detailed within equal intervals.  This disclosure clause has given a birth to corporate governance where policies like clear indication of director remuneration, whistle blowing, cash flow and financial statement certification by CEO/CFO has made mandatory and transparency in disclosure of reports for public offering, periodicals and other transaction related. Such move by SEBI has made the capital market function smooth and more reliable on it thus other policies created a trust among the investors.