role of regulators

8/8/2019 Role of Regulators

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Role of Regulators in Indian

Market

presented

by:Mohd

Huzaifa


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What is regulatory authority?

A regulatory agency (also regulatory

authority, regulatory body or regulator) is a

public authority or government agency

responsible for exercising autonomous

authority over particular area of human

activity in a regulatory or supervisory

capacity.


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Functions of RegulatorsFunctions of Regulators


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Household SectorHousehold Sector Financial SystemFinancial System

Why do We need Regulators?Why do We need Regulators?


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Regulatory Structure in India

Banking /NBFCs

RBI

Ministry ofFinance

SEBI

CapitalMarkets

NABARD

Co-operativeBanks &Regional Rural Banks

Ministry ofConsumerAffairs

FMC

InsuranceRegulatoryDevelopment Authority

(IRDA)

Insurance PensionFunds

SIDBI

State FinancialInstitutions

NationalHousing Bank

Housing FinanceCompanies

CompanyLaw Board

Corporates

Pension FundsRegulatory

Development Authority(PFRDA)

Commodity

Exchanges


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Pension Fund Regulatory andPension Fund Regulatory and

Development AuthorityDevelopment Authority


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AboutPFRDA

Pension Fund Regulatory and DevelopmentAuthority was established by the Government ofIndia on 23rd August 2003 to promote old age

income security by establishing, developing andregulating pension funds, to protect theinterests of subscribers to schemes of pensionfunds and for matters connected therewith orincidental thereto.


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Role ofPFRDA


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Investment norms to PFRDAInvestment norms to PFRDA

PFRDA

Fund

15% into Equity Index15% into Equity Index85% into Government85% into Governmentsecurities with fixedsecurities with fixed

incomeincome


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Deployment ofFundsDeployment ofFunds

To use for Fiscal Deficit

To retire imbalance of BOP

To serve as internal debt to Central

Government for particular tenure

To Serve as restriction to excess liquidity

infusion


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The Employees Pension Scheme(EPS)

Public Provident Fund (PPF)

New Pension Scheme (NPS)

15% can be invested in Index Equity

85% to be invested in G-Securities with Fixedincome


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Overlapping Products

Personal Pension Plans (PPP) (IRDA)

Group Pension Plans (GPP) (IRDA)

Pension products with Mutual Fund (SEBI)


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IRDA

( Insurance Regulatory &Development Authority )


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What is IRDA?

In april 1993, the government of India appointed a committee of Reforms in

insurance sector with Shri. R.N. Malhotra, a former governor of Reserve Bank

Government of India in January 1994.In accordance with the recommendations of

the committee, the government set up a regulatory body known as Insurance

Regulatory and Development Authority and enacted the Act known as InsuranceRegulatory and Development Act, 1999

Mission:

Insurance Regulatory & Development Authority (IRDA) is regulatory and

development authority under Government of India in order to protect the interests

of the policyholders and to regulate, promote and ensure orderly growth of the

insurance industry.

Came into being in 1999 after the bill of IRDA was passed in the Indian parliament.

It is a national agency.


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Types of Insurance

Life insurance

Non - Life Insurance(general insurance)

Property (eg. Builders risk insurance)

Aviation (eg.Private aircraft insurance)

Marine (eg. Marine hull insurance)

Miscellaneous (eg. Purchase insurance)


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OBJECTIVES OFOBJECTIVES OF IRDAIRDA

i. Take care of the policyholders interest.

ii. Open the insurance sector for private sector.

iii. Ensure continued financial soundness and

solvency.iv. Regulate insurance and reinsurance companies.

v. Eliminate dishonesty and unhealthycompetition.

vi. Supervise the activities of intermediaries.

vii. Amend the insurance act 1938 ,the LifeInsurance Corporation Act1956, and the GeneralBusiness Act1972.


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FUNCTIONS, DUTIES & POWER OF IRDA

To issue certificate of registration.

To protect the interests of the policyholders. To specify requisite qualifications code of

conduct and training for insurance

intermediaries and agents. To specify code of conduct for Surveyors/

Loss Assessors.


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Functions Cont...

To promote efficiency in the conduct ofinsurance business.

To supervise the functioning ofTariff

Advisory Committee.

To regulate investment of funds by the

insurance companies. To undertake inspection, conduct enquiries and

investigations.


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unctions Cont

To specify the percentage of Life and

General Insurance business.

To promote and regulate professional

organizations connected with the

insurance and reinsurance.

To specify the form and manner for

maintenance of books of accounts.


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LAWS AND REGULATIONS

Insurance Act, 1938

Life Insurance Corporation Act, 1956

Insurance Regulatory and DevelopmentAuthority Act,1999

Consumer Protection Act, 1986

Ombudsman

Income Tax Act

Marriage Womens Property Act, 1874


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What is SEBI?

Securities & Exchange Board of India (SEBI) formedunder the SEBI Act, 1992 with the prime objective of

Protecting the interests of investors in securities,

Promoting the development of capital market

Regulating, the securities market and for mattersconnected therewith or incidental thereto.

To regulate the Securities market & ensure fairpractices

Focus being the greater investor protection, SEBI hasbecome a vigilant watchdog


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Role of SEBI in Capital market

SEBIs Principal tasks:

To regulate the business in Stock Exchange & other

Securities market

To register and regulate the working of capital

market intermediaries

To register & regulate the working of Mutual fund

To promote & regulate Self-Regulatoryorganization


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Role of SEBI in Capital marketRole of SEBI in Capital market

To Prohibit fraudulent unfair trade practices

in security market

To promote investors education & trainingto intermediaries of Capital market

Prohibit insider training securities

Regulate acquisition of shares & takeover ofcompanies

Perform other functions too.


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Compliance ofRules and

Regulations

Inspection andInvestigation

SecuritiesAppellate

Tribunal

Prohibition ofUnfair Trade

Practices

Insider

Trading

Takeover

Code

ESOPs and

ESOSBuy-back of

Securities

Buy-back

through

open market

Buy-back

through Book

Building

Buy-back

through Tender

Offer

Model Code of

Conduct

Continuing

Disclosures

Maintenance of

records and

documents

Efficacy and

Adequacy of

Security of Files

and documents

COMPLIANCES UNDER SEBI ACT, RULES AND REGULATIONS

Open Offer Exemption

Compliances


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The Key roles of the RBI are..

Regulator and supervisor of the financial system

Manager of exchange control

Issuer of currency

Banker to the Government

Bank to banks: maintains banking accounts of all scheduled

banks


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Objectives of RBI

The main objectives of RBI as the central bank of India are asfollows :

To manage the Monetary and credit system of the country

To stabilize internal and external value of rupee

To balance and systematic development of banking in thecountry.

To development of organized money market in the country

To make proper arrangement of agriculture finance

To make proper arrangement of industrial finance


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Objectives of RBI (contd..)

To make proper management of public debt

To establish monetary relations with other countriesof the world and international financial institutions.

To centralization of cash reserves of commercial

banks. To maintain balance between demand and supply of

currency


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role of regulators

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