How companies and governments raise long-term funds — and who regulates the market that does it.
The money market deals in short-term funds (up to one year — Treasury Bills, Commercial Paper, Call Money), while the capital market deals in medium- and long-term funds through equity (shares) and debt (bonds/debentures) instruments.
The Securities and Exchange Board of India (SEBI), set up in 1988 and given statutory powers by the SEBI Act, 1992, regulates the securities market, protects investor interests, and promotes market development. It oversees stock exchanges (BSE, NSE), registers and regulates market intermediaries (brokers, merchant bankers, mutual funds), and enforces disclosure norms for listed companies.
The primary market is where new securities are issued for the first time — via an Initial Public Offer (IPO) or Follow-on Public Offer (FPO). The secondary market (stock exchanges) is where existing securities are subsequently traded between investors.
Mutual funds pool money from investors to invest in a diversified portfolio, regulated by SEBI's Mutual Fund Regulations. Depositories (NSDL and CDSL) hold securities in electronic (dematerialised) form, eliminating physical share certificates.
Download this topic's notes as a PDF, or search uploaded materials.
