Trust is a tricky concept, especially in the finance ecosystem – combine that with money, you almost create deadlock situations. While the prospect of excellent returns draws one’s attention, the possibility of losing it all makes financial decision making borderline haunting. This creates a demand for proper regulation of all the entities that, in any way, interact with money.
It is impossible to imagine an economy where the centralized regulatory bodies like RBI (The Reserve Bank of India) or SEBI (The Securities and Exchange Board of India) didn’t exist–Scams and fraud would have been the daily scene. Let's look at the roles of some of these watchdogs who make the Indian economy much more secure and functional.
Often termed the bank of banks, RBI acts as a regulatory body for the Indian banking system. Besides this, the RBI also acts as a guardian for the entire economy with printing and minting currency, maintaining reserves, and detecting fake currency, amongst many other functions of this body.
The board is the most important regulator of the securities market in the country. It protects investors' interests, securities issuers, and intermediaries (i.e., brokers and sub-brokers). Companies like Groww, Zerodha, and Spenny come under the purview of SEBI and are regulated by the board.
This body regulates the Mutual Funds sector of India. Although non-statutory, all the financial entities involved in the activities related to mutual funds must be a member of AMFI and subscribe to the ethics laid down by the association. AMCs are members of this association, while the association authorises companies like Spenny to sell the funds to investors.
Stock exchanges are the non-statutory organisations that offer a marketplace where investors sell and buy securities and other financial instruments. NSE and BSE are two of the significant exchanges present in India.
These are some of the institutions that act as the guardian of the Indian economy. So, make sure to check their accreditations before your next investment.
No. Spenny is not an AMC and hence not a member of the AMFI. However, Spenny is authorized to sell the mutual funds by the AMFI. (ARN-170468, EUIN-E339688)
A stock exchange may or may not be owned wholly by the government.
Central Depository Service India Limited (CDSL) and National Securities Depository Limited(NSDL) are government registered share depositories in India. These can be thought analogous to money in a bank account, as banks hold money electronically, so do these depositories in case of shares.
T+2 cycle means a stock once bought or sale once executed shall reflect in your Demat only after 2 working days. However, the major exchanges (NSE and BSE) are planning to reduce this cycle to T+1, starting late Feb 2022.