Explain the way Indian Capital Markets is organized. Over the last 3 decades various reforms have taken place to make the capital markets in India more and more structured and scam-free. Explain any five such significant reforms.
In India, the Capital market is of two types ;they are primary markets and secondary markets. The part of the capital market where firms and corporations issue securities for the first time are a primary capital market.
1.Creation of Securities and Exchange Board of India which has brought in uniformity in the transactions in all stock exchanges.
2. New Instruments, new innovative financial instruments have been introduced like convertible preference shares, secured premium notes, warrants.
3.Establishment of Creditors Rating Agencies in order to assess the financial health of different financial institutions and agencies related to the stock market activities.
4.Increasing of Merchant Banking Activities which provide financial services such as underwriting facilities, issue organising, consultancy services.
5.Investor's Protection which tries to protect the interest of the small investors from frauds and malpractices in the capital market.