Functions of SEBI in managing secondary market activities
Secondary Market is considered to be a market where securities (collateral) are exchanged after originally being offered to the public in the primary market and registered on the Stock Exchange. Major trading is usually done in the secondary market. Secondary market includes equity markets and the debt markets.
The secondary market presents a well-organized platform for the general investor for trading of his securities. Secondary equity markets act as an examining and control channel for the organization of the company by promoting value-enhancing control activities, authorizing execution of incentive-based management contracts, and accumulating information (through price discovery) that aids management decisions.
SEBI and its role
The SEBI (The Securities and Exchange Board of India) is the administrative body formed under Section 3 of SEBI Act 1992 to secure the interests of the people investing in securities and to encourage the growth of, and to manage the securities market and for the matters which are connected with it.
Various departments of SEBI regulating trading in the secondary market
The following units of SEBI take care of the activities happening in the secondary market:
| Sr.No. | Name of the Department | Major functions |
| 1. | Market Intermediaries Registration and Supervision department (MIRSD) | Registration, management, acquiescence monitoring and examines all market intermediaries as concerns all sections of the markets namely equity, equity derivatives, debt as well as debt-related derivatives. |
| 2. | Market Regulation Department (MRD) | Developing new policies and instructing the functioning and working (except matters relating to derivatives) of securities exchanges, their divisions, and market organizations such as Clearing and settling of organizations and repositories (referred to as ‘Market SROs’.) |
| 3. | Derivatives and New Products Departments (DNPD) | Administering trading at derivatives sections of stock exchanges, introducing new products to be traded, and making certain changes in policy |