Revision: Business Regulators and Intermediaries Business Studies ISC (Commerce) Class 12 CISCE

Key Points: Regulators and Intermediaries

Regulators are authorities set up by the Government to control and supervise specific individuals and organisations.
Their main objectives are to ensure ethical functioning of organisations and to protect the interests of the public.
For example, SEBI regulates stock exchanges, brokers, mutual funds and protects investors’ interests.
Intermediaries are individuals or organisations that act as middlemen between two groups in the economy.
Examples of intermediaries include stock brokers, merchant bankers, depositories and credit rating agencies.

Key Points: Food Safety and Standards Authority of India (FSSAI)

FSSAI was established under the Food Safety and Standards Act, 2006 to regulate food safety in India.
It lays down science-based standards for food and regulates manufacture, storage, distribution, sale, and import of food items.
FSSAI frames rules and guidelines to ensure safe and wholesome food for human consumption.
It provides scientific advice and technical support to Central and State Governments on food safety matters.
It accredits laboratories and certification bodies to maintain food safety standards.
FSSAI creates awareness, training programmes, and information networks related to food safety.
Food processors and food packers operate under FSSAI regulations to ensure safe processing and proper packaging of food items.

Difference Between Regulators and Intermediaries

Basis of Distinction	Regulators	Intermediaries
Meaning	Authorities which regulate intermediaries	Middlemen between corporate sector/business firms and investors/consumers
Nature	Official agencies	Unofficial or private agencies
Appointment	Appointed by the Government	Not appointed by the Government
Motive	Social motive	Economic motive
Example	SEBI	Stockbrokers

Key Points: Reserve Bank of India (RBI)

The Reserve Bank of India (RBI) is the Central Bank of India, established in 1935 under the RBI Act, 1934.
It regulates commercial banks (Indian and foreign) and Non-Banking Finance Companies (NBFCs) in the country.
RBI controls money supply and credit and formulates and implements the monetary policy of India.
It acts as the Banker’s Bank by providing loans and maintaining cash reserves of commercial banks.
RBI functions as the Lender of the Last Resort by giving financial assistance to banks during emergencies.
It performs the Clearing House function by settling inter-bank payments through book entries.
RBI is the Custodian of Foreign Exchange and works to maintain stability in the exchange rate of the Indian currency.

Key Points: Securities and Exchange Board of India (SEBI)

SEBI (Securities and Exchange Board of India) was established in 1988 and became a statutory body in 1992 under the SEBI Act, 1992.
It regulates and supervises the securities market in India, including stock exchanges and companies issuing securities.
SEBI controls intermediaries such as brokers and merchant bankers to ensure fair practices.
Its main objective is to protect the interests and rights of investors.
SEBI ensures orderly functioning and development of the securities market and acts as the watchdog of the capital market.

Key Points: Functions of SEBI

SEBI performs protective functions by preventing fraud, insider trading, price rigging, and unfair trade practices to protect investors.
It carries out developmental functions such as promoting the training of intermediaries, conducting research, and educating investors.
SEBI performs regulatory functions by framing rules for stock exchanges and registering and controlling brokers, merchant bankers, and mutual funds.
It supervises important market intermediaries like stock exchanges, stock brokers, merchant bankers, depositories, and credit rating agencies.
Depositories (NSDL and CDSL) help investors hold securities in electronic form through demat accounts, reducing paperwork and risk.
Credit rating agencies like CRISIL and ICRA assess the creditworthiness of securities and help investors make informed decisions.
Overall, SEBI ensures transparency, fairness, and orderly functioning of the securities market in India.

Key Points: Mutual Funds

A mutual fund is a trust that collects money from the public by issuing units and invests it in securities according to prescribed rules.
It is managed by professional fund managers and works under the regulation of SEBI.
Mutual funds offer different schemes such as open-ended, close-ended, income funds, growth funds, and balanced funds.
They help investors by providing diversification of risk, liquidity, professional management, and tax benefits.
Unit Trust of India (UTI) was the first mutual fund in India, followed by many others like HDFC and ICICI Prudential Mutual Fund.

Key Points: Insurance Regulatory and Development Authority of India (IRDAI)

IRDAI is the apex statutory body that regulates and supervises the insurance industry in India.
It was established under the IRDAI Act, 2014, and is appointed by the Government of India.
Its main objective is to protect the interests and rights of policyholders.
IRDAI regulates insurance companies and agents by issuing licences and setting rules and standards.
It ensures transparency, fair practices, proper investment of funds, and maintenance of solvency by insurance companies.

Key Points: Indian Standard Institute (ISI)

The Indian Standards Institution (ISI) was established in 1947 and later replaced by the Bureau of Indian Standards (BIS) in 1987 under the BIS Act, 1986.
BIS is a statutory body that sets national standards and promotes quality control in India.
Its main objective is to develop standardisation, marking, and quality certification to create quality awareness.
BIS prepares standards for products, certifies industrial and consumer goods, and protects consumers by ensuring product quality.
It promotes both national and international standards and helps reduce production costs by eliminating unnecessary varieties.
BIS provides quality marks such as ISI mark for consumer goods and BEE mark for electrical goods.
BIS plays an important role in improving the quality of industrial goods, electrical goods, and consumer goods in India.