REVIEW OF LITERATURE

REVIEW OF LITERATURE

According to SEBI, professional rating of market intermediaries is a matter of debate and discussions. The need is felt not only from the viewpoint of greater disclosure requirements for investor’s interest, considering the important role such intermediaries play, being an interface between the investor and exchanges but also from the viewpoint of measuring the adequacy of systems and controls to meet internal and external compliance requirements.

Thus, the need for Intermediaries Rating Services in view of the development is taking place in the capital markets and requires constantly up gradation and improvement in the systems and procedures in operation.  Besides compliance with regulatory requirements, it has assumed significance to mitigate risk and ensure protection of investor’s interest.

Rating objectives benefits the entity to brand its image and capitalize the same to generate more business by accruing benefits to all of its stakeholders comprising investors, stock brokers, regulators and others who will be benefited from the transparency and consequential focus on efficiency.

According to SEBI and Intermediaries Regulation and Supervision Department, different factors are to be considered for rating process:

·         Organization structure

·         Policy on investor’s interest

·         Risk management policy

·         Financials

·         History/ background of firm

According to Michal Parness, Founder & CEO, Investors don’t make money in the market. The reason the institutions make money is that investors are trading, every time they buy or sell.