A Capital Market is the market where debt or equity securities are traded for more than one year. Here government and business enterprises can raise funds of long term. The short term funds are of the money market and long term funds are related to capital markets.

If the classification is done for the Capital Markets, there are two capital markets, first one is primary markets and other one is secondary market. New bond or stock issues are traded to the investors. The process through which the bond and stocks are sold to the investors is known as underwriting. This is called primary market. The present securities are purchased or sold among the investors, in the secondary markets.

SEBI was formed by the Government of India in 1988 that acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament Chaired by C B Bhave. SEBI is basically the regulator for the Securities Market in India .

The main responsibilities and function of the SEBI is for the three groups i.e. the investors, the market intermediaries and the issuers of securities. Drafting regulations in its legislative capacity, it enforces actions in its executive function.