There exist many regulations to protect the investors, consumers and financial m
ID: 2741102 • Letter: T
Question
There exist many regulations to protect the investors, consumers and financial markets for fair and efficient maintenance. Some of these regulations include the following:
Customer protection regulations are designed to protect them from unfair trade practices of the suppliers. Customer protection regulation act established in 2008 says that the customer need to be informed of every part that is included in the product, should not behave in misleading way this protecting the rights of customers.
Investor is a person who participates in the growth of economy. He is safeguarded by various regulations which include the investor protection and education fund act 2009, investor protection and securities reform act 2010 given by SEBI etc.
The financial markets include the services of various Industries like banking, insurance etc. where huge services are provided thus regulated by various acts safeguarding the investors. These include the SEBI, RBI, central government, etc. thus protecting the customers, regulating foreign involvement, reducing financial crimes, maintaining stability of currency, foreign collaborations etc.
Therefore, they are established to protect the investors and the customer
ARGUE THAT THOSE REGULATIONS ARE ETHICAL AND NECESSARY TO PROMOTE A FREE MARKET
Explanation / Answer
All these regulations are ethical and necessary to promote a free market.
Customer protection regulation: This is the act of protecting customers. They have rights to get genuine product, since their payments make the business successful. Therefore, this is ethical on behalf of customers and sellers. On the other hand it promotes a free market, where the price of a product is determined through supply and demand forces. If demand is higher than supply, the price would increase and reach the equilibrium.
Investor protection: Investors should be protected because of their investment security and earning assurance. It also promotes a free market, where investors would be free to invest in shares when bank interest is low.
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