Hi Readers, here is a comprehensive FAQ of 100 basic investing terms, explained in clear language and with examples. Happy Learning!
1. What is a Share / Stock?
Answer: A share (also called a stock) represents ownership of a small part of a company. When you buy a share, you become a part-owner of that company (in proportion to the number of shares you own). For example, if you buy 100 shares of a listed Indian company, you own a small fraction of that company. (ClearTax)
Example: If you buy 10 shares of “ABC Ltd” when they are listed, you have a claim on ABC Ltd’s profits (via dividends) and on its assets (in liquidation) in proportion to your shares.
2. What is the Stock Market?
Answer: The stock market is the marketplace where shares of publicly listed companies are bought and sold. In India this primarily means the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). (South Indian Bank)
Example: When you place an order to buy shares of a company using your broker, you are participating in the stock market.
3. What is Equity?
Answer: Equity refers to ownership interest in a company – often represented by shares. In Indian usage, equity = shares of companies. (India Infoline)
Example: Investing ₹1 lakh into equities means you are buying shares worth that amount and becoming an owner of those companies (in proportion).
4. What is a Broker?
Answer: A broker is an intermediary who facilitates buying and selling of shares on your behalf. In India you need a registered stock-broker to trade via NSE/BSE. (ClearTax)
Example: You open a trading account with a brokerage firm, they place orders for you, you pay them brokerage fees or commission.
5. What is a Demat Account?
Answer: Demat (short for ‘dematerialised’) account is where your shares are held in electronic form rather than physical certificates. In India, you must have a Demat account to hold listed shares. (NSDL)
Example: When you buy shares of XYZ Ltd, instead of getting physical share certificates, your holdings are credited to your Demat account under your name.
6. What is the Primary Market?
Answer: This is the market where companies issue new shares to the public for the first time (e.g., via an IPO—Initial Public Offering). (Investopedia)
Example: When a company launches an IPO and you subscribe, you’re buying in the primary market.
7. What is the Secondary Market?
Answer: After the initial issue, shares get traded among investors on the stock exchanges—that is the secondary market. (Investopedia)
Example: If you buy shares of ABC Ltd from another investor (not from the company) via the NSE, that’s secondary market trading.
8. What is Market Capitalisation (Market Cap)?
Answer: Market cap = (Number of outstanding shares) × (current market price per share). It gives a rough size of the company. (Motilal Oswal)
Example: If a company has 10 crore shares, each at ₹100, its market cap is ₹1,000 crore.
9. What is a Blue-Chip Stock?
Answer: These are shares of large, well-established, financially strong companies with a track-record of stable performance. (Plutus Education)
Example: In India, companies like those in the Sensex/Nifty top 30/50 list are typically referred to as blue-chip.
10. What is the P/E Ratio (Price-to-Earnings Ratio)?
Answer: P/E ratio = current share price ÷ earnings per share (EPS). It shows how many times earnings the market is willing to pay for a share. (Plutus Education)
Example: If a company’s share is at ₹200 and its EPS is ₹10, its P/E = 200 ÷ 10 = 20. This means the market is paying 20 times its earnings.
11. What is EPS (Earnings Per Share)?
Answer: EPS is the portion of a company’s profit allocated to each outstanding share. It’s calculated as profit after tax ÷ number of shares.
Example: If XYZ Ltd has profit after tax of ₹100 crore and has 10 crore shares, EPS = ₹100 crore ÷ 10 crore = ₹10 per share.
12. What is a Dividend?
Answer: A dividend is a distribution of a portion of the company’s profits to shareholders. Many Indian companies pay annual or interim dividends.
Example: If you own 100 shares of a company which declares a dividend of ₹5 per share, you receive ₹500.
13. What is Dividend Yield?
Answer: Dividend yield = (annual dividend per share ÷ current share price) × 100%. It shows how much cash return you get relative to the price.
Example: If share price = ₹100 and annual dividend = ₹4, yield = (4 ÷ 100) × 100% = 4%.
14. What is Liquidity?
Answer: Liquidity refers to how easily you can buy or sell a security without significantly affecting its price. In the context of Indian markets: shares with high trading volume are more liquid. (ClearTax)
Example: A large-cap company’s shares may be very liquid; a small obscure company’s shares might be illiquid (harder to sell quickly or at fair price).
15. What is Volatility?
Answer: Volatility means the degree of variation of a security’s price over time. Higher volatility = larger price swings (up or down). (Angel One)
Example: A stock moving between ₹50 and ₹90 within a short time has high volatility; one slowly moving from ₹100 to ₹110 over months is low volatility.
16. What is a Bull Market?
Answer: A bull market is when share prices are rising or are expected to rise, and sentiment is optimistic. (Zerodha)
Example: When the Nifty index rises steadily for several months and many companies’ share prices go up, you are in a bull market.
17. What is a Bear Market?
Answer: A bear market is when share prices are falling or expected to fall, and sentiment is pessimistic. (Zerodha)
Example: If the stock market falls 20 % or more from recent highs and stays down for a period, that is a bear phase.
18. What is an IPO (Initial Public Offering)?
Answer: An IPO is when a company offers its shares to the public for the first time and becomes listed on the stock exchange. (Plutus Education)
Example: If XYZ Ltd issues 1 crore shares at ₹100 each in an IPO and gets listed on the NSE, you can subscribe as a retail investor.
19. What are Rights Shares?
Answer: Rights shares are additional shares issued by a company to its existing shareholders in proportion to their holdings, often at a discounted price.
Example: If you own 100 shares of ABC Ltd, you might get a right to buy 10 more shares at a discount.
20. What are Bonus Shares?
Answer: Bonus shares are free additional shares given to existing shareholders by a company, using its retained earnings (instead of paying a cash dividend).
Example: A company declares a 1:2 bonus – for every 2 shares you hold, you get 1 share free.
21. What is a Stock Split?
Answer: A stock split happens when a company divides its existing shares into more shares, reducing the price per share but not changing the overall value of your holding.
Example: If a company does a 2:1 split, and you hold 100 shares at ₹200 each, after split you hold 200 shares at ₹100 each (value remains ₹20,000).
22. What is Market Order?
Answer: A market order is an instruction to buy or sell a security immediately at the best available price. (www.bajajfinserv.in)
Example: You place a market order to buy 50 shares of XYZ Ltd – the broker buys immediately at the current best price.
23. What is a Limit Order?
Answer: A limit order is an instruction to buy or sell a security at a specified price or better. Execution happens only if price reaches your specified level. (www.bajajfinserv.in)
Example: You place a limit order to buy XYZ Ltd shares at ₹95 (current price ₹100) – your order executes only if price falls to ₹95 or below.
24. What is Bid Price?
Answer: The bid price is the highest price that a buyer is willing to pay for a security at that point in time. (India Infoline)
Example: If the bid for a share is ₹98, someone is willing to buy at ₹98.
25. What is Ask Price / Offer Price?
Answer: The ask price (or offer price) is the lowest price at which a seller is willing to sell a security at that point. (India Infoline)
Example: If the ask price is ₹100, someone is willing to sell at ₹100.
26. What is the Bid-Ask Spread?
Answer: The difference between the ask price and the bid price. A smaller spread implies greater liquidity. (India Infoline)
Example: If bid = ₹98 and ask = ₹100, spread = ₹2.
27. What is Liquidity Risk?
Answer: Risk that you may not be able to sell a security quickly without causing a significant price drop.
Example: A small company’s shares with very low trading volume may have high liquidity risk – you might struggle to sell when you want.
28. What is a Portfolio?
Answer: A portfolio is a collection of all your investments (shares, mutual funds, bonds, etc.).
Example: You hold shares of 5 companies + 2 mutual funds + some bonds – that collective holding is your investment portfolio.
29. What is Diversification?
Answer: Diversification means spreading your investments across different assets so that your overall risk is reduced.
Example: Instead of investing all ₹5 lakh in one company’s shares, you invest ₹1 lakh in five different companies across sectors.
30. What is Asset Allocation?
Answer: Asset allocation is deciding how much of your total capital goes into different asset classes (equities, debt, gold, real estate) based on your goals and risk appetite.
Example: You might allocate 60% to equities, 30% to debt funds, 10% to gold.
31. What is Return on Investment (ROI)?
Answer: ROI = (Current Value of Investment – Cost of Investment) ÷ Cost of Investment. It measures the gain or loss on an investment. (Investopedia)
Example: If you bought shares for ₹1 lakh and they are now worth ₹1.3 lakh, ROI = (1.3 lakh – 1.0 lakh) ÷ 1.0 lakh = 30%.
32. What is Capital Gain?
Answer: Capital gain is the profit earned when you sell a security for more than you bought it.
Example: You buy share for ₹90, sell later at ₹120 → capital gain = ₹30.
33. What is Capital Loss?
Answer: Capital loss is when you sell a security for less than you bought it.
Example: Bought at ₹120, sold at ₹100 → capital loss = ₹20.
34. What is Long-Term Investment?
Answer: In Indian tax context, “long term” for shares often means holding more than 12 months (for listed shares) to be eligible for favourable capital gains tax rates.
Example: You hold a share for 18 months before selling → qualifies as long-term.
35. What is Short-Term Investment?
Answer: For listed shares in India, short-term means holding 12 months or less (for capital gains tax purposes).
Example: You buy shares and sell them after 6 months → short-term.
36. What is Index?
Answer: An index is a statistical measure of change in a portfolio of stocks representing a market or a segment. In India: Nifty 50, Sensex. (Groww)
Example: When Nifty50 goes up 2 %, broadly Indian large-cap stocks have gained.
37. What is Market Capitalisation Segment: Large Cap / Mid Cap / Small Cap?
Answer: Based on market cap, companies are classified into large-cap (largest), mid-cap, and small-cap (smaller) companies. Risk and return profiles vary accordingly.
Example: A company with market cap ₹50,000 cr could be considered large-cap; one with ₹2,000 cr might be small-cap.
38. What is Entry/Exit Load?
Answer: For mutual funds, an entry load (now largely banned in India) was a fee to invest; exit load is a fee charged when you redeem units before a certain holding period.
Example: You invest in a mutual fund and redeem within a year → exit load = say 1%.
39. What is a Mutual Fund?
Answer: A mutual fund is a pooled investment vehicle managed by fund managers which invest your money in a diversified portfolio of stocks, bonds or other assets.
Example: You invest ₹50,000 in an equity mutual fund – the fund uses that to buy shares of many companies and you own units of the fund.
40. What is an ETF (Exchange-Traded Fund)?
Answer: An ETF is a fund whose units trade on stock exchanges like shares. They often track an index. (Ferguson Wellman)
Example: An ETF tracking Nifty50 means you buy units of that ETF and get exposure to the Nifty50 index.
41. What is a Debenture / Bond?
Answer: A bond/debenture is a debt instrument — you lend money to a company/government and get interest plus principal back at maturity.
Example: A company issues a 5-year debenture at 8% interest – you buy and every year you receive 8% interest, at end of 5 years you get back principal.
42. What is Dividend Reinvestment?
Answer: Dividend reinvestment means you use the dividend you receive from shares or funds to buy more shares/units rather than take cash.
Example: You receive ₹1,000 dividend from a mutual fund and use that to buy more units of the same fund.
43. What is Systematic Investment Plan (SIP)?
Answer: SIP is a mechanism in mutual funds where you invest a fixed amount at regular intervals (monthly, quarterly).
Example: You invest ₹5,000 every month in an equity mutual fund via SIP.
44. What is Rupee Cost Averaging?
Answer: When you invest a fixed amount regularly (e.g., via SIP), you buy more units when price is low and fewer when price is high — this averages out your cost.
Example: You invest ₹5,000 each month; in month 1 you buy at ₹100/unit → 50 units; next month price ₹80 → you buy 62.5 units. Over time your average cost per unit becomes smoother.
45. What is Lock-in Period?
Answer: A lock-in period means you cannot redeem or sell your investment for a fixed time. Some mutual funds (ELSS) or company-shares (employee stock options) have lock-in.
Example: You invest in an ELSS mutual fund which has a 3-year lock-in – you cannot redeem for 3 years.
46. What is Margin Trading?
Answer: Margin trading is when you borrow funds or use broker’s money (leverage) to buy shares. It increases potential profit – but also risk. (Enrich Money)
Example: You invest ₹1 lakh but borrow additional ₹1 lakh from your broker, buying ₹2 lakh worth of shares – if price rises 10 % you gain more; if falls you lose more.
47. What is Short Selling?
Answer: Short selling is when you sell a stock you don’t own, expecting the price to fall, so you can buy it back at a lower price and make a profit. (Enrich Money)
Example: You borrow 100 shares of ABC Ltd at ₹100 and sell them. Price falls to ₹80, you buy back 100 shares at ₹80 and return loan – profit = (100-80)×100 = ₹2,000 (excluding costs).
48. What is Derivatives?
Answer: Derivatives are financial contracts whose value is derived from an underlying asset (stocks, indices, commodities). Examples: futures, options.
Example: A futures contract on Nifty50 gives you the right/obligation to buy or sell the index at a predetermined price on a future date.
49. What is Futures Contract?
Answer: A futures contract is a standardised agreement to buy/sell an asset at a predetermined price on a specified future date.
Example: You buy Nifty50 futures at 17,000; on expiry you settle – if Nifty50 is 17,500 you gain; if 16,500 you lose.
50. What is Options Contract?
Answer: An options contract gives you the right, but not the obligation, to buy/sell an asset at a set price before or at expiry.
Example: A call option on ABC Ltd gives you the right to buy shares at ₹150 in next one month – if price rises to ₹170 you can exercise; if not you may let it expire.
51. What is Intrinsic Value (in context of options)?
Answer: For an option, intrinsic value is the difference between the underlying asset’s current price and the option’s strike price (for in-the-money options).
Example: If ABC Ltd share = ₹170 and you hold a call option with strike ₹150, intrinsic value = ₹170-₹150 = ₹20.
52. What is Time Value (in options)?
Answer: Time value = option premium − intrinsic value. It’s the extra amount paid for the time left until expiry.
Example: If call option premium = ₹25, intrinsic value = ₹20 → time value = ₹5.
53. What is Open Interest?
Answer: Open interest is the number of outstanding derivative contracts (futures/options) that have not been settled.
Example: If there are 10,000 contracts of Nifty futures open, open interest = 10,000.
54. What is Exercise Price / Strike Price?
Answer: The strike price (or exercise price) is the price at which the option holder has the right to buy/sell the underlying asset.
Example: You buy a put option on XYZ with strike ₹120 – you have the right to sell XYZ at ₹120.
55. What is In-the-Money (ITM)?
Answer: For a call option, ITM means underlying asset’s price > strike price; for a put option, price < strike price.
Example: Call option with strike ₹100, share price = ₹110 → ITM by ₹10.
56. What is Out-of-the-Money (OTM)?
Answer: Call: strike price > underlying price. Put: strike price < underlying price.
Example: Call option strike ₹150, share price = ₹140 → OTM.
57. What is At-the-Money (ATM)?
Answer: When underlying asset price ≈ strike price.
Example: Share price = ₹100, call option strike ₹100 → ATM.
58. What is Bidirectional Market (Two-sided market)?
Answer: A market or stock where both buyers and sellers are active, allowing smooth trading both ways. (Swastika Investmart)
Example: Big companies’ shares often have two-sided markets; very small stocks may have only buyers or only sellers.
59. What is Circuit Breaker / Upper & Lower Circuit?
Answer: In Indian stock markets, when a stock’s price moves beyond a pre-defined percentage in a session, trading may be halted (circuit breaker).
Example: If a stock has an upper circuit of +10 % in a day, once price reaches that limit, trading may be paused or restricted.
60. What is Book Value?
Answer: Book value = (Total Assets − Total Liabilities) ÷ Number of Shares. It shows the net asset value per share on books.
Example: Company assets ₹500 cr, liabilities ₹200 cr, shares 10 cr → book value = (500-200)/10 = ₹30 per share.
61. What is Intrinsic Value (of a company/share)?
Answer: Intrinsic value is the “true” value of a company/share based on fundamentals (assets, earnings, growth) rather than market price.
Example: You estimate ABC Ltd’s future cash flows and discount them to today → you conclude intrinsic value = ₹120; market price = ₹100 → you think it’s undervalued.
62. What is Efficient Market Hypothesis (EMH)?
Answer: EMH is the theory that all available information is already reflected in stock prices, so it’s impossible to consistently outperform the market.
Example: Under EMH, buying and holding a broad market index may be as good as active stock-picking.
63. What is Beta (β)?
Answer: Beta is a measure of a stock’s volatility relative to the overall market (index). A beta > 1 means more volatile; < 1 means less volatile.
Example: If stock ABC has β=1.2, it is expected to move 20 % more than market moves (up or down).
64. What is Alpha (α)?
Answer: Alpha is a measure of the excess return of an investment relative to the return of a benchmark index.
Example: Fund generated 12 % when benchmark returned 10 % → alpha = +2 %.
65. What is Sharpe Ratio?
Answer: Sharpe ratio = (Return of portfolio − risk-free rate) ÷ Standard deviation of returns. It measures risk-adjusted return.
Example: A fund gives 15 % return, risk-free rate = 6 %, standard deviation = 10 % → Sharpe = (15-6)/10 = 0.9.
66. What is Liquidity Ratio?
Answer: In company analysis, liquidity ratio (like current ratio) measures ability to meet short-term obligations. In markets, liquidity also refers to ease of trading.
Example: Company current assets ₹300 cr, current liabilities ₹150 cr → current ratio = 2:1 (good liquidity).
67. What is Leverage?
Answer: Leverage means using borrowed funds (or debt) to amplify investment returns (or losses).
Example: Company uses loans to expand operations—financial leverage. Investor uses margin—personal leverage.
68. What is Debt-to-Equity Ratio?
Answer: One measure of financial leverage = total debt ÷ shareholders’ equity. A higher ratio means more debt relative to equity.
Example: Company has debt ₹200 cr, equity ₹100 cr → D/E = 2.0.
69. What is Gross Domestic Product (GDP) and why does it matter to investing?
Answer: GDP is the total value of goods & services produced in a country. Growth in GDP often correlates with corporate growth and stock market performance.
Example: India’s GDP growth accelerating may drive higher corporate profits → positive for equities.
70. What is Inflation and its effect on investments?
Answer: Inflation is the rate at which general price levels rise. High inflation erodes purchasing power and can impact returns from equities, debt and fixed income.
Example: If your equity return is 8 % but inflation is 6 %, your real return is only ~2 %.
71. What is Interest Rate Risk?
Answer: Risk that changes in interest rates will affect the value of investments (especially bonds) and cost of borrowing for companies.
Example: If RBI increases rates, debt-heavy companies may face higher interest cost, shares may suffer.
72. What is Credit Risk?
Answer: Risk that a borrower (company/government) fails to pay interest or principal on time.
Example: Buying bonds of a weak company may carry credit risk of default.
73. What is a Bearish Sentiment?
Answer: When investors expect markets or a stock to fall, the prevailing mentality is bearish.
Example: Amid economic slowdown, many investors turn bearish, selling equities.
74. What is a Bullish Sentiment?
Answer: When investors expect markets or a stock to rise, sentiment is bullish.
Example: In a recovery phase after a downturn, investors become bullish.
75. What is Systematic Risk (or Market Risk)?
Answer: Risk inherent to entire market/asset class (cannot be diversified away).
Example: A global recession affects most stocks irrespective of company fundamentals.
76. What is Unsystematic Risk (or Specific Risk)?
Answer: Risk specific to a company or industry (which can be reduced via diversification).
Example: A scandal in a particular company affects its shares but not entire market if diversified.
77. What is Herd Behaviour in markets?
Answer: When investors follow the crowd (buying/selling because others are), rather than fundamentals. This may inflate bubbles or deepen crashes.
Example: Many retail investors rush into a hot stock without understanding value—risk of loss.
78. What is a Correction in the stock market?
Answer: A correction is a short-term drop (often 10 %–20 %) in a market or stock after a rally. (Investopedia)
Example: If Nifty50 falls 15 % from recent high, it’s considered a correction.
79. What is Capitulation?
Answer: A point where investors give up hope, sell off in panic, often marking a market bottom. (Investopedia)
Example: Massive sell-off amid fear that market won’t recover; then bottoming out.
80. What is Buy & Hold Strategy?
Answer: Investing in good companies/stocks and holding them for long term rather than trading frequently.
Example: You buy shares of a quality company and hold them for 10 years, reaping growth and dividends.
81. What is Value Investing?
Answer: Selecting stocks that appear to trade for less than their intrinsic value (undervalued) and holding them for long term.
Example: You find a company trading at P/E = 8 while peers at P/E=20, analyse and invest if fundamentals strong.
82. What is Growth Investing?
Answer: Investing in companies expected to grow earnings at above average rate; often with higher valuation.
Example: A tech startup with strong growth prospects, though P/E may be high—investing for future.
83. What is Fundamental Analysis?
Answer: Analyzing a company’s financials, business model, quality of management, market environment to decide investment.
Example: You look at company’s revenue growth, margins, debt, management track-record before buying.
84. What is Technical Analysis?
Answer: Analyzing past market data (price, volume) to predict future price movement—popular among traders.
Example: You study charts of a share, look for patterns like head-and-shoulders, support/resistance before trading.
85. What is Support Level (in technicals)?
Answer: A price level where stock historically tends to stop falling and bounce back (because demand increases).
Example: ABC Ltd share always bounces around ₹90 over past months → ₹90 is a support level.
86. What is Resistance Level?
Answer: A price level where a stock tends to stop rising and reverse (because selling increases).
Example: ABC Ltd share repeatedly caps at ₹120 → ₹120 is resistance.
87. What is Breakout?
Answer: When a stock price moves above resistance (or below support) with higher than average volume, signaling potential trend.
Example: ABC Ltd breaks above ₹120 with strong volume → possible new upward move.
88. What is Trailing Stop Loss?
Answer: A stop-loss order which moves up as the stock price moves in your favour but does not move down. Protects gains.
Example: You buy at ₹100, set trailing stop at ₹90; price rises to ₹120, trailing stop moves to e.g., ₹110; if price falls thereafter to ₹110 your shares get sold.
89. What is Asset Under Management (AUM)?
Answer: For a mutual fund, AUM is the total market value of assets it manages.
Example: Fund ABC has ₹5,000 crore in assets → AUM = ₹5,000 cr.
90. What is Expense Ratio?
Answer: The annual fee charged by a mutual fund as a percentage of its AUM for managing your money.
Example: Fund expense ratio = 1.2% → you pay ₹1,200 per annum for every ₹1 lakh invested (via returns reduction).
91. What is Exit Load?
Answer: Fee you pay when you redeem mutual fund units or switch out if you exit before a specified time.
Example: A fund may charge 1% exit load if redeemed within 1 year.
92. What is NAV (Net Asset Value)?
Answer: For a mutual fund, NAV is the per-unit value of the fund’s assets minus liabilities.
Example: If fund assets ₹100 cr, liabilities ₹10 cr, number of units 1 crore → NAV = (100-10)/1 = ₹90 per unit.
93. What is Systematic Withdrawal Plan (SWP)?
Answer: In a mutual fund, SWP allows you to withdraw a fixed amount at regular intervals (monthly, quarterly) from your investment.
Example: You invest ₹5 lakh in a fund and choose SWP of ₹10,000/month – you receive ₹10,000 each month from your investment.
94. What are Rights & Warrant?
Answer: Rights are issues to existing shareholders to buy additional shares. Warrants are options issued by company giving right to buy shares at a fixed price in future.
Example: Company gives warrants to shareholders – you get the right to buy shares at ₹80 anytime in next 5 years.
95. What is Lock-in Shares?
Answer: Shares which cannot be sold/surrendered for a certain period after issue (for example in IPOs, for promoters).
Example: Promoter shares may have a 3-year lock-in from listing date.
96. What is Reverse Stock Split?
Answer: When a company reduces number of shares by combining them, increasing price per share, often to meet listing requirements.
Example: 10 shares of ₹10 each become 1 share of ₹100 each.
97. What is Treasury Bills (T-Bills)?
Answer: Short-term government debt instruments (maturity < 1 year) issued by government—low risk.
Example: You invest in 91-day T-Bill issued by Government of India.
98. What is Working Capital and why is it important?
Answer: Working capital = current assets − current liabilities. It shows short-term financial health of a company.
Example: Company with ₹200 cr current assets, ₹150 cr current liabilities → working capital = ₹50 cr (positive).
99. What is Insider Trading?
Answer: Trading of a company’s shares by someone who has access to confidential/price-sensitive information not available to public. Illegal in India.
Example: A director learns of upcoming profits and buys shares before announcement – that’s illicit insider trading.
100. What is a Regulator – like Securities and Exchange Board of India (SEBI)?
Answer: SEBI is the regulatory body for securities markets in India. It monitors and regulates stock exchanges, brokers, mutual funds, issue of securities to protect investor interests. (NSDL)
Example: SEBI ensures companies disclose financials, stops insider trading, ensures brokers follow rules.