AN EMPIRICAL ASSESSMENT OF THE EFFECTIVENESS OF SEBI’S REGULATORY MECHANISMS IN PROTECTING RETAIL INVESTORS IN THE INDIAN SECURITIES MARKET

DOI: https://doie.org/10.65985/APER.2026811712

Authors:

Dr.Natika Poddar, Rutvik Naik

Keywords:

SEBI, Retail Investors, Regulatory Framework, Investor Awareness, SCORES, Investor Protection

Abstract:

The rapid growth of India’s capital markets has expanded investment opportunities for retail investors, contributing to financial inclusion and wealth creation. However, this growth has also increased retail investors’ exposure to risks such as fraud, market manipulation, information asymmetry, and procedural complexities. In this context, the Securities and Exchange Board of India (SEBI) plays a critical role as the primary regulatory authority responsible for safeguarding investor interests and ensuring market integrity. This study empirically examines the effectiveness of SEBI’s regulatory framework in protecting retail investors, with specific emphasis on investor awareness, confidence, and grievance redressal mechanisms. The study is based on primary data collected from 200 retail investors using a structured questionnaire and is supported by secondary data drawn from SEBI reports, academic literature, and regulatory publications. Descriptive and analytical techniques, including correlation analysis and one-sample t tests, are employed to assess investor perceptions regarding SEBI’s regulations and protective measures. The findings reveal that SEBI’s regulatory initiatives—particularly mechanisms such as ASBA, price band regulations, and the SCORES grievance redressal platform—have significantly enhanced retail investor confidence and improved perceptions of market fairness and transparency. Furthermore, the results indicate a statistically significant relationship between investor awareness and the reduction of investment-related grievances, underscoring the importance of financial literacy and regulatory awareness. Despite these positive outcomes, the study identifies persistent gaps in regulatory communication, limited outreach to rural and female investors, and emerging challenges associated with digital trading platforms. The study concludes that while SEBI’s regulatory framework has contributed substantially to creating a transparent and investor-friendly securities market, continuous reforms in investor education, communication strategies, and grievance management are essential to further strengthen retail investor protection in India.

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