INVESTOR PROTECTION LAW: BALANCING RISK AND INNOVATION IN THE SECURITIES MARKET
AUTHOR – KUSHAGRA BHAGWAT* & DR. PARISHKAR SHRESHTH**
* STUDENT AT AMITY LAW SCHOOL, AMITY UNIVERSITY LUCKNOW CAMPUS
** ASSISTANT PROFESSOR AT GRADE III AT AMITY LAW SCHOOL, AMITY UNIVERSITY LUCKNOW CAMPUS
BEST CITATION – KUSHAGRA BHAGWAT & DR. PARISHKAR SHRESHTH, INVESTOR PROTECTION LAW: BALANCING RISK AND INNOVATION IN THE SECURITIES MARKET, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (7) OF 2025, PG. 456-468, APIS – 3920 – 0001 & ISSN – 2583-2344
The Indian securities market is a fundamental building block for the economic development of the nation, facilitating the mobilisation of resources and the effective utilisation of capital. The rising participation of institutional and retail investors is the result of increased confidence in the Indian financial system. Yet, the smooth operation of this market relies on an elegant balance between safeguarding investor interests and fostering an environment conducive to innovation. The sustained growth of the Indian capital market is inherently linked to the preservation of investor confidence, and therefore security policies need to be enforced effectively. The regulatory framework must address the inherent conflict where over-regulation can dampen market vigor and the introduction of innovative financial products and under-regulation can put investors at unnecessary risk and undermine market integrity.
The authors, through this research paper, seeks to assess the Indian legal framework with respect to investor protection and its delicate interaction with innovation in the securities market. The analysis considers how legislations and regulatory agencies assist in safeguarding investors from scams such as insider trading, malpractices in the market, and deceptive information. It does this by encouraging honesty, good conduct, and well-informed participation in primary and secondary markets. It also examines the constant challenge of balancing protection of investors with promoting new ideas and efficiency in the securities market. This is particularly so with rapidly evolving technology and innovative financial products. By examining rules in depth, enforcement actions taken in their case, and initiatives to develop the market, the study illustrates how critical SEBI is in developing a robust and dynamic capital market. The report identifies that regulations need to change on a periodic basis to respond to new risks.
Keywords: SEBI, Investor protection, Investors, Securities Market, Risk Management, Stock Exchange, Market Manipulation.