Regulators

A financial market without rules will fail; there needs to be some foundation of legal certainty and regulations that diminish the possibilities of fraud and manipulation. Although markets often develop their own internal procedures, there is generally a statutory body which acts as the final legal arbiter, and which is designed to give confidence to market participants. In the United States, a number of different regulatory bodies have grown up which oversee various markets and participants; for instance:




Banks
(a panoply of regulators, ranging from Federal bodies such as the Federal Reserve or the Office of the Comptroller of Currency (OCC), and/or oversight by state bank regulators). In India it is Reserver Bank of India (RBI) etc.
Securities
(the Securities and Exchange Commission (SEC)). In India we have Securities and Exchange Board of India (SEBI)
Futures contracts
(Commodity and Futures Trading Commission (CFTC))

In other countries, there may be more centralized regulation. For instance, the United Kingdom has a single 'super-regulator' in the shape of the Financial Services Authority (FSA).
However, if there are too many rules then a market can be stifled; the costs of transactions may be increased by excessive bureaucratic monitoring. In current times, as financial capital and personnel can be quickly transferred between locations, the balancing acts of market regulators become ever more difficult to accomplish.


Considering India
Who regulates the Securities Market?
The responsibility for regulating the securities market is shared by Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India (RBI) and (SEBI).
What is SEBI and what is its role?
See here.