Capital market plays an important role in maintaining the economic growth of the country. Hence, it is important that there are regulations in this field. In India, SEBI acts as the guardian and protects the interest of the investors and protects the investors from any trade malpractices and market manipulations. It also penalizes the corporations who involve in such malpractices. However there are weaknesses that SEBI entails.

Introduction
Capital market is one of the markets that plays a crucial role in maintaining the economic growth of the country. The legal framework governing the capital market plays a crucial role in determining the market integrity. In this context, in India, there comes various laws that governs the same.

Firstly the company law governs the issue of prospectus in the capital market. As per section 26 he document invites the public at large to purchase share and debenture. This basically ensures transparency to the prospective investors which helps in maintaining the market integrity.

Now when it comes to companies act, section 23 talks about two methods of raising capital. It basically classifies it on the basis of the type of company which is private and public company. When it comes to private company, it can raise capital by private placements, price issue and bonus issue. On the other hand, for public company, the company raises capital by all the tree mentioned above and additionally by public offer by IPO, FPO and Private Placements.

So a company can choose to raise capital by any of them as it is flexible in nature. Hence, the section 23 of the companies act empowers the company to raise capital. But at this point the jurisdiction of SEBI arises. Under section 24 of the Companies act, the responsibility to extended to SEBI for the protection of investor. Hence, SEBI ow acts as the guardian.

Jurisdiction of SEBI
To begin with, the jurisdiction of SEBI arises in two scenarios:

1. Issue of securities
2. Transfer of securities

The term securities has been hereby defined under section 2(h) of SCRA which says that includes Shares, scrips, stocks, bonds, debentures, debenture stocks etc. in or of any incorporated company or another body corporate. So, SEBI basically regulates the issue and transfer of these securities. In this context there are two regulations that come to play, which is SEBI ICDR and SEBI LODR regulations.

SEBI ICDR deals with the issue of prospectus and disclosure requirements which can be done at different places by issue of security by IPO, FPO, OFS and private placements. Whereas, on the other hand, SEBI LODR regulation deals with the listing obligations and disclosure.

So, the SEBI ICDR regulations provides comprehensive details about the guidline od capital market. An issuer of specified securities must satisfy all requirements for such issues in order to register or file the final offer document with the Registrar of Companies (ROC) or designated stock exchange, as applicable, and to submit the draft offer document to the Securities and Exchange Board of India (SEBI).

Only if an issuer satisfies the following requirements prior to initiating a rights offering or public offering of certain securities. It has been provided in accordance with SEBI ICDR regulations section 26:

• Its promoters, directors, and individuals in charge were not, and are not, involved in the promotion, direction, or control of any other company that is barred from the capital market by any SEBI decision or directive.
   
• It has chosen one of the respectable stock exchanges to be the designated stock exchange and has applied to one or more of them for the listing of certain securities on those markets.
   
• In the event of an initial public offering (IPO), the issuer has filed an application to list specific securities on at least one respectable stock exchange with nationwide trading terminals.
   
• All of the issuer's partially paid-up equity shares that are presently outstanding have either been fully paid for or have been forfeited.
   
• Firm financial arrangements, excluding the amount to be raised, have been reached for 75% of the identified funding modalities through verifiable means, either through the intended rights issue or public issue or through clearly identifiable internal accruals that currently exist.

Further for listed entities, SEBI LODR regulation comes to play. The chapter 4 of the regulation deals with the same. It says once a company is listed the corporation must choose a company secretary who would coordinate with and inform SEBI, accredited stock exchanges, and depositories on adherence to their policies, guidelines, and other directives (in the format that may be updated periodically).

Once all the compliance are done with, the companies act under section 123 talks about the payment of dividend. But if the dividends are not paid, Section 127 comes to picture that talks about the punishment in case of non-payment. It again gives jurisdiction to SEBI.

Market Manipulations
One of the problems that affects the market integrity is Market Manipulations. It basically deceives the buyers by artificially affects the price of the share and affects the market. The well-known US case Cargil Inc. v. Hardin from 1971 established the classic definition of market manipulation as any action, plan, or device that purposefully manipulates the price of a financial asset to produce a different price than what would have happened in the absence of such intervention. A trader can raise the price of stock, for instance, by making big purchases of it.

The trader will make money if they are able to sell shares at that point and the price does not change in response to their sales. Naturally, we should anticipate that this approach will fail. When shares are sold, the stock price will drop, allowing the trader to buy at higher prices and sell at lower ones overall. This appears to rule out the idea of manipulation based on commerce, and that is the unraveling problem. It can take place in various forms like insider trading, artificially increasing or decreasing the price, spreading rumors and many more.

Information based manipulation is one of the methods through which the market manipulations can be done successfully by spreading fake news in the market. This kind of manipulation involves traders organizing a pool to buy shares, spreading rumors about the stock after the buy, and then selling at a higher price (Allen and Gale, 1992).

Allen and Gorten argue that the natural asymmetry between liquidity purchases and liquidity sales leads to an asymmetry in price responses. In the same context Van Bommel in 2003 talks about the manipulations by dissemination of information by gurus, analysts, investment newsletters, and other potentially informed parties. The rumor hence causes a tremendous impact on the market as it creates reactions in terms of prices and create overpriced phenomena in the markets.

Further internet also proves to be another method of disseminating information which done majorly by disseminating price sensitive information.

The other manipulation can be trade based manipulation. It is specifically done through price change. It can be understood by the given example. Imagine a trader who is prepared to engage in a formal, person-to-person transaction with an institutional investor for the sale of one million shares of ABC stock.

The two parties sign a contract in the morning specifying that the transaction price would be determined by taking the closing price of the ABC shares on the exchange. The trader purchases 10,000 shares of ABC on the market in the afternoon with the sole intention of inflating the price from $10 to $11, which will raise the closing price to his advantage.

It goes without saying that the trader gains at the institutional investor's expense. In this way the price inflates. Yet another method can be action based manipulation. In this the value of the forms changes by their actions. Takeover bids is yet another example of the action based manipulation.

Market manipulations hence results in skewed pricing. This in return misleads the investors and hampers the market integrity. Meaning thereby, the investors who purchased or sold the assets at the inflated or deflated price have to suffer the loss. Hence, the term of market manipulation is subject to several, more or less inventive interpretations and a concise description of market manipulation includes a intentional deceptive act or omission to create an artificial price.

Regulatory framework for Market Manipulation in India
Market manipulation is one of the issue that needs to be regulated because it creates market volatility. In India, in order to secure the interest of the investor the SEBI acts as the guardian. There had been certain recent amendments in order to ensure that the market it not mislead due to fake information and the investors are protected. SEBI has the power to investigate and penalize the corporation in case there is any market manipulation.

The core functions of SEBI includes:

• Policy formulation for the setting up of risk protection and surveillance systems at the stock exchanges to restore integrity, safety, and stability to the Indian securities markets
• Supervision of the stock exchanges' surveillance operations, including their monitoring of market movements;
• Examination of the exchanges' surveillance commencements of investigations
• Preparation of market movement reports and studies, which SEBI periodically circulates to the Government of India's Ministry of Finance as well as foreign securities market regulators.

Section 3 of the act talks about the formation of the board that would look after the investors in securities and and regulate the securities market. the section 11 (2)(e ) gives power to the board to keep an eye on the fraudulent and unfair trade practices relating to securities market.

Further the sub-clause (i) gives power to conduct inquiries and audit of the securities market. In this regard the section 11 C of the SEBI Act empowers the board to conduct any investigation in case there in any malpractice in the securities market. Further it may also direct every manager, managing director, officer and other employee of the company to submit any document that may be required in such inquiries.

By the 2002 amendment, Section 12 A was incorporated that talks about the prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control. Further Section 15G prescribes penalty for engaging in insider trading.

The penalty might reach a maximum of 10 lakh rupees. It might go up to 25 crore rupees, or three times the gains from insider trading or whichever is higher. Section 15 HA also penalizes the unfair practices whereby the penalty can extend up-to five lakh rupees or three time the amount of profit.

Hence, in this way SEBI acts as the guardian of securities market and protects the interest of the investor in India.

Conclusion
Despite the laws and the regulations that protects the investors and market integrity there are shortcomings associated with it. There can be myriad reasons for the same. One of the probable reasons could because of limited resources that SEBI accounts. The huge stock market of India makes it challenging for SEBI to look after it. Another reason could be the legal framework has inherent weaknesses.

It does not hence deter the manipulators to refrain from such an activities as the penalties are not very high. So, in order to deal with these issue SEBI must coordinate with other regulatory bodies such as RBI and IRDAI.