Alternative Dispute Resolution on Margin Trading Close out at Stock Exchange in India: A Case Study Approach

Abstract

The paper examines compliances of the margin trading rules and regulations of the Stock Exchange by trading members while serving their clients in the securities market in India. The paper applies case study approach to study the trading practices of trading members on Indian Stock Exchange systems and identifies the nature of securities market’s misuses and abuses. The paper identifies how trading members are violating and avoiding the regulatory compliances. The paper provides inputs for the development of appropriate regulatory framework for prevention of violations of rules and regulations in Indian securities market, prevention of capital market abuses and enables the investor protection. The limitation in a case study approach, the research findings and results may lack generalizability. The results may be generalized in the emerging markets. Hence, researchers are encouraged to study results further in other developed countries. The results provide critical perspectives on regulatory challenges and encourage the regulatory authorities to issue relevant guidelines to stock brokers to prevent from non-compliances of margin trading rules.