VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research VOLUME 3 | ISSUE 1 INTERNATIONAL JOURNAL OF ADVANCED LEGAL RESEARCH A UDIT C OMMITTEE – A ND I T S I MPORTANCE IN A CCORDANCE WITH C OMPANY L AW - Vindhaya M Aggarwal & Priyam Tiwari 1 Abstract Auditing is the one most important process in the functioning of any company and it is the only process that actually in reality tells us that how effectively is the company performing fiscally, after all any business’s primary objective is to make money. The audit committee as the name suggests is the most integral part of this intense process. It is made up of some persons who are generally from outside the organization itself. Their primary responsibility is to provide the organization's practices with a n objective and unbiased view. The purpose of the audit committee, which consists of members from outside the organization, is to ensure that, by eliminating conflict of interest, the audit process is neutral. By guaranteeing the independence of the audit process, the Audit Committee plays a critical role. Auditing a modern corporation's activities is an intricate and complex process that requires the management to understand the rules and judgments taken during the preparation of financial statements. The audit committee is set up to act as a conduit of information supplied to auditors by management and to isolate an auditor from management pressures. These committees shall therefore be independent of management and shall have the responsibility to decide o n the work or scope, including the determination of audit fees and the extent of non - audit services. The audit committee plays a major role in ensuring and guaranteeing the authenticity of the financial records of a company Amongst managing the company in cluding sales and services and dealing with all the employees and members and also to take care of the regulations for the company it can’t be expected out of the board that they make all the decisions. Accordingly, the Board is supposed to make an Audit Committee which is formed to ensure that a company produces satisfactory, appropriate and re liable information for the 1 Students at Symbiosis Law School, Noida VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research stakeholders and independent analysts to carry out a report to assess the results of the company. Keywords: Auditing, Audit Commi ttee, Financial Records, Corporate Governance, Company Management and stakeholders A UDIT C OMMITTEE AS PER THE C OMPANIES A CT , 2013 The audit committee is setup as per the a ccording to Section 177 2 of the Companies Act of 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules of 2014, certain specific types of businesses are currently obligated to set up an audit committee, including: (a) all listed businesses; (b) all public busi nesses with paid - up share capital of at least 10 crore rupees; (c) all public businesses with at least 100 crore rupees in annual turnover ; and (d) all public businesses with, collectiv e outstanding loans and debentures going beyond the amount if 50 Crore INR T HE C OMPOSITION OF AN A UDIT C OMMITTEE 3 An audit committee must have a minimum of three directors as members, with independent directors making up at least two - thirds of the committee. All of the committee's members, including the chairman, must be fi nancially literate, and at least one of them must have experience in either accounting or financial management. A director who is independent must serve as the committee's chair. The audit committee's secretary will be the company secretary. (Companies Act , 2013). 4 M EETINGS OF THE A UDIT C OMMITTEE It is provided that the committee should conduct a meeting minimum of four times per year, with no meeting being separated by more than 120 days. At least two members, or one - third of the members — which would include at least two independent directors — must be present for a meeting to take place. (Companies Act, 2013) I MPORTANCE OF A UDIT C OMMITTE E 2 Companies Act , 2013, § 177. 3 Audit Committee under Section 177 of Companies Act,2013, by CS M.Kurthalanathan, available at https://taxguru.in/company - law/audit - committee - section - 177 - companies - act2013.html 4 Audit Committee, by Chris John, available at https://www.indiafilings.com/lea rn/audit - committee/ VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research 1. To change and decorate financial practices and data, offer noteworthy bits of understanding. Audit committees deliver supervision of excessive - performing companies. To inspect and maintain the viability of hierarchical controls and external monetary reporting, audit committees meet with the CEO and monetary officers. They also paint along with the finance committee, which is typically aimed at round interior studies, organizational problems, and monetary methods. 5 2. Establish and hold up efficient anti - fraud applications. With their experiences and ability in economic, criminal, control and operational problems, audit committee individuals can expect a proactive task running with the NFP's leadership crew and auditors in making and intermittently evaluating an business enterprise - huge fraud prevention and reputation software and ensuring that investigations are embraced if fraud is discovered. They may also help the management group of the company to devel op an intense program of morality and consistency. In reviewing and refreshing both systems, the audit committee must rely on a comparably proactive feature. 3. Enhance the internal audit feature. The overall respectability of the internal audit role is prov ided by an organizational framework that has the internal audit team revealing it directly to the audit committee. Under this type, as the eyes and ears of the audit committee understand the capacity of the agency to perform its financial and consistent du ties and ensure that the employer alters procedures and internal controls as necessary, the internal audit crew will fill in. 4. To guide the audit process of the company. An audit committee should also consult external auditors (which are not related to th e company) to oversee their reports, findings and financial facts about the company to ensure that the external auditors and the management of the company are in agreement and can further ensure transparency to the stakeholders 5 Audit Committee, by Sweta, available at https://taxguru.in/company - law/audit - committee - section - 177 - companies - act2013.html VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research 5. The committee also discu sses with the external auditors about the corporate practices whether they are presentable and acceptable or not also the financial statements and records of the company so that the company can’t be challenged for the same. 6 6. For stakeholders, maximize re liability. The popularity of an NFP is its most distinct help. A message of freedom, credibility and confidence is conveyed by an audit committee. It also creates trust between current and capable materials, individuals, lenders, and other stakeholders. Th is excellent message will be sustained and further strengthened by the role and composition of the audit committee, achieving transparency in economic disclosures, and communicating the organization's compliance and ethics policies, NFPs and their audit co mmittees. 7 F ACTORS OF AN EFFECTI VELY FUNCTIONING A UDIT C OMMITTEE 1. It is the duty of the committee to understand and the legal and regulatory requirements and act upon them accordingly 2. The members of the committee should continuously insist on improving transparency between the company and the committee. 3. The Audit Committee should honestly report the financial records and earnings of the company. 4. The committee should insist the auditors of the company to effectively carry out the audit process and also lo ok over their reports thoroughly. A TAKE ABOUT A UDIT C OMMITTEES FROM THE S ATYAM S CAM C ASE In India the role of a board and requirement of an audit committee came under the lime light after the case of well - known Satyam Computers Ltd. It was such a huge co rporate governance failure which quite literally shook our entire market and the regulators and also the stakeholders of the same. 8 Numerous nations and many other sources did classify this as ‘India’s Enron’, it should then and there have started a spark, a requirement or an alert of 6 Audit Committee Role & Responsibilities, by CFA Institute, available at https://www.cfainstitute.org/en/advoc acy/issues/audit - committee - role - practices#sort=%40pubbrowsedate%20descending 7 Su pra note 5. 8 What changed in the legal landscape post Satyam scam, by Susmit Pushkar and Susanah Naushad, available at https://www.moneycontrol.com/news/opinion/what - changed - in - the - legal - landscape - post - satyam - scam - 2480623.html VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research sorts in the ears and eyes of the lawmakers and how old and incompetent our old laws relating to the corporate world were. It should have gone at least to a level where there were being made major changes to the functioning of the audit committees of Indian companies. After the Satyam case the reaction of the government and other regulators was to increas e the involvement of the Company Directors in the Committee so as to provide more insight to the company, the number of the independent directors hardly changed in case of any company. It was surprising to know that the audit committee meetings decreased s ignificantly after the scam. 9 The case of Satyam computer systems services Ltd is an instance of company corporate governance failure in India where an audit committee performed the primary function in the rip - off of the stakeholders trust and funds, the o pposite of what they are supposed to do . The organization failed every pillar of corporate governance and deceived authorities like SEBI, Registrar of businesses and companies and moreover the government of India O ne of the fine audit organizations of the time namely; Price Waterhouse Coopers, audited the books of the stated company for ten years , yet however failed drastically to take into due diligence concerning the frauds because it in no way verifies the forged statements with the financial institutio n and borrowers etc. The audit committee did not take any step in curtailing the malpractices in the enterprise and failed to rec ognize fraudulent sports. 10 These all steps tell us that there were actions taken but they were so little and insignificant tha t any company could very easily find way around those provisions. 11 A very significant change in the system was noticed and rather appreciated in the form of the Companies Act, 2013 in which the government changed the years old laws and re thought and re wrote them according to the needs of today, the act was enacted base d on the recommendations of numerous committees which were formed to address the issue of corporate structures and their failures. In case of Auditing Committees, the latest change was the Uday Kotak Committee which was formed by the government and specifi cally the Ministry of Corporate Affairs given the experience and expertise of Mr. Uday Kotak in June 2017 and very speedily delivered its report on October 5 th , 2017 out of which several were made in respect of auditing committees, out of which several wer e accepted. 12 The main point of the existence of audit committees is to identify that is there anything going on in a 9 Narayanaswamy et al. (2012) provide a d etailed discussion of the corporate governance framework in India. 10 Id. 11 Supra n ote 3. 12 Audit Committee, by M. Govindarajan, available at https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=9987 VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research company which is financially unethical or even worse illegal, but the companies act does not give that much power to the audit committee th at they can so closely observe the internal matters of the company, point being they only see what needs to be shown to them by the most senior members of the company C ONCLUSION Everyone has really high expectations from an audit committee of a company and the directors of the committee. It is expected from all the members to have very intense knowledge of accounting standards and also should have financial expertise which is fair if the committee is allowed to act independently. In the authors’ opinion it is very difficult to manage a twisted relationship with the management and the auditors of the company. It is also tricky because the members of the committee are expected to be alert for risks, constant conflicts are certainly to happen so as to be successful in the purpose of the committee. It is fairly certain to say that the to question the whole existence of audit committees would be diabolical, but it would be just to say th at the existing laws and regulations that give audit committees meaning need to be amended. 13 In the authors’ perspective the following are some steps that could be followed and can be acted upon so as to strengthen and give more importance to the Audit Com mittee : a. Any member of the committee has to be an expert in finances and financial management even to be considered for the role of a member in the audit committee In the authors’ opinion it is not only finances in which a person can help and assist the au dit committee, a person if at all has knowledge of companies and how they should function or has any experience in the field can be considered to be put amongst the members of the committee because that person would be able to provide a different view as t o what could be ethical or unethical that person would not only look at the law but also the ethics that might have an effect on the members and stakeholders of the company. The chairman of the company however should still have expertise in finances as he has to head the same and the knowledge of the same is very important to look over things very fairly. 13 Lesson from Satyam: Corporate governance evolves, not execution, by Rica Bhattcharyya and Sachin Dave, available at, https://m.economictimes.com/news/company/corporate - trends/lesson - from - satyam - corporate - governance - evolves - not - execution/articleshow/504763 72.cms VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research b. A minimum of six audit committee meetings each year should be held, two of which should be dedicated to a detailed review of the control environment and r isk management concerns in a systematic manner. c. Such as Directors and CEO’s there should be a check on a person and maximum how many audit committees can they join. d. The committee meetings should be held fairly close to the day of any board meeting so that important issues can be discussed and can be brought up in the board meeting. e. There should be setup a proper procedure for the selection of members of the audit committee, it should not be done by the chairman or the board or the stakeholders of the compan y because this invites bias in the committee and then the members could be easily manipulated which has been seen in the past, if the committee is selected independently, it would be able to do its work more transparently and more effectively. f. The term up to which one can be the member of any audit committee should also be decided, this is because if there is regular succession of the members it would ensure more and more transparency in the auditing process and the company management would have no option but to do their jobs honestly. g. The appointment of all the internal auditors and to whom they should report should be done only and only by the audit committee. This in itself proves that the existence of audit committees is very important for th e fai r functioning of any company and the provision should keep existing in the company. References: 1. Company Law by Avtar Singh 2. http://www.legalserviceindia.com/legal/article - 556 - evolution - of - audit - committee - in - india - an - insight - to - the - various - recommendat ions - and - reforms.html#:~:text=(e)%20The%20audit%20committee%20should,before%20finali zation%20of%20annual%20accounts. 3. https://link.springer.com/chapter/10.1057/9780230389304_3 4. https://onlinelibrary.wiley.com/doi/full/10.1111/j.1099 - 1123.2007.00356.x 5. https:/ /taxguru.in/company - law/audit - committee - companies - act - 2013 - sebi - lodr - 2015.html VOLUME 3 | ISSUE 1 AUGUST 2022 ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research 6. https://www.bloombergquint.com/law - and - policy/theres - something - rotten - in - the - state - of - audits - in - india - bah - say - auditors 7. https://www.bloombergquint.com/opinion/board - failures - why - audit - committees - arent - for - the - faint - hearted 8. https://www.cfainstitute.org/en/advocacy/issues/audit - committee - role - practices 9. https://www.indiafilings.com/learn/audit - committee/ 10. https://www.myaccountingcourse.com/accounting - dictionary/audit - committee 11. https:/ /www.protiviti.com/IN - en/insights/bulletinv1 - i9 VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in V OLUME 2 | ISSUE 4 INTERNATIONAL JOURNAL OF ADVANCED LEGAL RESEARCH T ECHNOLOGICAL CHALLENGES VIS A VIS SECURITIES MARKET - Apoorv Mishra 1 Abstract This study investigates the difficulties posed for the securities market by technological advancements. While trying to keep up with this evolution, a number of regulatory authorities are hard at work to guarantee that markets are both fair and efficient. When compared to prior periods, tremendous technological advancement has occurred, and this trend of technological advancement is continuing now. Innovative solutions powered by technological advancements are now not only possible but essential for earlier , more preventative identification and response. Due to the ubiquity of the problem, the increasing societal effect it has, and the interdisciplinary character of the field as a whole, it is of the utmost importance that an attempt be made to introduce it. In the last section, this study makes a number of recommendations that might contribute to the improvement of the securities market. Key words : - Securities, Technology, Market Significance The significance of this research is to study the relation between technology and securities market that how technology is presenting challenges for securities market. Body The financial markets in the United States are undergoing a dramatic transformation as a result of massive technical advancements, especially the growing use of the Internet. The flow of information is gradually becoming more streamlined and borderless, immediate, and virtually entirely free of charge. Opportunities exist for markets services, for new rivals, and for new 1 Student at ILS Law College VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in types of competition as a result of the fast changes that have already occurred and the much more rapid changes that are yet to come. In addition to this, they highlight the necessity for fresh ideas regarding the regulation of the nation's financial markets. 2 The stock markets h ave already been significantly altered as a result of the introduction of new information technologies. Larger and more mid - sized businesses have largely automated their order processing systems. The internet is being used by mutual funds for the purpose o f communicating with investors, as well as for offering and distributing shares. The Internet is used by corporate issuers of all sizes to undertake offers of their securities. Investors are increasingly going around conventional exchanges and trading syst ems based on dealers in favour of electronic networks, which allow them to transact with one another directly at a reduced cost. Customers who trade stocks on their own behalf are increasingly doing it using online platforms rather than by contacting or ph ysically seeing their brokers. Without the assistance of the conventional market middlemen, a number of very little issuers have utilised the internet to create second trading markets for stocks that are often rather difficult to trade. The global securiti es market is indeed a technology - intensive business, and it has been ideally positioned to take use of the benefits offered by the internet. In fact, it began doing so practically as soon even as internet became widely available. The trade of stocks and ot her financial instruments used to take place on physical trading floors and exchanges, but these operations are now mostly or entirely performed by computers in their intermediated and decentralised forms. The internet provides “a low - cost and efficient al ternative means to reach millions of potential interested parties without incurring the expense of a road show, without hiring the usual cadre of lawyers and financial advisers, without hiring a printing service, and, most importantly, without leaving the house.” 3 The expansion and innovation of financial services will have even more opportunities in the coming decade thanks to the continued rise of the Internet and its offshoots, especially as customers become more accustomed to and wired for using digital communications innovations and as confidentiality and security concerns are resolved. The financial industry as a whole will be affected. Regulation must change to keep up with the market's adoption of new technologies. 2 Steven M. H. Wallman, Information Technology & the Securities Market: The Challenge for Regulators , Brooking (23 June 2022, 14:00 Hrs https://www.brookings.edu/articles/information - technology - the - securities - market - the - challenge - for - regulators/ 3 Canada Etrade, https://www.canada.etrade.com/pages/home/main.shtml (23 June 2022). VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in The long - term effects of ongoing te chnological advancement are significant. 4 Investment advisors may now provide extra services to their customers more effectively thanks to new technology. Through its interpretative announcements and by giving advisors extra legal advice, the Commission ha s made it easier for them to utilise modern information and communications technology. The Commission has attempted to interpret its regulations creatively in order to enable such advances that are compatible with investor safety. The Commission is aware o f the numerous advantages that technology may offer advisors. Concerning technology and investment advisors, a number of legal questions have come up, such as whether certain behaviours would qualify one as a “investment adviser” under the law. Other legal difficulties include the use of Internet by unregistered investment advisors, the dissemination of adviser marketing via electronic media, the use of digital media to connect with customers, and improved recordkeeping. 5 Accessing and analysing information The data playing ground between investors and investment firms will be levelled as businesses give more information on themselves online. Investors will eventually be able to review raw financial information that is now gathered, at significant expense, into quarterly and yearly financial statements, as soon as it becomes available thanks to virtually immediate access to sections of management information systems. The market will be better able to learn from, take in, and act on information thanks to impr oved telecommunications technology, improved analytics, search new tech, and intelligent agent technology. This will result in more accurate pricing of securities and creative securities trading. Eventually, perceived information risk associated with an in vestment will decrease, which will have an impact on the cost of capital associated with that investment. Corporate Management Annual meetings will transition from being “physical” to being conducted electronically. More shareholder votes will be cast than ks to online voting. Annual meetings could be completely phased out in the future. To discuss business matters with other investors, the equivalent of “chat rooms” will be used. Activism by shareholders will gain momentum. Just as they do now with “exit,” selling their shares, investors will be able to utilise “voice,” or corporate governance, to boost shareholder value in real time, when a firm requires reform. The Indian financial markets will undoubtedly see numerous tech - driven advances in the years 4 White House, “Global Information Infrastructure will soon affect almost every aspect of daily life. A Framework for Global Electronic Commerce” http://www.whitehouse.gov/WH/New/Commerce/index.html . (23 June, 2022) 5 US Securities Exchange Commission, The Impact of Recent Technological Advances on the Securi ties Markets https://www.sec.gov/news/studies/techrp97.htm (23 June 2022). VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in to come, but market players agree that the path will be difficult and risky. While making sure those solutions driven by technology aid investors in making money, scalability is the largest problem. Technology will boost engagement, but we must scale such tha t platforms do not become unstable as more people use them. The capital market is extremely centralised and is heavily dependent on only two or three types of organisations (exchanges, clearing firms, and depositories). 6 The Function of Middlemen The techn ology will sometimes replace intermediaries with new intermediates and new sorts of intermediations, and other times it will replace intermediaries that just supply communications without contributing value in other ways (like via analysis). Offerings will be carried out electronically rather than by a large number of underwriter - employed salesmen. Broker - dealers and traditional exchanges will adapt and offer new services. As companies and sectors embrace cutting - edge technologies like electronic payments, internet banking, and cashless transactions, technology is changing economies. 7 In addition to the possibilities and advantages that it has brought about for investment businesses, their shareholders, and regulators, technology has also brought about a num ber of obstacles. The regulatory structure of the securities laws has to be updated so that it can keep up with the ever - increasing speed at which technology advances. The securities market confronts issues in facilitating and responding to changes in tech nology. These challenges are outlined below. 8 The necessity for safe methods of exchanging money or private information online, as well as guaranteeing that an investor may redeem share in a fund, are some technological obstacles. Others result from of the nature of online itself, which offers exceptional chances for cross - border connection. It will be difficult to make sure that disclosure statements are informative and serve as a roadmap for this group of investors, who have access to relevant data than t heir grandparents had in a lifetime. Investors will ultimately get “expert” financial planning advice from software that will eventually outperform many people financial planners in terms of quality. In order to provide ease, speed, and diversity at a low cost, smart agents will assemble a client’s portfolio via the Internet and execute transactions with progressively less investor involvement. The software as 6 Ashish Rukhaiyar , How Tech is Disrupting the Stock Market , Business Today (23 June 2022, 2:30 PM) https://www.businessto day.in/magazine/30th - anniversary - special/story/how - tech - is - disrupting - the - stock - market - 321704 - 2022 - 02 - 15 7 https://economictimes.indiatimes.com/markets/stocks/news/want - to - be - a - smart - investor - go - for - smart - technologies/articleshow/82242265.cms 8 Michael D. Mann, Cross Border Cyberspace: Jurisdiction in Cyberspace: International Implications of Electronic Ma rkets, Wallstreetlawyer.com, June 1997, at 24 - 26. VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in well as the tools needed to operate, sell, and advertise it will be developed by new intermediarie s, who will also accredit, evaluate, and rank it. Mutual funds or investment advisors will change to provide value in different ways as more investors utilise such technologies. Market structure; clearing and settlement. The current three - day settlement pe riod for securities will soon change to an instantaneous period, eliminating the danger of transaction default. Shares would be stored in book - entry form, much as mutual fund stocks are now, and ownership changes would only be recorded in the computer reco rds of the depository in the digital world that the new technology would create. Investors will be able to pay for goods and be compensated for sells right away thanks to improved money transfer technologies, online money, and electronic currency. The guar antee role of clearinghouses will subsequently be taken over by credit card firms or businesses similar to them by ensuring payment for securities purchases, if still required. Boutique exchanges, new trading platforms created especially for various invest or demands, will become more popular. In the end, an investor will have a variety of domestic and international marketplaces to choose from, each of which will cater to the different priorities of investors, whether they prefer immediate execution, the bes t price, the least amount of market impact, or a completely different type of trading platform. Finally, technology will keep accelerating the financial markets' internationalisation. Better and more affordable communications and analytics will continue to break down the wall between rivals that was created by time zones and geographic barriers that historically controlled and supported nationalistic attitudes on business. With today's technologies, access to overseas capital markets and international capit al users will become easier. Pressures for Change as well as Pressures Against Change Regulators face challenging issues as a result of all these advancements. Can technology itself be controlled, presuming it can be, or should regulation be focused on tackling fraud and manipulation? For example, “smart agent” software mimics an investment adviser within the context of the current legal system, and the Internet is beginning to appear a trading market in its current state. In addition, how should markets be classified in a society where several markets no longer easily fit the concept of a “ exchange” and are often managed in a variety of ways? What impact will disintermediation have on the government’s capacity to effectively regulate given the loss of hundreds of financial intermediations who served as “eyes and ears” to support legal effort s? How can one regulate to avoid misuse without stifling innovation, VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in given that the same information technology advancements that encourage development and capital creation simultaneously open up new opportunities for fraud and manipulation? (The argument for regulations and laws is too compelling and clear to advocate going back to the old caveat emptor system.) Other ways that technology has changed stock trading include direct mail campaigns that can quickly increase stock prices, websites, and online pu blications like The FT and the WSJ that provide real - time information on takeovers as well as prices so that traders can make better decisions. It is obvious that as technology develops, the stock market will continue to adopt more complex trading methods. Considering the popularity of automated trading, there will still be a need for the human aspect in the calculations made by the computer, therefore big data may be utilised to study market psychology. 9 To safeguard the public, regulators have traditional ly used a thorough, “command and control” style of regulation. Although that strategy helps in the prevention of misuse, it also inhibits the spreading of innovation as fresh concepts wait for regulatory clearance. Nevertheless, the climate that encourages a command - and - control mentality continues, despite the necessity for a shift in regulatory approach brought on by technology. For instance, industry, investors, the media, and Congress frequently request that regulators address a particular issue or matte r. Regulators adjust requirements just little to account for the major development rather than reconsidering the current ones. As a result, the regulations that were recently enacted must be modified in order to accommodate the next technological advanceme nt. Additionally, the number of remarks made, regulations modified, examinations taken, letters addressed, or lawsuits filed are often rated by Parliament or the media. A continual flurry of activity is often seen as a sign of a busy and thriving organisat ion. Many modest steps add up to much more than one large one. Additionally, sound - bite accountability favours command and control and gradual regulation. Regulators get criticism much more frequently for failing to safeguard someone who suffers harm than that for failing to support novel or experimental ideas that may have, though no one is certain, contributed to a better society. In order to control behaviour and oversee to what is recognized and safe, regulators choose to create precise, thorough regula tions. Additionally, regulators continue to strive for standards that they can effectively monitor and enforce, as all those who are controlled need precise and thorough instructions. The need for 9 How Technology Has Influenced the Stock Market, Computers in City, https://www.computersinthecity.co.uk/how - technology - has - influenced - the - stock - market/ (23 June 20220. VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in certainty is what drives precise regulation rather than dec larations of basic ideas that enable markets to evolve on their own. This is true for both those who must uphold the law and those who must enforce it. For market authorities, particularly in the last three years, the quickly evolving technology has presen ted new obstacles. In this context, SEBI has exercised extraordinary caution in cases like Depth Industries and Integrity Group Entities, where the authorities searched the Facebook profiles of the accused individuals on matrimony websites in attempt to pi ece together the sequence of events. These technical difficulties, nevertheless, were mostly brought to light in 2017 as a result of the WhatsApp breach case. Here, SEBI collected about 190 devices and looked at the conversations that were retrieved from t hem after reading news reports about the distribution of UPSI over WhatsApp. After investigation, SEBI discovered that the profits estimates being disseminated corresponded to the actual results that were later declared to stock markets. “Despite the fact that WhatsApp messages were successfully extracted, SEBI said in press conferences that they battled with the incapacity to conduct a thorough investigation during preliminary investigations because of whatsApp's end - to - end encryption. Since it’s becoming harder to tell so when UPSI loses its secrecy and becomes public knowledge, it's unfortunate that this is not an unusual incident. According to “rule 2(n) of the Insider Trading Regulations”, "UPSI" fundamentally includes any information that is not widely available information, that is, information that is available to the public symmetrically. It may be difficult to tell when information loses its discriminating nature and stops becoming UPSI, however, because of the inventive aspects of technology that e nable wide - ranging and quick circulation of information. In light of the fact that these restrictions are only going to get more complicated in the future with the introduction of features like ego messages, timed secret talks, etc., the issue that remains is how SEBI can take proactive measures to maintain a fair playing field.” 10 There are also entrenched interests. Market participants who benefit the most from the present system often oppose changes to it. Their resounding voices strengthen the status quo of regulation. In a market where the fundamentals are changing quickly, incremental, command - and - control regulation may go horribly wrong despite these obvious incentives for its continuation. The once - steady foundation on which regulators are constructin g has become unstable due to changing sands underneath it, and each tiny modification they make is increasing weight to a 10 Aastha Agarwalla, Market Surveillance by SEBI: Catching up to Technology (23 June 2022, 2 PM) https://lawschoolpolicyreview.com/2020/08/19/market - surveillance - by - sebi - catching - up - to - technology/ VOLUME 2 | ISSUE 4 MAY 2022 https://www.ijalr.in/ © 2022 International Journal of Advanced Legal Research ISSN: 2582 - 7340 For general queries or to submit your research for publication, kindly email us at editorial@ijalr.in progressively wobbly structure, if regulators don't take a step back and consider these basics. Financial markets have nothing like th e rule that innovation is the engine of development. The conventional supply chain of financial products is evolving as a result of new technologies like blockchai