Regulatory compliance in Indian share markets and banking refers to adherence to rules set by SEBI, RBI, and other statutory bodies. SEBI, established under SEBI Act 1992, oversees capital markets. RBI, constituted under RBI Act 1934, governs banking. Key frameworks include SEBI (LODR) Regulations 2015, PML Act 2002, Basel III norms, and Companies Act 2013. Non-compliance invites penalties, suspension, or criminal liability under respective statutes.

Regulatory compliance in Indian financial markets operates through a layered architecture. SEBI governs listed companies, intermediaries, and market infrastructure institutions (MIIs) like stock exchanges and depositories. Its LODR (Listing Obligations and Disclosure Requirements) Regulations 2015 mandate quarterly financial disclosures, related-party transaction approvals, and board composition norms. The SEBI (Intermediaries) Regulations 2008 govern registration and conduct of brokers, portfolio managers, and investment advisers.

RBI's compliance framework for banks covers capital adequacy under Basel III (minimum CAR of 11.5% for Indian banks including capital conservation buffer), KYC/AML obligations under the Prevention of Money Laundering Act 2002, and fair practices codes for lending. The FEMA 1999 governs cross-border transactions, replacing the older FERA regime.

For SEBI Grade A aspirants, the critical angle is understanding how violations trigger Section 11B (cease and desist), Section 15A-15HB (monetary penalties), and Section 24 (criminal prosecution) of the SEBI Act. The Securities Appellate Tribunal (SAT) hears appeals against SEBI orders.

For CLAT PG, regulatory compliance becomes a legal question: how do quasi-judicial bodies like SEBI exercise adjudicatory powers, what procedural safeguards apply (natural justice under Adjudicating Officers), and how does judicial review interact with SAT jurisdiction. Recent Supreme Court precedents on SEBI's investigative powers are increasingly tested through passage-based questions.