The maximum limit for portfolio investment in a particular listed firm is decided by the FDI limit prescribed for the sector to which the firm belongs. However, there are two additional restrictions on portfolio investment. First, the aggregate limit of investment by all FIIs inclusive of their sub-accounts in any particular firm has been fixed at 24% of the paid-up capital. Secondly, investment by any single FII in any particular firm should not exceed 10% of the paid-up capital of the company. Regulations also impose limits for investment in equity-based derivatives trading on stock exchanges. The overall responsibility of development, regulation and supervision of the stock market rests with the Securities and Exchange Board of India (SEBI), which was formed in 1992 as an independent authority. Since then, SEBI has consistently tried to lay down market rules in line with the best market practices. It enjoys vast powers of imposing penalties on market participants in case of a breach. Learn more about these legal issues from this book "Stock Market – Regulatory and Due Diligence Aspects".