The Securities And Exchange Board of India(SEBI)

(SEBI)Securities & Exchange Board of India established by The Government of India in 1988, the through an executive resolution. It was subsequently upgraded as a fully autonomous body or a statutory board in the year 1992 through the passing of SEBI Act on 30,January. Securities & Exchange Board of India has its headquarters at Mumbai.

The Act has been enacted with the objective of developing a healthy and orderly securities market and providing adequate protection to the investors. The Act provides for establishment of the Securities & Exchange Board of India. The board has been established and the assets and liabilities of Securities & Exchange Board of India established in 1988 have been transferred to it.

Basic Objectives SEBI

  • To protect the interests of investors in securities
  • To promote the development of securities market
  • To regulate the securities market
  • for matters connected therewith or incidental thereto.

Management of SEBI

SEBI shall consist of the following members:

  1. A chairman.
  2. Two members from amongst the officials of the ministries of the Central Government dealing with Finance and Law.
  3. Two other members,to be appointed by the Central Government.

Functions and responsibilities of SEBI

SEBI has to be responsive to the needs of three groups, which constitute the market:

  • The issuers of securities
  • The investors
  • The market intermediaries.

Securities & Exchange Board of India has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeal process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is headed by Mr. Justice J P Devadhar, a former judge of the Bombay High Court. A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in streamlining disclosure requirements to international standards.

Powers of SEBI

SEBI has been vested with the following powers:

  1. To approve by−laws of Securities exchanges.
  2. To require the Securities exchange to amend their by−laws.
  3. Inspect the books of accounts and call for periodical returns from recognized Securities exchanges.
  4. Inspect the books of accounts of financial intermediaries.
  5. Compel certain companies to list their shares in one or more Securities exchanges.
  6. Registration brokers.
  7. Promoting and regulating self-regulatory organization.
  8. Promoting investor’s education and training of intermediaries of securities markets.
  9. Prohibiting insider trading in securities.
  10. Registering and regulating the working of collective investment schemes including mutual funds.