Securities and exchange board of India – SEBI

The Securities and exchange board of India – SEBI was constituted on 12th April, 1988 as a non-statutory body through a resolution passed by the Government of India for dealing with all matters relating to development and regulation of securities market, protect the interests of investors and advice government on all these matters. It was given statutory powers on 30th Jan, 1992 and on 4th April, 1992 the SEBI Act came to power.

Under this act the Securities and exchange board of India was delegated several powers under the securities contracts regulation act and companies act in order to strengthen its hand as a capital market regulator. Now SEBI operates under the control and direction of the Finance Ministry of India.

In 1988 it was initially formed with a capital of Rs. 7.5 Crore provided by its promoters (IDBI, ICICI, IFCI).

Head Office – Mumbai

Branches – Kolkata, Delhi, Chennai

Statutory Objectives of Securities and exchange board of India – SEBI

  1. Protecting the interests of Investors

  2. Healthy Development of Securities market

  3. Regulation of Stock Exchange and Securities Market

Organisational structure of Securities and exchange board of India – SEBI 

It constitutes of Six Members –

  1. One Chairman who is the Head is nominated by the Central Government

  2. 2 members are selected form the Central Ministry (Law & Finance)

  3. 1 member is appointed by the RBI (Reserve Bank of India)

  4. 2 members are appointed by the Central Government who are professionals and have special knowledge of securities market

Functions of Securities and exchange board of India – SEBI

It is the duty of the board to protect the interest of investors and to promote development of securities through the following measures:

  1. Prohibiting Insider trading of securities and Price Rigging

  2. Regulating the stock exchange and other securities markets

  3. Registering and regulating collective investment schemes

  4. Registering and regulating the activities of stockbrokers, agents, merchant bankers, trustees, underwriters etc. and other intermediaries related to securities market.

  5. Undertaking inspections, conducting enquires, stock audits etc.

  6. Promoting and Regulating self-regulatory organizations

  7. Prohibiting unfair trade practices and frauds

  8. Educating and training investors and intermediaries od securities market

  9. Imposing penalties on violations of SEBI Guidelines

  10. Charging fees and Conducting research on behalf of the government

  11. Performing all other functions under the SEBI Act

Powers of Securities and exchange board of India – SEBI

The Securities and exchange board of India has been delegated the following powers:

  1. Power to Grant or Suspend or Reject the Certificate of registration to Intermediaries

  2. Power to Grant or Suspend or Reject Registration of Venture Capital Funds and Collective Investment Schemes

  3. Power to give directives to Intermediaries of Securities Market

  4. Power to issue directions to companies regarding issue of capital, transfer of securities etc.

  5. Power to Impose Monetary Penalties on Violation of SEBI Guidelines

  6. Power to Investigate Irregularities in a business through enquiries and inspections

Benefits of Securities and exchange board of India – SEBI

To Government – Regulation of Indian Capital Market, Check on malpractices, Investor Protection

To Issuers – It provides a market place where they can raise funds easily.

To Investors – SEBI provides protection from unfair trade and ensures supply of accurate and correct information.

To Intermediaries – It provides a competitive professional market

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