Securities And Exchange Board Of India (SEBI)
WHAT IS SEBI :-
SEBI (Securities And Exchange Board Of India) is essentially a statutory body of the Government of India which was established on 12th April 1992. It was introduced to promote transparency in the Indian investment market. Apart from its headquarters in Mumbai, the Foundation has several regional offices across the country including New Delhi, Jaipur, Ahmedabad, Kolkata and Chennai.
It is entrusted with the task of regulating the functioning of the Indian capital market. The regulatory body focuses on monitoring and regulating the securities market in India to protect the interests of investors and aims to create a safe investment environment by formulating investment guidelines along with enforcement of several rules and regulations.
The Securities and Exchange Board of India, owned by the Ministry of Finance within the Government of India, is the regulatory body for the securities and commodities market in India.
ESTABLISHMENT OF SEBI :-
The Securities and Exchange Board of India was constituted as a non-statutory body on April 12, 1988 through a resolution of the Government of India.
The Securities and Exchange Board of India was established as a statutory body in the year 1992 and the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) came into force on January 30, 1992.
The Formation or Structure of SEBI :-
To be precise, it comprises more than 20 departments, all of which are supervised by their respective department heads, which in turn are normally administered by a hierarchy. The Structure of securities and exchange board of india (sebi) is follows as :-
- A Chairman
- 2 members from Ministry of Central Government dealing with finance & administration of the Companies Act, 2013
- 1 member from the Reserve Bank of India
- 5 other members of whom at least 3 shall be the whole-time members.
Some Important Departments of SEBI :- There are more than 20 departments in SEBI, among them I list few names :-
- Information Technology Department
- Office Of International Affairs
- Foreign Portfolio investers and custodian
- Investment Management Department
- National Institute of Securities Market
And many more…
FUNCTIONS OF SEBI (SECURITIES AND EXCHANGE BOARD OF INDIA) :-
It is the duty of SEBI to take such measures to protect the interest of investors To promote the development of investors and securities market. These measures include:-
- Regulating business in stock exchanges and any other securities market.
- Registering and regulating the work of intermediaries.
- Registering and Regulating the work of the Depositories, Participants, FIIs and Credit Rating Agencies.
- Registering and Regulating the work of the Venture Capital Funds and Collective Investment Schemes.
- Prohibiting the Unfair and Fraudulent Trade Practices.
- Prohibiting the Insider Trading in Securities.
- Regulating Substantial Acquisition of Shares and Takeover of Companies.
- Calling for any required Information, undertaking Inspections and conducting Inquiries and Audits of the Stock Exchanges.
- Levying Fees and other charges for carrying out the purposes of this section.
- Conducting Research for above purposes.
- Performing any other function as may be prescribed.
POWERS OF SEBI :-
Quasi-judicial powers:- Quasi-judicial powers in cases of frauds and unethical practices relating to the securities market. SEBI India has the power to pass the judgement.The said power helps in maintaining transparency, accountability and fairness in the securities market.
Quasi-executive powers:- SEBI has the power to inspect the books of accounts and other important documents to identify or collect evidence against violations. If it finds anyone violating the rules, the regulatory body has the power to enforce the rules, pass judgments and take legal action against the violators.
Quasi-Legislative powers:- In order to protect the interests of the investors, the authorized body has been entrusted with the power to frame suitable rules and regulations. Such regulations include the imposition of listing obligations, insider trading rules and required disclosure requirements. The body makes such rules and regulations to get rid of malpractices prevalent in the securities market.
OBJECTIVES OF SEBI :-
To protect the interests of investors in securities.
To promote the development of market.
To regulate, the securities market and for matters connected therewith or incidental thereto.
PURPOSE OF THE SEBI :-
The objective for which SEBI was established was to provide an environment that would pave the way for the operation and allocation of resources. It provides practice, framework and infrastructure to meet the growing demand. It caters to the needs of the following groups:-
1. Issuer: For the issuer, SEBI provides a market which can be used to raise funds.
2. Investors: It provides security and supply of accurate information that is maintained on a regular basis.
3. Intermediaries: It provides a competitive market for intermediaries by arranging proper infrastructure.
To regulate, the securities market and for matters connected therewith or incidental thereto.
Note:- The information provided on this blog is for educational and informational purposes only, does not constitute a suggestion to invest, ask your financial advisor or do your own research before investing in any instrument. Because there is risk involved in the market.