Securities and Exchange Board of India

Sebi Headquarter

Securities and Exchange Board of India(SEBI)

Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. Established in 1988, it was given statutory powers on 30 January 1992 through the SEBI Act, 1992. Its primary functions include protecting investor interests, promoting and regulating the Indian securities markets. SEBI is responsive to the needs of three groups, which constitute the market: the issuers of securities, the investors, and the market intermediaries. It has been mandated to create a fair and efficient securities market in the country and also to prevent any frauds or malpractices within the securities market.

History

The need for SEBI was identified in the 1980s when the Indian stock market was hit by a major scam involving the diversion of funds. To address this, the Government of India established SEBI in 1988 through an executive resolution, and it was given statutory powers with the passing of the SEBI Act in 1992.

Functions

SEBI has been vested with a wide range of powers and functions to meet its objectives. These include:

• Regulating the business in stock exchanges and any other securities markets
• Registering and regulating the work of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner
• Registering and regulating the working of collective investment schemes, including mutual funds
• Promoting and regulating self-regulatory organizations
• Prohibiting fraudulent and unfair trade practices relating to securities markets
• Promoting investors' education and training of intermediaries of securities markets
• Prohibiting insider trading in securities
• Regulating substantial acquisition of shares and takeover of companies
• Performing such functions and exercising such powers under the provisions of the Securities Contracts (Regulation) Act, 1956, as may be delegated to it by the Central Government

Structure

SEBI is headed by a Chairman who is appointed by the Government of India. It has several departments managed by department heads, focusing on different aspects of the securities market, including corporate finance, trading, market regulation, investment management, and research and analysis.

Regulatory Framework

SEBI has formulated several regulations, rules, and guidelines to protect the interests of investors and to regulate the securities market. This includes the SEBI (Issue of Capital and Disclosure Requirements) Regulations, SEBI (Listing Obligations and Disclosure Requirements) Regulations, and SEBI (Prohibition of Insider Trading) Regulations, among others.

Recent Initiatives

SEBI has been proactive in its approach to dealing with challenges in the securities market. It has introduced measures to strengthen corporate governance, increase transparency, and improve the overall market structure. This includes tightening of disclosure norms, introduction of corporate governance guidelines, and measures to curb insider trading.

Challenges

Despite its efforts, SEBI faces challenges in terms of ensuring compliance with its regulations, dealing with high-profile cases of market manipulation, and adapting to the rapidly changing landscape of the global securities market.

Conclusion

The Securities and Exchange Board of India plays a crucial role in the development and regulation of the securities market in India. Its efforts towards ensuring investor protection, market integrity, and the development of a robust securities market infrastructure are vital for the economic development of the country.