What Is Sebi

Topics: Stock exchange, Stock market, Investment Pages: 8 (1940 words) Published: December 14, 2010
What is SEBI? :

What is SEBI? SEBI is the regulator for the security Market in India. In 1988 the Securities  and  Exchange  Board  of  India  (SEBI)  was  established  by  the Government of India through an executive resolution. Securities and Exchange Board of India (SEBI) was first established in the year 1988 as a non-statutory body for regulating the securities market and was subsequently upgraded as a fully autonomous body on April 12, 1992 the Securities and Exchange Board Of India was constituted. It was constituted in accordance with the provisions of the Securities and Exchange Board Of India Act 1992. Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennaiand Ahmedabad. PREAMBLE

The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as “…..to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto”

Securities and Exchange Board of India (SEBI), Functions 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.
SEBI 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 appeals process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court.

SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2 basis). SEBI has been active in setting up the regulations as required under law.

SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco.[citation needed] It had[when?] increased the extent and quantity of disclosures to be made by Indian corporate promoters. More recently, in light of the global meltdown,it liberalised the takeover code to facilitate investments by removing regulatory strictures. In one such move, SEBI has increased the application limit for retail investors to Rs 2 lakh, from Rs 1 lakh at present. [3]

The Board is responsible for the securing the interests of investors in securities and to facilitate the growth of and to monitor the securitiesmarket in an appropriate manner. To monitor and control the performance of stock exchange and derivative markets. Listing and monitoring the functioning of stock brokers, sub brokers, share transfer agents, bankers to an issue, trustees of trustdeeds, registrars to an issue, merchant bankers, underwriters, portfolio managers,investment advisers and others associated with securities markets by any means.Monitoring and Controlling the functioning of venture capital funds and mutualfunds. Forbid unjust and dishonest trade practices in the security markets andforbid insider trading in the security market. Undertake periodic audits of stock exchanges, mutual funds, individuals and self regulatory organizations associated with the security market. Functions:

One of the key functions of the Board is to
supervise and monitor the activities of the
exchanges, clearing houses and the
settlement system, strengthen market
infrastructure and ensure that appropriate risk...
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