SEBI

Securities and Exchange Board of India (SEBI)
Securities and Exchange Board of India (SEBI) is the nodal agency to regulate the capital market and
other related issues in India. It was established in 1988 as an administrative body and was given statutory
recognition in January 1992 under the SEBI Act 1992 which came into force on January 30, 1992. Before that,
the Capital Issues(Control) Act, 1947 was repealed. SEBI has been constituted on the lines of Securities and
Exchange Commission of USA.
SEBI is consisting of the Chairman and 8 Members (one member representing the Reserve Bank of
India, two members from the officials of Central Government and five other public representatives to be
appointed by the Central Government from different fields). SEBI has been playing an active role in the Indian
Capital Market to achieve the objectives enshrined in the SEBI Act, 1992.
The major objective of the SEBI may be summarized as follows:
To provide a degree of protection to the investors and safeguard their rights and to ensure that there is a
steady flow of funds in the market.
To promote fair dealings by the issuer of securities and ensure a market where they can raise funds at a
relatively low cost.
To regulate and develop a code of conduct for the financial intermediaries and to make them competitive and
professional.
To provide for the matters connecting with or incidental to the above.
Section 11 of the SEBI Act deals with the powers and functions of the SEBI as follows :
It shall be the duty of Board to protect the interests of the investors in securities and to promote the
development of and to regulate the securities market by measures as deemed frt.
To achieve the above, the Board may undertake the following measures :
1. Regulating the business in stock exchanges;
2. Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an
issue, merchant bankers, underwriters, portfolio managers;
3. Registering and regulating the working of the depositories, participants, credit rating agencies;
4. Registering and regulating the working of venture capital funds and collective investment schemes,
including mutual funds;
5. Prohibiting fraudulent and unfair trade practices relating to securities markets;
6. Promoting investors education and training of intermediaries of securities markets;

7. Prohibiting insider trading in securities;
8. Regulating substantial acquisition of shares and take-over of companies; and
9. Calling for information from undertaking, inspection, concluding inquiries and audits of the stock exchanges,
mutual funds, other persons associated with the securities market intermediaries and self-regulatory
organisations in the securities market.
In order to attain these objectives, SEBI has issued Guidelines, Rules and Regulations from time to time. The
most important of these is the “SEBI (Disclosure and Investor Protection) Guidelines,2000″. The provisions of
these Guidelines,2000 are aimed to protect the interest of the investors in securities.
The Guidelines, 2000 deals with the following areas :
Eligibility norms for companies issuing securities,
Pricing of securities by companies,
Promoters contribution and lock-in requirements,
Pre-issue obligations of the merchant bankers,
Contents of the prospectus/abridged prospectus letter of offer,
Post issue obligation, of merchant bankers,
Green shoe option,
Guidelines on advertisements,
Guidelines for issue of debt instruments,
Guidelines for book building process’
Guidelines on public offer through stock exchange on-Iine system,
Guidelines for issue of capital by financial institutions,
Guidelines for preferential issues of securities,
Guidelines for bonus issues,
Other operational and miscellaneous matters
In order to regulate and control and to provide a code of conduct for the merchant bankers, other
participants of capital market, and other matters relating to trading of securities, SEBI has issued several Rules
and Regulations.
These are related to Bankers to the issues, Buy back of securities, Collective Investments Schemes,
Delisting of securities, Depositors, Derivatives, Employee stock options, Foreign Institutional Investors(FII’s),
Insider Trading, Lead Manager, Market Makers, Merchant Bankers, Mutual Funds, Ombudsman, Portfolio
Manager, Registrars and Share Transfer Agents, Securities Lending Scheme, Sweat Equity, Stock Brokers and
sub-brokers, Takeover Regulations, Transfer of Shares, Underwriters, unfair Trade Practices, venture capital
Funds, Annual Reports, etc.
Securities and Exchange Board of India (SEBI) has a primary responsibility of regulating and supervising the
capital market. It has introduced a number of reforms for the control and supervision of capital market and
investors protection.

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Securities and Exchange Board of India (SEBI)

The major objective of the SEBI may be summarized as follows:

To provide for the matters connecting with or incidental to the above.

1. Regulating the business in stock exchanges;

5. Prohibiting fraudulent and unfair trade practices relating to securities markets;

6. Promoting investors education and training of intermediaries of securities markets;

8. Regulating substantial acquisition of shares and take-over of companies; and

The Guidelines, 2000 deals with the following areas :

Eligibility norms for companies issuing securities,

Pricing of securities by companies,

Promoters contribution and lock-in requirements,

Pre-issue obligations of the merchant bankers,

Contents of the prospectus/abridged prospectus letter of offer,

Post issue obligation, of merchant bankers,

Green shoe option,

Guidelines for issue of debt instruments,

Guidelines for book building process’

Guidelines on public offer through stock exchange on-Iine system,

Guidelines for issue of capital by financial institutions,

Guidelines for preferential issues of securities,

Guidelines for bonus issues,

Other operational and miscellaneous matters

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