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    SEBI

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    Lion Naresh Pradhan
    SEBI was established in 1988 as a non-statutory body and later became a statutory body in 1992 via the Securities and Exchange Board of India Act. SEBI aims to protect investors, regulate and develop an orderly securities market. It seeks to prevent fraud, provide guidance to investors, and maintain a balance between self-regulation and statutory regulation. SEBI is governed by a board with a chairman and members from the government and central bank.

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    SEBI

    Uploaded by

    Lion Naresh Pradhan
    14 views3 pages
    SEBI was established in 1988 as a non-statutory body and later became a statutory body in 1992 via the Securities and Exchange Board of India Act. SEBI aims to protect investors, regulate and develop an orderly securities market. It seeks to prevent fraud, provide guidance to investors, and maintain a balance between self-regulation and statutory regulation. SEBI is governed by a board with a chairman and members from the government and central bank.

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    Functions of SEBI

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    SEBI was established in 1988 as a non-statutory body and later became a statutory body in 1992 via the Securities and Exchange Board of India Act. SEBI aims to protect investors, regulate and develop an orderly securities market. It seeks to prevent fraud, provide guidance to investors, and maintain a balance between self-regulation and statutory regulation. SEBI is governed by a board with a chairman and members from the government and central bank.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    14 views3 pages

    SEBI

    Uploaded by

    Lion Naresh Pradhan
    SEBI was established in 1988 as a non-statutory body and later became a statutory body in 1992 via the Securities and Exchange Board of India Act. SEBI aims to protect investors, regulate and develop an orderly securities market. It seeks to prevent fraud, provide guidance to investors, and maintain a balance between self-regulation and statutory regulation. SEBI is governed by a board with a chairman and members from the government and central bank.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    About SEBI

    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.
    Preamble (प्रस्तावना)

    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"
    SEBI- Objectives, Functions, Purpose and Structure
    What is SEBI
    SEBI stands for Securities and Exchange Board of India. It is a statutory regulatory body that was established by
    the Government of India in 1992 for protecting the interests of investors investing in securities along with
    regulating the securities market. SEBI also regulates how the stock market and mutual funds function.

    Objectives of SEBI
    Following are some of the objectives of the SEBI:

    1. Investor Protection: This is one of the most important objectives of setting up SEBI. It involves protecting
    the interests of investors by providing guidance and ensuring that the investment done is safe.

    2. Preventing the fraudulent practices and malpractices which are related to trading and regulation of the
    activities of the stock exchange

    3. To develop a code of conduct for the financial intermediaries such as underwriters, brokers, etc.

    4. To maintain a balance between statutory regulations and self regulation.

    Functions of SEBI
    SEBI has the following functions

    1. Protective Function

    2. Regulatory Function

    3. Development Function

    The following functions will be discussed in detail


    Protective Function: The protective function implies the role that SEBI plays in protecting the investor interest
    and also that of other financial participants. The protective function includes the following activities.

    a. Prohibits insider trading: Insider trading is the act of buying or selling of the securities by the insiders of a
    company, which includes the directors, employees and promoters. To prevent such trading SEBI has barred
    the companies to purchase their own shares from the secondary market.

    b. Check price rigging: Price rigging is the act of causing unnatural fluctuations in the price of securities by
    either increasing or decreasing the market price of the stocks that leads to unexpected losses for the
    investors. SEBI maintains strict watch in order to prevent such malpractices.

    c. Promoting fair practices: SEBI promotes fair trade practice and works towards prohibiting fraudulent
    activities related to trading of securities.

    d. Financial education provider: SEBI educates the investors by conducting online and offline sessions that
    provide information related to market insights and also on money management.

    Regulatory Function: Regulatory functions involve establishment of rules and regulations for the financial
    intermediaries along with corporates that helps in efficient management of the market.

    The following are some of the regulatory functions.

    a. SEBI has defined the rules and regulations and formed guidelines and code of conduct that should be
    followed by the corporates as well as the financial intermediaries.

    b. Regulating the process of taking over of a company.

    c. Conducting inquiries and audit of stock exchanges.

    d. Regulates the working of stock brokers, merchant brokers.

    Developmental Function: Developmental function refers to the steps taken by SEBI in order to provide the
    investors with a knowledge of the trading and market function. The following activities are included as part of
    developmental function.

    1. Training of intermediaries who are a part of the security market.

    2. Introduction of trading through electronic means or through the internet by the help of registered stock
    brokers.

    3. By making the underwriting an optional system in order to reduce cost of issue.

    Purpose of SEBI
    The purpose for which SEBI was setup was to provide an environment that paves the way for mobilsation and
    allocation of resources.It provides practices, framework and infrastructure to meet the growing demand.

    It meets the needs of the following groups:

    1. Issuer: For issuers, SEBI provides a marketplace that can utilised for raising funds.

    2. Investors: It provides protection and supply of accurate information that is maintained on a regular basis.
    3. Intermediaries: It provides a competitive market for the intermediaries by arranging for proper
    infrastructure.

    Structure of SEBI
    SEBI board comprises nine members. The Board consists of the following members.

    1. One Chairman of the board who is appointed by the Central Government of India
    2. One Board member who is appointed by the Central Bank, that is, the RBI
    3. Two Board members who are hailing from the Union Ministry of Finance
    4. Five Board members who are elected by the Central Government of India

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