Securities and Exchange Board of India SEBI www.deekpay.com

What is SEBI?

SEBI is known as Securities and Exchange Board of India. It isIndiaA statutory regulatory body established by the Government in 1992 to protect the interests of investors in securities and to regulate the securities market.

SEBI's regulatory remit extends to all segments of the financial markets, including stock exchanges, mutual funds, portfolio managers, investment advisors and other intermediaries. It plays a key role in monitoring and regulating market activities, ensuring compliance with regulations and taking corrective measures against violations.

History of SEBI, Securities and Exchange Board of India

The establishment of SEBI marks an important milestone in the history of the securities market as it aims to bring about comprehensive reforms in the capital markets and ensure transparency and investor protection.

Prior to the inception of SEBI, the regulation of the Indian securities market was primarily regulated by the Controller of Capital Issues (CCI). However, with the changing financial landscape and the need for a more independent and professional regulator, SEBI was born.

The SEBI Act, 1992, gave SEBI autonomy to enable it to regulate and supervise the securities market in a holistic manner. Over the years, it has undergone several reforms and improvements to keep pace with the changing financial landscape. It has introduced various regulations and guidelines to promote good governance, prevent market manipulation and enhance investor confidence.

Objectives of the Securities and Exchange Board of India SEBI

The main objectives of SEBI include:

Investor Protection: SEBI's primary objective is to safeguard the interests of investors in the securities market. It aims to ensure that investors receive timely and accurate information about the securities in which they invest and are protected from fraudulent and unfair trading practices. Regulation and Development of Securities Markets: SEBI has been entrusted with the responsibility of regulating and developing the securities markets. It develops regulations and guidelines governing various market participants such as stock exchanges, brokers and listed companies to promote fair and transparent practices. Prevention of Insider Trading: SEBI is committed to preventing insider trading, which is the practice of individuals with access to non-public information using such information to gain an unfair advantage in trading. SEBI's regulations on insider trading are aimed at maintaining a level playing field for all market participants. Promotion of Fair Practices and Codes of Conduct: SEBI promotes fair practices and high standards of integrity in the securities market. It enforces a code of conduct for all market participants and creates an environment for ethical and transparent conduct of market activities. Prohibition of Fraudulent and Unfair Trading Practices : SEBI has the power to combat fraudulent and unfair trading practices in the securities market. It conducts investigations and takes corrective measures to maintain market integrity and protect investors from market manipulation. Development of Secondary Markets : SEBI plays a vital role in the development of secondary markets by introducing reforms and initiatives to improve liquidity, transparency and efficiency of trading. It is committed to creating an environment conducive to the development of capital markets.

Organisational Structure of SEBI, Securities and Exchange Board of India

SEBI has more than 20 departments, all of which are supervised by their respective Heads of Departments, who are generally managed hierarchically. The regulatory body is governed by its members, who include:

The President is nominated by the Union Government of India. Two members of the Union Ministry of Finance. One member of the Reserve Bank of India. The remaining five members are nominated by the Union Government of India.

SEBI is headquartered in Mumbai and has regional offices in New Delhi, Kolkata, Chennai and Ahmedabad, local offices in Jaipur and Bangalore and offices in Guwahati, Bhubaneswar, Patna, Kochi and Chandigarh.

Functions of SEBI, Securities and Exchange Board of India

SEBI performs multiple functions to fulfil its overall objectives of investor protection, market regulation and securities market development. The key functions include:

Protecting the interests of Indian investors while educating them about the securities markets and their intermediaries. To promote the development and seamless functioning of the securities market. To regulate business operations in the securities market. Provides a regulatory platform for portfolio managers, bankers, stockbrokers, investment advisers, commercial bankers, registrars, share transfer agents and other market participants. Oversees and regulates the responsibilities of depositors, credit rating agencies, securities custodians, foreign portfolio investors and other relevant entities. Prohibit fraudulent and unfair trading practices related to the securities market. Monitoring of corporate takeovers and share acquisitions. Ensuring the efficiency and contemporary relevance of the securities market through a thorough research and development strategy.

Powers of SEBI, Securities and Exchange Board of India

SEBI has a range of powers that enable it to function effectively as a regulator. These powers can be classified into three broad categories: quasi-judicial, quasi-executive and quasi-legislative.

1. Quasi-judicial power

The adjudicating authority:

SEBI has quasi-judicial powers to adjudicate on matters of violation of securities laws.

It has the power to hold hearings, review evidence, and issue orders to ensure the fair and equitable resolution of disputes within the securities market.

Reconciliation procedures:

SEBI has the power to facilitate the reconciliation process between the disputing parties.

Through a consent order, SEBI can reach a settlement and enforce compliance without resorting to lengthy legal proceedings.

2. Quasi-executive powers

Implementation and enforcement:

SEBI has been vested with quasi-enforcement powers to enable it to enforce compliance with securities laws and regulations.

The regulator may take measures such as fines, penalties and other measures to ensure that market participants comply with the prescribed standards.

Conducting investigations:

SEBI has the power to investigate potential violations of securities laws.

This quasi-enforcement power enables SEBI to collect information, inspect records and take corrective action to maintain market integrity.

3. Quasi-legislative powers

Rule-making authority:

SEBI has quasi-legislative powers to make and promulgate rules and regulations for the securities market.

This authority enables SEBI to adapt to changing market dynamics and develop measures to promote fair, transparent and efficient market practices.

Policy development:

SEBI is authorised to formulate policies to guide the development and regulation of the securities market.

This quasi-legislative role has made SEBI a dynamic institution capable of responding to emerging challenges and opportunities in the financial sector.

SEBI Important Rules and Guidelines

SEBI has framed several rules and guidelines to regulate the Indian securities market. Some of the important ones are:

SEBI (Prohibition of Insider Trading) Regulations, 2015 : The regulations prohibit insider trading in securities and provide a framework to detect and prevent insider trading. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 : The Regulations prescribe listing obligations for companies listing their securities on Indian stock exchanges. It also prescribes the disclosure requirements with which these companies have to comply. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 : The Regulations govern the acquisition of shares and takeovers of companies listed on Indian stock exchanges. It prescribes the procedures and disclosures to be followed by the acquirer and the target company. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 : The Regulations prescribe disclosure requirements for companies issuing capital and provide a framework for issuance of securities by such companies. SEBI (Prohibition of Fraudulent and Unfair Trading Practices) Regulations : The regulations prohibit fraudulent and unfair trading practices in the securities sector and provide a framework for detection and prevention of such practices. SEBI (Mutual Funds) Regulations, 1996: The regulations provide guidelines for the operation of mutual funds in India. It provides for the registration and regulation of mutual funds and the obligations of mutual funds and their asset management companies. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 : The regulations prescribe disclosure requirements for companies issuing capital and provide a framework for issuance of securities by such companies. SEBI (Securities Repurchase) Regulations, 2018 : The Regulations provide for repurchase of securities by companies listed on Indian stock exchanges. It prescribes the procedures and disclosures to be followed by companies wishing to repurchase their securities. SEBI (Credit Rating Agencies) Regulations, 1999: This regulation provides for the registration and regulation of credit rating agencies in India. It prescribes eligibility criteria for credit rating agencies, obligations of credit rating agencies and procedures for rating securities.

concluding remarks

In summary, SEBI's unique and innovative approach to its functions and powers reflects its commitment not only to meeting current regulatory needs, but also to anticipating and responding to future challenges in the dynamic world of securities trading.

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