SEBI is a statutory body established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
SEBI is a statutory regulatory body established by the Government of India to regulate the securities market in India and protect the interests of investors in securities.
Objectives of SEBI
SEBI has following objectives-
- Protection to the investors
The primary objective of SEBI is to protect the interest of people in the stock market and provide a healthy environment for them.
- Prevention of malpractices
This was the reason why SEBI was formed. Among the main objectives, preventing malpractices is one of them.
- Fair and proper functioning
SEBI is responsible for the orderly functioning of the capital markets and keeps a close check over the activities of the financial intermediaries such as brokers, sub-brokers, etc.
The organizational structure of SEBI
Mr. Ajay Tyagi is the current chairman of SEBI. He was appointed on the 10th of January, 2017 and took over the charge with effect from 1st March 2017 from Mr. U.K. Sinha
Offices of SEBI India
It has a headquarter at the a Bandar kurla Complex in Mumbai, India.
It has regional offices in various cities of India.
- 1 New Delhi,
- 2 Kolkata
- 3 Chennai
- 4 Ahmedabad
- 6 Hyderabad
- 7 Luck now
- 8 Shimla
- 9 Kochi
- 10 Jaipur
And many more areas do have Sebi offices. It has offices all over India.
The Structural Set Up of SEBI India
SEBI India follows a corporate structure. It has a Board of Directors, senior management, department heads and several crucial departments.
To be precise, it comprises of over 20 departments, all of which are supervised by their respective department heads, who in turn are administered by a hierarchy in general.
The SEBI’s hierarchical structure comprises of the following 9 designated officers –
- The Chairman – Nominated by the Indian Union Government.
- Two members belonging to the Union Finance Ministry of India.
- One member belonging to the Reserve Bank of India or RBI.
- Other five members – Nominated by the Union Government of India.
The below-mentioned list highlights some of the most important departments of SEBI –
- The Information Technology Department.
- The Foreign Portfolio Investors and Custodians.
- Office of International Affairs.
- National Institute of Securities Market.
- Investment Management Department.
- Commodity and Derivative Market Regulation Department.
- Human Resource Department.
Besides these, other crucial departments take care of legal, financial and enforcement-related affairs.
History of Sebi
Before Sebi came into existence, Controller of Capital Issues was the regulatory authority; it derived authority from the Capital Issues (Control) Act, 1947. In 1988, Sebi was constituted as the regulator of capital markets in India. Initially, Sebi was a non-statutory body without any statutory power. Following the passage of the Sebi Act by Parliament in 1992, it was given autonomous and statutory powers.
Powers and Functions of SEBI
Being a regulatory body, SEBI India has several powers to perform vital functions. The SEBI Act of 1992 carries a list of such powers vested in the regulatory body. The functions of SEBI make it an issuer of securities, protector of investors and traders and a financial mediator.
- To protect the interests of Indian investors in the securities market.
- To promote the development and hassle-free functioning of the securities market.
- To regulate the business operations of the securities market.
- To serve as a platform for portfolio managers, bankers, stockbrokers, investment advisers, merchant bankers, registrars, share transfer agents and other people.
- To regulate the tasks entrusted on depositors, credit rating agencies, custodians of securities, foreign portfolio investors and other participants.
- To educate investors about securities markets and their intermediaries.
- To prohibit fraudulent and unfair trade practices within the securities market and related to it.
- To monitor company take-overs and acquisition of shares.
- To keep the securities market efficient and up to date all the time through proper research and developmental tactics.
Powers and authority of SEBI
SEBI possesses high authority and power as its primary purpose was to control the market systematically by preventing any fraudulent activity. It has three significant powers:
- Quasi-Judicial- This includes drafting legislation with respect to the capital markets. With the help of this authority, it has the right to conduct hearing and pass judgments in case any fraudulent activity happens. The benefit of this authority is that it assures that there is fairness, reliability and accountability in the capital market.
- Quasi-Executive Functions- Implementing legislation also comes under SEBI. This means that SEBI has the absolute authority to build rules and regulations to shield the interest of investors.
For example, there is legislation called SEBI Listing obligation and Disclosure requirements; this was made to consolidate and simplify provisions of the current listing agreements for various segments to financial markets such as equity shares. Such regulations are made to keep any sort of illegal practice at bay.
- Quasi-Legislative- Under this segment, the role of SEBI is to create guidelines for the security of interest of investors. Few rules and regulations made by SEBI are disclosure requirements, trading regulation and listing obligation.
The primary goal is to methodize and fortify the provision of current listing agreements for various segments of the financial market. Although SEBI has a lot of powers, still, it has to go through the Securities Appellate Tribunal and the Supreme Court of India.
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