SEBI BY CHIRAGH DEVAL @LEXCLIQ

SEBI

The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and markets in India under the Jurisdiction of the Ministry of Finance, Government of India. It was established on 12 April 1992 and given Statutory Powers on 30 January 1992 through the SEBI ACT.

Securities and Exchange Board of India (SEBI) was first established in 1988 as a non-statutory body for regulating the securities market. It became an autonomous body on 30 January 1992 and was accorded statutory powers with the passing of the SEBI Act 1992 by the Indian Parliament. SEBI has its headquarters at the business district of  Bandra Kurla Complex in Mumbai and has Northern, Eastern, Southern, and Western Regional Offices in New Delhi, Kolkata, Chennai, and Ahmedabad respectively. It has opened local offices at Jaipur and Banglore and has also opened offices at Guwahati and Chandigarh in Financial Year 2013–2014.

Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947.

The SEBI is managed by its members, which consists of the following:

  • The chairman is nominated by the Union Government of India.
  • Two members, i.e., Officers from the Union Finance Ministry.
  • One member from the RBI.
  • The remaining five members are nominated by the Union Government of India, out of them at least three shall be whole-time members.

After the amendment of 1999, collective investment schemes were brought under SEBI except nidhis, chit funds, and cooperatives.

FUNCTIONS

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 has to be responsive to the needs of three groups, which constitute the market:

  • issuers of securities
  • investors
  • market intermediaries

SEBI has three powers rolled into one body: quasi-legislative 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 appeal process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is currently headed by Justice Tarun Agarwal former Chief Justice of the Meghalaya High Court. A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in streamlining disclosure requirements to international standards.

For the discharge of its functions efficiently, SEBI has been vested with the following powers:

  • to approve by−laws of Securities exchanges.
  • to require the Securities exchange to amend their by−laws.
  • inspect the books of accounts and call for periodical returns from recognised Securities exchanges.
  • inspect the books of accounts of financial intermediaries.
  • compel certain companies to list their shares in one or more Securities exchanges.
  • registration of Brokers and sub-brokers

SEBI committees

  • Technical Advisory Committee
  • Committee for review of structure of infrastructure institutions
  • Advisory Committee for the SEBI Investor Protection and Education Fund
  • Takeover Regulations Advisory Committee
  • Primary Market Advisory Committee (PMAC)
  • Secondary Market Advisory Committee (SMAC)
  • Mutual Fund Advisory Committee
  • Corporate Bonds & Securitisation Advisory Committee

There are two types of brokers:

  • Discount brokers
  • Merchant brokers

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