Securities and Exchange Board of India

From Wikipedia, the free encyclopedia Jump to: navigation, search Securities and Exchange Board of India It was formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI is headquartered in the business district of Bandra Kurla Complex complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad. Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947. Initially SEBI was a non statutory body without any statutory power. However in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act 1992. In April, 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India. The SEBI is managed by six members, i.e. by the chairman who is nominated by central government & two members, i.e. officers of central ministry, one member from the RBI & the remaining two are nominated by the central government. The office of

SEBI is situated at Mumbai with its regional offices at Kolkata, Delhi & Chennai.

[edit] Organization structure

Upendra Kumar Sinha was appointed chairman on 18 February 2011 replacing C. B. Bhave.[2] The Board comprises[3] NameDesignation Upendra Kumar SinhaChairman Prashant SaranWhole Time Member Rajeev Kumar AgarwalWhole Time Member Dr. Thomas MathewJoint Secretary, Ministry of Finance V. K. Jairath magyaMember Appointed Anand SinhaDeputy Governor, Reserve Bank of India Naved MasoodSecretary,Ministry of Corporate Affairs

Functions and responsibilities

SEBI has to be responsive to the needs of three groups, which constitute the market: the issuers of securities the investors the market intermediaries.

SEBI has three functions rolled into one body: quasi-legislative, quasijudicial 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 appeals process to create accountability. There is a Securities Appellate Tribunal which is a threemember tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court. SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2 basis). SEBI has been active in setting up the regulations as required under law. SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco.[citation needed] It had[when?] increased the extent and quantity of disclosures to be made by Indian corporate promoters. More recently, in light of the global meltdown,it liberalised the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to Rs 2 lakh, from Rs 1 lakh at present. [5]

[edit] Powers
For the discharge of its functions efficiently, SEBI has been invested

with the necessary powers which are: to approve bylaws of stock exchanges. to require the stock exchange to amend their bylaws. inspect the books of accounts and call for periodical returns from recognized stock exchanges. inspect the books of accounts of a financial intermediaries. compel certain companies to list their shares in one or more stock exchanges. levy fees and other charges on the intermediaries for performing its functions. grant license to any person for the purpose of dealing in certain areas. delegate powers exercisable by it. prosecute and judge directly the violation of certain provisions of the companies Act.

[edit] SEBI Committees

Technical Advisory Committee Committee for review of structure of market infrastructure institutions Members of the 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 & Securitization Advisory Committee Takeover Panel SEBI Committee on Disclosures and Accounting Standards (SCODA) High Powered Advisory Committee on consent orders and compounding of offences Derivatives Market Review Committee Committee on Infrastructure Funds

[edit] Controversies
Supreme Court of India heard a Public Interest Litigation (PIL) filed by India Rejuvenation Initiative that had challenged the procedure for key appointments adopted by Govt of India. The petition alleged that, "The constitution of the search-cumselection committee for recommending the name of chairman and every whole-time members of SEBI for appointment has been altered, which directly impacted its balance and could compromise the role of the SEBI as a watchdog." [6]HYPERLINK \l "cite_notePIL_alleges_nexus_in_Sebi_appoint ments-6"[7] On 21 November 2011 the court allowed the petitioners to withdraw the petition and file a fresh petition pointing out constitutional

issues regarding appointments of regulators and their independence. The Chief Justice of India refused to the finance ministrys request to dismiss the PIL and said that the court was well aware of what was going on in SEBI.[6]HYPERLINK \l "cite_noteSC_allows_eminent_citizens_to_with draw_petition_against_SEBI_chief.27 s_appointment-7"[8] Further, it came into light that Dr KM Abraham (the then whole time member of SEBI Board) had written to the Prime Minister about malaise in SEBI. He said, "The regulatory institution is under duress and under severe attack from powerful corporate interests operating concertedly to undermine SEBI". He specifically said that Finance Minister's office, and especially his advisor Omita Paul, were trying to influence many cases before SEBI, including those relating to Sahara Group, Reliance, Bank of Rajasthan and MCX.[9]HYPERLINK \l "cite_note-PranabChidu_feud_may_be_revived_over_S ebi_chief_PIL-9"[10]

[edit] Corruption
CBI arrested a Deputy General manager (DGM) of SEBI for demanding and accepting a bribe amounting to 10 lakh (US$20,000) on 1st June 2012.[11]The DGM was denied bail by a sessions court on 20 June 2012. Taking a tough stand, the court observed (among other things), "when our country is fighting against the menace of corruption, if a high ranking official of SEBI is granted bail, that will send wrong signals to the society".[12]

[edit] See also

Stock Exchange () ()

[edit] References