For Private Circulation only Chapter-07 The Securities & Exchange Board of India Act, 1992 1) What are

the object and powers of SEBI Act, 1992? Or Explain the role of SEBI for ensuring transparency in the securities market.

A] The objects of the SEBI Act are as follows: a) Protection of the interests of investors in securities. b) Promoting orderly and healthy growth of the securities market. c) Regulation of the securities market and other incidental matters. d) Promoting fair dealings by the issuer of securities and ensuring a market place where they can raise funds at a relatively low cost. e) Regulating and developing a code of conduct and fair practices by intermediaries like brokers, merchant bankers etc., with a view to making them more competitive and professional. f) Monitoring the activities of Stock Exchanges, Mutual fund and Merchant Bankers etc.

B] Powers of SEBI a. Regulating the business in stock exchange and any other securities markets. b. Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers etc. c. Registering and regulating the working of the venture capital funds and collective investment schemes and mutual funds. d. Registering and regulating the function of depositories, participants, custodians of securities, foreign institutional investors, credit rating agencies and other intermediaries. e. Prohibiting fraudulent and unfair trade practices relating to securities markets. f. Prohibiting insider trading in securities. g. Regulating substantial acquisition of shares and take-over of companies.

h. Promoting investors education and training of intermediaries of securities markets. i. Perform powers under the provisions of the Securities Contracts (Regulation) Act, 1956, as may be delegated by the Central Government. j. Levying fees or other charges for carrying out the purpose of this section.

k. Calling for information and record from any bank or authority or board or corporation established by Central or State Government in respect of any transaction in securities which is under investigation or inquiry by the SEBI. l. Calling for information for inspection, Audit of stock exchanges, mutual funds ant other persons associated with the securities market, intermediaries and self regulatory organization in the securities market. m. Power to make inspection of any book or register or other documents of listed companies, public companies, which intends to get it securities listed on any recognized stock exchange. n. Powers of Civil Court as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit in respect of following matter: i) The discovery and production of books account and other documents as specified by SEBI. ii) Summoning and enforcing the attendance of persons and examining them on oath. iii) Inspection of any books, registers, documents and records of company. iv) Issuing commission for the examination of witness or documents. o. Power to order for an inquiry or investigation in respect matter related to suspend the trading of any security in a recognized stock exchange, restrain person from accessing the securities market and prohibit any person associated with the securities market to buy or sell or deal in securities. p. Power to issue directors for inquiry in the interest of investors, or orderly development of securities market. 2) Securities Market Awareness Campaign (SMAC) SEBI launched a comprehensive education campaign aimed at creating awareness among investors about securities market. The following are the approach by SMAC: a) Workshop: Under this, the workshops are conducted to reach out the common investors, by the experts by delivering lectures and providing message on the

functioning of the securities market, fundamentals of investments and risk management. b) Advertisement: The SEBI prepared simple Dos and Donts for investors relating to various aspects of the securities market. The messages are spread across the investor base by way of advertisements in newspapers, especially in the regional newspapers. c) Educative Material: SEBI has prepared a standardized reading material and presentation materials for the workshops. Also SEBI has prepared reference guides on topics concerning investors. The materials are available in 10 major regional languages. d) Website Dedicated to Investor Education: SEBI has dedicated investor website (http://invstor.sebi.gov.in). It has also setup a simple and effective internet based response to investors. It ensure internet based registration of complaints and take immediate action on the grievances of investors. e) Radio: SEBI also provide information and investor guidance through radio frequently. f) Television: SEBI also provide cautionary message through major television channels.